Mexico's increasing competitiveness is expected to be a boon to those companies, including American companies that design the original product and their contract manufacturers – the companies that manufacture the American companies’ products in Mexico.
Contract manufacturers like MFI International are expanding their production facilities because so many American companies are taking advantage of Mexico’s superior manufacturing services.
MFI currently manufactures consumer products, electronics, furniture, mattress soft goods (mattress covers), medical devices, and equipment for the military and first responders, pet products, specialty apparel and specialty seating. Its new clients will allow it to manufacture casket products for the U.S. market at its plant in Mexico.
"Our clients typically experience cost savings equivalent to $1 million per year per every 50 employees when they move their operation from the U.S. to Mexico," said Fatih Akben, MFI's Director of New Business Development. The study by The Boston Consulting Group (BCG) projects that “global companies are expected to continue moving production to Mexico” because its average manufacturing costs are declining in comparison to other nations.
In 2000, Mexican labor costs were 58 percent higher than China’s labor costs, but they are projected to be 19 percent lower by 2015. Overall manufacturing costs in Mexico in 2015 are projected to be 6 percent lower than in China and 20 to 30 percent lower than Belgium, Germany, Italy and Japan. The lower manufacturing costs – and lower energy costs – “are expected to propel Mexican manufacturing exports” by $20 billion to $60 billion annually within five years, according to BCG’s June 28 press release.
American companies that hire contract manufacturers like MFI to manufacture many of their products’ components in Mexico are expected to benefit tremendously from this export boom, MFI can help companies bring their products to market expeditiously and inexpensively thanks to Mexico's high-quality labor force and the manufacturing plant's proximity to the U.S.
“Mexico is in a strong position to be a significant winner from shifts in the global economy,” BCG senior partner Harold L. Sirkin said. “That is good news not only for Mexico, which relies on exports for around one-third of its GDP. It’s also good for America, since products made in Mexico contain four times as many U.S.-made parts, on average, as those made in China.”
Mexico also has more free-trade agreements than any other nation - 44. That reduces companies' tariffs.
About MFI International
For over 30 years, MFI International has developed itself into a leading provider of cost-efficient and flexible manufacturing services in the Juarez, Mexico region. With a truly bi-cultural management staff that has extensive experience in both US and Mexican operations in a wide variety of manufacturing sectors, MFI offers complete package solutions through its two divisions, contract assembly and shelter manufacturing support ("shelter services"), across a wide variety of industries including the Medical, Casket, Consumer Electronics, and Home Furnishing and Automotive industries.
