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We Take The Guesswork Out Of
Operating In Mexico
All rights reserved © 2014 Offshore International, Incorporated
For manufacturing operations of any size
Cost Reduction
Pressures
Establishing a Presence
in a
Lower-Cost Country
Maintaining Proximity
To Customers
& Supply-Chain
Operational & Cost
Predictability
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Industry problems are we solving …
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The Offshore Group Today
Helping companies successfully operate since 1986
We Employ
16,223
In Mexico and U.S.
We Manage
We Support
Sqft. of Industrial Space
Manufacturers
4,255,137
affiliate companies & brands
Offshore International, Incorporated
Maquilas Tetakawi S.A. de C.V.
Offshore International, LLC
Manufacturas Zapaliname S.A. de C.V.
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1.
Employ their own talent without all the risk
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Operate in class A manufacturing space that is scalable and secure
3.
Move their factory inputs and outputs seamlessly across the border
4.
Comply with all government regulations without the burdens and distractions
5.
Leverage economies of scale to attain lower operating costs
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Our solutions in Mexico help companies of any size
Client operations range from 12 people to 3,500. Facilities size range from 5,000 sf to 175,000 sf
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BAE Systems
Benchmark Electronics
Bodycote Thermal Processing
CPP (formerly Esco)
Ducommun Aerostructures
Ellison Surface Technologies
G.S. Precision
GE-Unison Industries
Horst Engineering
Incertec Special Processes
JJ Churchhill
Paradigm Precision (Carlyle.)
Parker Aerospace
Sargent Controls (Dover)
Senior Aerospace
SPS Tech (a PCC company)
Trac Tool (Carlyle)
UTC Aerospace Systems
Vermillion
Williams International
Automotive & Transportation
Electrical, Electronic & Medical
Devices
Aerospace
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Avalon Labs (Am.Cap.)
Blickman
Cardiva Medical
C&M Corporation
CBC Connect (Westcor)
Electronic Evolution
Huber-Suhner
IKOR
Medtronic
Novacap (Dover)
The Phoenix Company
Precision Interconnect (TE)
Turck
Whitepath
Younger Optics
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Cooper Standard Automotive
DCM
Gemini Plastics
Intec Group
Liberty Steel
Mico
Neapco
Powerbrace
Senior Flexonics
St. Clair Technologies
TE Connectivity
TitanX
Unlimited Services
Waukesha Bearings (Dover)
Other Industries
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APSM
Greenheck Fan
Kromet
Minco (Demmer)
Parker (Camfil Farr)
• 40 clients in Guaymas/Empalme
• 16 clients in Saltillo
• 20 clients are publicly traded
• 8 clients also have standalone operations
• 32% of clients between 10 and 20 years
• 45% of clients between 5 and 9 years
• 23% of clients less than 5 years
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Current Clients
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Our Locations
Unique labor & talent characteristics and logistical advantages
Tucson, AZ
Nogales
Hermosillo
Houston, TX
Guaymas /
Empalme
Mission, TX
Saltillo
Distances
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Port of Los Angeles to Guaymas: 758 Miles
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Port of Houston to Saltillo: 523 Miles
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Port of Manzanillo to Guadalajara: 204 Miles
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Tucson to Guaymas/Empalme: 333 Miles
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Mission to Saltillo: 205 Miles
Guadalajara
Manzanillo
Queretaro
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Our Services
Solutions for manufacturing operations of any size
Is Mexico Right For You?
How Should You Operate In Mexico?
As a Standalone
With Support
Advisory
Services
Startup
Implementation
Shelter Framework & Administrative Services
Obtain reliable and useful
information to determine if
and/or how a business case
exists for establishing a
manufacturing presence in
Mexico.
Receive expert hands-on
support to plan and execute
the key elements needed to
successfully setup a
manufacturing presence in
Mexico.
Costing, Site Selection, Workforce
Evaluation, Logistics, Regulatory
Compliance
Legal Structure, Staffing, Facilities
Setup, & Regulatory Compliance
Immediately leverage a world-class infrastructure built specifically for
manufacturers to achieve a globally competitive advantage in a
predictable lower cost environment.
Legal Structure, Staffing, Facilities Setup, & Regulatory Compliance
Shared Service
For users requiring smaller
spaces and are willing to share
infrastructure.
Full Service
Provided in our integrated and
secure manufacturing
communities located in
Guaymas / Empalme, Sonora
and Saltillo, Coahuila.
Flex Service
For users operating outside
our manufacturing
communities with potential
transition to standalone. Flex
Services are available in
Guadalajara, Queretaro,
Hermosillo, and Saltillo.
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Our Business Model
You in Mexico
Leverage
economies of scale
Mitigate
risk and exposure
Manufacturing
Communities
Legal
Framework
Support
Services
Focus
on production
Minimize
taxes
La Angostura – Manufacturing Community in Saltillo, Coahuila Mexico
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Client
A U.S. or other foreign country
legal entity.
U.S. Contract
Offshore International
Benefits:
First 4 Years:
• No Permanent Establishment
• No Income Taxes
A U.S. Corporation
Related Parties
U.S.
Mexico
MTK or ZAPA
Mexico affiliates of Offshore
International
IMMEX - Shelter
Client
Operation
Various Client
Operations
Reference Articles 181 and 183 of Mexico’s New Income Tax Law
published in Mexico’s Official Federation Daily Register dated
December 11, 2013.
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Shelter Legal Framework
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Labor Management
A proven process built around manufacturer’s needs
You
Staffing
Plan
Job
Descriptions
Us
Skills
Development
Coordination
Recruiting &
Prequalification
Schools &
Government
Selection
Hiring &
Induction,
Employer
Of Record
Job
Training
Busing
Coordination
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Manage Employee Activities
Organizational Development
Problem Resolution & Corrective Actions
Turnover & Absenteeism Monitoring
Labor Union Relations
Employee Event Coordination
Employment Termination
Labor Arbitration & Legal
Administrative and support services delivered by experts and state-of-the-art systems through economies of scale
f e a t u r e s
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First-hand labor market knowledge
Recruiting of labor, technical, and leadership
positions
Employer of record and compliance with labor law
Labor union relations & negotiations
Skills development facilitation
Employee and employment problem resolution
Employee busing coordination
Medical care provision and employee amenities
b e n e f i t s
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Hiring best-practices
Employee retention
Reduced absenteeism and turnover
Personnel cost predictability and containment
Reduced labor-related legal compliance risk
Employment flexibility
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Labor Management
Cross Dock
Freight Consolidation in the U.S.
Import & Export
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Pre-border crossing inspection
Documentation
Classification and valuation
NAFTA, Prosec, & import duties
Border crossing coordination
Customs broker relations
Mexico importer/exporter of record
Mexican Customs compliance
Compliance & operations systems
U.S. Customs assistance
Regulatory audit management
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Import & Export Management
Administrative and support services delivered by experts and state-of-the-art systems through economies of scale
f e a t u r e s
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Startup training and logistics resource alignment
Determination and mitigation of import duties
U.S. based cross docking facilities and infrastructure
Importer and exporter of record in Mexico
Mexican Customs regulatory compliance
Trade agreement compliance (NAFTA, EFTA, etc.)
Customs brokerage relationship management
Inbound and outbound operations
Regulatory audit management
b e n e f i t s
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Customs cost predictability and containment
Reduced financial and operating risk through 100% compliance
Reduction in delays at border crossing ports
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Import & Export Management
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Park & Facilities Management
Administrative and support services delivered by experts and state-of-the-art systems through economies of scale
f e a t u r e s
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24/7 park security, surveillance, and controlled
access
Utilities provision monitoring and corrective actions
Infrastructure preventive maintenance
Building repairs and maintenance
Tenant improvement management
b e n e f i t s
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Achieve maximum operational continuity
Lower costs through preventative maintenance
Operate in safe and secure park environments
Complete building improvement projects on time
and on budget
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Park & Facilities Management
U.S. Standards
Mexico Standards
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Environmental and Occupational Health & Safety
Our Role
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Stay current on
regulatory
requirements
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Advise on best
practices
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Conduct internal
audits
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Recommend
preventive actions
Your Role
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Implement best
practices
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Cooperate with
internal and
external audits
Over 14,000 paid each
week through direct
deposit with onsite
ATM’s
Managing benefits required by
law, from labor union contract,
and employer provided fringes
including social security,
housing, and retirement
System to access regional
suppliers and service
providers, and process
In-Mexico indirect spend
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Corporate income taxes
Payroll taxes
Value added tax
State & local taxes
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Payroll & Benefits, Indirect Spend & Local Vendors, A/P,
Accounting, and Taxes
Administrative and support services delivered by experts and state-of-the-art systems through economies of scale
f e a t u r e s
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Electronic and networked time and attendance
systems
Direct deposit and in-park ATM machines.
Federal, regional, labor union, and employerprovided benefits management.
Mexico indirect-spend order processing systems and
controls.
Value added tax tracking and reimbursement
processing
Federal, state, and municipal tax and fiscal reporting
b e n e f i t s
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Employee retention
Indirect spend cost predictability
Income tax haven through shelter legal framework
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Payroll & Benefits, Indirect Spend & Local Vendors, A/P,
Accounting, and Taxes
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Mexico Operating Costs
Based on a compilation of 2013 costs in USD of 57 operations manufacturing in various regions of Mexico
Direct Labor Cost
Overhead Cost
(fully fringed cost per hour including overtime
and bonuses)
Total (Labor + Overhead)
(cost per direct labor hour including indirect
and salaried positions, facilities, utilities, inMexico indirect spend, administrative costs
and taxes)
(Mexico-incurred cost per direct labor hour)
Manufacturing Process
Min.
Avg.
Max.
Min.
Avg.
Max.
Min.
Avg.
Max.
Electromechanical &
Electronics
$2.35
$3.20
$4.42
$4.60
$9.32
$23.13
$6.95
$12.81
$28.20
Machining &
Metalworking
$3.01
$4.62
$7.04
$10.18
$18.67
$32.34
$14.11
$23.78
$35.62
Molding, casting,
materials processing
$2.42
$2.99
$4.19
$6.84
$15.30
$26.52
$9.72
$19.49
$29.35
Variations are due to employee qualification
levels, overtime, and locations.
Variations are due to space utilizations, ratio
of indirect to direct positions, utilities usage,
and logistics efficiencies.
Not included are allocated burdens from
foreign company support or asset depreciation.
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For more information:
Eduardo Saavedra
EVP, Business Development
Eduardo.Saavedra@OffshoreGroup.com
Ofc: 520-574-6209
www.OffshoreGroup.com