Ciudad Juarez: Cradle of Mexico’s Manufacturing Industry
By Juan Iván Álvarez Chabre | Cd. Juarez Regional Director at American Industries Group®
In 2022, a variety of factors continue to disrupt international trade, including the trade war between the United States of America and the People’s Republic of China, the havoc of the pandemic, and most recently, the war between Russia and Ukraine.
All these events have led to complications in the global economy including increases in tariffs, ruptures in commercial transactions, and tensions in international political relations, among others.
One example of the effects of these factors occurred during the pandemic when personnel shortages resulted in backlogs of ships with merchandise waiting to be loaded and unloaded at seaports around the world. This backlog then caused shortages of raw materials and finished products, disrupting the global supply chain and causing container shipping costs to rise dramatically, especially for companies exporting manufacturing products from Asian countries to the main consumer market of the United States.
In the face of these factors, Mexico’s strategic location is becoming increasingly attractive in global trade, and Ciudad Juárez, with its privileged location on the US border and home to the country’s maquiladora industry, is ready to receive all types of new investments. The city, which is the most important in northern Mexico, has a well-developed supply chain and business ecosystem thanks to its long history of being home to companies in the transformation and export sector, making it the ideal location for domestic and international companies. Hundreds of Top 500 international companies have established operations here, including many OEMs. The business ecosystem also includes companies in various industries across the entire supply chain, and suppliers in a variety of sectors, with a large number in the auto parts and automotive industry in Mexico, electrical and electronics industry, and medical device manufacturing in Mexico. Over the past four generations, the area has developed a mature and qualified labor pool, with over 300,000 jobs in the area in industry and thousands of other related indirect jobs in the area. Workers in the region are internationally recognized for their high quality and productivity outputs compared to the rest of Mexico.
More than 1,700 bilingual engineers in a variety of specialties graduate each year from the over 20 universities in the area and technicians in many fields, in addition to the thousands of professionals from other regions that arrive to work in Ciudad Juárez each year. These factors contribute to the continuous and significant growth of the manufacturing industry in the city.
Proof of Ciudad Juárez’s unrivaled stability for manufacturing operations is the international companies that have operated here for more than four decades.
This stability has resulted in the region’s record-breaking growth in recent years due to the expansion of existing operations and the establishment of new ones. These companies are thriving due to the robust, varied, and reliable local supply chain and location just along the border, allowing businesses to make logistics processes more competitive and lower shipping costs to clients in the neighboring US.
The importance of Ciudad Juárez in the country’s maquila industry is considerable. Figures from February 2022 report that 11% of all personnel working in the transformation and export industry are located in the city, and 74% of the total in the state of Chihuahua.
The United States-Mexico-Canada Agreement (USMCA) also offers an excellent opportunity for Ciudad Juárez due to its strategic location in the center of the US’s southern border with Mexico. This means that companies can easily ship finished products to the north, and being in the same time zones also facilitates transactions between the three countries.
Another advantage is the competitive labor rates Mexico offers, with Ciudad Juárez offering the most attractive in the region:
Lead time- Producing locally reduces transportation costs, timely delivery, waste, and overall risk. Direct Labor cost (Daily average) – USA: US $80.00 vs. Mexico: US $15.00
As Mexico’s leading soft-landing services company, American Industries offers its administrative services package, known as “shelter services,” from its Ciudad Juárez offices and a wide range of options for industrial real estate in Chihuahua.
For industrial real estate options, the new Independencia II Industrial Park, located in southeast Ciudad Juárez, has the following characteristics:
- Industrial park located on over 24 hectares with all the services of a world-class industrial park
- Located in the area with the most industrial and residential growth in the city
- The best road infrastructure
- Can house up to 6 industrial facilities of 120,000 sq. ft. each
- Flexible project to accommodate larger facilities
- Ongoing construction means there are spaces available for quick occupancy
- Lots available immediately for build-to-suit construction projects
- Availability of qualified labor (direct, technical, administrative, and professional)
- Located only 15 minutes from the Zaragoza/Ysleta international bridge (the busiest crossing for international trade traffic with the USA)
- Ciudad Juárez’s airport, along with the airport in El Paso, Texas, connect investors with Mexico’s most important industrial cities, as well as the US and Canada
AI has been part of the success of over 300 multinational companies manufacturing and distributing in Mexico. Combining foreign capital and technology with Mexican labor, industrial facilities, and our community has been the core value of AI for over 50 years: appropriate legal framework, ensuring regulatory compliance, meeting all labor laws, managing site selection and infrastructure, and simplifying logistics.
If you would like to grow your company by setting up operations in Mexico, contact us today to receive your cost model based on the specific needs of your project.