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PMI strong in Mexico while ThyssenKrupp expands their operations

An assembly line within an automotive manufacturing factory that is assembling the same type of car part.
29 Jan 2015

There are many countries around the world that manufacturing organizations target as a place to establish manufacturing operations. However, over the last decade of so, expanding to Mexico has become more attractive than setting up operations in any other nation. The country is thriving in the areas of advanced technical education which has contributed to the development of a workforce that is both highly skilled and committed to the production of quality materials.

Mexico is quickly developing a reputation for being a key competitor to other places across the globe vying for the offshoring attention of foreign companies. With the North American Free Trade Agreement in place, as well as labor and energy costs that are substantially lower than in other countries, for companies looking to increase their profit margins, manufacturing in Mexico makes sense. 

According to Barron's, while manufacturing activity in other emerging markets has slowed somewhat, this is not so in Mexico. Citing economist Jason Tuvey who works for Capital Economics in London, Barron's wrote that the strength of global demand allowed Mexico to outshine more popular offshoring destinations like China, India, Brazil and Russia.

"Manufacturers in Mexico continue to benefit from strong growth in the U.S., the country's largest trading partner," Tuvey stated. "We expect manufacturing activity across the emerging world to remain subdued. But while domestic headwinds mean that manufacturers in the BRICs are likely to struggle, those in the likes of Mexico, Central Europe and smaller economies in Asia are likely to outperform."

For companies potentially targeting Mexico as their offshoring home, the fact that the purchasing managers index is strong makes the country a solid choice organizations hoping to produce items in the country and ship the finished goods to consumers around the world.

A picture showing how the business worlds are connected throughout the globe, and therefore acting as a good reason for why companies should consider manufacturing in Mexico.Mexico continues to be an attractive option for foreign manufacturing companies.

"Mexico is quickly developing a reputation for being a key competitor to other places across the globe vying for the offshoring attention of foreign companies."

ThyssenKrupp broadens its Mexico manufacturing operations
For the better part of 15 years, ThyssenKrupp Materials de Mexico has been a partner with automobile and aerospace manufacturers operating in the country by providing these organizations with the aluminum and steel needed to produce their vehicles.

According to a report from Aerospace Manufacturing and Design, the company is planning to construct a 55,000 square foot facility on a 3.7 acre plot of land that will house a new carbon steel and aluminum blanking line. ThyssenKrupp is investing $20 million into this project, which will be completed by Q4 of this year.

"Mexico is a key area for investment and opportunity for our business, especially as it relates to the country's growing automotive manufacturing presence," Joachim Limberg, CEO of ThyssenKrupp's Business Area Material Services unit, told Aerospace Manufacturing and Design. "The ability to process both aluminum and carbon steel blanks on the same line will allow us to react and provide solutions to the materials and service demands of our customers much more quickly."

The move by ThyssenKrupp is in response to changes taking place primarily within the automotive sector where the industry is replacing key materials used to manufacture vehicles with aluminum and high-strength steel components. Ultimately, this new manufacturing facility will help strengthen both Mexico's aerospace and automotive manufacturing operations. 

"This expansion is important to our business as it positions us as the first Mexico-based facility to offer both aluminum and advanced high-strength steel configured blanking capabilities for our customers," Christian Dohr, CEO and president of ThyssenKrupp Materials de Mexico, told the website. 

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