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Plastics Today, September 2015

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Mexico outlook 16 Global Plastics RePoRt 2015 Plasticstoday.coM In addition to serving the automotive industry in that region, MGS Plastics Chi- huahua caters to the electronics and con- sumer markets. "Automotive is certainly a significant part of our business, but we do see growth in other sectors," commented Cummins. "This allows us to maintain a diversified portfolio of customers. Mexico continues to offer growth potential." That is reflected in MGS Plastics Chi- huahua's plans to expand capacity at the current location. "The expectation is that this will be completed within the next 18 months," explained Cummins. "The intention is to add an additional 20 mold- ing machines to the current fleet of 60." As far as challenges go, Cummins noted that they resemble those in the company's other manufacturing loca- tions: Transportation costs, business regulations and currency fluctuations. "Building and maintaining an experi- enced team is a challenge," he noted, "but it's not dramatically different from what the company experiences at other locations and facilities," he added. In some ways, the situation in Mexico may be even more promising. "We are hearing encouraging news regarding the government's commitment to manufac- turing through educational support and infrastructure improvement." Mexico is still relatively cost competi- tive in spite of the fact that costs have increased against China, noted Donahue. For suppliers looking to head to Mexico to supply customers, there are opportu- nities but it can also be scary, comment- ed Donahue. "Those Tier 2 suppliers are coming to serve their key clients, but they are not coming to North America just for one opportunity," he said. "They will become competitors in North America for the OEM business. Recently a client came to Mexico from Portugal, because its OEM customer told them it had to. The market will get even more competitive, which benefits Mexico, because it is a competitive playing field." Donahue said he believes that we're not going to see moldmaking move to Mexico. "It's an art form—something you build with a tribal knowledge base, which is very difficult to duplicate quickly," he added. "What we are seeing in that industry is the aftermarket service base being established. Moldmakers have to establish a service and repair business. The paperwork and time it takes to ship molds back and forth across the border create delays and costs. That service busi- ness for molds is a key part of winning customers there. You won't find it, and you won't steal it. You'll have to develop it," said Donahue. For molders it's a different story. Donahue noted that there's a huge short- age of quality molders in Mexico, and the ones who are there are swamped with work. "The OEMs will tell you there are not enough molders there and they need more of them to meet their production requirements," said Donahue. "There are still a lot of products and components coming from the United States and Canada, and they would like to get away from that. A lot of OEMs want to get more molders to come to Mexico." CALL TODAY FOR YOUR * ® Company Try any of IMS' vast line of spray solutions for FREE and experience the IMS advantage. Over 65 years of business, product develepment and customer satisfaction Call: 800.537.5375 www.imscompany.com/FREE *Offer valid for qualified industrial users Looking for a Better: • Mold Cleaner • Rust Preventive • Mold Release Proven Proven for over for over 65 YEARS 65 YEARS

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