Nearshoring

Investments in nearshoring are boosting industrial development in Chihuahua.

Esta entrada también está disponible en: ES (Spanish)

Through nearshoring, a new green industrial park will be installed in the state of Chihuahua.

The state of Chihuahua in Mexico continues to position itself as one of the destinations for nearshoring, a foreign investment strategy that seeks to establish manufacturing and service operations in locations close to the United States markets.

Recently, American Industries Group announced a $142 million investment in a new green industrial park in Chihuahua.

The new industrial park, which will be located in the municipality of Chihuahua, will be developed by American Industries Group, a company focused on investment services and industrial park development in Latin America.

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Sources: Forbes

The green industrial park will have an area of 54.5 hectares and it is expected to be operational by the end of the second semester of 2023.

We will focus on meeting the demand for more industrial space, which is currently at 99% occupancy levels in the Chihuahua region,” said American Industries Group CEO Liliana Hernandez to the media,

Nearshoring in Chihuahua: The state ranks fourth in the country since 2022.

Nearshoring has become an attractive strategy for foreign companies, especially in the manufacturing sector, as it offers several advantages such as geographical proximity to US markets, which reduces transportation costs and delivery times, as well as the possibility of maintaining greater supervision and control over production.

Nearshoring has become an attractive strategy for foreign companies, especially in the manufacturing sector, as it offers several advantages such as geographical proximity to US markets, which reduces transportation costs and delivery times, as well as the possibility of maintaining greater supervision and control over production.

Chihuahua has consolidated as the fourth state with the highest nearshoring investment in Mexico since 2022.

María Angélica Granadas, Secretary of Innovation and Economic Development, stated that during the year 2022, Chihuahua received more than 1.8 billion pesos in foreign direct investment. And it is expected that by the end of this 2023, the state will accumulate double that amount.

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Credits: T21

Nearshoring in Mexico, the country is an ideal neighbor for the United States.

This concept involves moving factories from their country of origin to one where costs in different areas such as salaries, taxes, and maintenance are cheaper.

Due to its location, Mexico is an ideal neighbor for nearshoring with US companies, which have decided to invest in the country’s workforce.

Currently, North America is one of the main destinations for nearshoring. Free trade agreements between Mexico, the United States, and Canada often reduce tariffs.

It is estimated that around 80% of Mexico’s industrial production is destined for the United States.

It is said that another good reason for US companies to do nearshoring in Mexico is the coincidence of time zones, which allows them to better coordinate their operations in both countries simultaneously.

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Credits: Ivemsa

Risks of nearshoring in Mexico

Credit rating agency Moody’s Investors Service pointed out three main threats that could limit the potential of nearshoring in Mexico.

These three issues that this manufacturing model could bring are: infrastructure limitations, public policy obstacles, and climate change. According to the report generated by this research.

Another aspect that Moody’s Investors Service points out is that the current occupancy rate of industrial spaces in Mexico is 98%.

It has been reported that access to renewable energy in Mexico remains limited. Despite this, multinational companies are moving forward with their sustainable production processes and decarbonization goals.

Sources: El Economista, Diario, Tiempo, El Ceo, El Economista, Expansión

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