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YOUR NEARSHORING JOURNEY A STEP BY STEP GUIDE TO START MANUFACTURING IN MEXICO
APPROVED & READY TO GO
LET’S LOOK AT THE NUMBERS - COST ANALYSIS
GO BACK HOME, DO YOUR WORK
SCHEDULE YOUR VISIT: MEXICO MANUFACTURING TOUR
REACH OUT TO THE EXPERTS
While the 1990s saw a shift in manufacturing to overseas countries like China, the 2000s are about returning closer to home. Reshoring to the U.S. may make sense for some, but nearshoring to Mexico oﬀers your company beneﬁts you can’t ﬁnd in the U.S.: a highly trained and aﬀordable workforce, favorable trade deals and tariﬀ free zones, as well as proximity to major global shipping hubs and markets.
With the unpredictable trade wars, oversight diﬃculty of factories so far away, and now the coronavirus, many manufacturers are looking to diversify their supply chain and ensure long term business continuity solutions. After twenty-four years of NAFTA, the most successful free trade agreement in the world, and now its replacement the USMCA, the collaborative and complimentary manufacturing partnerships between the U.S. and 09 Mexico have the proven longevity and stability you need to keep manufacturing and innovating your next big thing! 10
It’s time to explore moving your manufacturing to Mexico if you’ve experienced any of the11 following in the last 12 months: Transportation delays from overseas
Increased costs due to tariﬀs, trade wars
High employee turnover at overseas facilities
IP theft at overseas facilities Increased transportation costs
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Steps for Evaluating Mexico for
Manufacturing Expansion Reach Out to the Experts 1 Since the rise of the ﬁrst maquiladora (foreign owned manufacturing facility in Mexico), industry support services have developed ways to provide turnkey solutions to companies to start manufacturing in Mexico. These support services companies are often called Shelter Companies.
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Co-Production International has been a shelter company for nearly four decades and has helped establish over 200 companies in Mexico. Companies like CPI are the experts on the ground and handle a broad array of legal, ﬁnancial, human resources, import/export, site selection, real estate, and administrative needs to get you up and running in less time and at a lower cost than going at it alone.
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On your ﬁrst exploratory call with CPI, we will ask you about your goals and what solutions you are looking for that Mexico could help with. You will learn about CPI and what we do, from our Turnkey Shelter Program and Independent Corporation Program to our Administrative and BPO services. This call also allows us to gather the information needed to curate your ﬁrst industrial tour.
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Contact us today with your questions: Email: [email protected] U.S. Phone: (619) 429 4344, option 2
YOUR NEARSHORING JOURNEY
Schedule Your Visit: Mexico Manufacturing Tour
Time to meet CPI’s experts and see it for yourself! Mexico is our neighbor making travel easy and eﬀortless. Manufacturing executives come to visit facilities along the border and are back home by dinner time. The ﬁrst step for your company is to see Mexico manufacturing ﬁrsthand as well as experience the ease of travel in visiting facilities in Mexico. With Mexico you won’t have days lost in travel nor in jetlag, so what are you waiting for? We can curate your one-day tour to ﬁt a date that works for you – contact us today! a. See the Possibilities This is your chance to see various facility set ups and the processes that exist in Mexico. Mexico’s high-tech manufacturing industries carry facility certiﬁcations just 09 like you would ﬁnd in the United States. From ISO to certiﬁed clean rooms for medical device manufacturing, products are made under the same guidelines and with the 10 same safety regulations you require. 11 b. Talk to Plant Managers Ask plant managers about their experiences in Mexico, quality of the workforce, shift scheduling, and every detail in between. Plant managers are the perfect experts for 12 relaying their experiences and to help you know what to expect.CPI will help facilitate meeting plant managers during your industrial tour. You’ll ﬁnd that Mexico, especially14 the border regions, are binational and bilingual. It’s this type of cultural alignment that 16 makes expanding manufacturing operations to Mexico a breeze.
c. Facilities & Real Estate In Mexico you will ﬁnd Class A, B and C buildings for lease or to buy. Industrial parks and facilities oﬀer shell, semi-ﬁnished, and built-to-suit options, as well as inexpensive land for new facility construction.During your tour you’ll visit a variety of industrial parks and get a chance to see what’s available. Be sure to take notes on any facilities you’d like to potentially lease!
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d. Meet your Mexico Manufacturing Expert Teams: Shelter 23 Maquiladora Programs Working with a shelter company provider like CPI to establish your maquiladora in Mexico is the quickest and most aﬀordable way to get started. Starting from scratch,24 ﬁling incorporation documents, facility leasing and permitting, hiring, and compiling with Mexico’s laws and regulations has quite a learning curve. If you’re looking for 25 quick ramp up, seamless start up, and decades of expertise, the shelter program is the way to go. As we like to say, we free you up to focus 100% on manufacturing while CPI handles the rest. 27
Luckily, you do not have to go at it alone. By working with CPI’s Shelter Maquiladora Program your company operates under their existing permits and certiﬁcations and gives you access to CPI’s team of experts and strategic partners for each stage of your expansion. CPI has dedicated teams supporting you during each stage of your expansion: Operations, Human Resources, EH&S, Finance, and International Trade & Compliance. Each team of experts is ready to answer any and all questions you may have!
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Go Back Home, Do Your Work
You’ve met with CPI and visited manufacturing facilities in Mexico to get a feel for the buildings, the bilingual and bicultural workforce, and industrial hub locations. Now it’s time to go home and gather the information you need to see if Mexico is a viable opportunity for you to proceed. During this stage you will be working with CPI as we help develop your cost analysis for labor, facilities, overhead and import/export. a. Identify the Products You Want to Make in Mexico CPI, your Shelter Manufacturing Partner, will want to know: What production lines/products you are bringing to Mexico? A list of your raw materials so that we can conﬁrm tariﬀ free import under the USMCA and other trade agreements. Having their HTS codes will allow for quick checking!
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What kind of industrial equipment will you need to import? What is necessary for your production lines?
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b. Type of labor 20 Time to build a list of the type of workforce you will need. From assembly line workers to engineers and supervisors. CPI can assist you during this stage based on your 22 strategy and production goals for your new facility. This will help determine hiring and recruitment goals, labor costs, shift scheduling,and training your new,highly skilled 23 workforce. 24
c. Identify Your Utility and Infrastructure Needs What kind of utilities do you need and what are your infrastructure needs? From water 25 and electricity, to telecommunications cabling and loading docks, knowing your needs will help make sure your facility tenant improvements are suitable as well as 26 provide more accurate monthly overhead costs. 27
d. Site Selection: Choosing Your Strategic Location Do you need to close to the U.S.-Mexico border? Near suppliers? Near a seaport or airport? These are all questions you need to ask yourself to ﬁnd the right location in Mexico. Each city and region in Mexico have beneﬁts and opportunities depending on what you manufacture and the ultimate market destination for your products. A shelter company provider like CPI can also help determine the best location. Click here to see CPI’s overview of major industrial hubs and manufacturing locations in Mexico.
YOUR NEARSHORING JOURNEY
Let’s Look at the Numbers - Cost Analysis
You’ve taken the Baja Industrial Tour and gone home to work out your needs and goals for your new facility in Mexico. Now it’s time to get to the numbers. CPI has a robust program that will allow us to plug in all your needs from facility costs and employee salaries, to transportation considerations and import/export costs. Running the cost analysis is going to be the best way to ensure your new operations in Mexico make sense for your company! a. Labor Costs We have a database of every position and common salaries that exist in a Mexico manufacturing facility. To give you an idea, average assembly line workers in Mexico make $3.50 dollars an hour (fully burdened). More often than not expanding production to Mexico and taking advantage of the highly skilled and aﬀordable 09 workforce allows you to free up capital at home. 10 b. StartupCosts You’ll also need an idea of what your startup costs include. Most importantly leasing 11 your new building, tenant improvements, and other facility related costs. CPI can also help determine the costs for importing industrial equipment, purchasing production 12 line equipment, tools, employee safety gear, oﬃce supplies and more. 14 c. Overhead CPI’s cost analysis will allow you to see the monthly overhead costs of running your 16 facility in Mexico. From salaries to materials and everything in between, having an idea of what your monthly overhead will be gets you one step closer to taking advantage 17 of the opportunities for manufacturing in Mexico.
d. Administrative Fees When you work under CPI’s Shelter Maquiladora Program, CPI charges an administrative fee that includes your legal Mexican entity and entire Mexican administration costs that include:HR, payroll, labor law compliance, facility certiﬁcations like EH&S, and every detail of the back oﬃce included in your shelter program agreement.
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e. Present to the Board 24 You’ve seen Mexico’s manufacturing facilities in action, you’ve gathered your data, CPI has helped run a detailed cost analysis for startup costs, labor costs, overhead and 25 administration fees. Now it’s time to present the expansion plan to your board members and stakeholders. 26 27
CPI is happy to help with any presentations you may need to give and can provide site selection information and ideal location for your facility, your cost analysis and additional supporting documentation. CPI will help you understand facility costs, tenant improvements, labor costs, timeline and the most eﬃcient and cost-eﬀective way for your company to get started.
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Approved & Ready to Go
Now that the board has approved your expansion plans it’s time to ﬁnalize all the details. a. Site Selection and Your New Facility During your industrial tour and research period you had a chance to look at a variety of cities and industrial parks. Your board or stakeholders may want to see your ﬁnal choices in person. CPI can help arrange transportation and site visits to your potential facilities. CPI also acts as your real estate matchmaker and negotiator ensuring you get it everything you need for your new facility. b. Contract Signing with CPI As your Shelter Company Provider, it’s time to sign the contract with CPI. This includes your facility lease agreement and CPI services agreement.
c. Tenant Improvements CPI’s Operations Team are your boots on the ground ensuring tenant improvements 10 are on schedule while you plan your production and equipment needs. 11
d. Let’s Go – Time to Ramp Up! 12 CPI will work with you every step of the way during ramp up making sure your timeline is on track. You will have dedicated teams working with you at your new facility for 14 EH&S, utilities, and certiﬁcations, CPI’s HR team to start recruitment, hiring and training, and CPI’s Import/Export team to start working on getting your equipment imported and your raw materials on site, all gearing up to your go live deadline. We 16 have a detailed guide about this stage – just ask! 17 18 20 22 23 24 25 26 27
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WELCOME TO MEXICO!