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Tecma Tips: Customs benefits for textile manufacturing and reverse logistics in Mexico

Tecma Tips:  Customs benefits for textile manufacturing and reverse logistics in Mexico




Steve Colantuoni: Hello.  Today we are in Tecma’s Mexican headquarters in Ciudad Juarez.  I have the great pleasure of having Marisela Molina with me, who is an expert on the issue of Mexican Customs.  I’ve asked her iif she would join s so that we can ask her some questions in her area of expertise.  How are you doing today?

Marisela Molina: Very fine. Thank you.

Steve Colantuoni: One of the things that we talked about earlier, off camera, is that in Mexico there are various programs that are put into place for people that are involved in certain kinds of manufacturing activities in Mexico. You had mentioned to earlier that there are two activities, in particular, that you thought were worth mentioning. What are those manufacturing activites in Mexico?

Marisela Molina: Sure. We there are two things that I would like to mention for which we can use the benefits that Mexico provides. The first activity that I would like to address is reverse logistics.

Steve Colantuoni: Ok. So this would entail the concept of companies that manufacture a product in Mexico, or even somewhere else. Then the consumers that utilize that product will send it back to the company to get repaired, and then that same company will send the product to perform reverse logistics in Mexico.

Marisela Molina: Yes. Usually, when you buy something, you buy the guarantee attached to that product too.

A lot of companies perform repairs, or reverse logistics in Mexico.  The reason for this is that Mexican Customs provides certain benefits because the company is not actually manufaturing a poduct. Now companies are able to bring products in for reverse logistics in Mexico, plus all the items that will be used to repair those products into Mexico on a duty free basis. This means that no Mexican duties will be paid, because the company is only going to perform repairs. The country of origin of raw materials used in the reverse logistics in Mexico does not matter. They will enter Mexico duty free.

Steve Colantuoni: There are a lot of reverse logistics operations happening here on the border at Ciudad Juarez, and Tecma has several clients that are involved in these. Additionally, you often talk to companies that are considering coming to do reverse logistics in Mexico. What kind of things have you had contact with in your work that come down here for repair? Can you give some examples?

Marisela Molina:  Sure. Actually we have a couple of clients that are involved in reverse logistics in Mexico. They do this kind of repair. One company that is a Tecma Group of Companies client repairs printers. Another one repairs TVs. Most of them do reverse logistics on electrical products. Also, they repair small ATMs.

Steve Colantuoni;  There was another area of manufacturing activity that you mentioned, as well. This one was highly controlled at one time in terms of quotas. Additionally, at one time, you needed special “visas” to get materials used in the manufacture of the product in and out of Mexico, but workig in this has become very simple work with textiles in Mexico, according to our earlier discussions. What are the benefits related to doing textile manufacturing in Mexico?

Marisela Molina: Now there are benefits for textile producers in Mexico. If a company is going to produce the items in Mexico, and sell them into any of the NAFTA signatory countries it can bring textile products, including fabrics and thread, duty free. Performing cutting and saw operations can be done duty free, as well.

Steve Colantuoni. So, it has become a much more open process than it was many years ago when quotas were in place and “visas’ for raw material importations were required. With respect to revers logistics, with respect to textile manufacturing, things are open. In additon to the raw materials required to do reverse logistics and textal manufacturing in Mexico being duty free, is the machinery and equipment needed to perform these operatons duty free, as well?

Marisela Molina: Remember, with equipment things are done somewhat different. The benefits are only available for use making the actually product to be produced, but some of the equipment will be importable duty free based upon its HTS tariff code classification. Let’s remember that Mexico has an obligation to take care of the national producer. That was one of the reasons for strictly controlling textile manufacturing activities in the past. Now textile manufaturing is more open, because some rules have been put into place. As long as companies comply with the rules they will be able to use the benefits that are being offered in the are of textile manufacturing in Mexico.

Steve Colantuoni: If any of the folks that are viewing this video have questions as to how to go through the process of either a) setting up a reverse logistics operation in Mexico, or b) to work with textiles, I am sure that they can get in contact with you.

Marisela Molina: Of course, we are very please to help. You have my email. Viewer can contact me.

Steve Colantuoni: We have your email address going across the screen right now. Hopefully people will contact you and ask you questions about reverse logistics and textiles, as well as other things having to do with Mexican Customs.

Marisela Molina: Sure. I am very glad to help.

Steve Colantuoni: Thank you for sitting down for a few minutes.

Marisela Molina: Of course it’s my pleasure.

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

Photo credit: McKay Savage

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This quarterly publication will be populated with content that is useful and relevant to readers that are contemplating Mexico investments, have operations already within the Republic, as well as to other individuals that have an interest in Mexico and its manufacturing sector.