Industrial Development Commission of Mexicali

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Dec 1, 2013 (3 years and 8 months ago)

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1)

Industrial Development Commission of Mexicali




Only AEDO Certified outside of the United States and first in Mexico to receive this
certification.



More than 34 years of experience advising companies how to improve their operations
and costs.



Nonprofits organization that is 50% integrated by City Government and 50% private sector
(industrial developers, accountants, corporate attorneys, shelters and Mexican &
American import/export agencies), so NO CHARGES or FEES for advisements.



Pioneer mode
l for Economic Development and FDI (Foreign Direct Investment attraction)
in Mexico.


NOTES:

a)

AEDO is the Accredited Economic Development Organization which is the one in
charge to certified the Economic Development Organizations (EDO) in the U.S.

b)

Be a AEDO

Certified can create more trust and confidence in the information and
services with the prospects and be more professional.


2)

Why Mexicali?




Strategic location, easy access to US, Canada & Asian markets



Pro
-
business community, hard working, skillful and c
ost
-
competitive labor force



Dynamic, strong and growing private sector



One of the most attractive investment destination along US
-
Mexico border region



All necessary infrastructure



Mega
-
Region between Tijuana, San Diego, Imperial Valley and Mexicali Areas.



Large supply chain in the region.



Easy access logistics for raw materials, components and machinery.



Safest US/Mexico city border


NOTES:

a)

Ethos3 can mix all this concepts into some pictures that can explain some of the above
or even use some keyworkds.


3)

Th
e Workforce

a.

Overview: Demographic Impact

Mexicali has a much diversified economy; agriculture, food processing, commerce, housing and industry
which go from basic assembly to sophisticated high
-
tech manufacturing and R&D.


Harvest time often constricts the

workforce, many leaving to support the family farm or seek migrant
-

work
in California's Imperial Valley (border city to Mexicali in the US side). Mexicali is also a way
-
station for
Mexican migrant farm workers. Many Mexicali families have lived in the ar
ea for generations, and return
from the fields in the off
-
season.

On the other hand, the foreign industry has experienced an evolution over the last 15 years incorporating
more sophisticated processes requiring educated and skilled labor. It turns out to
have more universities
and training centers for the residents.

Mexicali has been experiencing increasing growth rates which guarantee an
ample, steady and reliable
labor pool
.


b.

Employment Considerations

The 2010 Mexican census calculations estimate
936,826

city’s population, which
232,506

are males and
209,255

are females in the economically active age range of
15
-

49
. Currently approximately
52,000 people

are employed in
173

foreign companies

located in Mexicali, also known as “maquiladoras”. In ad
dition, a
supply base exceeding
150 small and medium local businesses

supports this industry.

Mexicali has a workforce of
422,738 people

in economically active age. A projection for 2020 considers
613,340

people in economically active age.

Source: Nation
al Institute of Geography, Statistics and Information (INEGI).


c.

Unemployment Percentage

Mexicali unemployment ranges from
9%
-

11%
, depending upon the agriculture season.


d.

Skill Ranking

Baja California is the state with the highest investment in educatio
n in Mexico. Over
50%

of the state’s
annual budget is spent on education, helping the state achieve a
97%

literacy rate, much higher than the
90.5% national literacy rate.

Larger maquiladoras have located in Mexicali in the past decade, finding skilled wor
kers while staying close
to Southern California. Mexicali's literacy rate of
94.4%

is above average for border cities.

The recent growth of specialized industries outlines a new direction for Mexicali’s local industry. Electronics,
automotive and aerospace

jobs are growing in this area and the workers need to fill these positions require
better training and more specialized skills.

Education composition of the workforce:
2.10%

PhD/Masters,
28.2%

Bachelor Degree and
69.7%

High
School, Vocational or lower.


e.

Turnover Rates

Turnover rates are lower than the average for border cities at approximately
4%
-
6%

per month. Some
companies are doing higher rates and others very low. Good management policies and HR practices along
with career opportunities contributes
to reduce turnover rates. Agricultural migration during the harvest
season contributes heavily to the total community's turnover.


f.

Availability of Labor

Population and demographic projections still point to above average growth, as Mexicali
2.6%

growth rat
e is
affected by increased trade, border migration, and higher birth rates. A quick look at maquila employment in
Mexicali reveals:

Employment Size

% of total employment

0
-
49

18%

50
-
99

32%

100
-
499

28%

500
-
999+

22%


g.

Unions and labor relations in Mexicali

Unionization exists mostly in the government structure.

The manufacturing industry in Mexicali is virtually
union
-
free, with only
3%

of the maquiladora workforce
(52,000)

belonging to a union. Relations between
labor

and staff in most of the cases are very stable which means higher levels of productivity.

Strikes and Work Conflicts 2010 of major border cities (+ 500K residents)

Ciudad

Tijuana

Cd.
Juarez**

Mexicali

Reynosa*
*

Población

1,559,68
3

1,332,131

936,826

608,891

Strikes

44

0

2

0

Work conflicts/Strike
Notices *

6,891

4,814

2,198


1,719


*Could be either individual or collective.


**Highly unionized cities.

Source: National Institute of Statistics and Information (INEGI)



h.


Wages

Wages are the key driver of Mexico’s manufacturing industry. It is, therefore, one of the first and most
important topics that any company moving into Mexico will consider.

Mexicali Average Wages

Unskilled Operator

$2.6 hourly

Skilled Operator

$3.03
hourly

Technician

$4.37 hourly

5
-
year experienced engineer

$25,000 yearly

U.S. dollars/hr. includes all mandatory and average optional benefits for this market.

Exchange rate for April: $11 pesos per US dollar.


i.

North American Industrial Location Index





Cities

Industrial Facility
Lease Rate:

Low
-
High

($/SF/NNN/Annual)

Industrial Facility
Construction
Cost Shell

Low
-
High

($ / SF)

Industrial
Park Land
Cost:

Low
-
High

($/Acre)

Number of
available
industrial
facilities

> 100,000 sq.
ft.

Industrial
Vacancy

Rate: (%)

Unemployment
Rate (%)

Average Production Line
Salary Unskilled/Skilled
($/Hour)

Rail Served
Industrial
Areas (%)

Distance to
closest
commercial
port (miles)

Average
Full Trailer
($/Mile)
Assumes
500 mile
journey

CANADA






Montreal

4.50
-
6.50

40
-
65

120,000
-
450,000

24

9

7.9

12
-
25

20

Port City

1

Toronto

4.00
-
9.00

50
-
80

325,000
-
1,000,000

50

6

8

9.25
-
18

40

Port City

2.2

Vancouver

5.00
-
9.00

60
-
100

500,000
-
1,500,000

10

1.5

4.9

12
-
20

30

Port City

1

USA






Atlanta

2.25
-
4

23
-
31

45000
-
75000

212

12.1

9.3

10.75
-
15.75

20

248

1.6

Batimore

3.95
-
6.5

30
-
50

200000
-
800000

78

10.6

5.4

13.67
-
23.90

20

Port City

1.46
-
2.1

Chicago

2.5
-
4.5

32
-
45

150000
-
480000

418

11.8

9.1

13.12
-
23.56

18

800

2.19

Cleveland

1.95
-
4.5

30
-
40

40000
-
150000

127

8

7

10.86
-
18.34

>20

Port City

2.25
-
3.25

Dallas/Ft.
Worth

3.67
-
5.7

25
-
30

87000
-
218000

197

9.9

5.8

9.13
-
15.86

9.54

300

3
-
5

Denver

2.25
-
6.95

40
-
70

80000
-
217000

36

8.7

7.2

9.25
-
17.25

20

1100

2.25
-
3

Detroit

2.5
-
5

30
-
50

100000250
000

160

11.7

11

10
-
30

10

Port City

1.5

Houston

3
-
7.2

38
-
55

130680
-
239580

110

5.8

6.5

20.04

15

Port City

1.98

Los Angeles

3.48
-
9.36

48
-
65

653400
-
2,613600

519

4.5

10.2

26.55

8

Port City

1.31
-
1.7

Memphis

2
-
3.15

27
-
50

50,000
-
95,000

101

13.8

8.6

9.50
-
16.10

15

729 river
miles

3
-
5

Miami

4.97
-
11

55
-
80

250000
-
635000

42

14

8.5

12.50
-
32

4

Port City

N/A

New Orleans

2.75
-
5

50
-
60

218000
-
435600

10

12

5.4

10.50
-
24

50

Port City

3

New York

4.5
-
9

70
-
125

750000
-
5000000

21

10

7.4

10
-
36.44

<10

Port City

4
-
7

Newark

3.25
-
8.75

50
-
65

250000
-
450000

20

8.4

7.2

9.34
-
19.78

25

Port City

3

Philadelphia

1.75
-
6.5

45
-
70

60000
-
250000

22

9.3

4.7

7
-
21.36

15

Port City

2.75
-
4.75

Phoenix

5.25
-
14

35
-
70

275000
-
825000

89

14

6.7

7.25
-
25.77

3

385

1.75
-
2.60

San
Francisco

1.8
-
24.36

75
-
125

435000
-
3500000

21

6.9

5.9

8.42
-
28.53

>50

Port City

4
-
5

Seattle

3.6
-
16.2

45
-
65

330000
-
480000

79

6

7.8

8.65
-
24.28

5

Port City

2.25

St. Louis

4.35
-
9.85

30
-
40

115000
-
160000

61

8.4

7.6

14
-
19.38

5

350

2.25

MEXICO

Guadalajara

4.87
-
6.03

24
-
30

180000
-
750000

11

25

4.5

1.83
-
2.61

10

200

2

Juarez

3.5
-
5.5

23.5
-
25

130680
-
185131

22

11.3

2.8

2.5
-
2.8

5

640

1

Matamoros

4.8
-
6.24

36
-
54

121380
-
141610

5

10

8

1.8

30

20

1.35
-
2

Mexicali

3.36
-
5.16

25
-
30

101300
-
265000

9

9

6

1.85
-
2.62

40

180

1

Real Estate

Labor

Transportation

Mexico City

4
-
6.5

25
-
35

200000
-
800000

20

9.5

5.8

2.5
-
3.5

5

250

1.2
-
1.5

Monterrey

4
-
6.6

22
-
32

200000
-
550000

17

4

3

1.5
-
2.65

30

360

1

Nuevo Laredo

3.72
-
4.92

22
-
28

75000
-
100000

6

11

8

1.35
-
2

60

146

1.35
-
2

Reynosa

3.72
-
4.92

22
-
32

90000
-
125000

13

10

6

1.35
-
2

0

51

1.29
-
2.1

San Luis
Potosi

4.32
-
5.04

20.86
-
26.05

99099
-
116087

5

10

2

1.1
-
1.65

70

273

1.28

Tijuana

4.2
-
5.40

22
-
32

242809
-
546321

30

10

5

1.9
-
2.65

10

60

1.05

Footnotes & Comments

All cost are reflected in US$ amounts. Data was compiled in
December 2010

The information for San Francisco includes the nine bay
-
area counties of Alameda, Contra Costa, San Francisco, San Mateo, Santa Clara, Marin, Solano, Napa &
Sonoma.

This index is intended to provide a snapshot look at relative costs and rate
s across North America’s key industrial markets. The creators of the index realize that actual
costs and rates associated with specific manufacturing facilities will vary widely, given the many variables at play from ind
ustry to industry and facility to fa
cility.

With that in mind, several assumptions have been built into the model in order to standardize index content from market to ma
rket and category to category as much
as possible.

The Real Estate categories assume a 100,000 sq. ft. (9,290 sq. mts.) l
ight manufacturing facility in normal operating condition, 10 percent of which is office space,
2,500 KVA Electrical and block and metal or concrete tilt construction.

The cost per mile truck transportation costs, and other transportation costs’ are
subject to rapid and unpredictable increases due to cost of fuel.

Source: NAI Mexico.


j.

Quality

& Work Environment

Mexicali has a quality workforce that can adapt and thrive in the rapidly changing global marketplace. More
than 40 years of experience have made it able to understand and meet toughest quality regulations for
different business sectors. Some examples are:



1.

Shingo Prize for Operational Excellence;

2.

PACCAR Chairman’s Quality Award;

3.

ISO Certification Series

4.

OEM’s, Tier 1 and 2 approvals;

5.

DNV;

6.

AS9000 & 9100 Certification Series;

7.

NADCAP Approval;

8.

ITAR (International Traffic in Arms Regulations);

9.

Six Sigma

Certification;

10.

Lean Manufacturing Techniques;

11.

American Welding Society (AWS);

12.

America Society f Mechanical Engineers (ASME);

13.

Military Standards;

14.

Great Place to Work Institute;


k.

Keywords to describe Mexicali’s Workforce

Mexicali is a melting pot. A gre
at percentage of the population is not native to the city. This includes not
only Mexicans from other regions, but also foreigners that have made Mexicali their home. Nevertheless,
they all have something in common:
Hard work to achieve a better life.



Cu
ltural aspects, history and extreme weather in the summer, blend together to define the common traits
that Mexicali’s workforce share.



People in Mexicali are known for their unique work culture:




Loyalty



Embracement of philosophies



Pride



Work ethics



Honesty



Teamwork



Low turnover



High Productivity



No unions



Continuous improvement

4)

Education




More than 70% of the State’s budget is invested in education



UABC (State University) is the best public school of
Mexico



Top Private Universities with international standards



National Pioneers and leaders of linkage programs (school and industry)





Strategic partnerships between
government, private sector (industry) and educational institutions

in order to guarantee human resources for companies established in the city:




National leadership in linkage programs through:


Mexicali Linkage Committee:
established 1996 in order to guarantee availability of qualified
human resources for established m
anufacturing companies and support the talent of the city´s
growing labor force. Representatives from local e educational institutions and private sector
coordinate the committee.




Universities in Mexicali: 12

Mexicali has some of the highest rated private

and public universities in the country:

-

State University of Baja California:
ranked as one of the top public universities in the country.
Programmes of Engineering, Accounting, Business, Law, Medicine, Deontology, Political Science,
Agriculture, Nursing
, Computer Sciences and Languages



Total specialties:27



Enrollment: 12,000



Graduates/year: 750



Graduates average age: 23
-
25 years

-

Cetys University:
high education private institution that was established in 1961 by local businessmen.
Solid Engineering pro
grams and one of the best Business programs in Mexico. Top ten MBA programs



Total specialties:11



Enrollment: 1,700



Graduates/year: 230



Graduates average age: 22
-
25 years

-

Technological Institute of Mexicali:
Federal university dedicated to superior level education in
technology for Engineering.



Total specialties:7



Enrollment: 3,500



Graduates/year: 380



Graduates average age: 23
-
25 years

-

UVM:
top private university with nationwide presence. Member of a global

university network.

-

Polytechnic University of Baja California:
public university, member of a nationwide network of
polytechnic institutions that focus on engineering programs.



Technical Schools in Mexicali: 48



Engineering programs: Electrical, Electr
onics, Computer Sciences, Industrial, Mechanics,
Mechatronics, Cybernetics, Manufacturing, Chemical, Civil



Bilingual programs


International Educational Programs

Universities established in Mexicali have been focused on globalization and therefore have wor
ked on
international programs that give their students a global perspective and cultural experience.

Americas:

USA, Canada, Chile, Brazil, Argentina, Uruguay, Peru, Panama, Ecuador, Colombia, Costa Rica

Asia:

Japan, South Korea, China, Taiwan, Thailand, Au
stralia

Europe:

Austria, England, Sweden, Spain, France, Italy, Finland, Netherlands, Germany, Switzerland, Portugal


Professional Technicians Programs



Metal mechanics



Industrial Productivity



Electro Mechanics



Industrial Mechanics



Environment contamination

control



Computer assisted drawing



Plastic injection molding



Welding



Dimensional Metrology



CNC Equipment



Tool maker technicians


5)

Logistics

a) World Class Infrastructure



Location:




located in the state of Baja California in the Northwestern part of Mexico,

border city with Calexico,
CA as its counterpart



Baja California limits to the north with the United Sates, to the east with the Colorado River and the
Sea of Cortez, and on the 28th parallel to the Pacific Ocean



Mexican state with highest proximity to
the Asian market



located at heart of one of most fertile valleys: Imperial
-
Mexicali valley = Mexican port of west coast
NAFTA’s corridor
-

offers a strategic location to move components & products rapidly to global
destinations



Quick access to the Unite
d States thanks to the three ports of entry for pedestrians and vehicles
(15
-
30 minutes waiting time) and one for cargo that facilitate commercial exchange (see below for
more detailed information)

Proximity to big cities:

City

Driving hours (miles)

San D
iego

2 h (120)

LA

3.5 h (230)

Las Vegas

6 h (316)

Palm Springs

2 h (120)

Phoenix

4 h (240)

Tucson

5 h (300)




b) Import and Export




Customs:


Each year more than 30 million vehicles and pedestrians cross northbound into the U.S. trough Calexico’s
two ports of entry. The recently constructed East Calexico port of entry provides improved links to major
trucking routes and has increased the efficie
nt flow of goods and people between the two countries.

Mexicali´s East Calexico port has a crossing lane for cargo that is capable of processing 4,000 containers per
day northbound to the U.S. This facility is currently operating far below capacity, proce
ssing 800 containers
per day. Several miles of highways link the city’s industrial parks with the new port of entry. Some of the
services offered at the Mexicali customs office include:



Definite imports and exports



Temporary imports or exports



Fiscal dep
osit for storing of merchandise in authorized general deposit storages under customs
authority control



The transit of merchandise



Quality System ISO 9000



Merchandise dispatching


Express fast passes exist as an option for vehicles and cargo transportatio
n crossing into the United States
(10
-
20 minutes waiting time).

The express pass for cargo is called FAST (can be used by C
-
TPAT certificated companies only
-

U.S. importer,
foreign manufacturer and cross border highway carrier need to have the certificat
ion (more specific
information below)) and for civilians SENTRI. To receive the express passes organizations and civilians need
to comply with certain requirements.


Waiting times commercial port:

0
-
60 min during slow season (April


September)

60
-
120 min

during peak season (Oct
-
March)

Commercial port hours of operation:

Mo
-
Fr 8:00 am to 8:00 pm

Sat. & Holidays:

10:00 am to 2:00 pm Regular non
-
FAST shipments




10:00 am to 5:00 pm FAST (CT
-
PAT) shipments

C
-
TPAT Certification



voluntary government
-
business
initiative that builds cooperative relationships that strengthen and
improve overall international supply chain and U.S. border security



recognized as one of the most effective means of providing the highest level of cargo security
through close cooperatio
n with international supply chain businesses such as importers, carriers,
consolidators, licensed customs brokers, and manufacturer



through this initiative, U.S. Customs and Border Protection (CBP) is asking businesses to ensure the
integrity of their secu
rity practices and communicate and verify the security guidelines of their
business partners within the supply chain



more than 10,000 companies participating in C
-
TPAT



B
enefits
:

o

Reduction in U.S. Customs Inspections.

CBP has significantly increased its exa
m rates over
the last several years due in large part to the increased use of Non Intrusive Inspections
and other targeting tools. C
-
TPAT shipments are 4 to 6 times less likely to undergo an
examination.

o

Free and Secure Trade (FAST).

C
-
TPAT shipments enter
ing the U.S. from either Canada or
Mexico are able to use designated lanes at numerous border crossings as long as the U.S.
importer, foreign manufacturer and cross border highway carrier are certified members.

o

Front of the Line Privileges

are granted to C
-
TPAT shipments that are selected for an
examination

o

Marketability

through involvement in C
-
TPAT can be associated with things that every
company needs to maintain: reputation and brand equity.


c
) Trade agreements


Free trade agreements

Mexico has had a
growing commitment to trade integration through the formation of free trade agreements
(FTAs) since the 1990s and its trade policy is among the most open in the world.

The United States is Mexico’s most significant trading partner. About 80% of Mexico’s ex
ports go to the
United States and 49% of Mexico’s imports come from the United States. Mexico’s second largest trading
partner is China, accounting for approximately 6% of Mexico’s exports and imports.

In an effort to increase trade with other countries, M
exico has a total of 11 trade agreements involving 41
countries. These include agreements with most countries in the Western Hemisphere including the United
States and Canada, Chile, Costa Rica, Nicaragua, Guatemala, El Salvador, and Honduras.

In addition
, Mexico has negotiated FTAs outside of the Western Hemisphere and entered into agreements
with Israel and the European Union in July 2000. Mexico also has an FTA with Japan.

Below is a list of partners privy to free trade agreements with Mexico. The effec
tive date for each free trade
treaty is shown within parentheses:



United States, Canada (January 1, 1994)

NAFTA (North American Free Trade Agreement)


NAFTA

is a free trade agreement that eliminated trade and investment barriers among Canada, Mexico,
and the United States and gives strong support to flow of goods and investment among the three
states. NAFTA enables the manufactured goods produced in Mexico to

be brought into the United
States without duties or other costs.

The agreement also contains provisions for market access to U.S. firms in most service sectors;
protection of U.S. foreign direct investment in Mexico; and intellectual property rights prot
ection for
U.S. companies. NAFTA is the first U.S. agreement that addressed environmental and labor concerns by
including related provision in separate side agreements to NAFTA.



Columbia, Venezuela (January 1, 1995)



Bolivia (January 1, 1995)



Costa Rica
(January 1, 1995)



Nicaragua (July 1, 1999)



Chile (August 1, 1999)



European Union (July 1, 2000)



Israel (July 1, 2000)



El Salvador, Guatemala (March 15, 2001)



Honduras (June 1, 2001)



EFTA: Iceland, Liechtenstein, Norway & Switzerland (July 1, 2001)



Uruguay (July 15, 2004)



Japan (April 1, 2005)



Peru
(Abril 6, 2011) (step for future integration between Mexico, Peru, Columbia and Chile)



Mercosur: Argentina,
Brazil
, Paraguay,
Uruguay, Venezuela (pending ratification)

Source:
World Trade Organization, Regional Trade Agreement Database, http://www.wto.org/.




d) Connectivity

Completely integrated transportation network
-

air, land and sea
-

as well as communication systems
(phone, fax, satellite, micro waves and direct computer networking):




High
-
way Transportation:


Mexicali is easily accessible from the U.S. The wide network of Interstate freeways and highways that
run throughout the state of California provide quick acce
ss to the city. Interstate 8, located just 7 miles
from the border, handles eastern and western traffic and is one of the main routes, while Interstate 10
just a few miles further north (115 miles from the border), gives access to northern California and
c
entral and eastern U.S. In addition, a modern four
-
lane highway to Tijuana cuts driving time to 2 hours
or less. Within Baja California and nationawide Mexicali is well connected through federal highways.

Given its Location, Mexicali has access to the Paci
fic NAFTA corridor, crossing via its sister city of
Calexico, CA. This Pacific corridor communicates Mexico City with the entire geographic band formed by
the Rocky Mountain range and the Pacific coast, passing through the cities of San Diego, Los Angeles,

San Jose, Seattle and Victoria among others.




Air Transportation:


Mexicali's International Airport (General Rodolfo Sanchez Taboada), located 12.4 miles east of the city,
offers daily flights to major cities in Mexico, including Guadalajara, Monterrey a
nd Mexico City.

In addition, the Imperial Valley Airport, 15 miles north across the border from Mexicali, operates
commercial flights to U.S. cities.

The Yuma International Airport, at 55 miles distance, has domestic flights (Los Angeles, Phoenix) and i
s
about 5 miles from the center of Yuma, AZ.

The airports of Tijuana, San Diego and Los Angeles offer a wide range of options for flight from and to
cities all over the world. Most people prefer to fly out of San Diego.




Sea Transportation:


Mexicali is
within a 5 hour truck drive to the San Pedro
-
Long Beach harbor (on US side) and within 3 1/2
hours to the port of Ensenada (on Mexican side). Both harbors facilitate cargo shipments throughout
the world.





Railway Transportation:

A superior transportation
network, which facilitates the movement of goods and services, efficiently
and economically exists.

Mexicali's railroad network is 131 Kms. long, 71 of which correspond to main routes, 39 Kms. to
auxiliary routes and 21 kms. to private routes. The railways

that cross this municipality are joined to the
Pacific Railroad, with is linked to the Chihuahua
-
Pacific Railroad and the National Railway Network of
México.

Destinations:

o

Los Angeles

o

Long Beach

o

Tucson

o

Phoenix

o

Las Vegas

o

Colton

o

Calexico

o

Nogales




Telecommunication:

o

full integration of communication systems with the rest of the world

o

telephone lines, fax, data transmission, satellite communication service, internet servers


6)

Utilities


-
Abundant water & power supply

-
private and

government owned comp
anies providing services such as gas, electricity, telephone lines,
water, and sewer


Water (1,850,000 m3/year to Mexicali):

o

3 water treatment plants covering 95% of the population

o

Main source: Colorado river (appr. 40 miles East)

o

Supply of water to other

cities

o

cost depend upon amount consumed




Energy (
total available 2,285 MW)
:

o

2
nd

largest Geothermal Electricity Generating Plant (Cerro Prieto Geothermal plant) in the world
with a production capacity of 720 MW whose high excess of energy is exported to US

o

cost per Kilowatt depend on total amount of power used

o

1065 MW natural gas
-
fire
d, combined cycle facility (InterGen), exporting more than 40% to the US

o

400 MW electric generating facility (SempraEnergy), exporting 100% to the US


Natural Gas:

o

ECOGAS is a Mexican company, subsidiary of Sempra Energy, that distributes natural gas in th
e
states of Coahuila, Durango, Baja California and Chihuahua.

o


For over 15 years Sempra Energy has implemented solutions to the energy needs of Mexico, being
a pioneer in the development of distribution systems and transportation of natural gas in Mexico,
with the most modern power plant in the country.

o

Uses their pi
pelines from the United States to deliver this commodity in Mexicali.


7)

Security

In the past few years, Mexico has caught the attention of the international media because of the violence
that has largely affected the country.

This violence is mainly related

to drug cartels in their effort to gain control of the markets and to the efforts
of the federal government and militaries to stop the violence and drug trafficking.

Even though, some of the cities that have been more affected by the violence are in locat
ed in the border
with the US, the city of Mexicali has been largely spread by the drug cartels and is considered to be the
safest border town. It is a “well
-
run relatively tranquil border city with good engineering schools that has
seen growth in aerospace
, medical devices, and electronic” (Business Week
)



Sources:

1.

Industrial Development Commission of Mexicali
website and records

2.

Mexico Federal Government

3.

FBI

4.

LAPD

5.

Mexico Unido contra la Delincuencia

6.

Milenio Newspaper

7.

El Universal
Newspaper

8.

City
-
Data


How Safe is Mexicali?



Overall the crime rate in Mexicali is down 10% in 2010 from 2009



Mexicali remains a relatively safe city, with no indication of increased violence or drug trafficking
impacting day to day
activities, or business operations



Violence appears localized to some cities(Ciudad Juarez, Tijuana), yet operations in maquiladoras
continues uninterrupted



Ciudad Juarez has close to 300 maquiladoras with about 9,000 U.S. persons crossing the
border daily

to work



The homicide rate per 100,000 inhabitants in Ciudad Juarez is almost 20 times greater than
Mexicali



51.7

40.2

37.3

35.0

23.8

10.5

8.1

8.1

7.6

5.6

3.1

2.2

0.0
10.0
20.0
30.0
40.0
50.0
60.0
New Orleans
Baltimore
Washington
Los Angeles
Phoenix
San Diego
Homicide Rate

per 100,000 habitants

Detroit
Baltimore
Washington
New
Orleans
Los
Ángeles
Phoenix
Las Vegas
San Diego
Yuma
San
Francisco
Mexicali
Tijuana
Population
908,441
638,755
599,657
336,425
3,848,766
1,595,397
1,377,282
1,314,773
91,433
809,755
926,042
1,590,420
Homicides
365
238
143
174
312
122
111
41
2
45
97
556








8)

Lifestyle


The quality of life in Mexicali is considered one of the best in the country. It is a progressive and
cosmopolitan city with a variety of dining establishments, cultural centers and leisure activities. Life in
Mexicali is interesting and entertaining.

1,238.9

870.6

665.7

561.6

549.5

500.9

419.1

285.3

283.2

278.9

276.4

271.3

0.0
500.0
1,000.0
1,500.0
Detroit
Tijuana
Washington
New Orleans
Mexicali
Los Angeles
Violent
Robbery Rate

per 100,000 habitants

Detroit
Baltimore
Washington
New
Orleans
Los
Ángeles
Phoenix
Las Vegas
San Diego
Yuma
San
Francisco
Mexicali
Tijuana
Population
908,441
638,755
599,657
336,425
3,848,766
1,595,397
1,377,282
1,314,773
91,433
809,755
926,042
1,590,420
VR
11,255
5,561
3,295
1,410
10,638
4,329
7,735
3,667
458
2,310
2,623
10,587
2658

556

97

0
500
1000
1500
2000
2500
3000
Ciudad Juarez
Tijuana
Mexicali
Homicides Statistics

2009

2700

560

86

0
1000
2000
3000
Ciudad Juarez
Tijuana
Mexicali
Homicides

Statistics

2010

The

culture is a unique blend of Mexican, Chinese and American influences. With over 325 days of
sunshine and all kinds of natural and man
-
made amenities, a healthy, active, and fun desert lifestyle
can be found in our city.

The intriguing landscape of the d
esert gives way to majestic mountains in west direction, making
Mexicali a paradise for anyone who loves the outdoors.
Hiking, biking, and exploring are favorite
Mexicali outdoors activities.


a)
Mexicali Downtown

Located at the border crossing port to
Calexico, CA, Mexicali Downtown is where most Americans who
visit Mexicali shop.
You’ll find convenient stores, tourist souvenirs stands, Chinatown, small
restaurants, city’s cathedral church and historic buildings such as Cuauhtémoc Elementary School and
the Imperial Hotel where the Imperial cabaret was. In that place the ex
-
California legislator Jack
Teeney composed the song “Mexicali Rose” which became famous in 1939 with the Gene Autry’s
movie titled as the same.


The notorious Owl Bar & Casino (Bar El

Tecolote) was also a very famous place in Mexicali Downtown
during prohibition days in the States. The world
-
known gangster Al Capone used to frequently visit the
place in order to take care of his illegal businesses; during those days Mexicali was an imp
ortant
distribution point for liquor and tobacco to the States.


b)
Mexicali attractions



State Arts Center :

concerts, plays and arts exhibitions



”Sol del Niño” Museum:

science and technology center & IMAX Theatre


State Theatre:

Plays, films, concerts and dramatic performances



”Mexicali Beer” Brewery:

Historical Building


City Park & Zoo:

Museum, zoo, lake and raft rentals, kiddy pool, water slide, barbeque pits, camping
grounds, grocery store, basketball, soccer and volleyball
courts, children’s playground among other
amenities are usually enjoyed by the families during weekend and vacation periods.



State University Regional Museum:

a regional museum with archaeological and historical items on
display.


River Land Company:

Hist
orical Building



Baja California Cultural Institute:

Plays & arts exhibitions.



Vicente Guerrero Park:

Children’s playground, outdoor theater, roller
-
skating ring, barbeque pits,
camping grounds.


Old City Hall:

Historical Building.


c)
Sports



Baseball
team: “Aguilas (eagles)”


Basketball team “soles de Mexicali”


Bullfights



d)
Outdoor Activities


Golf



Off
-
road races



Hunting



Fishing



Mountain Biking



Camping





e)
Arts & Culture

EVENTS AND FESTIVALS

*
Baja Prog Fest

*
Agrobaja Fair

*
Fiestas del Sol

*
Chinito Mendoza “Jazz Festival”


*
Wine Exhibition


Chapter Mexicali

*
International Festival of Contemporary Ballet


*
Mexican Evening


Mexicali’s Food Festivals


*
Cheve Fest (Beer Festival)

*
Paella Festival

*
Chinese Cuisine Festival

*Mexicali has

with
many

nightclubs,

bars and dining establishments.





9)

I
ncentives


1.

Federal

a)

Support programs energy
-
saving

1.

Energy imports

2.

Savings and energy efficiency

3.

Self
-
sufficiency

4.

Cogeneration

b)

Incentives for Research and Technology Development and
Innovation

1.

CONACYT federal incentives

c) Promexico Incentives



2.

State



The State´s Law for Competitiveness and Economic Development allos:

o

Exemption on State´s Payroll Tax for up to five years

o

Up to 30% discount on the water bill, based on the percentage of

water treated and
reused on a monthly basis

o

20%
-
50% exemption on water connection fees



Cash grants for innovation and technology development, with linkage between company and
educational institution (FOMIX)



Training coverage for up to 3 months of salaries

for new employees. State Government can cover
between 1 and 3 minimum wages.


3.

City

Tax Incentives

It consists of fixing a credit for a company for the equivalent of certain number of minimum wages,
against the offset debits for the municipality taxes.

A)

Tax

on Property Acquisition: A tax credit in percentages ranging from 25% to 35% respect to
the amount paid as Tax on Property Acquisition which represents 2% of the value of the
acquisition.

B)

Municipal Rights and Permissions: Regards to fees being paid for se
rvices rendered to the
company requesting stimulus of any municipal agency or entity related to the investment
project, in percentages ranging from 25% to 75%.

Non
-
tax Incentives

A)

Management Support: Consist in supporting the management of the proceedings w
ith the
different government agencies at federal, state and municipal levels, through the Industrial
Development Commission of Mexicali, for the creation, establishment and strengthening of
activities of the company; in the same way to obtaining advice to
resolve problems that could
inhibit the competitiveness of the company or affect its operation.


INCENTIVES









Labor

Technology and
Innovation

Energy
Saving

Permits and
Licenses

Tax
Incentives

Non
-
Tax
Incentives

Federal










State









City


















10)

Industrial Sectors



Aerospace



Automotive



Electronics and Semiconductors



Information Technology



Medical Devices



Metal Mechanics, Tooling and Design



Plastics



Renewable Energy



Agribusiness



Tourism and
Medical Services



Logistics



Housing


11)

Established in Mexicali



Honeywell



Kenworth



Goodrich



Gulfstream



Krystal Enterprises



Skyworks



Breg



Intuitive Surgical



Mitsubishi



Newell Rubbermaid



Black and Decker



GKN Aerosp
ace



Panasonic



Nissan Design



Kellogg



Bosh



Rockwell Collins



Care Fusion



Coca
-
Cola



Sempra Energy



InterGen



12)

Automotive Industry



25 automotive related companies established in Mexicali.



Workforce of approximately 8,000 engineers, technicians, among others.



Manufacturing, Assembly, Design and MRO operations.



Minor Degree in Automotive Design at local private university for students with a Major Degree in
Mechanical Engineer.



Strong and
Effective linkage programs between industry and educational institutions.

Processes:



Sheet Metal



Light Duty Motor Vehicle



Body and Trailers



Gasoline and Engine Parts



Electrical and Electronic Equipment



Steering and Suspension
Components



Brake System



Transmission and Power Train



Seating and Interior



Metal Stamping



Electrical Components



Success Stories:




Kenworth (Kirkland, WA)
, owned by Paccar Inc., has been successfully manufacturing heavy duty
trucks

from its modern complex in Mexicali since 1959. From this location, Kenworth has been able
to
dominate the Mexican market (60%)

and export worldwide. The Mexicali facility is also the only
site that supplies Kenworth

trucks to the Central and South American markets.



Pilkington
(automotive glass)



Honeywell Automotive



Nissan (Tokyo, JPN)

opened a design center (2010), taking advantage of the highly qualified
engineers the city has to offer



Krystal Enterprises (Brea, CA
)
, world leader that manufactures limousines and security vehicles
started operations at the end of 2009



Furukawa

(electronic wires)



Alu Wheel



Isoclima




13)

Aerospace Industry



More than 40 years of experience in Aerospace Industry

o

Rockwell Collins


45
years in Mexicali

o

Honeywell


29 years in Mexicali

o

Gulfstream


25 years in Mexicali



Baja California has the largest concentration of Aerospace companies in Mexico. Approximately
25% of total aerospace industry in Mexico with more than 12,500 employees



Des
ign, assembly and MRO



Certified companies in Mexicali with AS9100 and NADCAP



Top Companies

o

Honeywell

o

Goodrich

o

Gulfstream

o

Rockwell Collins

o

LMI Aerospace

o

GKN Aerospace

o

Chromalloy

o

Mexmil




Manufactured in
Mexicali

o

Sheet Metal Components

o

Insulation blankets

o

Cables and harnesses

o

Motor rings

o

Aerospace precision tools

o

Composite overhead storage
compartments

o

Heat exchangers

o

Hydraulics and electrical
components

o

Composite seats

o

Rubber seals
and hoses

o

High precision aerospace
machining




Design and Engineering in Mexicali

o

Composite Cargo Containers

o

Aircraft Interiors

o

Heat exchangers

o

Full integration of electrical systems




Support Industry

o

Only binational cluster in Mexi
co

o

Large aerospace supply chain integration

o

Easy access logistics for raw materials, components and machinery


14)

Metal Mechanics

Metal mechanic industry concentrates the largest manpower in Mexicali and is the most solid and well
developed industrial sector

in the city. Some numbers & figures:




52
metal mechanics related companies established in Mexicali.



Workforce of approximately
32,000

technicians, engineers and workers.



Experience handling diverse metals (aluminum, stainless steel, titanium, kevlar, bras
s, bronze, and
copper, among others).



Strong and effective linkage programs between industry and educational institutions for the
workforce development.



Qualified labor pool which allows a minimum learning curve that saves time and money.


Successful sto
ries doing business in Mexicali:


The best example is
Nassco (San Diego, CA)
, a General Dynamics company, which has been building large
military and commercial ship structures in Mexicali for decades.



Other world known companies like
Black & Decker (Tows
on, MD), Accuride (Santa Fe, CA), Rheem (Atlanta,
GA)

and
Emerson Electric Co. (St. Louis, MO)

have established successful facilities in Mexicali that are
capable of manufacturing a wide range of products.




The future of the metal mechanics industry in M
exicali is to continue the transfer of high end work that
requires skilled human resources and modern technology.




Black& Decker



Accuride



Emerson



Rheem



Nassco (A General Dynamics Co.)



Persal


Industries served: Aerospace, automotive, mining, power generation, solar power, water treatment,
medical, electronics, tools and appliances. The experience acquired through the years allows many
companies of Mexicali to make custom products and very speci
al products.



Processes:




Electroplating



Plating



Shot Peeing



Sheet Metal



Polishing



Chroming



Anodizing



Coloring and painting



Laser cutting



Bending, Turning, Milling



CNC machining (multiple axes)



Heat treatment



Powder Coating


Some of the metal products manufactured in Mexicali:




Frames and components for aircrafts



Aero structures



Automotive chassis, axles and components



Blades



Precision machining components



Filing Cabinets, Shelves, Rails



Oil drills



Tracking Systems for Solar Panels



Water Heaters



Valves and fittings



Machinery and equipment platforms



Metallic rails



Metal Fabrication



Pipes



Tanks



Shipbuilding parts (ladders, handrails, manholes, pipe & vent hangers)



Door locks



Pumps



Fences





15)

Electron
ic Industry




One of the first industries established in the City, since 1974.



More than 40 electronics related companies established in Mexicali with companies such as
Skyworks, Panasonic, Bosch, Rockwell Collins, Mitsubishi Electronics, Emerson, among
others.



Different type of manufacturing products as: microchips and semiconductors; harnesses,
cables, connectors and PC boards; potentiometers, microcircuits and sensors; electronics tools;
avionics; televisions; electronic power supply; refurbishing; mon
itors; automotive and medical
electronics assembly, etc.



Workforce of approximately 22,000 technicians, engineers, among others.



With processes as: manufacturing, assembly and MRO operations.



As an important industry, the State University of Baja Californ
ia develops the Major in
Semiconductors Engineering.



Strong and effective linkage programs between industry and educational institutions.



With all the years of experience and the linkage programs is easy to obtain and develop people
for electronic companie
s related that could have some interest and Mexicali saving time and
money.


16)

Plastic Industry




Industry that complements the other industrial sectors in the City.



More than 20 companies dedicated to the plastics industry are established in Mexicali with
c
ompanies such as: Fabrica de Papel San Francisco, Newell Rubbermaid, Orange County
Containers, Tetra Pak, Custom Pack, Multitube, etc.



You will find processes as: blow molded extrusion, injection molding, etc.



Workforce of approximately 4,000 technicians,
engineers, among others.



Opportunities in Mexicali for these industries, allow companies to establish both, cost and
profit centers.



Products related with this industry: boxes, pens and colored pencils, caps for carton packages,
medical devices, packaging
, etc.


17)

Medical Devices



Largest medical device cluster in Latin America.



12 medical device related companies established in Mexicali (90% with U.S. Headquarter).



Workforce of approximately 6,300 engineers, technicians, among others.



Manufacturing,
Assembly and Packaging.



Operating facilities FDA approved.



Wide supply chain proximity (including sterilization)



region has the largest concentration of medical device companies established in Latin America, of
which 90% have American headquarters


Manufac
tured products:




Electro medical apparatus manufacturing and assemblies.




Medical irradiation apparatus manufacturing and assemblies.




Surgical and medical instruments manufacturing and assemblies.




Surgical appliance and supplies manufacturing.




Dent
al equipment and supplies manufacturing and assemblies.


Success Stories:




Intuitive Surgical (Sunnyvale, CA), started operation 2008, manufacturing precision instruments
for robotic
-
assisted minimally invasive surgery(Da Vinci surgical system)



BREG (ortho
pedic devices, manufacturing and assembly)



Masimo



Martech (catheter manufacturing)



Lancer



Multitube Medical Devices



Orthomed



Tri State Centurion



Care Fusion



Sds


Sybrom Dental Specialties (dental medical instruments)


18)

Renewable Energy



State Policy

o

2008
-
2013 State Development Plan



Creation of the Baja California Energy Commission



Formulates the State Energy Program



Electricity infrastructure connected to the USA (only Mexican city)



Availability of flat and less expensive land



Solar Energy

o

First Mexic
an State to develop renewable energy

o

Kyocera



Production of PV modules



For commercial and residential solar PV systems

o

Mexicali
-
Valle de las Misiones PV Systems



Largest photovoltaic solar panel housing Project in Latin America



Funded by CFE and the Baja
California State Government



220 low income houses were equipped with solar panels



La Rumorosa Wind Farm

o

Total investment of $26.1 MD

o

Total Capacity of 10 megawatts

o

5 turbines Gamesa G
-
87 2 MW

o

The project will supply clean energy to up to 35,000 low incomes

houses



Cerro Prieto Geothermal Plant

o

Located in Mexicali, Cerro Prieto generates 720 MW, being the largest in Latin America

o

Geothermal accounts for 4% of the total energy production in Mexico, of which 80% is
generated in Cerro Prieto



Thermoelectric

o

Sempr
a Energy´s Thermoelectric power plant in Mexicali produces 625 MW of power

o

Intergen´s thermoelectric power plant in Mexicali produces 1065 MW of power



19)

Food Processing


Mexicali offers a great potential to grow the existing food processing industry. Its
proximity to the US
(number #1 market for food and beverages) connected by rail, roads and air has attracted many global
players to make their products in our city.


Agricultural, livestock and food processing industries have experienced considerable investment in recent
years and are an important part of the export base of Mexicali’s economy.


Also, the fertile ground of the Mexicali Valley allows these companies to
have a strong source of a wide
variety of crops and produce.


Major food processors located in Mexicali:



Kellogg Co.



Frito Lay



Nestle



Coca
-
Cola



Maseca



La Moderna



Grupo BIMBO



Grupo Barcel



Jumex



Su Karne



Procarnes


Markets served: US, Mexico as well as many countries in Europe and Asia.

Food standard approvals:
USDA, FDA, Primus Labs, EurepGAP Standards, México calidad suprema.