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Companies can reduce medical device manufacturing costs in Mexico

Companies can reduce medical device manufacturing costs in Mexico

Although Tijuana and Baja California are the home of the country’s leading industry cluster, a number of states serve as locations at which US and other nation’s firms reduce medical device manufacturing costs in Mexico.

Along with the aforementioned leading cluster, the states of Sonora, Nuevo Leon, Tamaulipas, Yucatan, Coahuila, Chihuahua and the Federal District of Mexico City are the entities in which foreign investors are situated in order to reduce medical device manufacturing costs in Mexico. Together, this group accounts for seventy-six percent of the country’s production of medical devices, instruments and healthcare products.

An industry player on a global scale

Over the years, Mexico has become increasingly prodigious in the production of products for the global healthcare market. The country’s device manufacturers have become adept at turning out a wide range of products, from relatively low-tech one-use consumables to more sophisticated devices that are employed in surgeries and orthodontic procedures. Mexico also leads Latin America in the production of x-ray machines, pacemakers, as well as medical devices in general. In 2013, total medical device production in Mexico was valued at US $14.4 billion. Industry watchers estimate that by 2020 this sum will rise to a figure that will exceed US $12 billion. As of now, there are 2,344 companies that have made the decision to establish plants, and to reduce medical device manufacturing costs in Mexico. These firms are comprised of mostly mid-sized operations and major, well-known multi-nationals.

Climbing the value chain

Eliza Vazquez Ph.D., a researcher at the Technological Institute of Monterrey, as well as other experts in the sector, believe that there is much work to be done to take the medical device industry in Mexico to the next level of sophistication and expertise. The country must move up the industry value chain from its primary position of a producer to a nation that has the internal resources and capacity to conduct both research and design, and engineering, as well as establish manufacturing processes “in-house.” For her part, Dr. Vazquez believes that Mexico has a future in micro-manufacture, the production of complex miniature, high-precision devices. This would first and foremost consist of the design and manufacture of sophisticated molds in miniature that would be used to produce precision plastic injection molded components and end products. Although Mexico is just now beginning to step forth into this arena, Vazquez, and others, believe that the potential for domestic industry in this high-value area is vast. One of the necessary requirements of taking Mexico to this next level is to foster better connections between the private sector, universities, and public sector resources.

Although the presence of most of the medical device manufacturing in Mexico is the result of the inflow of significant sums of foreign direct investment, this movement of capital to the Mexican medical device sector has brought with it opportunities for domestic support industries to increase their number of employees and to grow their base of customers. In addition to plastic injection molding, producers of products for the healthcare industry in Mexico need access to companies that can also provide service in areas beyond plastic injection molding and such as metal fabrication, precision machining, heat treating, electronics, and product sterilization.

The outlook for Mexico and its medical device industry is a positive one. According to the “Competitive Alternatives” study which was conducted by the international accounting firm KPMG in 2014, medical device manufacturing costs in Mexico are, on average, 18.9% lower than in the United States.

Remember, relevant and useful Mexico manufacturing content is available at one’s fingertips by downloading the Tecma Group mobile app from the Google Play Store or ITunes.  Interested parties can also receive Mexico manufacturing information on a weekly basis by SMS Texting the word Tecma to 96000.

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