Group 1 By: Lakesha Cole
Location: Middle America, bordering the Caribbean Sea and the Gulf of Mexico, between Belize and the U.S. and bordering the North Pacific Ocean, between Guatemala and the U.S. Capital: Mexico City Climate: varies from tropical to desert Population: 104,959,594 (July 2004 est.) Ethnic Make-up: mestizo (AmerindianSpanish) 60%, Amerindian or predominantly Amerindian 30%, white 9%, other 1% Religions: nominally Roman Catholic 89%, Protestant 6%, other 5% Government: federal republic Currency: Mexican Peso
Religions: Roman Catholic 76.5%, Protestant 5.2% (Pentecostal 1.4%, other 3.8%), Jehovah's Witnesses 1.1%, other 0.3%, unspecified 13.8%, none 3.1% (2000 census.) Population: 114,975,406 (July 2011 est.); country comparison to the world: 11 Age structure: 0-14 years: 28.2% (male 16,395,974/female 15,714,182) 15-64 years: 65.2% (male 35,842,495/female 38,309,528) 65 years and over: 6.6% (male 3,348,495/female 4,113,552) (2011 est.) Median age: total: 27.1 years male: 26 years female: 28.1 years (2011 est.) Unemployment, youth ages 15-24: total: 10% country comparison to the world: 102 male: 9.7% female: 10.6% (2009)
Hierarchical Society • Mexican society and business are highly stratified and vertically structured. • Mexicans emphasize hierarchical relationships. • People respect authority and look to those above them for guidance and decision-making. • Rank is important, and those above you in rank must always be treated with respect. • This makes it important to know which person is in charge, and leads to an authoritarian approach to decision-making and problem- solving. • Mexicans are very aware of how each individual fits into each hierarchy--be it family, friends or business. • It would be disrespectful to break the chain of hierarchy. 'Machismo’ • Machismo literally means 'masculinity’. • There are different outward behaviors to display machismo. For example, making remarks to women is a stereotypical sign of machismo and should not be seen as harassment. • Mexican males generally believe that nothing must be allowed to tarnish their image as a man.
Before traveling to Mexico for business U.S. citizens living or traveling in Mexico are encouraged to sign up for the Smart Traveler Enrollment Program in order to obtain updated information on local travel and security. U.S. citizens without Internet access may sign up directly with the nearest U.S. embassy or consulate. Enrolling is important; it allows the State Department to assist U.S. citizens in an emergency and keep you up to date with important safety and security announcements Embassy Location: The U.S. Embassy is located in Mexico City at Paseo de la Reforma 305, Colonia Cuauhtemoc; telephone from the United States: 011-52-55-5080-2000; telephone within Mexico City: 5080-2000; telephone long distance within Mexico 01-55-5080-2000. Entry/Exit Requirements: For the latest entry requirements, visit the National Institute of Migrationâ€™s website, the Secretary of Tourismâ€™s Manual on tourist entry, or contact the Embassy of Mexico at 1911 Pennsylvania Avenue NW, Washington, DC 20006, telephone (202) 736-1600, or any Mexican consulate in the United States.
MEXICO: Economy The economy of Mexico is the 13th largest in the world in nominal terms and the 11th by purchasing power parity, according to the World Bank. Mexico has a free market economy in the trillion dollar class. It contains a mixture of modern and outmoded industry and agriculture, increasingly dominated by the private sector. Recent administrations have expanded competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution, and airports. Per capita income is roughly one-third that of the U.S.; income distribution remains highly unequal. Since the implementation of the North American Free Trade Agreement (NAFTA) in 1994, Mexico's share of U.S. imports has increased from 7% to 12%, and its share of Canadian imports has doubled to 5%. Mexico has free trade agreements with over 50 countries including Guatemala, Honduras, El Salvador, the European Free Trade Area, and Japan - putting more than 90% of trade under free trade agreements. In 2007, during its first year in office, the Felipe CALDERON administration was able to garner support from the opposition to successfully pass pension and fiscal reforms. The administration passed an energy reform measure in 2008 and another fiscal reform in 2009. Mexico''s GDP plunged 6.2% in 2009 as world demand for exports dropped, asset prices tumbled, and remittances and investment declined. GDP posted positive growth of 5.4% in 2010 and 3.8% in 2011, with exports - particularly to the United States leading the way. The administration continues to face many economic challenges, including improving the public education system, upgrading infrastructure, modernizing labor laws, and fostering private investment in the energy sector. CALDERON has stated that his top economic priorities remain reducing poverty and creating jobs.
Textile and apparel production and international trade have been important elements of economic activity and growth since the Industrial Revolution. Major reasons are (1) textiles and apparel are basic items of consumption in all countries, and (2) textile and apparel manufacture â€” particularly apparel â€” is laborintensive, requiring relatively little fixed capital for entrepreneurs to establish production facilities. Thus., these industries are major generators of jobs in many countries. In Mexico, the textile and apparel industries constitute the fourth largest manufacturing activity. The Mexican textile industry is the number one creator of jobs, with more than 500,000 Mexicans working in textiles and apparel. Furthermore, Mexico is the fourth largest supplier of textiles and apparel in the U.S. market. Mexican textile and apparel exports towards the United States grew 6.5 percent annually from January to March of 2011, compared to the same period in the previous. year. Mexican textile exports to the United States grew 11.5 percent annually from January to March of 2011, while apparel exports registered a 5.2% increment in the same period. Mexican exports play an important role in the U.S. market, demonstrating the capacity of diversification and quality in Mexican sewing in products such as cotton pants for men, women, boys, and girls, cotton blouses, knitted shirts, among others. Bureau of Labor Statistics, [http://data.bls.gov/PDQ/outside.jsp?survey=ce] viewed September 22, 2006].
Increasingly, companies and retailers are learning of the significant advantages and benefits of sourcing and manufacturing in Mexico versus other global locations. Some of the significant benefits and advantages of manufacturing in Mexico include: • Have the ability to manage because, at most, Mexico is a few hour flight away • Many Mexicans speak English, and Spanish is the most common foreign language taught in U.S. schools. Both languages have the same Latin root. • Language and numbers use same characters • Technical, customer or training visits to the plant can be accomplished in as little as one to two days. Transit cost is minimal. • Work visas can be obtained at the border in as little as 30 minutes for a U.S. citizen • Shipping transit time to the U.S. is less than one day • When quality issues occur it is practical to send product back for reprocessing given distances and costs • Economy is closely linked to the U.S with long term trend of Mexican peso slightly deflationary to the dollar Source: http://tacna.net
cont. • Possible to ship in pallet or box quantities allowing flexibility with customer LTL orders. Ocean freight not required Shipping cost per unit is low and only slightly more than shipping from the U.S. • Intellectual property is protected and Mexican courts typically respect and enforce companies’ rights to intellectual property. • Relatively strict environmental laws 48 hour work week and a low, but livable wage in Mexico. • Provides relatively good jobs in Mexico, helping to stem the flow of illegal immigration to the U.S Reasonably developed employee safety practices. Strong child labor laws • Reasonable health and safety monitoring and inspections. • Generally plentiful, with seasonal tight periods. High birth rate bodes well for a long term supply of labor.
• Approximately $2.50 to $3.00 per hour.
Mexico is currently attempting to redefine itself as a country that is not only an affordable place to produce, but offers benefits that are unavailable in Asia "based on the satisfaction of the clients' needs and the internal renovation of the industries," according to Canaintex. The industry hopes to be able to offer shorter delivery times, less language barriers and cultural differences, and more diversified products. Mexican textile and apparel workers are in the process of learning new skills, and companies are trying to change their focus. from the production of yarn and fabric to finished clothing. In the last five years the textile industry has invested $2bn in textile machinery and equipment according to ProMĂŠxico, the Mexican government institution in charge of strengthening Mexico's participation in the international economy.
In various. categories, Mexican exports towards the United States have consolidated their role in the market, and some stand-outs are highlighted below. These numbers show that the transformation of the Mexican industry is real and a product of the constant commitment by entrepreneurs and retailers to offer the client: fast response, constant labor training, specialization, competitive prices, and high productivity.
According to data from the National Institute of Statistics, Geography, and Informatics (INEGI), in March 2011 the wholesale of textile products, apparel, and footwear reached 17 months of consecutive growth, and in March, this indicator almost reached its highest level, except for March 2004 (109.8). www.inegi.gob.mx In March 2011 this indicator grew 1.2% over the same month a year-earlier. Also, since 2007 the positive trend of the wholesale sector showed a process of repositioning in the domestic market, resulting from the investment of entrepreneurs and their commitment to customer satisfaction. In the first quarter of 2011, this indicator grew 2.2% compared to the same month a yearearlier, higher than that reported in the same quarter of 2010 (0.8%). The personnel employed in the industry of textile products, apparel, and footwear in wholesale establishments grew 3.3%, higher than that achieved by wholesale establishments as a whole (2.1 percent) compared to March 2010.
In March 2011 retail sales of textile products, apparel, and footwear increased 3.2%. In this sense, this indicator shows a recovery phase achieving nine months of consecutive increases, even after a decline in June 2010, the road to recovery began in 2007. Notably, the textile products subsector grew 5.8% over March 2010. In the first quarter of 2011, retail sales of the textile products subsector grew 8.8% in the reference period compared to the same quarter in 2010. Personnel employed in commercial establishments that sell retail textile products, apparel, and footwear grew by 2.7% compared to the same month of 2010. This increase is mainly explained by the growth of employment in the textile products subsector, except apparel (5.8%), followed by apparel (1.9%) compared to the third month of 2010.
As stated, Mexico is the United Statesâ€™ second largest export market resulting in over U.S.D 850 million of trade taking place each day. The growth of the Mexican economy, U.S.-Mexico trade, geographic proximity and the similarity in business cultures gives U.S. manufacturers and U.S.based service providers ample opportunity to grow their market On the Nielsen consumer confidence index, consumer confidence in Mexico was at 77 at the end of 2009, below the global average of 86. The retail market declined right along with consumers' residual income and purchasing power. But Mexico, with the second-largest economy and the second-largest population in Latin America, still ranks among the top global apparel markets, offering many attractive opportunities for retailers. According to Euromonitor, Mexico's share of imported products in the retail market has been growing significantly, although it still maintains a positive trade balance. Wal-Mart opened 174 new stores in Mexico in 2009. The Cherokee Group, Gap Inc and Inditex, among others, have also expanded in Mexico in the last year. The market is highly fractured however: the top 11 companies made up 36.8% of the formal market in 2008, including Suburbia (8.9% of the market share), Liverpool/Fabricas (7.5%), Bodega Aurrera (3.5%), Coppel (3.5%), Walmart de Mexico (3.4%) and Zara (2.4%), according to research company Trendex Mexico. Source: http://www.jU.S.t-style.com/management-briefing/mexico-clothing-and-textile-sector-rides-boom-andbU.S.t_id108052.aspx
Mexicans have also become more fashion conscious. and more interested in trends than in the past. According to Euromonitor, fashion clothing accessories were the most successful sub-sector between 2007 and 2008, and are expected to reach U.S.$560m by 2013. Underwear and nightwear sales are also expected to grow according to the market analyst in its annual country analysis of the industry released in November 2009. Sportswear has also become an important niche market over the last decade, especially among the higher income population segment, due to the rising popularity of fitness centers, and more attention being paid to having a healthy appearance. Euromonitor notes that dress codes have also relaxed in Mexico, and casual wear sales have increased against declines in demand for formal wear. The total market for clothing in 2008 according to Trendex Mexico was U.S.$21bn (U.S.$9.3bn for men's clothing, U.S.$8.3bn for women's, U.S.$3bn for children, and U.S.$400m for infants). The average spending on clothing per capita is around U.S.$195.20 per year (EUR142 per year). About 25% of the market for clothing is in department stores, 16% in supermarkets, 21% in boutiques, and 33% in street markets (and the last 6% in other locations).
Mexico's geographic proximity permits lower transportation costs and fast delivery from the U.S; the largest segment of the market is centered in Guadalajara, Monterrey, and Mexico City. The best prospects in the textile industry are: • Synthetic fibers mixed with rayon • Other fabrics with textured polyester dyes • Other taffeta fabrics with discontinuous. dyes made of polyester fibers • Fabrics with artificial fibers • Cotton fabrics with 85% denim • Other fine wool fabrics • Silk (for garments to be exported) In addition, since Mexican yarn producers do not cover all the needs of the fabrics sector, a significant amount of yarn is imported (especially polyester/viscose and polyester/cotton).
1.â€Ż Manufacturera Lee De Mexico S. A. De C. V. Address: Tablaje Catastral 2287, Petectunich 1, Acanceh, Yucatan, Mexico, 97540 Products: clothing (6,186) scrap (253) label (97) fabric scrap (60) sewing (47) sewing machine (47) fabric cotton (40) bronze (40) unipacks (32) machine brand (24) bronze waste (23) top bottom (23) unipacks plastic (21) plastics bottoms (20) 2. Jerzees Yucatan, S.A. De C.V. Address: Tablaje Catastral 2728, Km. 18, Carretera Merida, Tixkokob, Yucatan, Mexico, 97470 Products: clothing (165) textile waste (28) textile (28) waste (28)
Important Contacts/Resources Mexican Export Bank – Bancomext www.bancomext.com North American Free Trade Agreement - TLC www.nafta-sec-alena.org Ministry of Economy – Secretaria de Economia www.economia.gob.mx Treasury Department – S.A.T. www.sat.gob.mx Mexican Customs – Aduanas Mexico www.aduanas.sat.gob.mx MX Customs Brokers Association – CAAAREM www.caaarem.org.mx
Published on Jul 24, 2012