7 Reasons Why Mexico is Your Best Bet for Medical Device Manufacturing

Medical Device Industry: 7 Reasons Why Mexico Is Your Best Bet Over China & Costa Rica

2016

By Co- Production International www.co-production.net

TABLE OF CONTENTS Contents Introduction ______________________________________________________________________________________________ 1 Findings ___________________________________________________________________________________________________ 2 Free Trade Agreements __________________________________________________________________________________ 3 Currency Rates____________________________________________________________________________________________ 4 Largest Concentration of Medical Device Industry in North America ________________________________ 5 Low-cost Skilled Workforce _____________________________________________________________________________ 6 Available Real Estate and Construction Costs __________________________________________________________ 8 Proximity of Transport to U.S. and Export Markets ____________________________________________________ 9 Patent & Intellectual Property Law Enforcement ____________________________________________________ 10 Summary ________________________________________________________________________________________________ 11 How to Get Started in Mexico __________________________________________________________________________ 12

Checklist: Top 7 Criteria For Choosing A Medical Device Manufacturing Site September, 2015 By Co-Production International

CHECKLIST: TOP 7 CRITERIA FOR CHOOSING A MEDICAL DEVICE MANUFACTURING SITE can create a competitive advantage, those savings will be lost if quality suffers. The host location must support a culture attuned to the rigorous quality control necessary to produce error-free products.

This white paper provides medical device manufacturing executives with the top 7 criteria to use in assessing the feasibility of a manufacturing facility in another country. The 7 criteria include: The medical device industry continues to grow, driven by technological advances in the treatment of a host of medical conditions and increasing sales in emerging markets. Projections are for global industry sales to increase at a 4.44 percent rate annually and reach $440 billion by 2018.1 Despite the rosy projections, medical device makers also face competition and downward pricing pressures in emerging markets. Many are considering a manufacturing facility location outside their home country. For the industry in the U.S., 54 percent of all new manufacturing facilities are in near-shore and offshore locations.2 Choosing the right location for a medical device manufacturing facility is a complex process, requiring a detailed analysis of internal production needs, facility features and site location requirements. The industry must also consider the quality of the workforce, since medical devices require precision manufacturing and assembly. While cost savings

1

“Analysts: Device market growth will outpace Pharma by 2018” – Fierce Medical Devices

1- Free Trade Agreements 2- Currency Rates 3- Concentration of Medical Device Manufacturers 4- Low-cost, Skilled Workforce 5- Available real estate and low-cost construction 6- Proximity of Transportation to U.S., Canada and Export Markets 7- Patent and Intellectual Property Protection and a “Business-friendly” Regulatory Environment Each company will have additional considerations that influence their decision-making; these criteria provide a baseline for choosing a manufacturing facility location.

While in theory the new location can be anywhere in the world, this paper focuses on the three countries that currently have a significant medical device manufacturing presence: Mexico, Costa Rica and China.

2

“Costa Rica in the Medical Devices Global Value Chain” – Duke University Center on Globalization, Governance, and Competitiveness August 2013.

Checklist: Top 7 Criteria For Choosing A Medical Device Manufacturing Site September, 2015 By Co-Production International

FINDINGS Our findings are that Mexico, and in particular the Tijuana-Baja California region of Mexico, provides the best combination of assets for establishing a medical device manufacturing facility. Medical device manufacturers with operations in Mexico and trade organizations cite major cost savings and ease of business processes3 as some of the main reasons for selecting Mexico.

Mexico’s free trade agreements include the United States and Canada under the North American Free Trade Agreement (NAFTA) and, in the Western Hemisphere, agreements with Chile, Colombia, Costa Rica, Nicaragua, Peru, Guatemala, El Salvador, and Honduras. In addition, Mexico has negotiated FTAs outside of the Western Hemisphere and entered into agreements with Israel, Japan, and the European Union.

The following compares Mexico with china and Costa Rica, using the 7 criteria.

1- FREE TRADE AGREEMENTS Mexico has had a commitment to trade integration and liberalization through the formation of free trade agreements (FTAs) since the 1990s and its trade policy is among the most open in the world.

Mexico lies in a strategic geographical location for international trade, sharing borders with the United States of America, while facing Europe and Asia, and representing an easy entry to the rest of Latin America.

Mexico, often touted as “The King” of international business in the world, with the following agreements in effect: 

  

13 Free Trade Agreements (FTA’s), which provide for preferential duty rates on foreign trade operations with 51 countries4.

30 Agreements to promote and protect foreign investment (APPRIs) 9 Commercial Agreements under ALADI5 32 Reciprocal Investment Promotion and Protection Agreements (RIPPASs) with 33 countries.6

3

“Manufacturing in Mexico: Advantages of Near-shoring” Co-Production International 2014.

4

Foreign Trade Information System

Of these agreements, the North American Free Trade Agreement (NAFTA) is the primary driver of Mexico's manufacturing industry. Provisions of the U.S.-Canada - Mexico agreement include no-tariff trade between these three Countries, while Mexico has the IMMEX decree which also provides dutyfree temporary imports for production.

“Mexico’s economic stability, low wages, reforms in important sectors, and active pursuit of trade agreements globally continue to attract the attention of international investors.” Luis Ricardo Rodriguez, Global Location & Expansion Services, KPMG in Mexico.

5

“Doing Business in Mexico” – PwC Mexico 01/2015

6

PROMEXICO

Checklist: Top 7 Criteria For Choosing A Medical Device Manufacturing Site September, 2015 By Co-Production International

U.S. President Barack Obama is promoting an additional free trade agreement called the TransPacific Partnership (TPP). The TPP will include the United States, Canada, Mexico, Chile, Peru, Australia, New Zealand, Brunei Darussalam, Japan, Singapore and Vietnam. The TPP is likely to come up for a vote in the U.S. Congress in late 2015 or early 2016.

Mexico and the U.S. don’t simply trade goods, but they work together to manufacture them. Whereas products made in China are made up almost entirely of non-American parts (96 %), products made in Mexico contain approximately 40 % American-made parts. Texas, California, Michigan, Illinois and 16 other states sell more than $1 billion dollars’ worth of goods to Mexico every year roughly 13% of all U.S. exports. U.S. - Mexico trade is responsible for 6 million jobs in the United States.

The Costa Rican government has created free trade zones that have proved to be popular with medical device manufacturers. These zones offer duty-free imports and income tax incentives.

However, medical device manufacturers with plants in Costa Rica say that uncertainty regarding changing regulations constrains investment, as are regulations concerning construction, taxation and property transfer procedures. Costa Rica ranked 110th out of 183 countries in the World Bank’s ranking for Doing Business (2012).9

Costa Rica is somewhat of a newcomer to the FTAs. It has 14 free trade agreements, providing access to 57 countries.7 FTAs include the U.S. and Canada in North America; Venezuela, Columbia and Peru in South America; and most of the countries neighboring in Central America. The country also has trade agreements with China and Singapore and with the European Free Trade Association (EFTA).8

China has 14 signed and implemented free trade agreements.10 These agreements include Asian nations under the ASEAN pact; Hong Kong, Macau, Singapore and Korea; Pakistan; Australia and New Zealand; Chile and Costa Rica in the Americas; and Iceland and Switzerland in Europe. However, China does not have Free Trade Agreements with Canada, United States or Mexico.

7

9 “Costa Rica in the Medical Devices Global Value Chain” – Duke

“Latin America’s Leading Med Tech Hub”

8 “Info Costa Rica/Trade Agreements” Organization of American

States, SICE Foreign Trade Information System

University Center on Globalization, Governance and Competitiveness 10

China FTA Network

Checklist: Top 7 Criteria For Choosing A Medical Device Manufacturing Site September, 2015 By Co-Production International

2- CURRENCY RATES Dramatic fluctuations in the value of the Chinese currency in 2015 are ample evidence of how difficult it is to make generalizations about world currencies and their exchange rates with the U.S. and Canadian dollar. That being said, economists are in general agreement that Latin Americabased commodity manufacturers stand to benefit, as exports become cheaper and more attractive.

Based on data from the World Bank11, trends over the period 2010 to 2015 indicate the following: 

Mexico’s peso started at 12.50 pesos to the US dollar in 2013 down to 13.29 pesos in 2014.

Then the rates started escalating to 16.06 pesos in 2015 and reaching a new low of 17.362 pesos to a dollar in 2016.



China descends, starting at 6.77 RNB to the U.S. dollar in 2010 and ending at 6.2 in 2014.

In 2015 it moved to 6.7 RNB and in Q1 2016, the rate hovered at 6.587 RNB to the dollar.



Costa Rica, like Mexico, descends then rises, from 525.83 colons to the U.S. dollar in 2010 to 538.32 colons in 2014. In 2015 the rate fell to 527.3 colons to the dollar and in Q1 2016, the rate raised up to 534.313 colons.

For the medical device manufacturer, the current news is highly favorable: a U.S. dollar now buys significantly more goods and services in Mexico than it did at any time over the past five years, what economists call a change in purchasing power.5

11 Currency Comparisons (multiple tables) The World Bank

The Mexican peso is expected to hit an all-time low of $20 pesos against the US dollar this year and rectifying itself by the end of the year to an

“For those companies deciding to setup a manufacturing facility in Mexico there is no time like the present” said Luis Hernandez, estimated 16.50 pesos to the US dollar.

CFO of Brady Corporation.

By investing US dollars in Mexico in the first 2 quarters of 2016, a company will save an additional 16% plus the natural 40% savings on labor, which is almost a 60% savings on labor which mean that for every $1 million dollars spent in the US, a company may expect to spend $400,000 dollars in Mexico, a $600,000 savings!

PESO FLUCTUATION TO THE DOLLAR (10 YEARS)12:

“Mexico is an economy that has been working towards making progress in reforms, and is positioned well to benefit from a stronger U.S.,” said Chris Chapman, whose London-based Manulife Asset Management oversees $302 billion. “In fact, much of the manufacturing that

Canada would have previously relied on has relocated to Mexico.”

12

XE Currency Charts (Mexico vs. USD)

Checklist: Top 7 Criteria For Choosing A Medical Device Manufacturing Site September, 2015 By Co-Production International

3- MEDICAL DEVICE INDUSTRY OVERVIEW Mexico, and in particular Mexico’s Tijuana-Baja California region, provide the best combination of assets for a medical device manufacturer that would benefit from proximity to other companies in their supply chain and to transportation to primary markets in the U.S. and Canada.

For medical device companies manufacturing components, Baja California is an area that also has a built-in market: other companies in the medical device supply chain. Business-to-business industrial sales within the major manufacturing clusters top $11 billion USD a year in Tijuana.

These are some of the Medical Device Companies manufacturing in Baja California, Mexico are:

The Medical Device sector in Mexico is comprised of 655 companies who exported $8.3 Billion USD13 in 2014.

Medtronic Nelcor Puritian Bennett (Covedien)

Cardiovascular disease treatment & technology, orthopedic devices, medical instruments Medical instruments, respiratory therapy equipment

 

Greatbatch

Orthopedic devices

Becton Dickinson

Glass & prefilled syringes, hypodermic products

Össur

Non-evasive orthopedics

Medline

Wound care products, medical uniforms, gloves

DJO Global

Orthopedic devices, surgical reconstructive implant products

Teledyne Medical

Surgical kits, syringe packaging



Largest exporter in Latin America Ninth largest exporter of medical devices worldwide.

Mexico's main trade partner in the sector is the US, with 92.5% of its exports going to that country and 62.7% of its imports coming from it.

The country´s most important and largest cluster is located in Baja California boasting 66 medical device manufacturers with 42,000 direct employees in the sector. Baja California captures 34% of national exports14.

The cluster of medical devices located in Baja California, and the Biotech cluster in San Diego, together are the most diverse and sophisticated bi-national concentration in North America in this sector.

Tijuana, Baja California is a few minutes south of San Diego, California and only 140 miles from the major port of entry in Los Angeles/Long Beach.

Tijuana’s stones-throw proximity makes logistics less expensive and provides quick and easy access to supply chain procurement vendors. Companies find first class facilities that are FDA, CE and ISO 13485 certified, as well as clean rooms ranging from Class 100 to 100,000.

13 Mexico Medical Device Report - Espicom 14

Invest in Baja

Costa Rica is the third largest exporter of medical devices in Latin America, after Mexico and Brazil. Since Baxter and Abbott (now Hospira) established operations in the country in the 1980s and 1990s respectively, Costa Rica’s medical devices production has grown to some $1.8 billion annually from 63 companies15. Costa Rica’s medical device presence is now approximately one-third the size of Mexico’s and is still hampered by problems of proximity, low quality of workforce and a lack of government incentives.

15

Costa Rican Investment Promotion Agency

Checklist: Top 7 Criteria For Choosing A Medical Device Manufacturing Site September, 2015 By Co-Production International

4- LOW-COST SKILLED WORKFORCE

In assessing labor costs, medical device manufacturers use a rule of thumb that labor accounts for approximately 30 percent of locationsensitive costs in manufacturing and 65 percent of total location-sensitive costs in service operations.

selection in the medical devices manufacturing sector.18 Contrary to outdated perceptions, with the rapid expansion of labor-intensive processing plants (maquiladoras), there is a large pool of skilled labor available in Mexico with 148,266 employees in the sector, especially in the northern border areas. The Mexican government instituted programs more than 10 years ago to boost the quality of its workforce.

Mexico graduates 130,000 engineers and technicians per year from universities and specialized high schools. This number rivals that of the United States, whose population is far larger.

Baja California alone boasts 51 universities and 14 technical schools. Partnerships between academia and government have helped spur development of industryspecific R&D centers. The State comprises a workforce of 42,000 at $2.10 USD hourly rate. (Fully burdened)19

Using this benchmark in a global search, executives find that labor costs are lowest in China, Mexico and India.16 However, China is no longer the low-cost center for offshore manufacturing. China’s manufacturing hourly wages have been increasing 12% a year since 200117. According to a 2012 report, the average hourly manufacturing wage in Mexico is now lower than the wage in China. In constant dollar terms, Mexican manufacturing wages are 14.6 percent less than those of China.

In assessing a location for medical device manufacturing, the cost of labor alone cannot guide the decision. Due to the potentially lifethreatening consequences of human error and the potential for liability lawsuits, the quality of the human capital involved in production of medical devices is essential to business success. Most industry research indicates that human capital is the single most important factor driving site

16

“Competitive Alternatives: Guide to International Business Location Costs 2012” – KMPG 2012 17 18

The Economics “The future of Factory Asia”

“Costa Rica in the Medical Devices Global Value Chain” – Duke University Center on Globalization, Governance, and Competitiveness August 2013

One of the primary beneficiaries of these policies to improve skills is the medical device industry, which needs skilled designers, engineers and component assembly personnel. The industry is characterized by a very high rate of innovation, resulting in short production cycles and a need for continuous improvements to existing products making use of cutting edge scientific and technological advances, with an average product life cycle of 18 months. For such a fast-moving industry, an educated workforce is essential.

The Mexican government has created a publicprivate alliance, called Medical Devices Cluster of the California’s20, to promote Mexico’s leadership in the industry.

Government-sponsored qualification courses are specific to the medical 19 20

Baja California State Government

“Manufacturing in Mexico: Advantages of Nearshoring” - Co-Production International 2014

Checklist: Top 7 Criteria For Choosing A Medical Device Manufacturing Site September, 2015 By Co-Production International device industry and prepare the workforce for the precision work necessary to produce world-class products that meet the specs of FDA Class I, II and III. Companies in Mexico are also enjoying significant labor cost savings, when compared to U.S., Costa Rica and China.

When wages, overhead and administrative costs are computed, the average hourly cost in Mexico is one-third that of comparable operations in the U.S. In Mexico the hourly work week is 48-hours with an average fully burden hourly wage of $2.50 USD. Mexico's workforce is extremely reliable, with an average turnover rate of only 2.6 percent.21 By comparison, Costa Rica continues to lag significantly behind Mexico. The Costa Rica medical device industry employs approximately 17,000 people, about 12 percent of Mexico’s employee base. Unlike in Mexico, which has a diverse range of medical device companies, 15 medical device companies employ the majority of workers in Costa Rica with an hourly rate of $2.42 - $2.93 USD22. Most importantly, the quality of the workforce is largely limited to low-value packaging functions.16 No. of Employees: 112 Annual Hours: 279, 552 Square Feet: 20,000

21

“Costa Rica in the Medical Devices Global Value Chain” – Duke University Center on Globalization, Governance and Competitiveness

The Costa Rican government has yet to develop an effective educational program to increase the number of engineers and skilled workers.

China is ranked low for skilled workers and vocational training, showing shortages of skilled workforce needed for complex products like medical devices. Shortage shows that 76% are unskilled, 20% skilled, and 4% highly skilled.23 Due to Mexico’s proximity and long history with the United States, the Mexican workforce is largely bilingual and bicultural. And since the Baja California region has had a concentration of medical device facilities for more than 40 years, executives find that the workforce understands American business practices and culture. These points of commonality help strengthen the operations on a daily basis – a contrast to difficulties observed in offshore locations in the Asia-Pacific region.

LABOR COST COMPARISON: MEXICO VS. U.S.A.

22

http://costarica.com/business/salary/

23

Center of International Education Benchmarking

Checklist: Top 7 Criteria For Choosing A Medical Device Manufacturing Site September, 2015 By Co-Production International

5- AVAILABLE REAL ESTATE AND CONSTRUCTION COSTS Industrial parks have been established throughout Mexico to provide the needed infrastructure for the thriving manufacturing industry. Developer and development options are usually available in these areas and vary from institutional to large family conglomerates that typically offer excellent speculative facility options with favorable terms, structured similarly to those in the US. Some states throughout Mexico offer donated land for the industry or sell it at relatively low prices, each analyzed individually and vary depending on the impact of the scope of the project and amount to be invested.

Above and beyond the long list of benefits to manufacturing in the northern Border State of Baja California there is also its availability of industrial space with over 87 industrial parks, 51 of them located in Tijuana, making it one of the top industrial markets in Mexico24. Many of these industrial complexes are structured around specific industries such as medical device and equipment manufacturing and assembly, electronics, aerospace/defense and automotive, offering not only space to lease but trade and logistics support together with basic infrastructure and tenant improvements.

One example is the Thomas Alva Edison Industrial Park, Tijuana's newest industrial park, which recently welcomed two U.S.-based medical device manufacturers - RAM Technologies and Phase 2 Medical, both supported and promoted by CoProduction International, Inc., the premier administrative services provider in Mexico.

24 25

Baja California State Government

“Latin America’s Leading Med Tech Hub“- Costa Rican Investment Promotion Agency (CINDE)

Land and office leasing in Mexico are available at rates lower than the U.S. and compare favorably with Costa Rica and China. The Tijuana-Baja California area has approximately 5 million square feet available of both commercial and industrial development, with average lease rates of approximately 42¢ per square foot/month in Tijuana, compared to $1.25 per square foot/month in the U.S. With its large concentration of industry, the Tijuana-Baja California area has a large number of skilled and proven construction companies, including firms with experience in high-quality, precision facilities like Class A cleanrooms, from Class 100 to 100,000. More than 90 percent of the medical device manufacturing facilities in TijuanaBaja California are ISO 13485 certified.

By contrast Costa Rica has 8 manufacturing parks and another nine parks suitable for offices and R&D in the greater metropolitan areas of the capital city of San Jose.25 Costa Rica also has inexpensive land in the rural areas, but neither of these options feature the tax breaks and incentives the Costa Rican government offers in free trade zone areas.

China has land for development but the cost of land has escalated dramatically in recent years. Beijing is now the most expensive residential real estate in the world, which has a ripple effect on commercial properties.

Recent commercial developments in Shanghai and Hangzhou are more than 20 percent higher than in the previous year. Nationally, real estate prices surged 7.4 percent in 2014.26

26

“Office Space Around the World” – Cushman & Wakefield 2014

Checklist: Top 7 Criteria For Choosing A Medical Device Manufacturing Site September, 2015 By Co-Production International

6 - PROXIMITY OF TRANSPORT TO U.S. AND EXPORT MARKETS Manufacturers can ship in and out of Mexico via sea, air, rail and highway trucking. As the area has developed into a global hub for medical device manufacturing, companies are likely to be near current and potential suppliers as well.

Major transportation highways and NAFTA corridors connect Mexico’s industry with major North American markets. With manufacturing hubs like Tijuana only minutes south of the U.S. Mexico border, medical device manufacturers can quickly and efficiently move parts and products.

The State of Baja California, Mexico has a strong network of well-maintained highways with Highway 1 as the major artery connecting the entire state to the U.S. via San Diego.

Rail is another transportation option. Recently, the U.S. and Mexico have initiated discussions aimed at revitalizing the cross-border railway between Tijuana and San Diego.

In Tijuana there are 1.4 million commercial northbound crossings a year at the Otay Mesa commercial port of entry. Farther up the coast is the deep-water port in Ensenada, Baja California, 63 miles south of San Diego, which connects to major port transportation centers in Los Angeles, Long Beach, Hong Kong and Shanghai. Depending on the destination of the shipment, a transport delivery time from Mexico to the U.S. can be achieved in the same day.

Mexico transport delivery times are far less than in China. The average transit time interval for a shipment departing China to arrival in the U.S. is at least 23 days average.

Costa Rica’s location, while much closer to the U.S. than China, is still more than 2,000 miles away.

Overland routes are not a viable option, except for transshipment. Costa Rica medical device product transport is largely by sea, resulting in at least 17 days average delivery times to the U.S.; or the more expensive option of air, which is a three-hour flight to the nearest U.S. major airport.13, South America and European markets.

Spotlight: Tijuana Cross-Border Xpress, an enclosed pedestrian bridge for Tijuana Airport (TIJ) passengers crossing the U.S./Mexico border, is now open. It serves the approximately 2.4 million passengers who already cross the border as part of their travels. Users of the bridge will be able to access the more than 30 destinations within Mexico that TIJ offers, many of which are not served by other Southern California airports. TIJ also has direct flights to Shanghai.

Checklist: Top 7 Criteria For Choosing A Medical Device Manufacturing Site September, 2015 By Co-Production International

7- PATENT AND INTELLECTUAL PROPERTY LAW ENFORCEMENT

provisions of the World Trade Organization (WTO) Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS).28

Mexico’s stance on intellectual property law enforcement, a prominent issue for medical device manufacturers, is modeled on the international standards established by the World Intellectual Property Organization (WIPO).

Mexico’s IP laws protect and enforce patent holders and intellectual property users in much the same way as they do in the U.S. The Mexican Patent and Trademark Office will cooperate with its counterparts in other countries to reduce the local examination process for patents that have already been registered in other countries.

Near-shore vs. Offshore: In the World Bank’s annual “Doing Business” Report, Mexico is ranked 48 under the "Ease of Doing Business” category, surpassing all the BRIC countries - including China (91st), Brazil (130th), and India (132nd), which compares business regulations for domestic firms in 185 countries. 27 Mexico’s pro-business government made notable improvements in its business regulations, including the elimination of minimum capital requirements for LLCs, and reducing the number of times a company pays taxes from 27 to 6 times a year.

Costa Rica has made strides in protecting Intellectual Property rights since establishing the Administrative Registration Tribunal (ART) in 2002. ART is an independent body that adjudicates appeals relating to the country's national IP registries and uses as guidelines the

China’s IP protections is a contentious issue addressed at the highest levels of government, most recently in September 2015, in a meeting between U.S. president Barak Obama and Chinese president Ki Jinping.29 Concern about IP enforcement remains a major factor influencing company strategies and operations in China.

China’s IP laws and regulations increasingly reflect international standards, and China has indeed made steady efforts to better protect and enforce IP rights. However, challenges remain, including lingering issues with China’s IP legal framework in areas such as trade secrets, uneven enforcement, and significant procedural barriers that frustrate company efforts to protect IP in China 30.

Given the circumstances in China, one potential strategy for medical device manufacturers to protect their intellectual property rights is to register their company in China and use domestic Chinese intellectual property law.31 Mexico possesses a modern intellectual property framework. Compared to China and other Asian countries, there are no technology transfer requirements or association with local enterprises.

27 “Costa Rica in the Medical Devices Global Value Chain” –

30

28 “Costa Rica builds respect for IP Rights” – WIPO Magazine, Sept. 2012

31

29 “US – China agree to not conduct cyber theft of IP” – CNBC Sept 25 2015

Best Practices: Intellectual Property Protection in China

China’s Strategies on Intellectual Property Rights, Technology Standards and Innovation” – National Bureau of Asian Research

Checklist: Top 7 Criteria For Choosing A Medical Device Manufacturing Site September, 2015 By Co-Production International

SUMMARY More than half of all medical device manufacturers will open a new plant outside of their country. The most likely locations are Mexico, China and Costa Rica.

By applying 7 criteria to assess the viability of these three markets, Mexico takes a clear leadership position as the location of choice.

Mexico’s assets can be summed up as follows: 1- Favorable trade agreements with virtually all major markets in the world 2- Favorable currency exchange rate 3- Large concentration of medical device companies, as potential suppliers and customers

4- Low-cost, highly-skilled workforce, including a large pool of engineers and workers experienced in the medical device manufacturing industry 5- Real estate available for purchase or lease at reasonable rates, and quality, experienced construction firms who perform at rates much lower than the U.S. and Canada 6- Multiple modes of transportation to the U.S., Canada and export markets 7- Patent and Intellectual Property protection and a “business-friendly” regulatory environment.

ABOUT CO-PRODUCTION INTERNATIONAL Co-Production International (CPI) is the premiere Administrative Services Provider for companies seeking facilities in Mexico.

Strategically located in San Diego, California, CPI’s “shelter services” program manages the entire array of services to launch a new facility.

CPI takes a consultative approach, meeting with a medical device manufacturing company’s principals and operations team. Based on the medical device manufacturer’s requirements, CPI creates a comprehensive report, including an analysis of labor costs, operating overhead and start-up costs; and performs a site exploration and timeline.

Upon approval, CPI manages the construction process, from land purchase or leasing, to permits, to contracting with reputable companies for the build-out or build-to-suit. Once the new facility is

ready, CPI provides the admin team to manage daily operations.

By utilizing CPI services, a medical device manufacturer has a fully-operational facility while maintaining control of the manufacturing process, QA and ERP systems. This allows for a shortened learning curve and a faster time to market for their product.

“Our goal is to make it possible for medical device manufacturers to do what they do best: create highprecision instrumentation that supports better healthcare for all of us,” said Enrique Esparza, Chief Executive Officer of CPI.

Checklist: Top 7 Criteria For Choosing A Medical Device Manufacturing Site September, 2015 By Co-Production International

CONTACT INFORMATION Denisse Martinez, Marketing Director Co-Production International 209 Plaza Salinas, Chula Vista, CA. 91914 Tel (619) 429 4344 Ext. 231 www.co-production.net

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