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Population
The state of Querétaro has an estimated population of 1.34 million people and 60 % of the population is under 24 years old. The city of San Juan del Rio has an estimated 170 thousand inhabitants. Approximately 91 thousand people (54% of the total population) are considered economically active. -Source (INEGI 1999)
Geography
- Querétaro is one of the smallest states in México, with an area covering 11,769 square kilometers (4,544 square miles)
- The City of San Juan del Rio has an elevation of 6,300 feet.
- The climate in San Juan del Rio is temperate:
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Maximum average temperature 100 oF
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Minimum average temperature 37 oF
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Annual average temperature 64.4 oF
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Average precipitation 19.5 inches
Querétaro’s neighboring states are: San Luis Potosi to the northeast, Hidalgo to the east, Michoacan to the south, Estado de México to the southeast and Guanajuato to the west.
Distances from San Juan del Rio to The U.S. Border, Key Cities and Seaports.
Overview
- San Juan de Rio is the second most important industrial area in the state.
- The region has a well-developed infrastructure of goods and services, suitable for medium and large-scale manufacturing, especially in the apparel manufacturing industry.
- Local authorities prefer industries with low water usage as water consumption in the region exceeds the recharge capacity of the local aquifers.
- The primary industries in the area include; Apparel Manufacturing, Paper and Cardboard Boxes, Auto Parts and Cable manufacturing.
- The capital city of Querétaro, only 26 miles to the north via a six-lane highway, has an international airport with a 98 ft x 6,260 ft runway. Two companies offer daily commuter flights to Mexico City, Monterrey and Guadalajara.
- The Bajio International Airport with direct service to many U.S. hubs and the largest Mexican cities is 2.5 hours away by car.
- Mexico City is only 1 hour and 40 minutes by car via a four-lane highway.
- Key Companies established in San Juan del Rio:
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 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. Over 47% 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 its 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.
- Open unemployment rate for San Juan del Rio is not published, however we expect the rate to be similar to Queretaro’s 3.3% (2000 INEGI)
- Of the estimated 91 thousand economically active persons in San Juan del Rio, only 40 thousand (44% of the total) paid social security taxes in 1998. Payment of social security taxes is a sign of permanent employment in an established company. This means that the real rate of unemployment is substantially higher.
- The minimum wage established in January of 2000 for the State of Querétaro is $32.70 pesos/day or $3.53 USD/Day at $9.30 pesos/USD.
Source AERI, 1999
Exchange Rate $9.30 Mex/USD
Annual salaries in US Dollars, including benefits, paid to executives and executive assistants in Querétaro.
Source AERI 1999
Figures are in USD calculated at $9.30 Mex. Pesos/USD
Labor Unions
Although unionized labor is prevalent in México, labor unions have not been an impediment to business growth in the country. There have been only four labor strikes in Querétaro since 1993. The state government assists companies experiencing labor problems through its local arbitration board.
Worker Skill Level and State Sponsored Training Programs
The most credible proof of the quality of the workforce in the state is the type of industry established in San Juan del Rio. The principal maquila plants in San Juan del Rio operate in the following industries:
Assistance
- Mixed Training Program: A program designed to help industries train new workers. The state grants each trainee one minimum wage for 60 days.
- Quality Improvement Program (CIMO): A program designed to train personnel already working in a company. The company pays for a maximum of 35% of the training program, the state covers the rest. This program can be used to train the workers of a local supplier.
Industrial Costs
All costs in pesos as of January 2000. Prices of all fuels increase on a monthly basis.
Electricity
Costs increase 1% per month USD@$9.30
Fuel
All figures are in pesos as of January 2000. USD@$9.30
* Natural Gas Prices do not include distribution fee.
Water and Drainage Costs
Source: State Government Office. Effective January 2000
The Support
General Infrastructure
- Fiber-optic digital lines at most industrial parks.
- Natural Gas at selected sites
- Direct access to the NAFTA super highway to Laredo, TX and El Paso, TX
- Regional Customs House located in Querétaro offering the following services:
- Customs Procedures
- Loading and unloading platforms (Rail to Truck)
- Fiscal Custody
- Capacity to handle 6,000 containers/month
- Capacity to handle 300 trailers a day
- Storage facilities
- Six Universities in Nearby Queretaro
- Health Care- Querétaro ranks forth in Mexico in the quality of hospital services.
- Rail service to: Cd. Juarez/El Paso, Nuevo Laredo/Laredo, Guadalajara, Nogales and Mexicali
- Several resorts and golf courses within a 30 minute drive.
- The resort city of Tequisquiapan in 30 miles away.
- French and Italian consular offices in nearby Queretaro
- Customs brokerage companies in Queretaro
Industrial Parks
San Juan del Rio has 3 industrial parks.
Building costs range from $15 to $25 US Dollars per Square foot. - Source (INEGI) 1999 Click Here To Register
The Politics
Political Climate and Taxation
Querétaro is a state governed by the PAN party, a right of center party, which traditionally supports business interests.
The actual Governor, Mr. Ignacio Loyola Vera, is not a career politician but a businessman turned politician. His administration’s goal is to foster sustainable economic development in the state.
Tax Incentives
- Payroll Tax: Most states in Mexico charge a State Payroll Tax (typically 2%). The State of Querétaro does not, and it is not planning to introduce legislation to do so.
- Real Estate Taxes on Property Transfers: This is a one -time tax of 2% of the purchase price of the property. During 1999, real estate buyers will receive a 50% to 100% reduction on this tax, depending on the municipality.
- Fee to Register Real Estate Property: This is a one-time tax of 7.5 per thousand of the property’s acquisition price. During 1999, real estate buyers will receive a 50% to 100% discount depending on the specific project.
The Conclusion
Located in the center of Mexico, San Juan del Rio is an ideal place for an industrial facility that supplies assembled products to other industrial complexes in the area. It is also an ideal place to locate facilities producing items with a high value per unit, high shipping density, and high labor content. San Juan del Rio’s maquilas are primarily garment assembly plants.
Advantages of locating in Querétaro:
- Social stability
- A stable labor force
- The Mexican state with the highest economic growth in the last 6 years
- Strategically situated in the center of México
- Proximity to all the services available in México City (138 Miles)
- Access to modern highways connecting the city to key industrial centers in the area and the US
- One of Mexico’s highest standards of living
Disadvantages:
- Distance to the Laredo Port of entry is 620 miles.
- Support and service companies may not be locally available and may have to come from Queretaro or Mexico City.
- Recent growth means tighter labor markets and higher labor-turnover rates.
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