Mexico’s manufacturing sector is booming, and for good reason. From its strategic location and skilled workforce to favorable trade agreements and competitive costs, our country offers a compelling destination for businesses looking to expand their operations. However, establishing a manufacturing facility in a new country can seem daunting.
That’s where we come in. Thanks to Hermosillo’s more than 60 years of experience in industrial design and construction in Mexico, we have helped many companies grow and transform their manufacturing projects into reality.
This article will discuss the key steps to establishing a manufacturing facility in Mexico in 2024. From selecting the ideal site to evaluating investment costs and choosing the right general contractor, we’ll equip you with the knowledge and confidence to make informed decisions throughout the entire process.
Site Selection
Site selection is critical for every company when considering establishing manufacturing operations in Mexico. A well-chosen industrial site directly impacts the efficiency, costs, and overall success of manufacturing companies in Mexico. Here are vital factors to guide you in site selection:
- Proximity to Markets: Opt for sites that shorten the distance to your customers or export markets. It’s essential for timely deliveries and lower transportation expenses.
- Infrastructure and Services: Select industrial sites with necessary public infrastructure, such as paved roads, utilities, and access to public transportation. This ensures the smooth operation of your manufacturing plants in Mexico. We will delve deeper into this topic in the following point.
- Discover Industrial Construction Sites: Utilize site selection services or consult site selection consultants to uncover ideal locations. At Hermosillo, we provide a clear industrial perspective, including a technical evaluation of the potential sites.
- Evaluate Local Amenities: Consider the availability of housing, educational and entertainment facilities, as well as services that can accommodate the needs of a skilled workforce. A location with these facilities would be more attractive and sustainable.
Utilities and Feasibility
When planning to build a facility, a thorough manufacturing risk analysis must consider the availability of essential utilities. Adequate access to water, electricity, gas, drainage, and other utilities is non-negotiable for a seamless manufacturing process.
To ascertain utility availability:
- Electricity: Confirm that the electricity grid can handle the facility’s demands and evaluate alternative power sources in an emergency.
- Water: Verify the quantity and quality of water available to support the manufacturing operations.
- Gas: Ensure a reliable and cost-effective gas supply, especially if gas is a critical energy source for your processes.
- Drainage: Scrutinize local drainage systems to manage water discharge without disrupting the overall system operations.
Preliminary Construction Cost
When embarking on the journey to build a manufacturing facility in Mexico, conducting a thorough preliminary cost analysis, including a comprehensive construction project cost breakdown, is crucial. This ensures that every facet of the project cost is accounted for, from pre-construction to labor, production and material costs.
At Hermosillo, we leverage advanced technology and artificial intelligence to perform an optimal platform analysis, pinpointing the most suitable locations for industrial facilities and their final floor levels. This AI software is essential, especially when dealing with challenging landscapes and slopes, like the multiple hills in Tijuana, Baja California, where the existing site must be worked to establish the final optimal levels of the platforms.
Meticulous project cost estimates help secure appropriate funding for the project, pivotal for any sizable investment. Precise cost estimates during the preconstruction phase of the project can influence the approval of the overall scope of work and/or the rejection of the investment.
At Hermosillo, we have over 60 years of experience in the design and construction of industrial facilities throughout Mexico. Thanks to this, we have a vast database of similar projects for the accurate cost estimate of a new project. With this wealth of information and national outreach, we ensure our clients receive accurate and up-to-date cost estimates for projects in any city across the country.
Customer Evaluation of Investment
Now, after all the technical information you have regarding your new project, it’s time to decide whether to invest in establishing their new manufacturing facility in Mexico – according to your business model and financial projection.
The tools we shared previously in this blog post will assist and guide you in making an investment evaluation. Having addressed all these needs and prior questions, you can feel confident in making an objective and correct decision, not based on feelings or beliefs but on hard facts and valuable information.
Conducting a comprehensive risk assessment is vital to evaluating an investment. This includes understanding the regulatory landscape in Mexico, assessing the potential for changes in market demand, and considering the long-term sustainability of the investment.
Understanding the dynamics of the Mexican market is another critical aspect of the investment evaluation. Mexico offers unique opportunities, including a strategic geographic location, a robust supply chain, and a skilled workforce. Our team at Hermosillo can provide in-depth analysis and insights into these market dynamics, equipping our clients with the information needed to make informed technical decisions.
General Contractor Selection
A general contractor is a service provider and a partner throughout the construction process. A general contractor with a robust and reliable track record ensures adherence to high standards of quality and safety, which is critical for the success of your project.
When looking for a contractor, the following points are indispensable:
- Expertise and Alignment: Secure a partner whose expertise aligns with your specific industry and project requirements.
- Collaborative Approach: Choose a company that fosters a collaborative environment and teamwork.
- Financial Stability: Verify the contractor’s financial strength to handle large-scale projects.
- Comprehensive Services: Look for a general contractor offering complete end-to-end design and construction services under the same roof.
- Values: Choose a general contractor with the same values as your company.
- Risk Management: Evaluate their risk management approach and ensure it aligns with your risk profile.
At Hermosillo, our reputation for excellence is built on these very principles. We are a general contractor with a national presence and financial capability to undertake projects of various scales throughout Mexico. Our comprehensive services cover all the phases of a project; each of our projects is handled by a dedicated onsite team of experienced professionals who focus on delivering world-class manufacturing facilities in Mexico
Read here 5 reasons to choose Hermosillo as your general contractor
Conclusion
Establishing a manufacturing facility in Mexico offers immense possibilities for your business’s future. Yet, its success is deeply rooted in careful planning, informed choices, and strong partnerships. You can confidently embark on this rewarding journey by following the key steps outlined in this article and leveraging the expertise of seasoned professionals like Hermosillo. The path to expanding your manufacturing company in Mexico may be complex. Still, the right approach and support can lead to unparalleled growth and success in the dynamic world of global manufacturing.
