| Zacatecas Industrial Profile |
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KEY INDUSTRIES
MAIN COMPANIES
ADVANTAGES
DISADVANTAGES
Overview
Zacatecas is a good location for companies that do not require a highly specialized workforce. Companies considering Zacatecas need to evaluate the benefits of lower labor costs and turnover rates with higher freight, support, and logistics costs. Zacatecas is becoming an attractive maquila destination as companies with operations in Torreon and Monterrey that have a need to expand their operations farm-out their low-tech, labor intensive operations to areas with lower labor costs.
The City
Population
With a population of 123,899 people, Zacatecas is the second largest city of the state of the same name, after Fresnillo which has a population of 180,232 people. About 430,000 people live within a 40-mile radius from the city of Zacatecas. The city’s population is growing 1.3% annually, way below the national growth rate of 1.8%. (INEGI 2000)
LOCATION
Zacatecas, capital of the state with the same name, is located in the central-northern part of Mexico, in the geographical center of the country. The State of Zacatecas covers an area of 28,957 square miles and borders with Durango and Coahuila to the north, San Luis Potosi to the east, Aguascalientes and Jalisco to the south, and Nayarit the west.
PROXIMITY TO KEY CITIES
INDUSTRY SNAPSHOT Industrial activity in Zacatecas originally developed from mining and agriculture. In fact, agriculture is still the primary economic driver of the state. Zacatecas is Mexico’s leading producer of beans, chili peppers and cactus leaves and the second producer of grapes and guava. The state is also Mexico’s largest producer of silver. Other metals and minerals produced include gold, zinc, copper, iron, bismuth onyx, mica, fluorite and quartz. The leading manufacturing sectors include food processing, metal and machinery production, as well as wood and paper production. The manufacturing activity by sector is as follows:
(Source INEGI 2004) According to INEGI (2004), there are 14 maquila plants that employ 7,221 workers in the State of Zacatecas. Maquila employment in the city has increased while the number of maquila plants has decreased. In 2000, there were 6,054 workers and 20 maquila plants. In 2002, the State received a total of $98.9 million USD in Foreign Direct Investment (FDI), which represented a negligible 0.1% of the total FDI in the country for 2002. Most FDI in the state relates to the textile, furniture, footwear, and electronics industries. The Workforce DEMOGRAPHICS AGE DISTRIBUTION Zacatecas: Distribution By Age Group Click Here To Register LABOR AND EMPLOYMENT UNEMPLOYMENT AND SUB-EMPLOYMENT SKILL LEVEL The skill level of the workforce in Zacatecas is lower than in border cities and major industrial centers like Monterrey and Guadalajara. For the most part, the state is still an agricultural and mining entity with limited maquiladora activity, most of which concentrates in the apparel sector. EDUCATION and TRAINING There are 41 high schools and 37 universities, most of which offer postgraduate degrees and technical specialization programs. The main higher education institutions are the following:
About 96.8% of the population over 15 years old is literate, which compares favorably with the 90.5% national literacy rate. TURNOVER RATES The State of Zacatecas does not publish turnover statistics but we expect them to be very Click Here To Register |
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| Skilled Operator: | Click Here To Register | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Technician: | Click Here To Register | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Engineer: | Click Here To Register | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Source: Area industry wage studies and interviews with local managers, $11.00 pesos/USD
INDUSTRIAL COSTS dollar @ 11 pesos/USD
| Electricity (H-M rate over 100 Kw): | Click Here To Register |
| Natural gas: | Click Here To Register |
*CFE.-June 2004, ** Pemex.-June 2004
INDUSTRIAL REAL ESTATE
Zacatecas has an adequate infrastructure to support maquila operations. Housing credit is available from government institutions such as FOVISSSTE, INFONAVIT and PROMIVI. Most Industrial Parks have electricity, water, drainage system, and fiber optic telecommunication services.
AVAILABLE SPACE
Industrial parks offer all services necessary for manufacturing including water, electricity, natural gas and fiber optic telephone services. Here are current industrial real estate costs of Class “A” plants in the parks:
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TRANSPORTATION
Highways
Zacatecas is located in the geographical center of Mexico, midway between Mexico City and the U.S. border in Laredo Texas. The State of Zacatecas has 6,126 miles of highways, including:
- Federal Highway 49, which provides access to Torreon, Coahuila and all the way to El Paso, Texas to the north, and to Ciudad Valles and Tampico to the east
- Federal Highway 54 that communicates with Monterrey
- Federal Highway 71 provides access to southern cities like Guadalajara and Mexico City
Given its central-northern location, Zacatecas provides with quick access to two important NAFTA corridors:
- The central western corridor includes the largest concentration of maquiladoras and the 2nd largest trade volumes of all the North American corridors, connecting to Chihuahua, El Paso, Denver, Las Vegas and Edmonton.
- The central eastern corridor which passes through Houston, TX and the largest North American cities and the industrial basins of the central eastern region, as well as through the Great Plains in the U.S. and through the Canadian Prairies. Some of the cities in this corridor include Mexico City, Monterrey, Dallas, Houston, Atlanta, Chicago, Detroit, Toronto, and Montreal.
Rail Transportation:
The city has a railroad station which is part of the Mexico City -Cd. Juarez rail line. Railway service links to the Mexican ports of both the Atlantic and Pacific Ocean. In total, there are 416 miles of railroads in the State of Zacatecas.
Air and Sea Transportation:
The city has good access to the U.S. east and west coasts via ship transportation through Tampico and Altamira on the Gulf of Mexico. The Zacatecas International Airport offers scheduled domestic and international flights and freight service provided through Aerocalifornia, Aerolitoral, Aeromar and Mexicana to several Mexican and US destinations.
CUSTOMS
There are no Mexican customs offices in Zacatecas. At present the coverage of the Aguascalientes’s 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
- Definite imports and exports
- Temporary imports or exports
- Fiscal deposit, for storing of merchandise in authorized general deposit storages under customs authority control
- The transit of merchandise
- Quality System ISO 9000
- Merchandise dispatching
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 ZACATECAS INCENTIVES
- Scholarship System that covers the total cost of educational programs for technical training and specialization for human resources
- Assistance in obtaining complementary financing
- Simplification of administrative procedures, related to investments made
Sectors offering special opportunities Auto Parts, Agroindustry, Commerce and Services, Electronics, Mining, Textile and Garment, Tourism.
The Support
SUPPORT SERVICE COMPANIES
Large-scale operations will find a limited number of companies offering support services, especially for high tech operations that require specialized services. Service and supplier support for the apparel industry is adequate; however, other industries are advised to research the availability of support and service companies before investing in Zacatecas
- A company ordering a truck can expect to receive it in Zacatecas by the following day
- Railway transportation may be the choice when production schedules allow for longer transportation time
The Politics
UNIONS
There are three main unions with presence in Zacatecas: the Mexican Workers Confederation (CTM), the Revolutionary Confederation of Workers and Farmers (CROC), and the Revolutionary Confederation of Mexican Workers (CROM). Although Unions are present, labor conflicts are unusual. In fact, Zacatecas has not experienced any labor strikes during the last 15 years. Unions in the city are flexible and cooperative with management and help recruit new employees. When companies start operations, they meet with union representatives and make an agreement. This process aids in protecting the interests of both management and the workforce.
POLITICAL INFLUENCES
Ms Amalia Garcia, the recently elected governor of the State of Zacatecas, belongs to the center-left PRD party. She is considered an energetic, pro-business leader that is making efforts to attract Foreign Direct Investment to the state by improving regulations and incentives.