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POPULATION

The population of the city of Oaxaca is 256,848 of which 119,306 are men and 137,542 are women. According to data gathered by the censuses of 1990 and 1995, the population grew at an annual rate of 1.2%. The state of Oaxaca is home to several groups of indigenous people including the: Amuzgos, Chatino, Chinanteco, Chocho, Chontal, Cuicateco, Huave, Ixcateco, Mazateco, Mixe, Mixteco, Náhuatl, Triqui, Zapoteco, Zoque and Popoloca, almost two million inhabitants are indigenous, which means 6 of each 10 persons belong to some ethnic group. (source — INEGI 2000)

STATE DESCRIPTION

• The state is divided into 570 municipalities.
• The State of Oaxaca has a 342-mile coastline, along the Mexican Pacific, divided between the Jamiltepec, Pochutla, and Juchitan districts.
• The population of the state of Oaxaca is estimated at 3.7 million inhabitants.
• The archaeological resources that the State of Oaxaca has are so plentiful that, to date the National Institute of Anthropology and History (INAH) has discovered 4,000 different archaeological sites. Sites that helped pave the way for the origins of Mexican culture, and remain open for visitors to enjoy. Monte Albán and Mitla are two sites that have become famous all around the world, attracting a high number of foreign visitors. Other sites worth mentioning are Yagul, Lambiteco and Dainzú.
• Oaxaca offers a delightful, tropical climate with an average temperature of 82°F.
• Oaxacan beaches are world renowned for their white sand.

LOCATION

As capital of the state with the same name, the city of Oaxaca was settled in a sub-tropical valley surrounded by the high mountains of the Sierra Madre del Sur. In pre-Columbian times, Mixteco and Zapoteco tribes settled the valley. Descendants of these people are found throughout the state, which is famous for its folk art, regional cooking and Mezcal (local alcohol). Vestiges of the pre-Columbian and colonial periods are found in the magnificent ruins at Monte Alban and Mitla, as well as the Cathedral and Temple of Santo Domingo.

REGIONAL INFLUENCE

Oaxaca’s land is used in the following categories, Forestry 40.85%, Stock Breeding 24.58%, Agriculture 11.57%, Others 23.00%. As you can see from the above numbers Oaxaca is largely an agroindustry-focused state. The state of Oaxaca, in 1998, produced more than 130 million USD from the mining of materials such as: Cement, Gold, Silver, Titanium, Graphite, Marble, Salt, and hydrated lime. This has led to the employment of 5,000 people.

The Following is a breakdown of the G.D.P for the state of Oaxaca:

(source- Gobierno del Estado de Oaxaca, Mexico)

PROXIMITY TO KEY CITIES

The Workforce

DEMOGRAPHIC IMPACT

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UNEMPLOYMENT PERCENTAGE Click Here To Register  

EDUCATION and TRAINING

It is estimated that the educational infrastructure is adequate to fill the needs of most textile and agroindustrial industries, although Oaxaca has an illiteracy rate of 19.40%.

The following is a breakdown of the education system of Oaxaca.

TURNOVER RATES

The state does not publish turnover statistics but we expect them to be Click Here To Register  

The Operation

WAGE RATES

Of all of the manufacturing inputs, labor is the only one less expensive in Mexico. Everything else costs more in Mexico than in the United States, from shipping to telecommunications, to energy, to real estate, to the cost of capital. Accurate information on labor rates is therefore of paramount importance to any company considering manufacturing in Mexico. Wage rates in Mexico are controversial. The government, in conjunction with union representatives and members of the largest industrial organizations, adjust the minimum wage on an annual or semi-annual basis. There is a minimum wage rate for 88 different "professional classifications" that vary from construction supervisor to shoemaker. Few workers earn the minimum wage, especially in the export-manufacturing sector. Forty seven percent of employed workers in Mexico earn more than twice the minimum wage, and 11% earn more than five times the minimum wage. The minimum wage in Mexico is in reality a benchmark or reference wage, used by the government to direct increases in salaries that are congruent with its monetary and fiscal policies. The following wage rates are from a survey of industrial parks in Oaxaca.

LABOR COSTS-Rates include all mandatory benefits and payroll taxes

Source Bancomext-1999 Rate $9.40 pesos/US dollar

SALARIES FOR EXECUTIVES AND EMPLOYEES

Rates include all mandatory benefits and payroll taxes

Source Bancomext-1999 Rate $9.00 pesos/US dollar

INDUSTRIAL COSTS

Source Mexican Dept. of Energy and Guanajuato State Government

Electricity USD @ 9.00

Costs increase approximately 1% per month

Fossil Fuels USD @ 9.00

Costs increase 1% per month

Water USD @ 9.00

Bancomext-1999

INDUSTRIAL REAL ESTATE

These are the results of a current market survey conducted in the Irapuato region.

Industrial Real Estate US dollars/sq. ft.

Source Bancomext-Exchange Rate $9.40 pesos/dollar

INFRASTRUCTURE

• Oaxaca has 10,013 miles of highway, 25.2% paved, 52.3% coated, and 22.5% not paved.
• The State of Oaxaca has 457 miles of Rail Road. An important railway station is located at the municipal capital directly connecting Oaxaca with other major cities of Mexico.
• Salina Cruz is the major port in the State of Oaxaca
• Existing passenger bus lines and car rental agencies are available as alternative transportation.
• A railway system crosses the southeast and northeast sections of the county. The railway station located in Irapuato is one of the most significant in the region.
• There are 30 hospitals in the state of Oaxaca, with 4,196 beds and 3,113 doctors.
• Other infrastructure concerns exist such as: domestic and international delivery service, satellite TV, radio communication to the USA and Puerto Rico, normal and cellular telephony, internet access, underground optical fiber network.

Transportation Costs by railroad (price plus 15% tax)

(source- Gobierno del Estado de Oaxaca, Mexico)

Transportation Costs by land (40’-48’ containers transporting jeans)

(source- Gobierno del Estado de Oaxaca, Mexico)

Transportation Costs by Sea (price plus 15% tax)

(source- Gobierno del Estado de Oaxaca, Mexico)

CUSTOMS

The closest Mexican customs office is in the port of Salina Cruz.

The Support

SERVICE and SUPPORT COMPANIES

• Large-scale operations will find a limited number of companies offering support and services, especially for high tech operations.
• Support for textile industry, agriculture, and mining are the most prevalent.

The Politics

 UNIONS

Unionized labor in Oaxaca does not represent a major impediment to new starts or expansion.

POLITICAL INFLUENCES:

The Government of the State of Oaxaca is a strong proponent of foreign investment and will assist companies seeking to relocate to the state.

OTHER BIG NAMES

Some of the companies operating in Oaxaca include:

ADVANTAGES

• Strong agroindustry presence, with well-developed infrastructure.
• Growing industrial infrastructure.
• A few major companies already established.
• Lucrative fishing industry with extremely well developed support and infrastructure.
• Stable labor environment.

DISADVANTAGES

• Large-scale operations will find a limited number of companies offering support and services, especially for high tech operations.
• Infrastructure largely agroindustrial.
• Medium to small workforce.

The Conclusion

Oaxaca is an unparalleled state for the tourist. With its picturesque beaches and flavorful culture, it continues to be a hotspot of tourist activity. Textile and agroindustry operations will find ample support, while other operations will be better suite elsewhere.