CDNetworks, a content delivery network, has expanded to Mexico, adding a point of presence (PoP) in Mexico City.
"Mexico has become an important manufacturing hub for the world," said Jeff Kim, president and COO of CDNetworks. "Our new PoP enables manufacturing headquarters, located in the US and Europe, to reliably and easily manage offsite resources by ensuring fast and available applications running over the internet."
In other words, CDNetworks sees that companies are expanding to Mexico, and it sees an opportunity for growth in its own business.
Many companies are beginning to build their own manufacturing facilities in Mexico and operate them as owned subsidiaries.
Another company takes advantage of opportunities in Mexico
The New York Times wrote about Spellman High Voltage, a company that produces electronics, which expanded its operations in 2011 and opened a new plant in Matamoros, Mexico. Raw materials can be imported duty-free because of the North American Free Trade Agreement, allowing assembled products to be exported back to the U.S. without tariffs. Additionally, according to The New York Times, the average wage for a Mexican worker is significantly lower than U.S. wages – in 2011, it was between $8 and $16 a day. This means low cost manufacturing directly benefits the bottom line.
"Central location, great infrastructure, suppliers and labor pool," Bob Cook, president of the El Paso Regional Economic Development Commission, said, citing some of the advantages of building plants in Mexico.
CDNetworks and Spellman High Voltage are just two companies that are benefiting from moving to Mexico. For companies with trouble making the transition, there are offshore shelters that make everything easy.
The Offshore Group: You Manufacture ... We Do The Rest.