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Foreign company expanding its Mexican branch

A stack of a monetary currency pertaining to New Zealand.
19 Feb 2014

New Zealand company Fisher & Paykel (F&P) Healthcare is saving money by expanding its Mexican manufacturing plants, according to the Sidney Morning Herald.

"Operating margin has continued to improve as a result of product mix, operating efficiency gains and manufacturing at our Mexico facility," said CEO Michael Daniell.

By growing its factory in Mexico, F&P will be able to add more equipment to build the products it needs to grow its business, such as breathing systems and respirators. The company expects that half of its consumable product volume will be made in Mexico within the space of a few years, according to the Morning Herald

If foreign companies can benefit from offshoring to Mexico, then the benefits for Americans who start manufacturing in Mexico are even more striking. In a recent meeting between Canada, America and Mexico reported on by The Wall Street Journal, the Mexican government cited studies that indicate the American economy gets very little (only a few pennies) from Chinese exports to the U.S. In opposition to this, exports from Mexico greatly benefit the United States - about 30 cents for every dollar.

"[President Enrique] Peña Nieto needs to convince Obama of this vision: Mexico can be an export platform for all North America," said Luis de la Calle, a former Mexican trade negotiator.

Additionally, travel between Mexico and America is easy. New rules are said to be in the works that will make business travel between the two countries even easier than it is now, according to The Guardian.

"There are several national trusted traveler programs already in place like Nexus, Global Entry, Sentry, and in the case of Mexico, Viajero Confiable," said a senior source in the Mexican ministry of foreign affairs.

For firms that may have trouble working out the complex regulations that govern intra-country commerce like nearshoring, working with Mexican shelter companies makes things easier.

The Offshore Group: You Manufacture ... We Do The Rest.

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