A variety of multinational businesses have taken the initiative to shift manufacturing offshore and into markets that have a strong production sector. Mexico has become the ideal offshoring location for many companies due to its strategic location connected to both North and South American consumer markets. At the same time, the country is accessible to both Pacific and Atlantic Ocean traffic, and has strong transportation infrastructure across the border with the U.S. and Canada, as well as south toward its Central American neighbors. As a result, a diverse group of international firms have made manufacturing in Mexico a central aspect to their global production and distribution strategy. However, the extent to which these various companies have made Mexico a strong ally in manufacturing is not clear. These are five businesses that have a strong manufacturing presence in Mexico.
This beverage maker, which has expanded over the years to produce a variety of products, first began selling Pepsi-Cola in Mexico in 1907. With a strong presence in the region, Mexico made up 35 percent of the company's net revenue in 2012, according to a press release. Meanwhile, Pepsi has plans to inject $5 billion into its operations in the country over the next five years, signaling long-term investments in Mexico. The food and beverage company announced it will expand its manufacturing capabilities in the country to meet growing demand for its products. One of the most recent developments has been the Monterrey-based Global Baking Category Innovation Center, which utilizes advanced technology.
In a meeting at the World Economic Forum in Davos, Switzerland, Mexican President Enrique Pena Nieto met with Cisco CEO John Chamber during which time the two discussed plans for the Cisco Support Center in Mexico City, Telecompaper reported. This facility will be dedicated to providing customer support to consumers in Spanish. At the same time, Cisco has plans to increase manufacturing of hi-tech products targeted at the international information technology sector. It will also work to improve the Cisco Networking Academy. These initiatives will likely cost the company $1.35 billion in 2014, and will ultimately strengthen the company's investment in manufacturing in Mexico.
The Eurpoean company recently announced plans to diversify its investments worldwide, namely by working in Mexico to develop the country's rail infrastructure, according to Bloomberg. The company aims to take over $7.47 billion in railroad engineering contracts through a bidding process. The goal is to manufacture signaling equipment, rail cars and develop electrification projects that will connect Mexico City with Toluca and Queretaro. At the same time, the company plans to work on tourist routes through the south in the Yucatan and metropolitan rail lines in Guadalajara. If the company is successful in bidding for the projects, they aim to complete them by 2018.
- 3D Robotics
While not as high profile as the previous companies, this technology firm began as a startup and developed rapidly. The Los Angeles Times reported the company manufactures drones and other technology components for civilian use and had initially begun production in Southern California and China. However, 3D Robotics quickly learned of the supply chain obstacles associated with manufacturing products in China and was quickly attracted by Mexico. Instead of waiting for months for freight to arrive by cargo ship, the company was able see a much faster turnaround by offshoring in Mexico.
Like PepsiCo, this company has long-term plans for manufacturing in Mexico. Nestle recently announced it will put $1 billion toward constructing a new infant nutrition factory, as well as a pet food facility, The Wall Street Journal indicated. The food producer also plans to augment an existing cereal factory to include production of Cheerios and Nesquik.