Mexico on the move as a medical device player
Production of medical devices in Mexico is expected to grow by 74% from 2011 to 2020, rising from $8,562 to $14,914 million. The overall annual growth rate over that time of 6.4% will outpace other NAFTA countries as well as Germany, Japan, and Switzerland. According to ProMexico, the Mexican government pro-trade organization, there were 2321 “economic units” in the country related to devices in 2010. Of those, 744 were exporters, with those businesses located mainly in Baja California, Chihuahua, Coahuila, Distrito Federal, Estado de México, Jalisco, Nuevo León, Sonora and Tamaulipa.
Approximately 67 of those device exporters are located in Baja, including big name device firms like Smiths, Tyco Healthcare, Cardinal Health, Pall Life Sciences, Medtronic, Gambro, Medimexico, ICU Medical Inc., Hudson Aci, Dj Ortho, CLP, Sunrise Medical, and North Safety Products.
Those companies have helped make Mexico the 11th largest medical device exporter in the world, according to ProMexico, including being the main exporter in Latin America and the leading supplier to the U.S. More than 80% of Mexico’s exports are destined for the U.S. which receives 24% of all autos and auto parts from Mexico along with 21% of electronic products.
A huge market and a shared border make California a key trade conduit, with goods flowing both ways. California was the second largest exporting U.S. state to Mexico ($20.9 billion in 2010, 17% of the total of $163.3 billion) behind only Texas ($56 billion, 59% of the total). California is also the second largest importing state from Mexico, behind Texas once again, with imports of $33 billion.
Moving beyond fridges and Fords
Proximity to the U.S. and lower costs are driving the segment in much the same way they’ve promoted other plastics heavy industries like appliances, automotive, and electronics to locate manufacturing south of the border.
In 2011, according to KPMG, Mexican manufacturing costs in medical devices were 23.3% lower than in the U.S. KPMG noted that Mexico is working hard to expand beyond its traditional industrial sectors. “The country is an increasingly attractive destination for aerospace companies, medical equipment manufacturers, and software developers which are expected to play a growing role in the economy,” KPMG stated in a report.
First BRIC now MIST
For years, the so-called BRIC countries of Brazil, Russia, India, and China have been looked to to lead growth in the developing world, but in 2011, a new acronym was born. MIST, short for Mexico, Indonesia, South Korea, and Turkey, was coined by Goldman Sach’s Jim O’Neil.
In 2011, Mexico was the 14th largest economy in the world, but by 2020, it is expected to become the largest economy in Latin America and the world’s 7th largest economy, passing BRIC nations Russia, Brazil, and India.
Injection molding machine suppliers set up shop
The activity in Mexico has not been lost on injection molding machine suppliers, with Milacron, Arburg, Engel, and KraussMaffei, all announcing Mexican subsidiaries in recent years, several of which are in the state of Querétaro.
Source: Plastics Today