- Manufacturing in Mexico
- About Tetakawi
July 19, 2021
Empalme, Mexico, is a small city with a deeply embedded manufacturing culture. Sitting 15 miles away from the popular tourist destination of San Carlos, it offers automotive, aerospace, and electronics manufacturers alike a haven from the bustle of nearby Hermosillo with even better access to deep water ports and international railways. Manufacturers interested in a location that balances competitive costs, easy access to international markets, and beautiful vistas to attract foreign staff may find Empalme, Sonora, to be an excellent location for manufacturing.
With the right upfront planning, manufacturers may find they can set up an operation in Empalme, Sonora, in as little as 30 days. Consider the following four tips to position your launch for success.
Empalme's strategic location has attracted a range of manufacturing industries, including electronics, medical devices, and plastics, as well as a vast community of metal fabricators. Manufacturing made up 13.5% of the city's economic output in 2019.
As part of the broader Sonora manufacturing network, Empalme has particular strengths in the automotive, medical, and electronic sectors. Companies like Wise Harness Solutions, which produces wire harnesses, battery cables, and control panel assemblies, meet the needs of a diverse range of these industries. Other companies manufacturing in Empalme, Sonora are Cooper Standard, Incertec, Medtronic, TE Connectivity, and Younger Optics.
Empalme's location also offers the benefit of connecting with manufacturers across Sonora. The state capital—and automotive manufacturing capital—of Hermosillo is home to nearly 150 maquiladoras largely supporting the local Ford Motor Co. plant. Goods from across the state and country often flow through the nearby municipality of Guaymas, a deep-sea port that provides a prime location for shipping cargo internationally. This makes Empalme an excellent central location for companies across a vast range of manufacturing sectors.
One of the toughest steps to launching a new manufacturing operation is finding the right spot. Settling on the benefits of Empalme is the first step. The next step is to identify the right real estate. Although new construction on a greenfield site gives manufacturers complete control over their facility, many companies find that sites across Mexico offer well-connected Class A facilities. What's more, by leasing an industrial property in Mexico, manufacturers can ramp up operations more quickly than building a facility from scratch.
Facilities such as Tetakawi's Bella Vista Manufacturing Community, provide more than just infrastructure. Manufacturing communities are positioned to provide manufacturers with everything they need. Bella Vista offers amenities meant to attract a top-notch workforce, including sports and recreation facilities, a medical center, and a daycare center. On-site support services make it easy to work through the administrative burden of launching a new operation in Mexico.
One of the greatest benefits of operating within a manufacturing community in Sonora comes from the easy access to a range of shelter services. Shelter service providers can help manufacturers with startup support that may include everything from developing the appropriate legal entity to manufacture in Empalme, Sonora, as well as ensuring compliance with local regulations, developing supply chain logistics, and creating an effective hiring and workforce retention plan.
As the foreign company's legal entity in Mexico, a shelter service provider can significantly reduce a startup operation's administrative load. Because the shelter service provider operates on the foreign company's behalf, the typical risks of forming a company and legal entity in Mexico are reduced considerably. The shelter service provider also serves as a liaison between the foreign company and the bodies in Mexico regulation tax, trade, and labor.
Shelter service providers also offer a knowledge repository of sorts, giving foreign companies a resource to turn to understand better the obligations of running a manufacturing operation in Mexico.
The municipality of Empalme is home to a population of more than 51,000 people, with a labor participation rate of approximately 61% as of 2020. However, when considering the broader region, manufacturers find they have access to a potential workforce of roughly 1.5 million people.
Many individuals working in Sonora, Mexico, already have experience in manufacturing and may be looking for a better opportunity. New entries to the workforce matriculate yearly from the area's six high schools, six universities, and three technical trade schools. Each of these schools has a strong connection with the local industry, with many having structured educational programs to fit local business needs.
To recruit these workers, manufacturing operations must offer a competitive wage and appropriate benefits package, both of which are likely highly cost-effective compared to average wages in the United States or even other low-cost manufacturing countries like China. In Empalme, average hourly wages are typically around $2.77 USD.
With the right strategic approach to opening an operation in Empalme, Sonora, manufacturers find that they can reduce operating costs by as much as 35%. Given the significant learning curve that comes with navigating regulations and norms of operating in a foreign company, manufacturers might be most likely to see these savings when supported by a partner with knowledge of the region.
This is an area where Tetakawi can help. With more than three decades of experience in helping companies launch and run successful operations in Mexico, Tetakawi can provide the insight and services needed to set your company apart. If you're ready to take the next step in launching a manufacturing operation in Empalme, Sonora, contact Tetakawi today.
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