The foundry industry in Mexico

Currently, this industry has regained strength, in fact, companies in this sector have had an oversupply of products due to the growth of nearshoring in the country. Therefore, it is important to talk more about this topic and thus, enter the market in an appropriate way. If there is no clarity, an important opportunity for the great industries of the sector could be lost. 

Today, various buying organizations have moved their bases to Mexico, due to constant problems with other plants such as those in Asia, countries like the United States are looking for new ways not to stop their activities.

In previous years, the outlook was not so encouraging for the foundry industry, as the situation for the sector was declining due to the country's negligible economic growth with only a 0.3% increase. Due to different reasons such as the increase in inputs, labor, among other factors that stopped the growth considerably.

Today, the foundry sector in Mexico is one of the most important globally, since it is among the ten countries with the highest production and number of installed companies. There are 800 organizations, of which 92% are micro, small, and medium-sized, and the rest are part of different international corporations that supply other industries and manufacturing clusters that are integrated into the country's industrial gross domestic product.

Despite the fact that, according to the Mexican Society of Foundries, 70% of the consumption of these products is internal and only 30% is exported, the industry produces 3 million tons in Mexico, of which 73% of foundries are destined for the automotive industry, and the rest is destined for the hydraulic, electrical, mining, and railway sectors. With the arrival of the aforementioned nearshoring, different companies worldwide have turned to Mexico to transfer their business processes or technology to third parties located in distant destinations. For this reason, local plants are expanding their current production capacities from 20% up to 40%, thus, it is expected that these import and export statistics will change by 2023.

It is clear that Mexico leads the way in attracting foundry investors, as the labor force is of quality, accessible, and the regulations are more flexible. Therefore, the country must focus its efforts on two clear tasks; first, the foundry industry must optimally train each responsible person in the process; second, it must make use of new digital automation technologies to speed up processes and shorten delivery dates.

Undoubtedly, the foundry industry in Mexico has a great opportunity to grow exponentially, given the need of first-world countries to accelerate processes and avoid disputes with Asian countries, which are the main exponents of the sector. For this reason, it is important that both owners and organizations begin to create strategies and work plans capable of meeting the demand that will arise from foreign companies within our country.