GodsSpokeman.Com Reynosa Mexico October 2009

NAFTA’s Comprehensive Resource For Manufacturing and Real Estate in Reynosa Mexico.

Reynosa Industrial Profiles

KEY INDUSTRIES: Electronics, Medical , Automotive parts, Consumer Appliances.

MAIN COMPANIES: Delphi, TRW, Emerson, LG,

Maytag, CR Bard.

RECENT ACTIVITY: Maytag expanded their manufacturing campus, MSL/Celestica opened their 2nd facility and continue to grow. Draxlemaier opened 2nd plant and kicked off Stiva Park. Andrew corporation started their 1st operation.

ADVANTAGES: Access to the U.S. highway system and a good transportation alternative to Laredo. Good supplier pool, drawing off both the Rio Grande Valley and Northeastern Mexico’s industrial base. Established in the top tier of manufacturing locations in Mexico. Growing labor pool with increasing skill level. Good location for expatriates with McAllen, Texas nearby.

DISADVANTAGES: No manufacturing operations outside of the industrial parks. Continued growth over the past five years has put a potential strain on available labor. Relatively high overall cost of doing business – labor, lease rates, services. Very hot during the summer. Reynosa is a town with some growing pains – poor road system and low level of infrastructure compared to other locations. No rail access

Overview: Reynosa has been one of the most active manufacturing locations in Mexico since 2000. The city has continued to attract new companies and while retaining the expansion projects for companies already established in town. Overall, the area provides a solid location for manufacturing in Mexico. However, Reynosa is one of the more expensive cities to do business and is beginning to experience some growing pains. Once the Anzalduas International Bridge opens (June 2009) some of this pressure will be relieved, but it is just one of many steps that Reynosa needs to remain competitive in the coming years. It should be mentioned that McAllen is doing an excellent job of supporting companies from the U.S. side by offering a growing warehouse/distribution center and improving the area’s infrastructure. The Rio Grande Valley has the opportunity grow and thrive for many years to come.

The Workforce: POPULATION, Reynosa is the third largest city on the U.S./Mexico border with 526,888 people according to the 2005 census. However, current population estimates put the actual number closer to 700,000 people in the city and immediate area. Growth is rapid, with a 4.85% annual increase from 1990 to 2000. This is accelerated by immigration from southern states into northern Mexico and south Texas. The 2006 U.S. census counted 126,411 in McAllen, Texas, the sister-city to Reynosa and 8 miles north. There are just over 600,000 people in Hidalgo County, Texas including McAllen, Mission & Edinburg.

STATE DESCRIPTION: Tamaulipas shares borders with Texas to the north, Nuevo Leon to the west, San Luis Potosi and Veracruz to the south, and the Gulf of Mexico to the east. The state’s industrial development occurs on two fronts, the Maquiladora industry to the north and the chemical and petrochemical industries near the gulf port of Tampico/Altamira.

LOCATION: Reynosa is located at the north of the Mexican Republic, 60 miles west of Brownsville, Texas, along the U.S./Mexico border at an altitude of 125 ft. above sea level. The approximate land area is 3,156.34 square kilometers. The Rio Bravo (Rio Grande River) is the boundary between Reynosa and McAllen.

The city sits on flat, grassy terrain on the banks of the Rio Grande River. The climate is hot and humid almost the entire year with occasional heavy rains in the summer, average annual precipitation is 26 inches. High temperatures from May to August often surpass 100° F and low temperatures in December and January can reach 14° F.

REGIONAL INFLUENCE: Reynosa in the last two years became the oasis of the Maquiladora industry by ignoring the crisis that underwent the sector in the rest of the country. Only Nuevo Laredo attracts more attention in the Rio Grande Valley due to its role as the largest transportation hub in North America. Reynosa occupies the second place in share of Maquiladora employment along the Texas-Mexico border with 19%. Reynosa also has the biggest growth in employment in all the Texas-Mexico Border in 2004 with 3,608 new employees. (2004 INEGI – February 2008). The city has a diverse economic base, which includes oil and natural gas resources, livestock, agriculture, tourist trade and industry. Recent growth is partially the product of excessive congestion at Nuevo Laredo and perceived labor issues in Matamoros. However, this growth has begun to strain the already inadequate availability in housing.

Two international bridges serve McAllen and Reynosa: the McAllen-Hidalgo Bridge and the Pharr-Reynosa Bridge. On the U.S. side Hwy 281 is the key route heading towards San Antonio. The planned construction of a new border crossing, the Anzalduas International Bridge, promises to make a huge impact on the area’s growth potential. Not only will Anzalduas open the westside of Reynosa for direct access to the U.S. without having to cross town, but may also take some of truck traffic away from Nuevo Laredo as it will connect directly with the highway to Monterrey and the NAFTA Highway leading to Mexico City.

A couple items to consider: Nearby Nuevo Laredo is the busiest commercial border-crossing point between Mexico and the U.S., handling over 40% of all northbound commercial traffic. Texas accumulates 50% of all the merchandise that the United States exports to Mexico, helped by the meeting points of transport of the state and their proximity with the market. McAllen, Texas is one of America’s fastest growing cities and will continue to attract new suppliers to the area to better serve the Rio Grande Valley industrial base.

INDUSTRIAL REAL ESTATE: Ten major industrial parks serve Reynosa. With the exception of MaquilPark, all are Class “A” with good infrastructure and available land. However, the concentration of maquiladoras in the industrial parks can lead to turnover issues as companies cannibalize other workforces.

AVAILABLE SPACE: A current survey of industrial parks with a variety of site options reveals the following average prices in U.S. dollars per sq. ft.

Industrial Parks, Stiva Alcalá, Colonial Parque Industrial del Norte, El Puente, MaquilPark, ProLogis, Parque Industrial Reynosa (North and South), Reynosa Industrial Center, Villa Florida.

TRANSPORTATION:Reynosa’s overall accessibility and adequate transportation system makes it attractive to maquiladoras who are serving customers throughout the U.S. on a JIT basis. McAllen, Texas possesses one of the largest Foreign Trade Zones in the United States, an added attraction for companies with components inbound from countries outside of the NAFTA zone. The major east-west route circling Reynosa, known in Mexico as a periferico, keeps most commercial traffic outside of the population centers, but overall the system needs improvement. Reynosa is connected to major U. S. cities by highway 281, which has been designated the future I-69 corridor, linking Mexico through the U. S. to Canada. Highway 281 provides easy access from McAllen to interstate highways I-35 and I-37.

Reynosa has two international bridges and a third in the planning stages. Almost 13% of all northbound Mexican trade crosses through the Rio Grande Valley. Out of the $150 billion that cross through the South Texas Border, 38.5% crosses through the Rio Grande Valley. Reynosa – Hidalgo International Bridge connects downtown Reynosa with Hidalgo, Texas, just 7 miles south of McAllen. Built in 1967, it has two spans handling non-commercial traffic north and southbound. The present flow of traffic is over 15,000 vehicles per day. The Pharr International Bridge connects the eastside of Reynosa to Pharr, Texas, 10 miles to the southeast of downtown McAllen. This bridge was built in 1995 and provides service for Reynosa’s commercial traffic. Northbound traffic flow is over 7,000 vehicles per day. Traffic from the industrial areas on the westside of Reynosa currently has to cross town to use the Pharr Bridge.

The planned Anzalduas International Bridge  (note now completed) will link Reynosa with McAllen and Mission and will be located 3 miles upstream from the Reynosa Hidalgo Bridge. According to the proposed design, the bridge will have four vehicular lanes and two pedestrian lanes. The bridge will connect Mexican highway 40 to U.S. highway 281, the future U.S. highway I-69. The U.S. issued the presidential permit in July 1999 and Mexico issued diplomatic notes in February 2001. Construction is anticipated to be completed by between 2006 and 2008.Reynosa’s International airport offers passenger and cargo service with daily flights to the most important destination in the country including Mexico City. Mexican Customs and immigration facilities are on site. The McAllen International Airport is a regional transportation center serving the third fastest growing metropolitan area in the U.S. Daily flights to Mexico City, Monterrey, Dallas and Houston.

Southern Pacific Rail offers service to the McAllen foreign trade zone. McAllen currently has no rail service.

The seaport of Altamira is located six hours drive to the south. This port is Mexico’s most important seaport. Altamira started operations on June 1, 1985 with a dock 250 meters long and 12.355 acres for warehousing. Presently, the port has twelve docks and nine terminals.

CUSTOMS: U.S. Customs operates a four-lane bridge with a dedicated truck lane northbound at the Pharr crossing. Brokerage support is plentiful from many Laredo-based customs houses that operate satellite offices in McAllen.

TAXES

Reynosa’s tax system is composed of (i) a municipal urban property tax of .006% of the municipal appraisal, (ii) a state payroll tax of 2%, (iii) a federal income tax 32% (ISR), (iv) a federal value added tax 15%, 10% or 0% (ISR), (v) a federal minimum alternative asset tax 1.8% (IMPAC), and (vi) a federal employee profit sharing of 10% of profits (PTU).

The Support

SUPPLIERS and SERVICE COMPANIES

Most manufacturers in Reynosa have warehousing for needed supplies or rely on deliveries from South Texas companies. The recent industrial growth experienced by both, Reynosa and McAllen, ensures adequate services for Maquiladora operators.

The Politics

UNIONS

The labor union climate in Reynosa is very favorable to industry. Relations between unions and management are peaceful and harmonious. New companies have a choice of selecting one of three union leaders under the CTM or establishing their own in-house union. There has not been a strike or labor conflict in Reynosa since the mid 1980’s.

POLITICAL INFLUENCES

The state’s governor, Eugenio Hernandez Flores, is a young and charismatic leader who understands the importance of foreign investment to generate jobs and economic growth for the state.

The Reynosa mayor is Ricardo Ongay Villareal, which has impulsed the Maquiladora industry along his government, has made the introduction of new plants an easier task.

Reynosa is Manufacturing The Following Items.

TV manufacturing

Electrical components

Consumer appliances

Medical equipment

Electrical components

Automotive stereos

Electrical components

Automotive products

Electrical devices and motors

Car stereos

Control valves

Power supplies

Telephones

Apparel

Frozen concentrate citrus juices

Car radio speakers

Accessories for mobile phones

printers

Telecommunications equipment

Household goods

contract manufacturing

Consumer appliances

Bathroom fixtures

Motors

Medical products

Manufacturing in Mexico Cities

Acuna

Aguascalientes

Altamira

Chihuahua

Celaya

Colima

Culiacan

Durango

El Paso

Ensenada

Gomez Palacio

Guadalajara

Guanajuato

Hermosillo

Irapuato

Juarez

Leon

Lerdo

Matamoros

Monterrey

Morelia

Naucalpan

Nogales

Nuevo Laredo

Ojinaga

Piedras Negras

Puebla

Queretaro

Ramos Arizpe

Reynosa

Saltillo

San Juan Del Rio

San Luis Potosi

Silao

Tijuana

Toluca

Torreon

Veracruz

Zacatecas

Joomla

Norman Oetker Missionary English Class Reynosa Mexico

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