Why Mexico Is Ideal for Sheet Metal Fabrication
December 27, 2021
When it comes to manufacturing in Mexico, the automotive and electronics industries are notorious big performers, however, Mexico’s metal fabrication industry has also found great success. The industry has grown not just because of its importance as a supplier, but also because of the numerous advantages Mexico offers sheet metal manufacturers and other metalworking and metallurgy companies.
Metal Fabrication in Mexico Today
The sheet metal fabrication, and metal mechanics industry as a whole, is one of many thriving manufacturing sectors in Mexico and is an important pillar of the country’s economy. Exports of metal mechanical products in 2017 totaled more than $78 billion, and the sector includes more than 600,000 direct-industry employees.
The industry is so important to Mexico’s economy largely due to the fact that metal fabrication companies in Mexico provide critical components to the country’s biggest secondary manufacturing sectors, such as automotive, electronics, and aerospace manufacturing. Manufacturers can find companies all across the country that specialize in essential sheet metal fabrication processes, including:
- Laser cutting
- CNC machining
- Tig welding
- Injection molding
Metal production in Mexico also helps to drive innovations within the metal industry and other manufacturing sectors. Because of metal’s importance to many other industries, manufacturers are always seeking out new ways to expand, modernize, and optimize their operations. In 2017, steel supplier Turnium announced it would be investing $1.1 billion in a hot steel rolling facility in order to produce more advanced products in Nuevo Leon, a Mexican state that is home to top metal fabrication companies.
The Mexico Advantage for Metal Manufacturers
Sheet metal manufacturing and the metal industry overall are booming in Mexico thanks to the country’s clear competitive advantages.
A Growing Industry
Other manufacturing sectors in Mexico are seeing significant growth as companies look to relocate their operations to North America, and as these different industries move, so do supply chains. OEMs looking to keep their Tier 1, 2, and 3 suppliers local continue to present opportunities for sheet metal fabrication businesses.
The USMCA & Other FTAs
Promoting the expansion of sheet metal fabrication and other metal manufacturing sectors in Mexico, the USMCA requires that 75% of work done on automobiles, one of Mexico’s biggest exports, must be done in North America. Furthermore, 70% of the vehicles’ steel and aluminum parts must be purchased from North American suppliers.
The USMCA and Mexico’s many other free trade agreements also help manufacturers lower export costs. By eliminating or reducing tariffs, sheet metal producers can ship components to manufacturers located outside of Mexico for a fraction of what it would cost to export out of other countries.
Proximity to Other Manufacturers
Mexico’s metal fabrication industry is critical to many other of Mexico’s manufacturing sectors. The proximity to OEMs and other supply tiers helps make companies’ supply chains more resilient and more competitive by allowing for the low-cost, low-risk transport of sheet metal parts and other essential components.
Proximity to Consumer Markets
Sheet metal made in Mexico often goes on to other Mexican manufacturing facilities to be converted into complete products. Due to the heavy nature of many of these products, such as automobiles, it’s beneficial for these manufacturers, and their suppliers, to be close to the target market in order to reduce transport costs.
Mexico’s government has invested heavily in higher education and vocational training programs and sees more than 120,000 engineering students graduate each year. Many of these universities and programs collaborate with private sectors in order to drive innovation in Mexico’s metal fabrication industry.
The IMMEX Program
Sheet metal producers have the advantage of being able to work with a shelter company under Mexico’s IMMEX program. Not only does this reduce and, in some cases, eliminate VAT taxes and other customs fees, but it also provides manufacturers with administrative and legal support, allowing manufacturers to focus on production and scaling their business.
Grow Your Fabrication Capabilities with NAPS
At NAPS, we have the expertise and experience to help you take full advantage of Mexico’s IMMEX program. With our complete Administrative and Compliance Management Program, we’ll guarantee you meet all IMMEX requirements, while also taking over standard administrative processes, such as payroll and human resources. With NAPS, you get full control over guiding and growing your business while we handle the rest. Contact us today to learn more about how we can help you ramp up your manufacturing in Mexico.