Aerospace opportunities in Mexico

An Expert's View about Aircraft Parts and Equipment in Mexico

Posted on: 1 Sep 2010

Latest overview of market potential for the aerospace sector in Mexico.

Sector briefing Aerospace Opportunities in Mexico Why ? Mexico is the largest military and commercial aircraft market in Latin America. It has the second largest business aircraft fleet in the world and has a large private aviation services industry to service the oil and gas sector and provide executive transport. Mexican aerospace imports are spread evenly between aircraft and aircraft parts, aero- engines and avionics. After China, Mexico and Latin America is forecast to be the second largest market for the aerospace sector over the next two decades. Dozens of new international companies have opportunities and an introduction to other invested in this sector over the last few years. relevant issues. There are currently more than 67 foreign aerospace suppliers (including several UK companies) comprising around 190 firms and "Mexico is in a strategic 30,000 skilled workers in Mexico which location for the development currently manufacture, design and repair within of aerospace both in the industry. At the end of 2008 exports of aeronautical components and engineering manufacturing and in designs totalled over $3 billion USD. engineering" Find general information on Mexican market conditions on UKTI?s website. The Doing Business Guide for Mexico gives an overview of Mexico?s economy, business culture, potential UK Trade & Investment Sector briefing: Aerospace opportunities in Mexico As a result, engine manufacturers like General Opportunities Electric, SAFRAN, United Technologies and Honeywell have established supply chain Mexico is today?s opportunity. This is why more offices in Mexico developing Tier 2 and Tier 3 than 16,000 foreign companies have had the suppliers across the country and migrating confidence to invest in the country. suppliers from abroad to Mexico. More passengers are flying, a greater number Mexico?s growing aerospace market is of airlines are operating, and airports are indicative of its potential for profitable upgrading and expanding both physically and investment. Major US aerospace companies operationally. Subsequently, opportunities are and leading global OEMs have continued to available in every aspect of the aviation either open plant operations in Mexico or have industry. When the major contributors to the tapped into a significant supply base there with aviation industry grow (i.e. Airlines, airports, investment proven to be profitable. EADS for etc.) so do those smaller to mid-sized firms example will partner with only 15 countries that supply the inputs to these larger industry contributors. including Mexico and is encouraging its suppliers to go to Mexico. The Mexican In general, best prospects for products and economy has proven to be strong enough to services in the general aviation / aerospace facilitate a supply and manufacturing base in industry include: the sector of aerospace that would benefit both ? Airplane parts and spare parts. itself and the US. Mexico is currently the 9th ? Remodelling services. major supplier of aerospace components to the ? MRO and FBO services. US (after being the 17th not so long ago). ? Ground support equipment. ? Security systems. Of the 190 aerospace manufacturing ? Identification systems. companies in Mexico the main clusters are ? Access controls. located in the northern States of Nuevo Leon, ? Luggage checking systems; among Sonora and Baja California, including Primes many others. such as Honeywell, GE Aircraft Engines, United Technologies, Textron and Snecma. All have GENERAL CHARACTERISTICS OF MARKET International Procurement Offices in Mexico / CLUSTERS mostly responsible for developing suppliers in Latin America. The global aerospace market is experiencing a strong period of growth given the strong The State of Baja California has around 40 demand for the main OEMs (Boeing, Airbus, aeronautics manufacturing and engineering Bombardier, and Embraer). Emerging markets operations alone. Baja California is next to are leading the recovery in the aeronautical California and Arizona which are home to industry. The increasing demand for Airbus thousands of US aerospace firms. Tijuana and A380 and Boeing 777 and 787 signify that GE, Mexicali are home to significant operations Rolls Royce and other leading aerospace including Gulfstream, Hutchinson, and Rockwell suppliers will experience a strong period of Collins, as well as the recent $40 million USD growth over the next few years. Engine OEMs Honeywell System Integration Lab and Test will also continue to put pressure on their facility which will employ 300 engineers and suppliers to consider low-cost manufacturing 100 technicians. options such as Mexico. The State of Sonora has a strong advantage Another interesting characteristic in the from its proximity to Arizona, and showcases industry is the growing pressure on the supply Tier 2 and Tier 3 aeronautical suppliers chain to become faster and leaner, similar to including Esco, Goodrich, Sargeant Aerospace the automotive industry. This means that key and Smith West amongst others. suppliers and partners will have to work more closely in increasing aspects of programme Monterrey?s large industrial base houses Frisa development and production. Cost pressures Aerospace which makes special steel rings for are also a significant factor, particularly as most global turbine manufacturers, including many of the production elements including Rolls Royce. MD Helicopters which opened up metals, composites, tools, utility and energy its facility in March 2006, is now moving from costs and R&D are becoming more expensive. assembly of fuselages to fully finished UK Trade & Investment Sector briefing: Aerospace opportunities in Mexico products. Its first helicopter fuselage was ? They are able to take advantage of completed in January 2007. Mexico?s 12 free trade agreements (FTAs) with over 40 countries including the EU; The City of Chihuahua is home to Safran?s ? The availability and cheap cost of Labinal, a firm which is the largest aeronautical labour; as well as the availability of employer in Mexico. It includes an R&D centre highly qualified staff; employing 100 engineers, and provides the ? Political and economic stability; production of 50% of all the wiring of the ? Proximity to the US; Airbus 380. Cessna also has manufacturing ? Highly experienced shelter operations; facilities and is currently expanding its ? Work ethic and cultural similarities. operations. FACTS ? AEROSPACE INDUSTRY IN Queretaro has also developed into an MEXICO / ADVANTAGES important aerospace cluster with Bombardier, and three leading MRO operations including ? Mexico is becoming the key provider for ITR, Safran?s Messier Services and SNECMA?s the world?s aerospace industry, which in the Engine Services. Mexico is continuing to last five years has experienced a two-digit experience a shift towards more value added growth rate. Furthermore, the number of and complex work i.e. high mix and low aerospace companies established in Mexico has volume production. This is something that the tripled in the same period. primes are keen to develop further and demonstrate Mexico?s continued commitment ? Mexico is located in the heart of the to engineering, manufacturing and scientific aerospace world, and it is the meeting point of innovation. The GE Engineering and Research two of the main manufacturing corridors in Centre in Queretaro which began over seven North America. years ago, today employs over 700 engineers. In Jalisco, Hydra Technologies has built the ? Mexico has a border of more than 2000 first UAV in Mexico for a US based company, miles with the United States, the largest specialising in the development of technology aerospace buyer in the world. Furthermore, for security applications. Mexico has 7,000 miles of coastline, favouring trade relations with Asia and Europe. Mexico also provides other advantages including the ability to manufacture parts and ? Mexico has the world?s largest free components for military and defence. The US trade agreements network. Furthermore, the government traditionally gives protective political and legal systems in Mexico favour the treatment to American companies in defence development of new businesses and offer deals, leaving foreign suppliers of aircraft parts judicial safety for investments. a 5% duty, on average. As a member of NAFTA, Mexico is excluded from this tax, giving ? Mexico offers the most competitive suppliers in Mexico an advantage over operation costs. According to KPMG?s suppliers in other countries. ?Competitive Alternatives 2008? research, compared to the current industry leaders, If you have any questions on the opportunities companies established in Mexico can save up above, contact the UKTI Mexico Advanced to 30 percent on operation costs. Engineering Team contacts named in this report. Business opportunities aimed CURRENT MEXICAN CAPABILITIES specifically at UK companies are added daily to UKTI?s website. These leads are sourced by our EDUCATION AND TECHNOLOGY staff overseas in British Embassies, High Commissions and Consulates, across all sectors ? Mexico is a country with a qualified and in over 100 markets. labour force. Mexico has a population of 107 million people. In 30 years, the country?s Some of the main reasons given by foreign economically active population will reach 69 companies for setting up operations in million people. There are over 750,000 Mexico include: qualified engineers and technology students in Mexico. ? IP protection regulations exist; UK Trade & Investment Sector briefing: Aerospace opportunities in Mexico MRO (MAINTENANCE, REPAIR, OVERHAUL) ? There are over 900 Mexican institutes ITEMS ? 9.90% and universities that offer specialisation programmes for engineers and technicians, ? Turbines and engines particularly in the areas of high tech and ? Auxiliary power units (APU) advanced manufacturing. Currently over ? Airframes 12,000 and 14,000 new engineers graduate ? Electric and electronic systems from Mexican universities, and the vast ? Landing systems majority speak English as a second language. ? Dynamic components ? Propellers ? The Mexican Council for Aerospace ? Coverings, corrosion and protection Education (Consejo Mexicano de Educación ? Interior arrangement and redesign Aeroespacial), formed in 2007, is a network of academic institutions that train engineers and technicians specialised in the aerospace ENGINEERING, R&D, AND DESIGN ACTIVITIES industry. ? 10.40% ? Furthermore, the Mexican Aerospace ? Aerospace dynamics Industry Federation (Federación Mexicana de la ? Control systems Industria Aeroespacial) is a civil association ? Computational fluid dynamics (CFD) that works to promote and represent the ? Instrumentation Mexican aerospace industry around the world ? Flight simulation and to define a National Strategic Plan for the ? Non-destructive testing (NDT) Industry. ? Virtual instrumentation ? Data and image information processing ? Mexico has acquired a vast experience ? Specialised business information in the automotive and electric/electronics systems industries and that is a guarantee for the ? Equipment design aerospace industry?s success. The country?s ? Embedded systems aerospace industry has world class infrastructure, thanks to: Business opportunities aimed specifically at UK 9 Transfer of quality methodologies companies are added daily to UKTI?s website. 9 Development of suppliers These leads are sourced by our staff overseas 9 Manufacturing standards in British Embassies, High Commissions and 9 Certification Consulates, across all sectors and in over 100 9 Human talent markets. EXPERIENCE AND ACTIVITIES CARRIED You can be alerted to business opportunities on OUT BY AEROSPACE COMPANIES IN a regular basis by registering on the UKTI MEXICO website. Find out more on UKTI?s business opportunities service on the UKTI website The companies work mainly in the following areas: MANUFACTURING AND ASSEMBLY ? 79.70% ? Engineering components ? Harnesses and cables ? Landing systems components ? Plastics injection and moulding ? Heat exchangers ? Precision machinery ? Audio and video systems ? Isolation for airframes ? Software development and control UK Trade & Investment Sector briefing: Aerospace opportunities in Mexico Major events and activities UKTI contacts EXPO MANUFACTURING 2011 One Name Venue: Monterrey, Nuevo León Jonathan C. Clare (CINTERMEX) Consul Date: March 1-3, 2011 British Consulate Monterrey Organiser: E.J. Krause and Associates Inc. Tel: +52 (81) 8356 5359 Mr. Oscar Sánchez Email: jclare@ukconsulate.org Tel: + 52 (55) 1087-1650, Ext. 1140 www.ukti.gov.uk Email: oscar@ejkrause.com Web: www.expomanufactura.com.mx Itzel Hernández Trade and Investment Officer British Consulate Monterrey AERO EXPO IN MEXICO 2011 Tel: +52 (81) 8356 5359 Organizer: VUELA GROUP Email: ihernandez@ukconsulate.org Contact: Mr. Edgar Lira, Coordinator www.ukti.gov.uk Ms. Teresa Reyes, Commercial Manager Place: Fairmont Acapulco Princess Hotel, Alejandra Rodriguez Acapulco City Trade and Investment Officer Date: TBC British Consulate Monterrey Tel: +52 (55) 5559 7669 Tel: +52 (81) 8356 5359 (55) 5575 9640 Email: arodriguez@ukconsulate.org Fax: +52 (55) 5564 8844 www.ukti.gov.uk Email: treyes@vuela.com.mx edlira@vuela.com.mx Dario Ochoa Web: www.aeroexpo.com.mx Trade and Investment Officer British Consulate Monterrey New export events are added daily to the site Tel: +52 (81) 8356 5359 and you can register to be alerted to them on a Email: dochoa@ukconsulate.org daily, weekly or monthly basis www.ukti.gov.uk UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events UK Trade & Investment Sector briefing: Aerospace opportunities in Mexico Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for business in the Mexican market are advised to you to meet contacts and promote your undertake as much market research and company in the Chinese market planning as possible in the UK. UKTI?s team in Mexico, with its wide local knowledge and This work is available via our Overseas Market experience, can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in global markets. wishing to enter or expand their business in overseas markets. This can include: ? Provision of market information To find out more about commissioning this ? Validated lists of agents/distributors work, or accessing other UKTI services and ? Key market players or potential specialist advice, please visit the UKTI website customers in the Mexican market to find contact details for your local UKTI ? Establishment of interest of such office. contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2010 by UK Trade & Investment. Crown Copyright © UK Trade & Investment Sector briefing: Aerospace opportunities in Mexico
Posted: 01 September 2010

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Aerospace opportunities in Mexico   By UK Trade & Investment
Aerospace opportunities   By UK Trade & Investment