Flex, a medical manufacturing company that designs and builds intelligent medical devices, announced the grand opening of a new medical device manufacturing facility and Center of Excellence in Tijuana, Mexico.
The new Flex medical manufacturing facility will employ 2,400 workers and span 530,000 square feet of land. The new facility will manufacture medical devices for OEM customers that are used to treat medical conditions including cardiovascular disease, diabetes, hearing impairment, neurological diseases and skin conditions.
"Tijuana is an ideal location for our medical Center of Excellence as it has a highly trained local workforce, strong local universities and a geographic location that makes it highly accessible and convenient for our customers," said Javier Gonzales, Flex vice president of operations and general manager in Tijuana. "Our operations provide a wide array of design through manufacturing capabilities and a management team that has guided countless customers through the stringent regulatory and compliance environment."
Flex has been established in Mexico for the past 17 years, employing over 200,000 locals and maintaining multiple facilities in Tijuana, Ciudad Juarez, Aguascalientes, Reynosa and Guadalajara. Beyond its innovations in medical device manufacturing, Flex supports Mexico's local communities. For example, the company provides support for the Technological University of Tijuana through grants for engineering scholarships, as well as for the purchase of manufacturing equipment for students studying industrial manufacturing.
Medical manufacturing: A booming sector
According to KPMG's report, "Guide to International Business Location Costs," Mexico has an 18.7 percent cost advantage for businesses over the U.S., which is nearly triple the cost advantage of doing business in Canada and an even greater discrepancy when compared to doing business in The Netherlands or U.K. As a result, the medical manufacturing sector in Mexico is expected to see sustained growth over the next three years.
According to the BMI "Mexico Medical Devices" report, there will be a CAGR of 13.8 percent in Mexico between 2013 and 2018, which will bring the medical device market to $6.9 billion by 2018.
While the cost advantages of manufacturing in Mexico span all sectors, including auto, aerospace and electronics manufacturing, the medical manufacturing industry has made Mexico its home base. Just recently, the mayors of Tijuana and San Diego both visited Tijuana to conduct an industrial tour of the area's medical manufacturing sector. According to the press release, Tijuana is seen as Mexico´s mecca for medical device manufacturing with the largest concentration of medical device manufacturers and employment in Mexico.
Medical device manufacturing in Mexico is not exclusive to Tijuana, however. For example, Guaymas and Empalme, Sonora, are two locations east of Tijuana where medical manufacturing is one of the sectors driving economic growth. These locations provide manufacturers with convenient supply chains to the U.S. through Arizona.
"Companies like Flex have been leveraging the offshoring advantages of manufacturing in Mexico for decades."
Companies like Flex have been leveraging the offshoring advantages of manufacturing in Mexico for decades. As a result, Mexico exports 92% of the medical devices it produces to the United States and Canada. Additionally, BMI expects Mexico to remain the leading exporter of medical devices, ahead of Brazil. There are three key reasons why:
1. Workforce: Medical device manufacturing requires high-skilled labor. Mexico has gone above and beyond to invest in educational infrastructure to make the country appealing to manufacturers. Additionally, medical device manufacturers can gain access to this high-skilled labor at a lower cost than in other countries.
2. North American Free Trade Agreement: With such high demand from the U.S., medical manufacturers heavily benefit from the ability to operate under a shelter company and export goods cheaply due to Mexico's participation in NAFTA.
3. Location: As the BMI report pointed out, Mexico has become an extension of the U.S. with regard to medical manufacturing. Due to the heavy demand for medical devices in the U.S., manufacturers are benefiting from Mexico's close proximity to the sector's No. 1 market.