Everyone seems to know something about offshore manufacturing. Depending on which side you are on, it’s a sound business decision, or greedy corporate management stealing from the consumer. While I don’t want to get into any political or moral discussions about the rightness of manufacturing overseas, I do want to talk about it.
Typically, offshore manufacturing has been limited to large corporations, who could build their own factories, train the native population and maintain the infrastructure necessary to move large amounts of product from the Far East to the United States. As with most things, there are a few exceptions; where foreign factories produce similar products for a number of American owned companies. Although this doesn’t requiring building your own factory, it still requires the infrastructure to work with a manufacturing plant half a world away.
A number of years ago, the Mexican government passed a law making offshore manufacturing much easier for smaller companies. With this law, they created the Maquiladores. These factories are specifically designed to manufacture goods in Mexico, taking advantage of the low government controlled work force wages, for shipment and sale outside of Mexico.
Seventy-five percent of the products produced in any maquiladora have to be exported from Mexico for sale in other countries. Since the finished products are to be sold outside of Mexico, there are no import/export duties to pay on materials and components sent into Mexico for their manufacture. However, for the finished products that stay (a maximum of 25%), duties are charged on the materials and components.
The great thing about these maquiladores is that small to medium sized companies can contract the manufacturing of their products in Mexico, without building their own factory. While many of these factories are foreign owned, there are a number of maquiladores which are contractors, fabricating just about anything imaginable. This could give your company the competitive edge it needs to take the next step in the ever-growing global marketplace.