Spotlight on Mexico’s Local Suppliers, Specialized Processes & Allies

By Alejandro Lara Cruz | Co-Chairman of the Board at American Industries Group®
Published 07/28/2023

When considering expanding operations into a new country, businesses must evaluate and research numerous factors. One of the most important aspects of the decision-making process is finding reliable suppliers and processes that meet the specific requirements for each company’s operations. Mexico offers a significant advantage with its extensive network of local suppliers and specialized processes across various industries. In addition, many companies may not be aware of the vast network of allies available to them in Mexico that can also play a crucial role in ensuring long-term success. These allies include a variety of public and private entities such as clusters, industrial associations and parks, chambers of commerce, educational institutions, and the most important partner for international companies in Mexico—a shelter company.

Local Suppliers and Specialized Processes: A Foundation for Success

Mexico has a robust and diverse network of local suppliers that cater to the needs of businesses across a wide range of industries. Whether manufacturing, automotive, aerospace, technology, medical devices or any other sector, the country has developed a well-established ecosystem of suppliers. Local suppliers like these provide cost-effective solutions, ensure timely delivery, and maintain high-quality standards. This enables companies to streamline their operations and easily meet their customers’ demands. Having local suppliers also helps to mitigate risk by improving supply chain transparency and minimizing unforeseen disruptions, such as transportation delays.

In addition to its strong ecosystem of suppliers, Mexico also offers specialized processes and capacities that can give businesses a competitive edge. A specific example in the aerospace industry of the highly-specialized processes available in Mexico are those offered by Metal Finishing Company, Inc. The company, which operates in Chihuahua, offers processes including aerospace finishing, plating, non-destructive testing, painting, and heat treatment. By leveraging these specialized processes available in the aerospace industry, as well as the automotive, medical and electrical sectors, among others, businesses can enhance their efficiency, produce higher-quality products, and stay ahead of the curve in their respective industries.

Metal Finishing

Another useful tool to help international companies to network and locate suppliers is the Supply Chain for the Maquiladora Industry (or CAPIM) supplier catalog. This resources is specifically designed to link international companies with suppliers in the maquiladora industry in Mexico. It helps them streamline the supplier selection process by providing a curated list of qualified suppliers in a range of areas, from components to logistics, materials, and equipment.

Clusters: Collaboration for Success

Another important ally available to foreign companies in Mexico are industrial clusters. These clusters bring together companies operating in regions where specific industries have consolidated operations to foster collaboration, knowledge sharing, and innovation. By being part of a cluster, businesses can benefit from the synergies created by the proximity of like-minded companies. Some of Mexico’s main clusters include the automotive cluster, which is primarily located in the northern states of Baja California, Sonora, Chihuahua, Coahuila, Nuevo León, and San Luis Potosí, with OEM plants based in Guanajuato, Aguascalientes, Jalisco, Mexico State, Puebla, and Veracruz, among others; the aerospace cluster, with five main hubs located in Baja California, Sonora, Chihuahua, Querétaro, and Nuevo León; and the medical devices cluster, concentrated in cities such as Tijuana, Baja California and Cd. Juarez.

Government Support and Programs: Paving the Way for Success

Recognizing the importance of attracting foreign investment, the Mexican government has implemented various programs to incentivize international companies. These programs, including the Manufacturing, Maquiladora and Export Service Program (IMMEX), Sectorial Promotion Programs (PROSEC), and Authorized Economic Operator (OEA) offer various incentives, such as tax breaks and streamlined administrative processes, to facilitate the establishment and growth of businesses. By taking advantage of these programs, in addition to a variety of regional programs, companies can significantly reduce costs and streamline logistics processes.

Industrial Associations: Building Bridges and Expanding Horizons

Mexico is home to numerous industrial associations that act as valuable allies for businesses seeking to establish a presence in the country. These associations bring together companies from the same industry, providing a platform for networking and knowledge sharing. They facilitate collaborations, organize industry-related events and conferences, and act as a voice for member companies in advocating for their interests. Some of the most important in the country include the Mexican Association of the Automotive Industry (AMIA), the National Maquiladora and Export Manufacturing Industry Association (INDEX), the National Autoparts Industry (INA), which represents and promotes the automotive parts manufacturing sector in the country, and the Mexican Association of the Aerospace Industry (FEMIA). All of these organizations play a significant role in policy advocacy, industry collaboration, and strengthening competitiveness and development in their respective sectors.

Industrial Associations

Industrial Parks: Infrastructure for Success

Mexico has developed a network of industrial parks strategically located throughout the country to further support the growth of businesses. These parks offer state-of-the-art infrastructure, including well-designed facilities, reliable utilities, efficient logistics support, and a variety of certifications, including the Safe Park Program, and Green Park Certification, among others, which are granted by the Mexican Association of Industrial Parks (AMPIP), the organization that represents and promotes industrial parks in Mexico. By establishing their operations within these industrial parks, companies can benefit from enhanced security, cost savings, and a supportive business environment. Additionally, being part of an industrial park provides businesses with opportunities for collaboration, access to shared services, and easy connectivity with suppliers and customers.

Chambers of Commerce: Navigating the Business Landscape

Chambers of commerce play a vital role in supporting international companies setting up in Mexico. They offer valuable resources like market research, business matchmaking services, and legal guidance. Mexico has numerous chambers of commerce that cater to the needs of companies in a variety of industries and different areas of the country. These include the National Chamber of the Transformation Industry (CANACINTRA), which represents the manufacturing and transformation industry in Mexico, as well as the American Chamber of Commerce (AmCham Mexico), which promotes business and investment between Mexico and the United States. A variety of state and local chambers of commerce also focus on regional interests, all of which help companies establish strong connections in Mexico by providing valuable insights, networking opportunities, and access to potential clients and partners.

Educational Institutions: Developing a Skilled Workforce

Developing and maintaining a skilled workforce is crucial for the long-term success of any business. In Mexico, educational institutions play a significant role in nurturing talent and providing companies with access to a pool of skilled professionals. By partnering with Mexico’s local universities, technical schools, and research institutions, companies can tap into a pipeline of talented individuals who possess the knowledge and skills required for their specific industry. These educational institutions also offer training programs tailored to the needs of industry, ensuring that the workforce remains up-to-date with the latest developments and technologies.

Shelter Company: A Guiding Hand for Newcomers

Another unique figure available to support and facilitate the establishment of foreign companies in Mexico is the shelter. By partnering with a shelter company like American Industries, businesses can leverage their decades of expertise, experience, knowledge of the local business environment, and well-established network of allies in the above areas. This enables companies to focus on what they do best—production and meeting their customers’ needs—while a trusted partner takes care of all permitting, ensures legal, tax, and labor compliance, and in general, guarantees a smooth transition to Mexico.

In conclusion, Mexico’s broad network of reliable suppliers and specialized processes available provide a strong foundation for international companies to grow in Mexico. By leveraging the power of allies, including a shelter company, companies will further accelerate success, maximize long-term growth and profitability, and ensure they remain competitive in today’s rapidly changing global market.

Alejandro Lara Cruz

Co-Chairman of the Board

American Industries Group®

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