Market Profile

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Market Profile

Key Industries

• Automotive
• Electronics/Electrical    
• Consumer Appliances

Main Companies

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Recent Activity

• Foxconn opened a major campus in western Juarez to manufacture Dell computers.
• Electrolux has expanded their campus to its third phase.  They now produce refrigerators and ovens.
• Winstron continues to expand their presence with two new facilities, adding over 400,000 SF in the past year.
• VienTek has expanded their wind blade manufacturing campus and shown consistent growth over the past six years.

• Major support services and supplier base in Juarez and El Paso, Texas
• Key transportation hub on the U.S./Mexican border
• Excellent infrastructure to support major manufacturing operations
• A large, capable workforce with a high skill level 
• Good quality of life on both sides of the border
• A strong maquiladora culture

Disadvantages

• Presence of large industrial campuses can impact labor demand in certain areas
• Water intensive operations will require special storage and treatment infrastructure
• Border crossings can become congested at peak times during the month
• Hot during the summer

CITY PROFILE

Cd. Juarez is one of the premier manufacturing locations in Mexico alongside Monterrey and Tijuana.  City and state government as well as private developers have made significant investment in the city’s infrastructure to ensure that future growth can be sustained.  Cd. Juarez has unmatched transportation infrastructure as well as ample land sites for the construction of new industrial and housing developments.  Combined with excellent support services and access to U.S. transportation routes, it should be included in any site selection investigation.

POPULATION

Cd. Juarez is the largest city in the state of Chihuahua and the fifth largest in Mexico.  It has an official population of 1.4 million people but it estimates on actual population range between 1.8 and 2.0 million.  Its rapid growth has been fueled by the thousands of Mexicans who have migrated to the city in search of better wages.

The current population of El Paso, Texas is 720,000. 

Location

Cd. Juarez is the northernmost city in the State of Chihuahua and is situated between two mountain ranges and the Rio Grande. The earliest Spanish settlers dubbed the region "El Paso del Norte," or "The Pass of the North," for its geographic characteristics and established travel routes. Juarez has an elevation of 3,800 ft. and is located at the mid-point of the 2,000 mile long U.S.-Mexico border.

The State of Chihuahua—the largest in Mexico—borders Texas and New Mexico to the north, Nuevo Leon to the east, Durango to the south, and Sonora and Sinaloa to the west.  It shares a 350-mile border with Texas, delineated by the Rio Grande River.

The state has been historically important for its agriculture and ranching industries.  The explosive growth of the maquiladora industry has increased the population of Chihuahua, particularly in the manufacturing bases of Juarez and the state’s capital, Chihuahua City.

The weather in Cd. Juarez is hot and dry in the summer, and pleasant in the winter. The average annual precipitation is 8.65”. 

REGIONAL INFLUENCE / INDUSTRIAL ACTIVITY 

The El Paso – Cd. Juarez borderplex is one of the busiest in terms of commercial trade and passenger traffic between the U.S. and Mexico. Cd. Juarez is also the largest production-sharing center in North America.  Since Mexico introduced the maquiladora program in 1964, Cd. Juarez has been at the forefront of the country’s manufacturing and assembly industry.

Cd. Juarez also anchors the world’s largest bi-national commercial community, with a Gross Regional Product exceeding $41.0 Billion (U.S.).  The three major population centers in this region include Cd. Juarez, El Paso, and the trio of counties comprising Southern New Mexico (Luna, Dona Ana and Otero counties).  Juarez has the largest economy ($21.0 billion) of the three communities.

The cities of El Paso and Cd. Juarez have developed a deeply symbiotic relationship in regards to manufacturing. While Juarez is a world-class manufacturing center with a highly skilled, productive labor force, El Paso provides logistics and service support centers that feature excellent rail, air and truck transportation to global markets as well as superb quality of life for executive management

PROXIMITY TO KEY CITIES AND SEAPORTS 

EMPLOYMENT CONSIDERATIONS

At the peak of manufacturing activity in 2007 Cd. Juarez employed over Click Here To Register  people.  This was approximately Click Here To Register   of the total maquiladora employment in Mexico and highlights the important position that the city has in Mexico’s overall manufacturing industry.    As of June 2009, maquiladora employment in Juarez has dropped to Click Here To Register  .

Consequently, Cd. Juarez has one of the highest concentrations of maquiladora operations on the U.S./Mexico border with approximately Click Here To Register  plants in operation and Click Here To Register  industrial facilities.  Officially, the number of maquiladoras is approximately Click Here To Register  but many companies operate multiple facilities.  Almost all of these manufacturing facilities are located within the 25 industrial zones around the city.  These plants are some of the largest in Mexico, with many of them employing a workforce in excess of Click Here To Register  people.

The maquiladora labor force in Cd. Juarez has quadrupled since 1982. The newer maquiladoras are operated by high-tech, capital-intensive industrial companies.

UNEMPLOYMENT PERCENTAGE

Current unemployment rate in Cd. Juarez is likely Click Here To Register  , close to the national average and double the rate reported in 2007.  Since the economic downturn the city has lost Click Here To Register  manufacturing jobs, or almost Click Here To Register  of the total, so unemployment in this sector is well above the published figures.

SKILL RANKING / QUALITY OF LABOR

Although the population of Cd. Juarez is predominantly young and undereducated by U.S. standards, the employable workforce can be characterized as energetic, industrious, and trainable. The skill level of Cd. Juarez maquiladora workers is among the highest along the border.

The most credible proof of the workforce quality is the type of industry established in the city.  High technology operations can be found at a number of Cd. Juarez maquiladoras, and newer plants have integrated increasingly complex processes.

EDUCATION AND TRAINING PROGRAMS 

Cd. Juarez’s academic institutions offer the local population ample educational opportunities.  The city’s educational foundation consists of 6 universities, 143 high schools, and 3 technical institutes.  English is taught at all primary and secondary schools.

Cd. Juarez is home to a satellite campus of the prestigious Tecnologico de Monterrey, one of the most prestigious universities in Latin America. This school offers degrees in business administration as well as many engineering and computer systems disciplines.

Additionally, the community and its maquiladora industry have established several programs to prepare the labor force for high technology manufacturing. Two prime examples are CENALTEC and CAST. CENALTEC is a joint state-industry initiative that provides advanced technical training in several business support activities. CAST is a program that includes courses in electronics, hydraulics, instrumentation and measurement and other basic technology skills.

TURNOVER RATES 

Turnover rates have dropped dramatically since the economic downturn in 2008.  In the past typical monthly turnover rates ranged between Click Here To Register  .  Today, however, it is not uncommon for operations to have less than Click Here To Register   monthly turnover rates. 

Even before the economic downturn turnover rates had stabilized in many plants as companies engaged in higher value-add manufacturing and working conditions improved.  As the economy of Cd. Juarez rebounds, it is expect that turnover rates will remain stable and below historical norms and previous basic assembly operations continue to be replaced by more technical value-add operations.   

For the most part, turnover rates vary greatly from one operation to another rather than from city to city.  The majority of turnover occurs in the first 90 days of employment, during the training period.  TeamNAFTA does not put much weight behind turnover rates in the site selection process, focusing instead on labor and education requirements, company culture and management practices.

Cd. Juarez Maquiladora Turnover Rates

Source: Juarez Maquiladora Associtation
Updated: Aug 2009.

WAGE RATES
2007-2008 Fully Loaded

Source: Area industry wage studies and interviews with local managers. 13.00 pesos = $1 US

INDUSTRIAL COSTS

Cost / KWH of Energy Consumed

 Rates are in USD. Source: CFE, August 2009

Fossil Fuels USD @ 11.00

PEMEX APRIL 2004

Water USD @ 11.00

JMAS-2004 (Source: Mexican Department of Energy, Chihuahua State Government, CFE and Bancomext, 2004)

INDUSTRIAL REAL ESTATE 

Cd. Juarez’s industrial real estate market is divided into two submarkets: North and South.  The city center in the north was originally established along the U.S. border directly opposite El Paso, and from the 1960s through the 1980s all industrial activity was concentrated in this area.  As the population of Cd. Juarez has increased in recent years, the city has spread along the Rio Grande to the South and East.  This growth has led to the development of new industrial areas in those areas of expansion.

Northern Cd. Juarez has older, class “B” facilities.  Due to the changing demand for production facilities in Mexico over the past 10 years, many of these older buildings have become functionally obsolete.  Vacancy rates in this part of town are high.

Most newcomers to Cd. Juarez (as well as companies adding capacity within the city) have moved southeast, taking advantage of the relativity open plain.  This area has larger lot sizes, mixed zoning and better transportation.  Large tracts of land remain available for new construction, but some sites may be two years away from having completed infrastructure.   Each of the four new industrial parks in the Southeast has adequate available space. Additionally, new industrial land is available to the southeast of the city in an area referred to as "Nuevo Juarez." This real estate is being offered on a build-to-suit basis.

Industrial Real Estate

  
2nd Quarter 2009 Industrial Statistics

• Industrial Market Size:  Click Here To Register
• Industrial Vacancy: Click Here To Register
• 2Q Total Activity: Click Here To Register

INFRASTRUCTURE 

Cd. Juarez has ample utility and transportation infrastructure.  Electricity and natural gas are readily available.  Companies that have large process water requirements need to pay special attention to securing rights upfront. Roadways around the city are excellent. Most of the major arteries have 6 to 8 lanes. 

TRANSPORTATION

Competition for maquiladora shipments is intense and provides industry with the lowest transportation rates among U.S.-Mexico border communities. The city’s location at the mid point of the U.S.-Mexico border facilitates shipment by air, rail or truck.

Three major commercial ports of entry serve Cd. Juarez: Zaragoza (east), Cordova (central) and Santa Teresa (west). A Dedicated Commuter Lane (DCL) at the Lerdo-Stanton Street and Zaragoza Bridges reduces plant-to-home driving time to less than thirty minutes.

Rail and trucking services are extensive. There is an association of truck transport services in Cd. Juarez with over 40 members that provides transportation services within Mexico and to the U.S.  Rail service to major West and Midwest markets takes less than eighteen hours.

There are two commercial airports in the area: Cd. Juarez International Airport and El Paso International Airport. The Cd. Juarez Airport provides air service to Mexico’s major national markets while the El Paso Airport offers direct flights to important U.S. cities and airline hubs. Airport facilities in El Paso are excellent for commercial cargo. Cd. Juarez International Airport is not as well developed. As a result, most maquiladoras requiring airfreight transfer cargo from Cd. Juarez to the El Paso airport via truck.

CUSTOMS

The United States Customs Service operates two sophisticated facilities at the Bridge of the Americas (BOTA) and the newer Zaragoza Bridge.  Wait times for passenger vehicles coming into the U.S. from Mexico can be up to one hour on the BOTA, and even longer for trucks.  Crossing is much quicker at the Zaragoza Port of Entry.

The customs infrastructure is also growing at the Santa Teresa International Crossing, which enters into New Mexico.  This is driven by the opening of Foxconn’s campus on the southern side of the border in this area.  Although Foxconn only initiated operations in 2009, the amount of traffic crossing at Santa Teresa has been substantial.

INCENTIVES 

Cd. Juarez is not known to offer major incentive packages for new operations beyond basic tax breaks and training assistance.   

SERVICE AND SUPPORT COMPANIES

Cd. Juarez has excellent support and service companies that cater to the large and well-developed maquiladora industry. Highly qualified legal, tax and accounting advice is available on both sides of the border. El Paso has modern industrial parks and warehousing facilities that support maquiladora operations in Mexico.

UNIONS

Even though there have been attempts to link union activity in U.S. corporations to their Mexican counterparts, the Cd. Juarez workforce is largely non-unionized.  Only 5% of the workers belong to the Mexican Workers Union (C.T.M.).

OTHER BIG NAMES

Cd. Juarez is home to some of the largest maquiladoras on the border. The city’s industrial roster represents a Who's Who of international manufacturing with nearly 80 members of the Fortune 500 represented or doing business in the area. Listed below are a few of the major operators in Cd. Juarez:

Additionally, Cd. Juarez attracts investment from around the globe, although the U.S accounts for approximately 75%.  Below is a graph showing Foreign Direct Investment by country in Juarez.

Source:  Juarez Maquiladora Association

Industrial Market Map

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