Luis Aguirre
Former President
INDEX
/
Insight

Stepping up Mexico's Manufacturing Industry

Wed, 02/19/2014 - 17:41

The Mexican manufacturing sector came to life in 1965 at the northern border of Mexico as a result of the Bracero (manual labor) program that enabled Mexicans to legally work in American fields. At the end of this program, the workers had to leave the US and moved to the northern states of Mexico to wait for the reactivation of this program, a day that never came. “Local entrepreneurs started looking for ways to offer jobs to these people, most of whom did not have any professional education,” explains Luis Aguirre Lang, Former President of the National Council of the Maquiladora and Manufacturing Industry Exports (INDEX).

In 1966, the first 12 maquiladoras were established in Ciudad Juarez, performing simple assembly processes for foreign companies. INDEX represents some of the most important multinational companies involved in different sectors: automotive, aerospace, electrical equipment, electronics, biotechnology, medical devices, and telecommunications.

These 5,000 companies are part of the maquiladora program and represent 65% of Mexico’s total exports of nonpetroleum products. At the end of 2012, INDEX members accounted for US$200 billion exports and 2.3 million direct jobs. “Considering this, plus indirect jobs, we are talking about 9 million families that receive their income from this industry in Mexico,” Aguirre Lang says. “Sustainable practices are essential for the Mexican manufacturing sector to compete in the global market,” says Gerardo Vázquez, Director of the Safety and Environment Council of INDEX.

“Sustainability performance is measured based on water consumption and discharge, waste generation, greenhouse gas emissions, volatile organic compound emissions, energy costs, installed capacity of different energy sources, energy efficiency, EHS management systems, certifications and voluntary programs.” INDEX’s sustainability plan analyzed these metrics during the last quarter of 2013, in order to create an action plan that will improve the environmental performance of the maquiladoras. The council’s Environmental Performance 2013 report demonstrates the benefits that the sustainable actions of only 17 maquiladoras have rendered. CO2 emissions have been reduced by 1.03 million tonnes, water usage was reduced by 96,000m3, and waste production was reduced by 81,600 tonnes, which amounted to savings of around US$6.32 million. “We are part of a highly competitive global market and environmental and social issues have to be taken into account,” underlines Aguirre Lang. Vázquez adds that more than 95% of the products manufactured in Mexico are exported. “It is critical to change our culture, since customers and consumers are demanding socially and environmentally products.”

The Mexican manufacturing industry has been facing increasing energy prices, recently rising at about 8.3% per year, which is negatively affecting its competitiveness and long-term strategic decision making. This makes renewable energy technology attractive since it allows consumers to fix energy cost per kilowatt through PPA agreements. “The red tape around renewable projects comes at a high cost, but when the regulation allows you to generate your own energy, you can create a customized energy solution,” Aguirre Lang stresses.