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Maquila. Assoc. (INDEX) Welcomes New President

February 11th, 2014 Comments off

PRESS CONFERENCE: Feb. 11, 2014

The Maquila Association also known as (INDEX) and the McAllen Economic Development Corporation met the morning of February 11 to introduce INDEX’s new president, Carlos Vera (Plant manager at Brunswick in Reynosa) for 2014 and update the community on the recent Mexican tax reform.

McAllen EDC commented on indicators of positive growth for the Reynosa/McAllen area due to the large auto supplier base in the McAllen/Reynosa area and the expansion of the auto industry in general. Security was also addressed and both organizations (MEDC/INDEX) expressed their diligence towards constant communication between maquiladora managers and government.

The new INDEX president, Carlos Vera also stated that they are hosting more meetings to be better prepared and brainstorm ideas to keep safety certain among parks.

MEDC asked Carlos Vera a few questions:

MEDC: How has and will the tax reform impact McAllen and Reynosa?

Carlos Vera, INDEX: It did not affect us the way we thought it perhaps could.  All the modifications to the decree alleviate most of the impact and i do not think at this moment it will impact us in the future. Our position at the national level is stronger and we will keep working to strengthen our relationship with the authorities for future lobbying on fiscal or labor reforms. To be blunt, Mexico has to switch to a friendlier model to do business for foreign corporations before anything. After that is laid as the foundation we will soon see the positive impact any reform could have on the manufacturing/maquiladora industry. As for McAllen, they will be affected positively when the mid level people choose to purchase their home supplies in the USA instead of Mexico based on the tax rate increase from 10% to 16%.

MEDC: What is your vision as president of INDEX?

Carlos Vera, INDEX: My vision is to have a very strong association with active members bonding joints internally and externally with the communities of Reynosa and McAllen, helping to grow the society, culturally and educationally.

MX TAX REFORM DETAILS & UPDATES

Presidential decree published on December 26, 2013

•Allows for the deduction of an addition 47% of exempt benefits from the payroll
•Two-year time limit to fulfill the requirement that at least 30% of M&E should be the property of the non-resident. For companies who had been complying with 216 Bis since before Dec/31/09.
•Immediate crediting of IVA vs withholding payment for non-resident sales to the company with the IMMEX or automotive program in  Mexico (no VAT flow).
•Income Tax incentive of October 30, 2003 repealed

Miscellaneous rules published on December 30, 2013

•Enforcement of the requirement of no sales in Mexico in order to be considered as a Maquiladora for tax purposes has been deferred for 6 months.
•Specification of the definition of income from productive activities stemming from Maquiladora operations

Published on January 1, 2014

•Three certification modalities: A, AA and AAA
•More As means greater additional benefits, both fiscal and foreign trade, (e.g. IVA refunds in 20, 15 and 10 days respectively), and also means having to comply with more additional requirements.
•ALCALCE will resolve certification applications in no more than 40 days (as of the date when all the requirements have been met).
•Validity periods for IVA would be A= 1 year, AA= 2 years and AAA 3= years
•The general requirements are basically fiscal, foreign trade and contractual compliance, as well as an initial on-site inspection by AGACE. For the AA and AAA , the compliance requirements include their suppliers.
•Certification must be requested in accordance with a calendar that corresponds to the tax address, considering  the ARACE circumscription:

- Companies certified with Rule 3.8.1., NEEC and tax  warehouses.-   April 1   through 30

- Northeast (including Reynosa).- June 3 through July 3

- North Pacific.-  April 15 through May 15, North Center.- July 7 through   August 7, Center.- August 7 through    September 8, West and South.

-September 22 through October 22

RGV STEM Students: The Future is in McAllen

October 17th, 2013 Comments off

Manufacturing today is no longer the dirty, dark, and dangerous world it may have been during the early years of American industry. Indeed, advanced manufacturing has the potential to symbolize the broader manufacturing resurgence underway in America as well as play a driving role in the country’s overall economic recovery.

A good deal of progress has been made in recent years in restoring global competitiveness, jobs, and excellence in innovation in this sector.

SOMETHING TO THINK ABOUT (SOUTH TX RESIDENTS): We will benefit from the manufacturing sector in various ways. With more industry, comes more homes, with more homes, comes more retail. It’s a domino effect and we are in the HOTTEST spot in America to host an industry such as manufacturing. We are outgrowing our area, and in no time, we will have to start building up.

UTPA and STC who have the latest technology courses, certifications, and degrees are producing thousands of graduates who are well suited for the manufacturing industry. The talent pool is here. With the new university merger, the healthcare industry and product manufacturing plants will locate to benefit from what we call, an “international MSA” and the massive pool of trained and skilled workforce.

  • STEM Education: To maintain its technological edge on the global stage, the United States will need sustained and long-term investment in STEM education to encourage the youth of today and tomorrow to pursue the engineering, science, and computer science-driven careers that will be needed to fill jobs in America’s manufacturing sector. The long-term timeframe must also be met with immediate STEM-career training initiatives to prepare workers to take the job openings in this field that currently sit unfilled. Attracting students to these fields and to careers in manufacturing also requires a more positive image of the sector and better collaboration between industry and educators.

*blog developed from Huffington Post. For full article clickHERE

Manager’s Mixer – Sept. 2013

September 27th, 2013 Comments off

A BIG thank you to Embassy Suites Hotel in McAllen for hosting a fun mixer for us and our plant managers. Fire guacamole, bacon wrapped shrimp and some good wine swarmed the room as managers mixed and mingled. This is a very important gathering for our corporation because we are able to connect with our innovative plant managers and staff from Reynosa and McAllen in a relaxed ambiance. Embassy Suites gave away a hearty gift basket of champagne and snacks alongside a free one night stay and $40 gift certificate to Remington’s Steak House. Can someone say generous? We love our friendly business partners. Below are some fun pictures!

Tilted Kilt’s Grand Opening, 100 jobs generated

September 13th, 2013 Comments off

Business on the west side of McAllen is booming. MEDC strives to bring businesses and communities together with unique experiences, and a great quality of life and innovation. Today’s highlight of the morning was “Tilted Kilt’s” grand opening. CLICK HERE FOR NEWS STORY

What’s the Difference Between an Engine and a Motor?

August 21st, 2013 Comments off

Who would have ever thought? Now think to yourself. Does my vehicle run on an engine or a motor? How about those annoying “Check engine light” alerts that light up from time to time? A-ha…

Those are the things you can learn on just a simple tour of the South Texas College Technology Campus located on Ware Rd. in McAllen.

While a lot of the technology courses are hands on and practicum based, the difference between “pass or fail” is the reading and logic. A big misconception of these programs is that students think the programs are 100% hands on and don’t have to read or write. That becomes quite difficult when you’re given a work order and left alone with a deadline.

An other eye opening fact is the high demand and salaries. A STC graduate with a technology certificate averages $75,000 as their starting salary. (I know what you’re thinking.. I need to change careers!)

The truth is, the manufacturing and technology field is growing. What’s better is that it’s growing here in the Rio Grande Valley.

So…. What’s the difference between an engine and a motor?

A motor needs external power, like a blender. It won’t work unless it’s powered by something else.

An engine produces it’s own power due to the internal combustion and can run on its own.

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The Rio Grande Valley Market Maintains Population Growth if not Housing Growth in 2013

July 23rd, 2013 Comments off

(Rio Grande Valley, TX – May 21, 2013) The Rio Grande Valley continues to see population growth in the 2.5% range, increasing the demand for housing, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

The Rio Grande Valley MSA registered an annual job gain of 7,300 jobs in the year ending February 2013, a 2.0% rate. The benchmark results show a gain of 8,800 jobs (2.4%) in Year-2012, and 5,700 jobs (1.6%) in 2011. Job growth forecasts project the Rio Grande Valley to see job growth in the 2.3% range for 2013. “The local recovery has struggled to gain momentum in the past year though the revised job numbers show employment growth, namely in the sectors of transportation, and retail,” said Randall Allsup, Metrostudy’s regional director of San Antonio and Rio Grande Valley markets. The Rio Grande Valley unemployment rate as of February 2013 is 10.7%, which is down 0.5% from a year ago.

The annual rate of new home growth in the Rio Grande Valley as determined by Metrostudy’s first quarter survey is 1,773 starts. This annual rate of 1,773 is down 365 units, or 17.1%, from the 1Q12 rate of 2,019. “The expectation is that the decline is temporary as the short and long term prospects for the market are good with job growth forecasts for 2013 in the 2% range, and close proximity to a recovering Mexico,” said Allsup. The Rio Grande Valley had 412 starts in the first quarter, down 19.7% from the fourth quarter of 2012. In the Rio Grande Valley the number of new home closings in the year ending 1Q13 was 1,767 down 386 units, or 17.9%, from the 1Q12 rate of 2,153. There have been 458 closings in the 1st quarter, down 12.8% from 4Q12.

Metrostudy’s 1Q13 survey found the level of new home inventory to be high relative to the number of closings in the same period. There were a total of 1,368 homes in inventory at the end of 1Q13, which represents an 9.3 months of supply based on the annual closings rate. Metrostudy documented 685 homes under construction at the end of the first quarter, a decrease of 54 units when compared to 1Q12. “The months of supply of finished vacant units, is the key indicator of the health of housing inventory. When finished vacant inventory in the Rio Grande Valley market approaches approximately 3.0 months, builders are generally forced to begin to offer some concessions in order to move the inventory of unsold homes,” said Allsup.  The inventory of finished vacant units totaled 667 homes at the end of 1Q13, up 10% compared to the 1Q12 level of 609. Based on the closings rate for the first quarter, the current level of finished vacant inventory represents 4.5 months of supply.

“The Rio Grande Valley continues to see population growth. The increased demand for housing is currently being absorbed by an extremely tight rental market with occupancy levels over 95% and rents that continue to climb. The positive side to this is that climbing rents will help build demand for detached housing which has seen the sales pace in the resale market steady over the past few months and inventory levels are beginning to drop which will contribute to stabilizing home values, especially in more desirable areas,” said Allsup.

For information contact:
randall allsup @ 210.525.9549
email rallsup@metrostudy.com

Click here to access original article by MetrostudyReport and access more information on Metrostudy

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Four Reasons Mexico Is Becoming a Global Manufacturing Power

June 28th, 2013 Comments off

Mexico is beginning to beat China as a manufacturing base for many companies despite its higher crime rate, according to a new report from Boston Consulting Group. Mexico’s gain is a plus for the U.S. because Mexican factories use four times as many American-made components as Chinese factories do, says the consulting firm. Here are Mexico’s four key advantages:

1. Manufacturing wages, adjusted for Mexico’s superior worker productivity, are likely to be 30 percent lower than in China by 2015. China’s wages have soared. They were about one-quarter as high as Mexico’s in 2000 but are catching up rapidly and will be slightly higher by 2015. And labor productivity remains higher in Mexico, even though the gap is narrowing. The crossover point was 2012, when unit labor costs in China (i.e., wages adjusted for productivity) grew to equal those in Mexico. By 2015, Mexico will be around 29 percent less expensive.

2. Mexico has more free-trade agreements than any other country. The North American Free Trade Agreement gives Mexican goods easy access to the world’s largest market, the U.S., as well as to Canada. But that’s not all. Mexico has free-trade agreements covering 44 countries. That’s more than the U.S. (20 partners) and China (18) combined.

3. Mexican manufacturing has a significant advantage in energy costs. Natural gas prices in Mexico are tied to those of the U.S., which are exceptionally low because of a glut of supply on the market. China pays from 50 percent to 170 percent more for industrial natural gas. Mexico also has an edge over China in electricity costs, although power isn’t as cheap in Mexico as in the U.S.

4. Industry clusters, especially in autos and appliances, are growing. Mexico has developed a national expertise in certain industries, which makes it more attractive for companies to locate or expand plants there. Because Mexico is a major auto manufacturer, 89 of the world’s top 100 auto parts makers have production in the country. The companies are concentrated in five Mexican states, reducing transportation costs. In appliances, more than 70 manufacturers are in the country, ranging from components makers to assemblers of both small and large appliances.

Mexico’s progress relative to China is major good news for the country because manufacturing accounts for 35 percent of Mexico’s gross domestic product (vs. 12 percent of U.S. GDP), Harold Sirkin, the report’s lead author, says in an interview. The U.S. benefits in two ways, he says. First, by selling more components to Mexican manufacturers. Second, by selling more consumer products, such as American-made beef, to Mexicans, who will have more money for imported products if their living standards rise.

Read original article: Bloomberg Business Week

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CONTRACT MANUFACTURING

March 15th, 2013 1 comment

U.S./MEXICO BORDER MANUFACTURING: KEEP YOUR OPTIONS OPEN

Advantage #2: Contract Manufacturing

Expanding or relocating into the U.S./Mexico border offers a large selection of competitive advantages for companies looking to stay ahead of the competition. Likewise, those selections are also presented in different packages, with different amounts of investments in machinery, and/or labor.

Contract Manufacturing, is a popular choice among companies looking to test the efficiency of this international model.
Under a contract manufacturing operation, a company and the contracted entity will define the terms under which a product will be produced. The distribution of responsibilities or contributions between both parties may include:

CLIENT
• Existing supply chain or assistance identifying new sources of raw materials
• Equipment/Tooling
• Start-up Procedures
• Manufacturing process
• Volume/Price commitment
• Delivery schedules

CONTRACTED ENTITY
• Up-to-date regulatory compliances
• The sourcing of direct/indirect labor
• Customs accounts & traffic procurement
• Production & quality control
• Finished goods to spec requirements
• Manufacturing Resource Planning (MRP) management
• Established distribution & logistics services/sources

This option represents a smaller capital investment than the traditional “Maquiladora” or manufacturing plant setup. Depending on the chosen location of the contracted services, U.S. or Mexico, this may also allow companies to bridge any cultural gaps and minimize the learning curve of doing business in Mexico.

http://www.mcallenedc.org/contract-manufacturing.php

MANUFACTURING IN MEXICO: ADVANTAGE #1

March 14th, 2013 Comments off

MEXICO: BETTER MANUFACTURING OPTION THAN ASIA

Lower Cost of Shipping; Reduced Time to Market

Recent events and manufacturing trends have shown Asian countries to be losing popularity as manufacturing destinations. Meanwhile, Mexico has been rising as the preferred choice for manufacturers world-wide.
Factors like the increased cost of shipping from Asia to the U.S. versus the lower-cost distribution options Mexico provides have proven to capture the attention of manufacturing companies looking to not only remain competitive in today’s market, but grow at a profitable pace.

Reduced Time to Market

Mexico is a direct southern neighbor to the United States, the largest consumer market in the world. This becomes a key consideration of the supply chain where companies manufacturing in Mexico don’t need as much lead time for the product to reach the market.

In the case of the McAllen, Texas / Reynosa, Mexico international metropolitan area operations reduce their inventory costs by operating under a truly efficient speed to market model. Many existing operations may have two days’ worth of inventory, or in certain cases, hours’ worth of inventory, sourcing raw materials from the U.S. or Mexico. Companies purchase what they need, when they need it. A healthy number of reliable local suppliers provide these daily, even hourly deliveries. With this efficient and consistent delivery of materials, companies do not incur significant storage costs, nor have funds tied up on inventory.

However, if an operation is importing from Asia, delivery can take up to 3-6 weeks, forcing operations to order a larger inventory to meet forecasted customer demands. This results in additional storage costs and inventory that may not meet changing market demands.

Manufacturers or suppliers that are already located in McAllen / Reynosa are able to ship the same day, and get it delivered to their clients’ plants seamlessly.

Likewise, the days of sitting on large quantities of finished goods are a thing of the past. The minute the product order is received, it is built and shipped. Many of the companies in this international metropolitan area build to order.

manufacturing-in-mexico.php

 

FibeRio® Technology Corporation Announces Strategic Investment Financing Led by SABIC and Aster Capital

February 26th, 2013 Comments off

February 25, 2013 | McAllen, TX – FibeRio, the developer and manufacturer of ground breaking Forcespinning® nanofiber production systems, today announced it has completed a $13M capital raise led by two global strategic investors – SABIC Ventures B.V., Saudi Basic Industries Corporation’s corporate venture capital arm, and Aster Capital Partners, sponsored by Solvay, Schneider Electric, Alstom and the European investment fund. The funding will be used to accelerate the company’s commercial growth, introduce larger scale production systems to the market and execute on a growing pipeline of orders and global opportunities with industry leading customers.

“The support of two of the leading, knowledgeable strategic investors in this space, SABIC and Aster Capital, is a strong validation of the uniqueness of our Forcespinning technology and will help the company accelerate our growth, open new markets and enable new applications for all of our customers” commented Ellery Buchanan, CEO of FibeRio. “This collaboration will greatly accelerate our vision of the Forcespinning process becoming the world’s leading, cost effective process to produce nanofibers at scale never before achieved.”

Forcespinning is a disruptive, platform technology which enables leading manufacturers to produce nanofibers on a truly commercial scale in a cost effective way using a wide range of polymers and an environmentally sensitive process. Forcespinning is the only fine fiber production system capable of both melt and solution spinning from lab scale to full industrial scale production. Unlike electrospinning, Forcespinning does not require materials to contain certain dielectric properties for processing which limits the materials that can be produced into fiber. Nanofiber applications are used in a variety of markets including filtration, nonwovens, battery separators, textiles, biomedical and conductive applications.

Hans Kolnaar of SABIC Ventures commented “FibeRio’s unique processing technology not only increases our market reach, but offers SABIC an opportunity to move further down the value chain with innovative fibers for our customers.”

“We view the cost effective production of nanofibers at scale as a key technological focus for the nonwovens marketplace for a wide variety of applications in the filtration, energy, medical, hygiene and textiles markets. Thanks to our sponsor, Solvay, we were able to validate that FibeRio has a unique breakthrough technology to accelerate nanofiber growth for all levels of production. We are excited to partner with a company that will be driving the deployment of nanofibers for the foreseeable future” commented Pascal Siegwart and Todd Dauphinais, partners at Aster Capital in a joint statement.

The combined breadth of resins represented by SABIC and Aster cover everything from commodity polymers such as polypropylene and nylon to high performance materials including fluoropolymers, polysulfones, polyethylene imines, and liquid crystal polymers among others. A number of these materials have never been made into nanofibers before and can offer materials performance advantages to FibeRio Forcespinning equipment customers. FibeRio, SABIC and Solvay will all benefit through the integration of a wide range of resins with Forcespinning technology.

FibeRio’s existing shareholders also participated in this financing round, including the University of Texas System – UT Horizon Fund, the University of Texas – Pan American, the State of Texas, Silverton Partners and Cottonwood Technology Fund I. As part of this financing, James Wilson, of SABIC’s Innovative Plastics Strategic Business Unit, and Todd Dauphinais of Aster Capital will join the FibeRio board of directors.

About FibeRio
FibeRio Technology Corporation provides the technology and capital equipment to transform the materials market through the unlimited availability of cost effective nanofibers. Founded in 2009, the company has already delivered several large scale industrial Forcespinning units to industry leading customers across the globe. The company is headquartered in its manufacturing facility in McAllen, TX. For more information, please visit www.fiberiotech.com or call 956-207-5448.

About SABIC Ventures
SABIC Ventures is the global corporate venture capital arm of SABIC, based in the Netherlands. Its primary goal is to seek out innovative technologies and businesses consistent with the company’s global strategy. Its investment focus includes functional materials, alternative feed stocks for chemicals and materials and alternative energy technologies. SABIC Ventures invests directly in seed stage, early stage and late stage companies.

For more information, please visit www.sabic.com/ventures

About SABIC
Saudi Basic Industries Corporation (SABIC) ranks among the world’s top petrochemical companies. The company is among the world’s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.

SABIC recorded a net profit of SR 29.24 billion (US$ 7.80 billion) in 2011. Sales revenues for 2011 totaled SR 189.90 billion (US$ 50.64 billion). Total assets stood at SR 332.78 billion (US$ 88.74 billion) at the end of 2011.

SABIC’s businesses are grouped into Chemicals, Polymers, Performance Chemicals, Fertilizers, Metals and Innovative Plastics. SABIC has significant research resources with 16 dedicated Technology & Innovation facilities in Saudi Arabia, the USA, the Netherlands, Spain, Japan, India and South Korea. The company operates in more than 40 countries across the world with around 40,000 employees worldwide.

SABIC manufactures on a global scale in Saudi Arabia, the Americas, Europe and Asia Pacific.

Headquartered in Riyadh, SABIC was founded in 1976 when the Saudi Arabian Government decided to use the hydrocarbon gases associated with its oil production as the principal feedstock for production of chemicals, polymers and fertilizers. The Saudi Arabian Government owns 70 percent of SABIC shares with the remaining 30 percent held by private investors in Saudi Arabia and other Gulf Cooperation Council countries.

For more information, please visit www.sabic.com

About Aster Capital
Aster Capital is a leading energy and environment technologies focused venture capital firm sponsored by Schneider Electric, Alstom and Solvay, global leaders in the energy and chemicals industries, and the European investment fund through the Competitiveness and Innovation Framework Programme. They have jointly invested in Aster’s second $135 million investment fund. With a total of $200 million under management, Aster aims to proactively leverage the expertise of these sponsors to support its portfolio companies in their further development. Aster Capital has offices in Paris, San Francisco, Shanghai, Tel Aviv and Tokyo.

For more information, please visit www.aster.com

[For interviews or custom quotes, contact Kial Gramley at kgramley@fiberiotech.com 

or call 956-207-5448 ext. 12]