Medical Device Manufacturing on the Move in Mexico
August 30, 2013
Since 1994 when the North American Free Trade Agreement (NAFTA) removed the trade barriers between the United States, Canada and Mexico, the member nations have experienced ever-increasing ties and collaboration. Manufacturing in Mexico has boomed, quintupling exports and providing good jobs for the country’s workers. As the global economy improves after the recession, Mexico is poised to take advantage of opportunities in the medical device market that serves the healthcare industry in the United States and other countries around the world.
The maquiladora program was instituted in Mexico to address the high rate of unemployment that existed throughout that country and to take advantage of opportunities for exporting to the United States. It is a system that arose in the 1960s out of a burgeoning agricultural industry in the U.S. Over the decades, the system has grown and changed to include manufacturing companies. After the implementation of NAFTA, it has aided a number of foreign manufacturers to operate in Mexico to provide products for a variety of industries. The maquiladora program exports about 90 percent of its products to the United States.
With increasing competition from China over the years, Mexico has not been content with watching its manufacturing base be replaced by imported Chinese goods. The country has made aggressive efforts toward increasing their manufacturing base by actively seeking out new areas of business activity. With competitive wages, strong expertise in manufacturing processes, its location relative to the United States and more free trade agreements than China, Mexico has a number of advantages over its Asian competitors. The country continues to seek out emerging areas of opportunity that can aid in continued development of its industrial base in the coming decades. One of the areas is the burgeoning healthcare industry.
In the manufacturing industry, Mexico has made its mark concentrating on appliances, electronics and automotive parts. With the huge rise in aging populations in the United States and other countries around the world, it made sense for Mexico to begin to take on the medical device market, as well. Big names in the medical device industry such as Medtronics, Carefusion, Pall Life Sciences, Cardinal Health and Tyco Healthcare began looking to Mexico to provide manufactured units from manufacturing plants in Tijuana, Sonora, Nuevo Leon, Estado de Mexico, Coahuila, Chihuahua and Jalisco. This effort has made Mexico the 11st largest medical device exporter in the world, with a market that is expected to grow 74 percent from 2013 to 2020. With its proximity to the United States, low shipping expenses and ability to provide shipments quickly, Medical Device Manufacturing in Mexico is poised to excel for decades to come.