Why Manufacture in Mexico?
Updated: Nov 7, 2020
The key to success is having the right partners to get you there.
It is 2020, and you’re a Business Owner or in a position in a Company that is looking for ways reduce costs in your Manufacturing. Right off the bat your mind goes to China. That’s where since 1980, businesses wanted to go to manufacture. Then in 2010, China became the No. 1 industrial powerhouse. However, with Labor rates increasing, Tariffs not going down from there current 25% rate any time soon, and the issue that we see that China is stealing proprietary technology. These are all reasons why so many manufactures, to include Chinese companies, are leaving China to open up their establishments in other locations; like Mexico.
Mexico is right on the USA Border. When your product crosses the border you and directly ship it to any location you want. There is having to load it on a plane or boat, to only then have to be inspected in an Airport/Harbor by US Customs. Not to mention, If you find any quality issues in your product, you can make immediate corrections, and not loose a container worth of product. You are no further than a few hours flight from your facility.
Currently there is over 3,000 Maquiladoras (Manufacturing Facilities) in Mexico operating with over 1 Million Mexican people working for those facilities. Maquiladoras, primarily produce electronic equipment, clothing, plastics, furniture, appliances, and auto parts, and even today ninety percent of the goods produced at maquiladoras are shipped north to the United States.
So why Mexico? Why should you bring your company to Mexico?
Mexico is beyond competitive in all areas that you can think of, as well as, beat the competition in other certain areas. Many companies save 20-30% on labor alone when they move operations to Mexico. They also save money on overhead costs like real estate, whether you want to purchase or rent a building. Mexico’s IMMEX / Maquiladora program offers benefits with one being a significant tax savings. Direct labor in Mexico is approximately seventy percent less expensive, however, the education in Mexico is top notch and you can find very highly trained professionals and management level employees and competitive salaries as well.
The proximity to the USA is one of the great advantages, especially being that 90% of the product being Manufactured in Mexico goes to the USA. Companies save large amounts of money in transportation and freight being that they are so much closer to their US corporations. Plus, Mexico is extremely aggressive on there trade agreements. Mexico has over 40 trade agreements with countries around the world, this includes NAFTA and the soon to be USMCA (T-MEC).
Mexico’s Demographic’s make manufacturing possible in the country. Mexico's population has a median age of 26, compared to 37 for the U.S., and a total labor force of 47 million people. Currently, 115,000 engineers graduate annually, there are 3 million citizens enrolled in post-secondary education and the country boasts a 93 percent literacy rate.
Finally, Mexico has been bouncing back and forth as the USA’s top trading partner recently. They are growing and plan to keep growing. Every US Dollar that cross the border in trade, $.40 cents was derived from a US Origin company, where as in China, that number is only $.04 cents.
Join Javid LLC in your quest to open up your Manufacturing Operation. We can offer you many solutions that will help you start up. Whether you want a Shelter to help you run your facility, or if you want to open up your own facility. Javid LLC can help you.
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