Armando Lee
Director General
The Offshore Group
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Insight

Manufacturing's Best-Kept Secret

Tue, 11/01/2016 - 15:23

When it comes to manufacturing, Sonora may be the manufacturing sector’s best-kept secret. The Offshore Group wants to get the word out. The Offshore Group, which delivers industrial real estate services, has supported the consolidation of the manufacturing sector in the state from the introduction of the first automotive company. It grew alongside the region’s manufacturing sector and eventually branched into the aerospace industry through a partnership with Smith West. Now, the company manages over 4 million square feet of industrial and office space and works with 73 companies in Mexico. “As international companies enter Mexico to manufacture, we simplify their processes by handling legislative processes, payroll and governmental offices,” says Armando Lee, the company’s Director General.

In the aerospace industry, The Group has 18 clients that have brought a series of processes and expertise to the state, from harnesses to aero structures. As the company turns 30 this year, Lee reflects that all the projects the company has backed have contributed a unique aspect to the state’s aerospace industry. The Offshore Group has a business development department that identifies potential companies that could participate in the supply chain and also caters to the suggestions of its existing clients. The firm has become a large and essential source of information for investors, says Lee.

The company’s experience in Sonora helped it identify that existing aerospace companies needed support from Tier 3 and 4 businesses. Without that support, companies higher up the supply chain needed to send their products to the US for final treatments. “To address this issue we integrated several companies here,” Lee says. “For instance, Bodycote in Empalme, Sonora manages heat treatments and Incertec offers anodizing processes and plating. In Guaymas, Ellison Surface Technologies provides two processes that are unique in Mexico, namely high velocity oxygen fuel and plasma spray.”

Sonora offers distinct advantages over other Mexican states such as its strategic location, its workforce, its highway and airport infrastructure and its suppliers.

These characteristics make Empalme as competitive as any larger location in Mexico and some companies are choosing it even over major manufacturing hubs, says Lee. “Sadly, many are unaware of the advantages Sonora has to offer, such that we consider the state a best-kept secret,” he says. “But we want to communicate Sonora’s potential worldwide and to do so we need the support of the federal and state governments.”

This year’s goal is to protect and promote the growth of local companies as the country endures a tougher economic climate. The Offshore Group is Sonora’s largest employer with 13,500 employees and expects to grow that figure by 5-6 percent to finish next year with just over 14,000 employees. The state still has a lot of room for growth, Lee says, but several areas must be addressed. Some notable areas of opportunity are secondary treatments, such as anodizing.

Lee says The Offshore Group can help simplify a company’s entrance into Mexico. “We offer much more than a facility. We provide a series of manufacturing communities with many benefits and unique characteristics, from sports centers to nurseries,” he says. The Group, which manages a large volume of trucks, also helps clients reduce transportation costs by allowing them to pay only for the space they need in a truck instead of leasing a mostly empty unit. It works closely with local universities and training centers and has generated several projects with CONALEP and Hermosillo Technological Institute (ITH). “Our communities allow companies to connect and create partnerships, even with their competition,” says Lee.

While Sonora is a key focus for The Offshore Group, it also has an eye on Queretaro, Tijuana and other areas with potential. The federal government is setting up special economic zones (ZEE) to identify underdeveloped areas in the country. It will offer preferential conditions regarding infrastructure and regulations to promote their development. “Our goal is to support the development of these areas and we hope the government will facilitate this process,” says Lee.