Today, Mexico is a global leader in contract manufacturing due to its industrious and skilled labor force, well-developed infrastructure, and lower labor costs. These factors, in particular, have made it an ideal location for companies to produce many products on a large scale.

First, its low labor costs and skilled workforce in everything from producing medical devices to parts for the automotive industry make it an attractive location for companies that want to reduce their operational costs while maintaining high-quality control.

Second, Mexico’s favorable regulatory environment allows foreign companies to operate with little fear of government interference or red tape.

In short, Mexico’s journey to becoming a global contract manufacturing leader is a testament to its ability to adapt and maintain competitiveness in today’s global economy.

In this blog, we’ll discuss the growth of Mexico’s manufacturing sector and how it became the leading choice for global business manufacturing operations.

Advantages: Why Are Global Companies Manufacturing in Mexico?

Global companies are manufacturing in Mexico for a variety of reasons. First, the labor cost is very low in Mexico, making it an attractive location for manufacturing and secure enough for foreign direct investment.

The country’s reliable supply chain and skilled labor force make it an ideal place to produce products from the automotive to the electronics industry.

The History of Mexico Manufacturing

A few significant factors in the development of Mexico as a leader in manufacturing include favorable free trade agreements and a more reliable global supply chain, all while keeping operating costs low.

Mexico also has abundant raw materials, such as mineral deposits, oil, and fuel, making it an ideal factory location.

Favorable Government Policy

Implementing favorable government policies has proven to be extremely influential in the growth of the Mexican manufacturing sector. These have included policies related to tax breaks, tariffs on imported goods, and subsidies for domestic manufacturers that help to encourage companies to set up shop in the Mexican economy.

Additionally, government policies can influence the types of products manufactured in a region. For example, some countries may prioritize specific industries over others (e.g., electronics vs. food products). This may influence which technologies are developed and used in factories.

Global trends have also played a significant role in shaping manufacturing in Mexico. Rapid economic growth and technological advancements have led to increased demand for consumer goods and processed products. This has driven the growth of many industries, including chemical manufacturing, metal processing, and textile production.

In short, manufacturing in Mexico has evolved through several factors, including natural resources and labor availability, as well as government policies and global trends.

Manufacturing with Shelter Services

Manufacturing with shelter services is a process in which products and services are created under controlled and safe conditions. This process can produce various products, such as food, clothing, building materials, and medical supplies. Manufacturing with shelter services can also be used to produce fuels, chemicals, and other materials that are essential for everyday life.

With the rise of advanced technologies, manufacturing through a shelter company has become more efficient and cost-effective, allowing companies to produce high-quality products at affordable prices.

Because many manufacturing processes require skilled workers with specific skills and knowledge, manufacturing with a shelter company has the added benefit of helping to drive the local economy by providing jobs for people looking to advance their careers.

Contract Manufacturing in Mexico

Mexico’s manufacturing industry is known for its high-quality products and efficient production methods. One of the main factors contributing to Mexico’s success in the manufacturing sector is its strong network of contract manufacturing companies.

These companies provide a platform for businesses of all sizes to outsource certain manufacturing tasks, such as tooling, testing, and packaging, all while retaining control over the final product. This allows businesses to scale their operations efficiently while maintaining control over their products’ quality.

Manufacturing in Mexico vs. China

Both Mexico and China have extensive manufacturing sectors that produce goods on a large scale and in both countries, manufacturing is an important source of employment and economic output.

However, there are also some key differences between the two nations. One major difference is that Mexico already had a more established industrial infrastructure than China did during its industrialization, including well-developed transportation networks, skilled labor pools, and advanced manufacturing technologies. By contrast, China had to develop these capabilities from scratch, making it a long road to high manufacturing productivity and efficiency levels.

Another key difference is the political environment in each country. In Mexico, the government plays a more active role in supporting the manufacturing and promoting industrial development. The government in China, on the other hand, has tended to focus on economic growth and market-oriented policies, resulting in less consistent support for manufacturing initiatives.

Overall, while both countries have developed their manufacturing sectors successfully, some key differences between Mexico and China may influence the trajectory of their respective industries.

Proximity to the US

An essential factor contributing to Mexico’s success in the manufacturing sector is its centrally located position between North America and South America. Working with a foreign company that’s not so far from home allows for quick delivery and distribution of goods across multiple markets.

Its close proximity to other major economies in the region also makes it easy for companies to source components and materials from other countries, further reducing costs and increasing efficiency in their supply chains.

BF&S Contract Manufacturers

BF&S Mexican contract manufacturing delivers unparalleled attention to detail and delivery from concept to completion. With BF&S’ full shelter services, clients can control their quality and production. Clients benefit from the experience of the BF&S staff, as well as their knowledge of the local market, eliminating the need to make sizable investments in physical and human assets.

BF&S customers can initiate operations quickly without establishing a legal presence in Mexico. BF&S “shelters” our customers from many risks and liabilities.

BF&S performs these tasks and functions that are not core to the manufacturing process, allowing our clients to focus on those areas that affect their profitability and growth.

Learn more by continuing to explore our website.

The industrial manufacturing industry is responsible for fabricating products used in large-scale manufacturing processes. Since the advancements of the industrial revolution, industrial manufacturing facilities have made mass manufacturing possible.

New technologies in industrial manufacturing are responsible for producing various products from raw materials, including everything from huge industrial machine tools to simple household items.

Capabilities of the Manufacturing Sector

Converting raw materials into useful machines, tools, and products is a cornerstone of the economy. Without it, no mass-produced object would be readily available to the masses. Supply chains would grind to a halt, many business models would cease to exist, and life as we know it would be impossible.

However, business and production opportunities still abound, thanks to the manufacturing sector. Industrial manufacturing, in particular, often refers to the manufacturing of manufacturing machines. Rather than manufacturing a product to buy in stores, industrial manufacturing deals with creating machines to manufacture the goods.

Manufacturing Industrial Equipment

Industrial equipment supports the manufacturing of goods for sale by a company.

Examples of industrial manufacturing equipment include:

• Machinery
• Tools
• Materials
• Personnel equipment
• Factories or plants

Industrial Manufacturing Companies: Offshore vs Nearshore

You may be familiar with the idea of “offshore manufacturing”, where in companies save money by manufacturing goods outside of the country where labor and material costs may be cheaper. Many developed countries are used to importing goods from China, for example.

However, recent supply chain issues, rising shipping costs, and concerns around intellectual property security have left many US companies searching for an alternative. Enter: nearshore manufacturing.

Nearshore manufacturing is when a business expands manufacturing to a nearby country, usually sharing a border with the business’s home country. This allows for better communication through shared language and similar time zones, lower shipping costs, more beneficial trade agreements, and greater security around intellectual property, all while still enjoying a lower manufacturing cost.

BF&S Contract Manufacturers for the Industrial Manufacturing Industry

BF&S Mexican contract manufacturing delivers on unparalleled attention to detail and delivery from concept to completion. With BF&S’ full shelter services, clients have full control of their quality and production. Clients benefit from the experience of the BF&S staff, as well as their knowledge of the local market; eliminating the need to make sizable investments in physical and human assets.

BF&S customers can initiate operations quickly without establishing a legal presence in Mexico. BF&S “shelters” our customers from many risks and liabilities.

BF&S performs these tasks and functions that are not core to the manufacturing process, allowing our clients to focus on those areas that affect their profitability and growth.

Other Industries We Serve:

• Aerospace Manufacturing
• Medical Manufacturing
• Military Manufacturing

Learn more by continuing to explore our website.

What are Shelter Companies?

A shelter company is a third-party supplier that provides real estate and other resources to complete a project. At the same time, the hiring party retains full control.

Through a Mexican government-supported shelter program, companies do not have to pay income tax in Mexico for four years, while the Mexican shelter company “shelters” the foreign company with a manufacturing facility, raw materials, and more.

Licensing

When a Mexican company is there to offer shelter services, they will secure licenses and permits needed to operate in place, allowing production to commence much faster.

Most companies that operate under a shelter contract manufacturing can be up and running in Mexico in just 3-6 months.

What Shelter Services are offered?

Besides obtaining licensing and permits, manufacturing communities offer various service needs. Shelter companies in Mexico provide administrative services such as HR and accounting, advisors to deal with Mexican legalities, and all the core manufacturing functions needed to carry out the manufacturing operation.

Risk & Liability

When working with a shelter company, the provider assumes much legal risk and liability. It is up to the shelter company to ensure all compliance measures are being met and that rules and regulations are being carried out appropriately.

Services offered by Shelter Companies in Mexico include:

• Human resources and recruiting
• Employee payroll and benefits administration
• Customs management and import/export administration
• Tax and fiscal compliance issues
• Environmental and occupational health and safety
• Purchasing negotiations and vendor relationships
• Facilities management and real estate

The benefits of working with a Shelter Company

Access to a skilled workforce

Skilled labor, is defined as at least five years in an industry-specific role, is plentiful in Mexico. In recent years, Mexico has made it a priority to provide exceptional service to manufacturing companies. As a result, the Mexican workforce is filled with highly skilled workers who bring value to operations.

Room to grow

A growing business means a growing output of products, but it also requires growth behind the scenes to hire more employees, organize larger-scale accounting, and more. When working with Mexico shelter companies, all of these areas are accounted for. The right shelter service provider is there to help keep up with the growth of your business.

Lower Costs

The Mexican government views the shelter manufacturing model very favorably, benefiting the Mexican economy. Companies operating under the shelter service model are rewarded through income, consumption, and import/export tax incentives.

Doing Business with Foreign Companies

In recent years, China has been the hub for manufacturing outside the United States. Still, many businesses have been looking for an alternative closer to home with various growing issues, including cost and supply chain.

Manufacturing with Mexico shelter services offers foreign companies tax advantages, cost savings, and a skilled industrial workforce to support their manufacturing operations. There are several options available when setting up a new operation in Mexico. However, working with a shelter program is one of the most cost-effective, efficient, and safest ways to save on everything from janitorial and security costs to logistics and customs fees while completing a project.

Shelter Manufacturing with BF&S

BF&S’ full shelter services allow our clients to have full control of their quality and production. Clients benefit from our experience and knowledge of the local market, eliminating the need to make sizable investments in physical and human assets.

Our customers can initiate operations quickly without actually establishing a legal presence in Mexico. BF&S “shelters” our customers from many risks and liabilities.

BF&S performs these tasks and functions that are not core to the manufacturing process, allowing our clients to focus on those areas that affect their profitability and growth.

Learn more by continuing to explore our website.