Executive Summary
1. What
is a Maquiladora (in-bond operation)Maquiladoras
are Mexican corporations that assemble imported components for export to other
countries (usually the U.S.). Maquilas have special privileges that make them
attractive to an offshore manufacturer, some of them are: duty reduction incentives,
temporary import of raw materials and equipment without duty and simplified customs
procedures among others.There are a variety of
support services that are needed by the maquila operations (logistics, customs,
environmental, human resources, relocation services and legal and accounting services)
that can be more effective provided by Mexican companies who have knowledge of
their community and culture.

2.
What is a Shelter Program The
"Shelter" program is designed for foreign manufacturers that need a rapid access
to the advantages of operating under a maquiladora, but: | without
loosing control over the manufacturing processes, |
| without
performing costly investments and, |
| without
having legal presence in the country. |
Shelter
plans are still the most popular and effective method of establishing an assembly
site in Mexico today. 
3.
Which companies are suitable for a Shelter Program
The Shelter plan is used in Mexico by important transnational
companies such as Philips, Siemens, Sumitomo and ATT, as well as small and medium
producers from the US, Asia and Europe. The
most likely prospects for a shelter program would be: | Companies
that do not have the strong capital and human resource investment backup to start
a manufacturing operation in Mexico by their own, |
| Companies
that wish to learn about manufacturing in Mexico before switching to a stand-alone
operation, |
| Companies
that are required by their customers to bring their product next to their manufacturing
plant, |
| Companies
that have customers in Mexico but do not have off-shore experience, |
| Companies
that wish to reduce their costs without having to send operations overseas, |
| Companies
that want to take advantage of the NAFTA and other Free Trade Agreements Mexico
subscribes, |
There are a variety of
support services that are needed by the maquila operations (logistics, customs,
environmental, human resources, relocation services and legal and accounting services)
that can be more effective provided by Mexican companies who have knowledge of
their community and culture.
4.
Why establishing an off-shore operation in MexicoMany
companies choose to transfer production to other countries to be close to related
suppliers and customer sites. There are geographic and business advantages related
to having a presence near key technological centers. Other benefits often include
cost reduction advantages related to reduced labor and the overall cost of doing
business.As a common interest in reducing the production
costs, many companies have to choose between manufacturing in Asia, Europe or
Mexico.
When production/lean cells and production systems
are configured correctly, the lead-time from time of schedule change to receipt
of new product at EOM/distributor site can be one week, or less, with normal ground
transportation. While this requires pre-planning for inventories and supply chain
responsiveness, one week lead-times are very normal from Mexico.
While
Asian and European suppliers are very motivated to receive new business, the ocean
vessel container shipping lead-times, even when using a shipping broker, are normally
planned at 4 weeks. This can be, on occasion, improved to 3 weeks, but for most
outsource and OEM products, ocean freight still takes about 1 month. Airfreight
is becoming a more cost-effective option for some compact, high value-added products
especially as part of a contingency plan for 'emergency' product availability.
The
quality of any outsourced product is most closely related to the quality of the
process, equipment and tooling, documentation and training materials utilized
by the original manufacturer and the level of skills in the direct labor.
The
cost savings varies with the type of product, labor content, process control and
capability, freight costs and other overhead requirements. But for Mexico, from
many real life experiences the typical cost savings are from 25,000 to 35,000
USD per employee per year.
Working conditions are
a function of regulations and the management staff (and investors) that run the
site. Most maquiladoras have conditions equal or better than equivalent sites
in the US. Many Mexican sites offer subsidized transportation, meals, on-site
healthcare or daycare, paid medical, air-conditioning, training and incentives.

5.
Top advantages of establishing an off-shore operation in MexicoThe
obvious reasons include: inexpensive labor costs, no to low import duties, but
other important advantanges are:
Labor
advantagesMexico's labor force is much less
expensive than the U.S., Canada and other emerging countries
direct labor is
readily available (and easily trained), indirect labor is readily available, employees
work a 48-hour week,Proximity to the U.S.
Saves
time, money, and resources. Materials and finished goods have shorter transit
times. Suppliers are closer. Communication issues are less complicated due to
fewer time zone changes, and any cultural differences easier to transcend.
Preferential
U.S./Mexico customs programs
Under Mexico's maquila
program, manufacturers pay little to no duty on raw material and capital equipment
entering Mexico; U.S. duty accrues only on value added to materials during the
manufacturing process
Manufacturers gain access to the 95 million Mexican market;
75% of maquila product can now be sold in Mexico, by 2001, 100% may be sold to
Mexican markets
Better service to your
customers
You may need to be close to your customers
- many OEMs are requiring their suppliers locate in Mexico
An
edge for competing in North American markets
The
North American Free Trade Agreement (NAFTA) typically gives duty preferences to
companies who manufacture in North America and whose products qualify under NAFTA
rulings.

6.
Which are the best locations to establish an in-bond operation in MexicoBorder
cities of Mexico were the origin of the Maquiladora Industry, currently maquiladoras
are established in every state of the country. Industries
have developed areas of specialization, the Automotive industry is located in
the northern states of the country like Baja California, Sonora, Chihuahua, Coahuila
and Nuevo Leon; as well as the central region in states like Jalisco, Guanajuato,
Morelos, Estado de Mexico, Puebla, Aguascalientes, Queretaro and San Luis Potosi.
Autoparts, electronic components, electronic products, textiles, plastic products
and metal products have also their influence areas.
The
type of operation, its complexity, its closeness to suppliers and customers, and
the infrastructure requirements, are the most important issues to consider before
deciding which city is the most appropriate for your facility.

7.
How can Intermex help in this processIntermex
works as a one-stop shop in which any foreign investor can find the appropriate
service, from the design of a building to the shelter services required. Intermex
can help through all the process of establishing an In-Bond operation providing:
| Design
and construction of industrial facilities according to the customer needs, |
| Lease
or sale of industrial buildings, |
| Shelter
services for any off-shore operation, |
| Shared
shelter services for small or pilot operations, and |
|
Comprehensive Logistics services |

8.
Why working with Intermex | We
have more that 30 years helping establishing off-shore operations in Mexico. |
| We
work as a One-stop shop |
| Open
book policy |
| A
group of experts to your service along all the process |
| Account
executive dedicated to your operation, among others. |

9. Costs of my operation if manufacturing in Mexico
The level of cost savings varies with the type of product,
labor content, process control and capability, freight costs and other overhead
requirements. But for Mexico, from many real life experiences the typical cost
savings are from 25,000 to 35,000 USD per employee per year. Intermex
has a cost model that provides real and accurate numbers for operating in Mexico.
This model takes into consideration the number of workers, the type of operation,
the number of indirect and managerial employees, the number of shipments, the
lease cost of a building, etc. To obtain
a quotation of your operation, please send an e-mail to: maquila@intermex.com.
You will be contacted within 24 hours, and we can provide you with the numbers
for your operation in 48 hours.

10.
Who should I contact For further
information of any of the issues in this web site, please send an e-mail to: maquila@intermex.com.
or call us at the following numbers: FROM USA: 1-866-249-3326 or FROM MEXICO:
01-800-221-1541