New solar deal marks advancement of Mexican manufacturing

In an indication of Mexico's increasingly sophisticated manufacturing industry, Vidrio Formas, a glass manufacturer based in Lerma, Edo, Mexico, recently teamed with ReneSola Ltd. and Solar Power Systems of Mexico to update its facility with photovoltaic technology.

Solar power
Vidrio Formas manufactures glass bottles and other containers for tequila and coffee companies, producing more than 1 million units per day. In working with the two partnering solar energy companies, Vidrio shows that manufacturing operations in Mexico are cutting edge, and companies are dedicated to the most advanced, eco-friendly production methods.

The solar companies, for their part, expressed excitement about the deal. "Solar Power Systems is an esteemed solar integrator serving the Latin American commercial solar market during a notable period of regional growth," said Kevin Chen, president of ReneSola America. "As such, we are pleased to be collaborating with them on developments like this and hope to continue our relationship as their module supplier in future solar integration projects."

The benefit of nearshoring
In addition to Mexico's displayed commitment to responsible manufacturing, many sources predict that labor costs in the country will soon fall significantly below those in China, where offshore operations have long been entrenched. Nearshoring practices are advantageous for many U.S.-based businesses because nearshoring takes advantage of the North American Free Trade Agreement (NAFTA), which provides a favorable economic environment that connects the United States and Canada to Mexico and Latin America. 

And while labor costs remain low, the quality of production in Mexico is excellent and continues to improve. The relative closeness of Mexican facilities is also appealing to American companies, which may see Chinese facilities as too remote and unregulated. 

Why Mexico?
Although manufacturing throughout Latin and South America is seeing a rise in popularity, certain NAFTA provisions make Mexico an excellent link between the United States and NAFTA's more southern members. With expertise in a number of specific industries, like the automotive parts industry, Mexican manufacturing also offers the promise of seamless integration, entering an established supply chain with little disruption. 

As labor and operational costs in Asia continue to climb and costs in Mexico remain lower while Mexican manufacturing becomes more sophisticated, U.S. businesses will see the benefit of relocating their operations to Mexico.