How to Decide Where in Mexico to Manufacture

How-to-Decide-Where-in-Mexico-to-Manufacture

How-to-Decide-Where-in-Mexico-to-Manufacture

Making the decision to shift your manufacturing operations from China or some other distant location to nearby Mexico is a major strategic change in thinking. Once you’ve come to the conclusion that this is the best way to move your company forward, the next step is to figure out where in Mexico to go.

Reach out to Tetakawi’s manufacturing experts early in the site selection process. They have nearly 35 years of experience helping companies of all sizes or business sectors establish a successful presence in Mexico.

 

So Many Sites to Consider in So Little Time

Mexico is actually the thirteenth largest country in the world and is roughly three times the size of Texas. That’s a lot of territory to consider. Fortunately, it manages over 5 million square feet of turnkey industrial space in some of the premier manufacturing areas in Mexico and can help narrow down the choices during the site selection process based on your particular needs.

If you ask management when they want to make the move, the answer will likely be NOW. Yet, there are a lot of moving parts that need to be coordinated to make a move successful.

 

Know What You Need

Do you want to own a building in Mexico or lease one? Do you want to focus on existing facilities and how they can be converted for your manufacturing business or look at sites suitable for a build-to-suit project? Know the answers to these basic questions before you start running around the country looking at sites.

Nail down your other requirements upfront. These include parameters such as square footage (current and for projected future growth), budget for new construction or renovations, mechanical needs (electricity, gas, connectivity, floor thickness, lighting, etc.), and other specifics.

Take a hard look at the logistics of how to get your products from the manufacturing site to your customers.  Ask yourself if the infrastructure can support the volume you are expecting.

 

IMMEX Certification

Once you find a suitable location, you need to make sure it meets the requirements of the IMMEX program so that the manufacturing operation can be certified and receive IMMEX benefits, including import duty deferrals. Once it is approved for the planned use, permits will be issued and the company can start importing the equipment and materials needed to start production while the remaining administrative tasks (e.g. compliance, tax, account, recruiting, etc.) are taken care of.

 

What a Shelter Service Can Offer

One of the most efficient ways to start manufacturing in Mexico is to take advantage of the services of an experienced shelter service provider such as Tetakawi. They can provide the physical site, skilled employees, logistical and administrative support, and expert advice to launch production often in about half the time (or less) it would take for a company to establish a foreign subsidiary in Mexico on its own.

If you work with Tetakawi, they have IMMEX-certified industrial buildings ready to go. This can shave months off the timeline needed to set up in Mexico. As a shelter service company, Tetakawi is also exempt from the 16% value-added tax (VAT) that is normally assessed on all temporarily imported goods.

 

Cultural Differences to Keep in Mind

To keep your business going smoothly while moving manufacturing to Mexico, it’s best to respect cultural differences so mistakes aren’t inadvertently made that could jeopardize the speed and efficiency of putting together a new site in this country.

For example, family is central to Mexican life and often plays a part in the workplace. It’s not uncommon for companies to host family events, offer onsite childcare, and create compensation packages that allow time off for family issues. Being cognizant of the importance of family could help with recruiting.

Also, small talk and nonverbal communication play an important role in building rapport and trust with business partners. Take the time to do it right and it will be greatly appreciated.

Keep in mind too that traditional business culture minimizes conflict. This doesn’t mean that challenges are being dismissed as inconsequential. Avoiding direct confrontation is a reflection of the other party’s respect for the relationship.

Time is also more of a fluid concept in Mexico. Being fifteen minutes late for a meeting is considered on time and viewed as rude behavior or taken as an insult. Extra time spent at lunch or other more casual meetings is part of the process of building the trust that forms the basis of long-term partnerships. Accepting the nuances and subtleties of Mexican business culture will go a long way to establishing a successful business.

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