| Tecate Industrial Profile |
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Population Tecate is a smaller mountain community of approximately 73,000 persons, located 30 miles east of Tijuana and on the U.S.-Mexico international border. Growth is fairly stable, with the mass of northern migration still lured to the City of Tijuana. Known best for its brewery of the same name, Tecate is still a small Mexican city, nestled in the scenic hills at the foot of Mount Cuchuma.
INEGI and State Government Estimates STATE DESCRIPTION
LOCATION: Tecate rests on the U.S. border, 50 direct miles east of the Pacific Ocean. It still is a small Mexican town isolated from the industrial cities of Tijuana and Mexicali. The small town on the U.S. side is also called Tecate. REGIONAL INFLUENCE: Best known for the Tecate brewery, the city is still primarily a tourist destination with a very agreeable climate and only occasion rain. The Rancho La Puerta is still a popular spa getaway for Southern California's jet-set. The community is predominantly agricultural, with stable families that have lived there for many generations. Maquiladoras grew from smaller assembly shops that were originally in Tijuana, and fled the high costs and overcrowding that accelerated in the 1980's. Of Tecate's 110 maquilas, very few employ more than 100 people with a combined total employed under 6,000. PROXIMITY TO KEY U.S. AND MEXICAN CITIES
The Workforce DEMOGRAPHIC IMPACT |
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50 - 99 |
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100 - 499 |
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SKILL RANKING
Larger maquilas have not located in Tecate in the past few years, so there is little reason to expect comparable skill levels with Tijuana. Tecate's literacy rate of 93.4% is average for border cities. Approximately 81% of its inhabitants are elementary school graduates and an additional 12% have finished preparatory or technical school.
EDUCATION and TRAINING
Tecate has several technical schools, and a university campus supported by Tijuana faculty.
TURNOVER RATES
The Operation
WAGE RATES
Wages in Tecate are expected to be lower than Tijuana's, but still high for the border, reflecting the influx of smaller shelter operators to the community.
AVAILABLE SPACE
Tecate is set against hilly terrain, which limits the availability of land for housing and industry, thus restricting the city's growth in most directions. Several industrial parks are planned, but a poor road system may hamper this development.
One major industrial park serves Tecate, with limited available space. The park is far from the worker living areas, which contributes to a higher turnover rate than in communities of comparable size.
A current survey of the industrial park in Tecate reveals the following average prices in U.S. dollars/sq. foot
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Industrial land purchase price |
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New construction, build-to-suit |
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Lease for industrial space (5 yr) |
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Refurbish to suit costs |
INFRASTRUCTURE
- A new four-lane highway to Tijuana is Tecate's greatest asset for future growth, as many maquilas fleeing Tijuana still need to rely upon the supplier base there.
- Truck rates are similar to carriers in Tijuana, and vary from $1.50-$2.00 U.S. per mile and are negotiable. Regular freight and container rates are comparable to the border cities and vary from $8.00-$11.00 per ton per kilometer.
- There is a rail link from Tijuana to Tecate and other Mexican cities. Spurs to several industrial parks are available. Water, electricity and gas are available in the central industrial area and the two business parks.
CUSTOMS
The crossing at Tecate is antiquated and quite limited. Most shelter operators and maquilas depend upon the new commercial crossing at Otay Mesa. The limited traffic does translate into fewer delays, although the crossing is not staffed adequately at all times.
LOCATIONS
Tecate maquilas must rely upon Otay Mesa, Tijuana and San Diego for developed airfield and transfer operations.
TAXES
Baja is considered a Free Trade Zone by the Mexican government, a designation roughly similar to a U.S. Foreign Trade Zone. Maquilas pay B.C.N. State payroll taxes of 1.8% of the base wage paid per worker.
The Support
SERVICE and SUPPLIER COMPANIES
The service and support capacity of Tecate is severely limited. Most shelters must rely upon Tijuana and San Diego based support companies. A review of Tijuana's network would be required for new start-ups in the Tecate area.
The Politics
UNIONS
Unionized labor in Tecate does not represent a major impediment to new starts or expansion. Migrant farm worker unions are more prevalent in this region.
POLITICAL INFLUENCES
Local government in Tecate is expectedly provincial, and opposed to rapid industrial expansion.
OTHER BIG NAMES
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parts for lamps, polishing and electroplating of metal parts
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electronic component assemblies
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copper plating
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golf bags
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ornamental lamps
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sails
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metal parts for beds and sofas
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television components
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transformers and inductors
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coil winding
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wooden furniture
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wooden frames
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electronic component assemblies
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office chairs
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automotive alternators
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drill bits
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stained glass
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THE PROS AND CONS
ADVANTAGES
- Labor costs are lower than in Tijuana.
- New highway to Tijuana will expand support capabilities.
- Quality of life is better than in Tijuana.
DISADVANTAGES
- Low skill level of labor
- Harvest season crimps work force
- Limited infrastructure for large manufacturing operation
- Poorly designed and agricultural-based road system in Tecate
- Small size of labor base will inhibit support for a complex manufacturing operation
Conclusion
Tecate is only a viable option for the smaller maquila functions which a shelter operator can provide.