| Aguascalientes Market Report |
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KEY INDUSTRIES
MAIN COMPANIES
ADVANTAGES
DISADVANTAGES
Market Overview Aguascalientes is a second tier manufacturing market in Mexico. Its location off of the NAFTA Highway makes transportation somewhat difficult both for northbound products and those heading into central Mexico. However, there are some major operations located in the city and the skilled labor force and lower production costs will continue to attract new companies. Nissan is the biggest story in town and has recently attracted some new mid-sized suppliers to the area. We expect this city to grow, but not at a pace comparable to the El Bajio region or cities with better transportation access. The City POPULATION
Aguascalientes, the capital of the State with the same name, has an estimated population of 643,419 people according to the 2000 census, though 2002 estimates set the number at 688,458 people. This population is growing at an average annual rate of 2.4%, faster than the 1.8% national rate, with over 13,000 people joining the workforce annually. It is should be noted that the city’s population represents 68% of the state’s population of 1,012,893 inhabitants. LOCATION The city of Aguascalientes is located in the south central region of the state with the same name, which is located in the geographical center of Mexico. The city is located 508 miles south of the U.S. border and 313 miles north of Mexico City at an elevation of 6,181 ft. The state of Aguascalientes is surrounded by the state of Zacatecas to the north and the state of Jalisco to the south. Annual average precipitation is 18-20 inches and the rainy season runs from June to August. The weather is generally mild and pleasant with the following average temperatures.
INDUSTRY SNAPSHOT Aguascalientes has traditionally been an agricultural center that is now emerging as an industrial location in central Mexico. Industry development started at the beginning of the 1980’s with the establishment of the automotive and electronic industries. Today 68% of total foreign direct investment (FDI) comes from Japan, and 29% from the U.S. Nabco, Nicometal, Sanoh, A.T.C., and Kappler are among the main Japanese companies that operate in the city. FDI in Aguascalientes concentrates mainly in the manufacturing sector, particularly in the automotive and auto parts industry that represents 72% of the total FDI (USD $3,100 Million), followed by the electronics industry with 19% of FDI (USD $806 million) while the textile and apparel industry reached USD $102 million. (SOURCE: Statistics Department. Secretariat of Economic Development) The Workforce DEMOGRAPHICS AGE DISTRIBUTION AGUASCALIENTES: Distribution By Age Group Click Here To Register LABOR AND EMPLOYMENT UNEMPLOYMENT AND SUB-EMPLOYMENT SKILL LEVEL Maquiladoras with operations in Aguascalientes use world class technology for their operations and perform high value added activities. 72% of the maquiladora activity in the city is related to the auto and auto parts industry and 19% to the electronics industry. The quality and productivity of the workforce has been recognized internationally and companies in the city have modern technological and organizational operating and training systems. Relevant areas where Aguascalientes has favorable rankings on a National Level include:
(Source - InstitutoTecnologico y de Estudios Superiores de Monterrey. Investment Survey on Mexican States, 2000) EDUCATION and TRAINING PROGRAMS
The State government has invested heavily on education, which reflects on both an educational level that surpasses the national level and a literacy rate of 95.8%. This is higher than the 90.5% national rate. Aguascalientes has an elementary school completion rate of 84%; one of the highest in the country. The technical education system Aguascalientes consists of 14 schools and 4 institutions that offer several job training programs, including automotive technician, automotive mechanic and automotive electronics among others. University enrollment rose to 20,583 students in last year. Over 85 majors are offered, among which engineering degrees have the highest demand. TRAINING PROGRAMS The government of Aguascalientes has implemented a plan to tailor school programs towards the export manufacturing sector. Additionally, the State Government offers 883 courses and 9,300 training scholarships. About 20,000 unemployed workers are trained on a yearly basis. School-Company ties are necessary in order to orient careers offered by the educational system towards the industrial sector. One of the most important projects is the “School of Technological Education of Aguascalientes" (CETMEJA), which prepares technicians for the automotive and auto parts industries. TURNOVER RATES The Operation WAGE RATES Wages are the key driver of Mexico’s manufacturing industry. It is, therefore, one of the first and most important topics any company expanding in Mexico will consider. TeamNAFTA touches on the overall wage issues in our Info Center, but we have also provided some sample wages for Aguascalientes below. While we have access to more detailed wage information, we typically present that information in a tailored report addressing a company’s specific labor needs.
Average hourly wages paid in Aguascalientes: 2003 - 2004
Source: Area industry wage studies and interviews with local managers, $11.00 pesos/USD INDUSTRIAL COSTS dollar @ 11 pesos/USD
*CFE.-June 2004, ** Pemex.-June 2004, *** Comision Nacional del Agua.-June 2004 REAL ESTATE A 25.4 miles long industrial corridor holds eight industrial parks and one Service Park with 764 hectares for industrial use and 27 hectares for electric power and telecommunications services as well as direct access to railroad tracks. The State government developed its Industrial Park program in 1975 and is currently expanding the industrial infrastructure with three new parks for a total of 11 Industrial Parks:
AVAILABLE SPACE A current survey of industrial parks in Aguascalientes, with a variety of site options, reveals the following average USD prices:
TRANSPORTATION Aguascalientes has a road network of 1,272 miles of highway that link the city to major Mexican cities and to the U.S. border. Main highways run north-south and east-west crossing the city and allowing efficient transportation between the Gulf and the Pacific coasts and linking the city to several key spots in the interior of Mexico. The four-lane Federal Highway 45 connects to the cities of Leon, Queretaro and Mexico City while Federal Highway 70 travels east to San Luis Potosi and on to Monterrey and Nuevo Laredo. Highway 45 travels north to Zacatecas, Torreon, Chihuahua and Cd. Juarez. Most of the highway network in the State consists of two-lane highways though there are 156 miles of four lane highways. The city of Aguascalientes has a railroad system running through the state from north to south parallel to the Panamerican Highway 45 heading to the U.S. border. The railroad system in the state allows quick communications toward the main ports and border points as well as to key the metropolitan areas like Monterrey, Mexico City, Guadalajara Laredo, Torreon and Cd. Juarez. Aguascalientes’ International Airport is only 10 miles from the downtown area offering daily direct flights to Mexico City, Monterrey and San Antonio Texas with connecting flights through Mexico City to any point in the world. CUSTOMS Mexican customs operate full service facilities in Aguascalientes. At present the coverage of the Aguascalientes customs office includes the States of Aguascalientes, San Luis Potosi, and Zacatecas. This custom’s office has the same authority as the border or seaport offices to carry out different services including:
INCENTIVES The government offers incentives in relation to payroll taxes, training programs, and assistance in the procedures for meeting requirements at three levels of government (federal, state, and municipal).Additional incentives can be negotiated depending on the location of the new project, type of manufacturing activity and job creation. The incentives include: infrastructure works, fees with the State Public Registry and construction permits. STATE OF AGUASCALIENTES INCENTIVES
SUPPORT SERVICE COMPANIES Nissan, the largest employer in Aguascalientes, brought a network of key suppliers to the area and this group of companies continues to grow. Aside from Nissan and its supply network, the bulk of suppliers in Aguascalientes are related to the apparel and textile industries. Nevertheless, the city has an important potential for the development of suppliers, particularly in the metal mechanical area, which is the area where the largest and most varied development has taken place during the last fifteen years. The supplier network has been steadily improving. 22% of all supplies used by the companies of the area for manufacturing are purchased in the State. A new initiative launched by the State Government through its Ministry of Economic Development has focused on promoting in a systematic manner, the development of suppliers for large and medium companies. The Politics UNIONS Aguascalientes is the state in Mexico with the lowest incidence of union unrest. There have been no labor strikes in Aguascalientes during the last 30 years. POLITICAL INFLUENCES The Government of Aguascalientes has three main priorities:
It is important to point out that the State Government, in an effort to promote the development of the poorest areas of the state, has assigned two thirds of its public expenditure budget to communities outside the city of Aguascalientes OTHER COMPANIES IN AGUASCALIENTES
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