Ramirez de la O Urges Companies to Take Advantage of Nearshoring
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Ramirez de la O Urges Companies to Take Advantage of Nearshoring

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Emilio Aristegui By Emilio Aristegui | Junior Journalist and Industry Analyst - Thu, 02/16/2023 - 18:04

Mexico can foster long-term economic growth if nearshoring opportunities are taken advantage of, argued Rogelio Ramírez de la O, Minister of Finance. During the presentation of Nafin’s and Bancomext’s financial programs, the minister called on businesspeople to seize the opportunities created by this new wave of investment and highlighted that this process requires collaboration between the public and private sector. 

Nearshoring is an opportunity to promote exports, productive investment, job generation, to improve living standards and to diversify Mexican industries and venture into new ones. Its aim is to take advantage of the benefits of outsourcing, such as cost savings, while minimizing some of the disadvantages associated with offshore production as companies seek to reduce cultural differences, language barriers and time zone differences to improve business practices. This has proven beneficial for companies that require a high level of collaboration and communication with their service providers, as it offers easier coordination and more frequent face-to-face meetings. 

Ramirez de la O highlighted that nearshoring forces Mexico to review its public and private policies, as it requires the country to promote innovation, training and support for SMEs. The minister highlighted that Mexico must open dialogue with exporters, suppliers, small and medium-sized businessmen, representatives of financial intermediaries, as well as industry chambers and associations.

“In the face of the severe adversities that have hit us, Mexico has shown its ability to move forward if you have the will to do so. The country is experiencing a decisive moment in its development process, in which entrepreneurs play a very important role,” said Ramirez de la O via an SHCP press release. 

Luis Antonio Ramírez, Director General, Nafin-Bancomext, highlighted that one of the main drivers for nearshoring in Mexico is USMCA, as analysts have found 240 products in which the country can expand its exports to the US thus replacing the Asian market as the latter country’s main supplier, as reported by Forbes. 

Companies, such as Foxconn, Sony, Whirlpool, GE, BMW, Honda, Mazda, Nissan, Toyota, Volkswagen, 3M and Siemens, among others, have already amplified their operations in Mexico, explained Mexicomlogistics. Meanwhile, real estate firm Newmark reported that about 80 percent of US manufacturing companies operating in China have moved their operations to North America, with Mexico benefitting the most from this relocations. "We could say we are in the fourth wave of nearshoring, which we may also call friendshoring, as this involves not only economic issues but geopolitical problems, too. However, we must be in control of this real estate niche, since between 80 and 85 percent of the nearshoring benefit is moving to Mexico," said Javier Camarena, CEO, Meor, as reported by MBN. 

Photo by:   Image by marcinjowiak from Pixabay

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