Mexican Electronics Manufacturing Business Update
Ramon Hernandez is Koh Young’s country manager for Mexico, and operates out of Guadalajara. He has been working in the electronics industry in Mexico for nearly 20 years and has extensive experience in capital equipment sales, covering the Americas from Canada throughout Argentina. He spoke to EMSNOW Mexico recently to give us an update on business conditions and strengths of the EMS industry in that region.
EMSNOW: How is your business in Mexico?
Our business in Mexico continues to be an important contribution to Koh Young’s global revenue. We expanded our operations this year by opening a brand new facility in Guadalajara with full demonstration and training capabilities. This is helping us to better serve our customers as well as centralize our operations. We continue growing our technical support team in Mexico by supporting all the key cities with manufacturing facilities; these days, support is a key factor for our partners. We know and understand our customer challenges so we believe we are able to provide the best support in our industry. We have a good mix of customers in Mexico. Koh Young cares for all customers; we don’t have big or small customers, our philosophy is to serve our customers the best way possible regardless of the size of the company.
EMSNOW: What is driving your business here? Is it particular industry sectors or new technologies?
Koh Young has a diversified customer base in Mexico. That includes Automotive and EMS as the major contributors as these are the main sectors for the industry in Mexico. We maintain leadership in the Automotive industry due to better performance and technology. Industry 4.0 has played a major role in stimulating new business. Our CEO has a long term strategic vision; we are pioneers in AI as well as in the SPI & AOI sector. We started to work with AI a few years ago and have been ahead of our competitors by innovating with new technology and software solutions to contribute with our customer to Industry 4.0 initiatives.
EMSNOW: Is the business more concentrated in certain areas/regions (e.g., Guadalajara, Tijuana, Juarez, Monterrey)? Or it it fairly evenly distributed around the country?
Business for us is well distributed within Mexico, this is one of the reasons we have a direct technical support presence in all the major cities. The states of Jalisco, Chihuahua and Tamaulipas has the major number of SMT lines in Mexico, however, we have seen that the Bajio region has been growing in the past few years so this is a growing region for us as well.
EMSNOW: How would you describe the current business climate for electronics manufacturing in Mexico?
It is a reality that the global economic situation has impacted the manufacturing industry in Mexico as well; there is an substantial slowdown in Automotive globally, and the trade war between USA and China has impacted the health of the global economy. However, the Americas in general continue to be strong in manufacturing, and Mexico definitely continues to be strong as well with manufacturing facilities from all over the world. USA, Europe and Japan are major players in electronics manufacturing in Mexico.
EMSNOW: What are the major industry trends you see here?
Mexico has very talented people. We have evolved to be not only a manufacturing location but to be a hub for development and a key global strategic location for the major players in electronics manufacturing worldwide. We can see this trend with 5G technology products being manufactured in Mexico, global initiatives for Industry 4.0 for the major EMS and Automotive companies as well as new technology in general are all being initiated in Mexico.
EMSNOW: What are the challenges you see for the industry here? Labor, government, tariffs, etc?
We have seen that the global economy can change dramatically from a single tweet, message, news — all within hours. Mexico is at risk also to these sudden changes so we need to be prepared with strong strategies to manage these challenges on a daily basis. Regardless of the uncertainty that we had with the new government, we have seen that we continue to be strong in the manufacturing sector. The trade war has brought some business to Mexico but also some business went away. We need to keep aligning our strategies for the challenges in the global economic situation.
EMSNOW: Any challenges around finding skilled labor and managing growth?What do you consider the main opportunities for electronics manufacturing here?
I am glad to say that we receive several resumes when we have any open position in our organization. Our major challenge is to find the correct profile to fit our culture and the excellent team that we have in Mexico and USA. Koh Young is a growing company where we surprise ourselves every quarter by hitting a new sales record. We have installed more than 15,000 units worldwide and a good portion of this number is in Mexico. Managing growth is always a good problem to have; more than a problem I see it as a good challenge to improve the organization enabling us to keep investing in training for our people so we can better serve our customers. Electronics manufacturing has a major challenge in finding skilled labor but there is an even bigger challenge in keeping this talent. Our challenge as managers and leaders is to keep our people motivated and trained so they decide to stay with the company.
EMSNOW: Is there anything else about the industry you wish to share or comment on?
We have talked about the last few years and how electronics manufacturing has developed in Mexico and how we are maintaining our leadership in this sector. The industry has gone from being only a manufacturing location to a strategy and development location for the major players in the industry. I would like to see in the future a Mexican company take a leadership position in the electronic sector; we have great minds, talent, education in Mexico but we are still missing the experience where we can launch a product in the market and feel proud that it is a technology created and developed in Mexico. That’s the next step for electronics manufacturing in Mexico.