Industrial Hubs in Mexico Expand as a Result of Trade Shift Toward Nearshoring

The manufacturing-based economy of Mexico, free trade agreements and proximity to the United States attract some international corporations.

As part of a larger change in global trade, businesses from all over the world are relocating production and equipment to Mexico to establish a manufacturing hub closer to the United States.

According to economists and business leaders, the nearshoring trend is being influenced by supply chain disruptions, prolonged Covid related shutdowns in China, high shipping costs, and geopolitical uncertainty brought on by Russia's invasion of Ukraine.

In Tijuana, home to one of the world’s largest export manufacturing hubs for televisions and electronics, industrial parks are almost at full capacity, according to executives. On the other side of the border from El Paso, Texas, in Ciudad Juárez, recruiters are using job fairs to fill positions with workers for new or expanding businesses.

"It was really difficult to be able to hire enough personnel at our U.S. plants to sustain our development. Sam Rosen, president of Ollin Plastics, the plastic molding division of Minnesota-based ATEK Companies, stated this was a key factor in the decision to establish a facility in Mexico.

The Mexican government says more than 400 companies currently have shown interest in moving production from Asia to Mexico.

According to Mexican Economy Minister Raquel Buenrostro, "the movement of international corporations from Asia to Mexico to expand regional markets is a key priority for Mexico, and it is something that Mexico, the United States, and Canada are interested in."

In Baja California state, only around 2% of space in industrial parks is available, said Román Caso, chief executive of San Diego-based Co-Production International, which provides industrial space, logistics and administrative services for export manufacturers in Mexico.

“There’s no construction being done that isn’t already sold,” Mr. Caso said.

“The hottest points in the market are the border cities,” said Fibra Nova Chief Executive Guillermo Medrano.

Cecilia Montao, a partner with Deloitte in Mexico City who specializes in international business, claimed that her team has recently advised companies on more than 30 projects to move production to Mexico. Some organizations want better-located warehouses or distribution centers that are closer to their target markets, she explained.

Chinese electronics and appliance manufacturer Hisense Co., one of the world’s top producers of flat-screen televisions, bought a TV manufacturing plant in Rosarito, Baja California, in 2015. Later, it added suppliers and procedures, increasing productivity and assisting Mexico in moving beyond just being an assembly line.

Hisense announced that it is now constructing an industrial park in Monterrey with a $260 million investment for the production of kitchen appliances, washing machines, air conditioners, and refrigerators for the American market.

Shelter companies like Co-Production International can be a valuable resource for manufacturers looking to expand operations, offering quick ramps, scalability, and minimal risk to the business owner. CPI has over 44 years of U.S. and Mexican manufacturing expertise, bringing a robust network of strategic partners and dedicated teams to help you get up and running. Human resources, recruitment, hiring, and compliance with labor laws fall under CPI’s Shelter IMMEX Program, which allows manufacturers to focus 100% on manufacturing while CPI handles the rest.

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