| Tijuana Industrial Profile |
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KEY INDUSTRIES
MAIN COMPANIES
ADVANTAGES
DISADVANTAGES
Overview Tijuana is one of the most important manufacturing centers in North America. The city not only links Mexico and the U.S., but is also the gateway to Asia. The city’s incredibly dynamic manufacturing base has long attracted companies from California looking for labor advantages. The industrial base, while home to some of the largest operations in Mexico, is built on flexible operations that have skills required in the electronics industry. Although the manufacturing profile is slowly changing and the city is diversifying into new industries, Tijuana has relied on its core base in electronics to keep developing a world-class labor pool and supplier base. The City POPULATION Tijuana, a metropolis of over 1.6 million people, is located 17 miles south of San Diego, California. The city is growing at a 6.9% annual rate, much faster than the 1.8% national growth rate for Mexico. This excessive growth is accelerated by illegal immigration from the interior of Mexico into Southern California. The city’s population accounts for 49.8% of Baja California’s total population. On the U.S. side, San Diego is the second largest city in California. Together, Tijuana and San Diego have a combined a population of over 4 million inhabitants. Most of Tijuana’s population is between 16 and 30 years old. (2004 INEGI - February 2008) LOCATION Tijuana is located in the northwestern section of the Baja California peninsula, bordering with San Diego. Baja California shares a 159 miles border with the U.S. both in California and Arizona. The State borders with Sonora to the east, Baja California Sur to the south, and with the Pacific Ocean to the west. Tijuana is hot and arid, with an average annual precipitation of only 10". Summers are extremely hot with temperatures often reaching 100° F while winters are mild and pleasant. PROXIMITY TO KEY CITIES
INDUSTRY SNAPSHOT Baja California’s economy largely depends on its export manufacturing, fishing, agriculture and tourism industries. Previously known as a popular tourist destination, Tijuana is now one of the main maquiladora centers of Mexico with over 570 plants employing 156,098 workers. Tijuana’s geographic position makes it an ideal location for manufacturing and commerce, while its proximity to San Diego helps maquiladoras attract qualified management. The access to the ports of Long Beach, San Diego and Ensenada provides immediate entry to Asian markets. It is important to note that almost a third of the manufacturing base in Tijuana is making electronics and components. It is also the main area of Asian investments in Mexico, with a large number of Japanese and Korean electronics firms have established in the city. The Workforce DEMOGRAPHICS AGE DISTRIBUTION Click Here To Register LABOR AND EMPLOYMENT
UNEMPLOYMENT AND SUB-EMPLOYMENT SKILL LEVEL Tijuana’s workforce is one of the most skilled in Mexico, largely due to its long history in trade and maquiladora operations. The quality of labor is on par with Cd. Juarez, Monterrey and Guadalajara and it is relatively easy to find skilled productions workers and technical employees as a consequence of several industry-specific programs that local universities and technical schools have structured. Furthermore, some of the larger maquila that relocate into Tijuana bring with them skill training and educational programs. EDUCATION AND TRAINING PROGRAMS Baja California is the state with the highest investment in education in Mexico. Over 50% of the state’s annual budget is spent on education, helping the state achieve a 97% literacy rate, much higher than the 90.5% national literacy rate. In 2003 there were 58 high schools, 18 higher education institutions and 80 job training centers and technical schools in Tijuana. Generally, companies that establish in Tijuana do not have to look further than the city limits to find the professional personnel they need as professional career programs are based upon local industry demand. (Sources: Tijuana-EDC, SEP) TURNOVER RATES Turnover rates in Tijuana are Click Here To Register 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 Tijuana 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.
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 INDUSTRIAL REAL ESTATE AVAILABLE SPACE Tijuana is surrounded by mountainous terrain to the west, south, and southeast, which limits the availability of land for housing and industry. The city’s growth is thus restricted towards the northeast onto the Otay Mesa. In point of fact, one-third of Tijuana’s land is considered unusable because of its hilly terrain, canyons and slopes. This means that land available for further industrial development is limited. The city of Tijuana has approximately 48 industrial parks varying in size, from 5 to 1,000 acres. The availability of parks of different sizes provides with many different options for companies that are considering manufacturing in the city. A current survey of industrial parks in Tijuana, with a variety of site options, reveals the following average prices:
TRANSPORTATION Highways Tijuana is served by three main highways including a new four-lane toll road to Tecate. Federal highway 1 and 3 connect to the rest of the Baja California peninsula while highway 2 communicates with the rest of Mexico. Its proximity to San Diego enables immediate access to the U.S. The three main highways have good circulation while the smaller roads are often clogged; truck tie-ups are quite common in the densely populated interior of the city. Given its location, Mexicali has access to the Pacific NAFTA corridor, which communicates Mexico City with the entire geographic band formed by the Rocky Mountain range and the Pacific coast, passing trough the cities of San Diego, Los Angeles, San Jose, Seattle and Victoria among others. Tijuana has two of the most important Ports of Entry into Mexico, which combine for roughly 20% of all of Mexico's import/export transactions. The U.S. Customs Office and Immigration and Naturalization Service have established the Dedicated Commuter Lane in both ports of entry, making border crossing activity fast, modern and secure. Tijuana's ports of entry are within a 30-minute drive from any given location in the city. Railroads Tijuana offers daily rail freight service to and from the Ports of San Diego and Los Angeles via the San Diego-Imperial Valley Rail System. Mexicali, located 106 miles from Tijuana, has connecting rail routes via the Mexican National Rail System to every destination in Mexico. Air and Sea Transportation Tijuana's International Airport is the most important airport in northwestern Mexico with 120 daily flights, while San Diego's airport offers flights to several destinations around the world. The seaports of Ensenada, San Diego and Los Angeles/Long Beach are located relatively close to the city. (Sources; Baja California state government, Tijuana EDC) CUSTOMS The modern commercial crossing facility at Otay Mesa is a significant improvement over the old San Ysidro Crossing, directly south of San Diego. Though it remains a long commute from San Diego's business center, bridge waiting times have been significantly reduced. In comparison, older maquilas located in the southern, western and interior of Tijuana can expect up to an entire day in transit, which explains the popularity of the Otay Mesa industrial land. Mexican and U.S. Customs are overwhelmed by the increase in traffic and there is talk to move the facilities for commercial traffic to the east in the next few years. It is important to note that for southbound traffic going from the US into Mexico, customs inspections average time is between 2 to 4 hours. 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 the creation of jobs. The incentives subject to negotiation include: infrastructure works, fees with the State Public Registry, and construction permits. STATE OF BAJA CALIFORNIA INCENTIVES
Sectors offering special opportunities: Automotive, mechanical metallurgy, aerospace, electronics, high technology, food products and beverages, plastics and medical. The Support SUPPORT SERVICE COMPANIES Tijuana has an excellent supplier and support infrastructure, which goes from basic, non-specialized materials, to the most specialized technology materials. The introduction of large Japanese and Korean television and electronics manufacturers has driven up the number, availability, and selection of quality of service and support companies. Professional services in accounting, legal services, customs brokerage, construction, environmental and real estate brokerage are available in the city. The Politics UNIONS 75% of workers are unionized. Every national labor union in Mexico has some representation in Tijuana, including the Revolutionary Confederation of Mexican Workers (CROM), Revolutionary Confederation of Workers and Farmers (CROC), and of course the largest state-run union, Mexican Workers Confederation (CTM). Most of these unions are pro-business entities and work closely with local companies to promote high productivity practices. Union leaders are cognizant of oversees competition and thus maintain a harmonious working environment with management. The large Japanese and Korean manufacturers in Tijuana have resisted unions successfully by hiring new workers from Tijuana's abundant labor pool. POLITICAL INFLUENCES Local government in Tijuana is expectedly pro-business and pro-maquila. They are focused on promoting rapid industrial expansion in the outskirts of Tijuana. Likewise, the San Diego City Council supports expansion in the Otay Mesa industrial parks. The Western Maquila Trade Association, with its 200+ membership, is active in lobbying for and promoting the maquiladora industry in both Baja California and California. The State of California Department of Commerce is well funded and is a reliable resource for new business information. OTHER COMPANIES IN TIJUANA
Industrial Market Map
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