Maquiladora Overview 2013

Maquiladora Industry

• The Border Industrialization Program, enacted in

1965 by the Mexican government, gave birth to the

maquiladora industry. (today IMMEX)

• The main objective was reduction of high

unemployment rates in communities along the

border following the abolition of the Bracero farm

labor program by the U.S.

• Maquiladora Industry was born in Ciudad Juarez in 1965

• Chihuahua is the largest employer in Mexico

(26% of the country)

• The biggest bi national metropolitan area of Mexico and

USA border.

• The seventh largest manufacturer center in North America.

Maquiladora Industry

Infrastructure

Ciudad Juarez offers a solid infrastructure with remarkable

quality at a competitive cost and through reliability.

World Class Infrastructure:

Ground Transportation

Railroad Network

Telecommunications and flights

Ports of Entry

Infrastructure

Ground Transportation

(Highways)

Railroad Network 3 Service Providers: Union Pacific, Burlington-Santa Fe

and Ferromex

Infrastructure

Telecommunications and Flights Access to 2 international Airports

Cd. Juarez – El Paso

Infrastructure

Regional Ports of Entry / Border Crossings

(Annual Totals)

789,283

Trucks

Infrastructure

Business Environment

Ciudad Juarez is the logical option to many companies due

to:

• Outstanding quality of life

• World-class infrastructure

• Highly qualified labor force

• Diversified professional services

El Paso del Norte Region

• + 50,000 jobs in El Paso tied to Mexico

• 3,400 executives, engineers, live in El Paso / work in

Juárez

• +14,000 direct jobs in El Paso related to maquila

• +30,000 indirect jobs in El Paso related to maquila

• $ 8 billion annual purchases creates other opportunities

Business Environment

Maquiladoras established in Juarez

(by country of origen)

68.3%

8.7%

12.2%

9.6%

0.9% 0.3%

USA

EUROPE

MEXICO

ASIA

CANADA

SOUTH AMERICA

Business Environment

Call Center 3%

Packaging 9%

Plastics / Metals

9%

Other 20%

Automotive 29%

Electric 7%

Electronics 18%

Medical 5%

Industrial Sectors

Automotiv

e Leather

Automotive

Electronics/Electric Sector

Source: INEGI

IMMEX Plants

MEXICO

State of CHIHUAHUA

CD. JUAREZ

5,074

482

326

Source: INEGI

New IMMEX Permits

2005 2006 2007 2008 2009 2010 2011 2012 Mar-13

20 28

33

51

39 35

22 23 5

Source: Secretary of Economy

0%

12% 1%

3%

62%

0% 13%

5% 4%

AGRICULTURE, FORESTRY, FISHING AND HUNTING

COMMERCE TRADE

IND. ELECTRIC AND WATER HARVESTING AND POT

CONSTRUCTION INDUSTRY

TRANSFORMATION INDUSTRIES

EXTRACTIVE INDUSTRIES

SERVICES FOR BUSINESS PEOPLE AND THE HOME

COMMUNITY AND SOCIAL SERVICES

TRANSPORT AND COMMUNICATIONS

Juarez Workforce

Source: Social Security

Source: INEGI / Social Security as of March 2012

IMMEX Workforce

Source: INEGI / IMSS

2,241,000

356,707

222,040

Source: Social Security

IMMEX Workforce in Juarez

Ene-12 Abr-12

12-Jul Ago- 12

12-Nov Dic-12

Ene-13 13-Feb

13-Mar

199,556

206,334

213,552 212,926

215,331 213,478

219,765 222,741

222,040

Electrical

9%

Electronics

28%

Other

7%

Plastic/Metal

3%

Packaging/Services

3%

Call Center

4% Medical

9%

Automotive/Aerospace

37%

Sectors Workforce

Maquiladora in Cd. Juárez:

Imports 22.6 Billion USD

Exports 43.0 Billion USD

Largest Manufacturing Centers in North America

517,700

418,900

361,500

254,800 241,717

235,700 230,061

212,400 197,700

185,800 178,700

150,200

122,800 112,800

# Employees

Sources: •SAE Databases: Employment, Hours, and Earnings — State and Metro Area (Current Employment Statistics — CES(May 2012) U.S. Bureau of Labor Statistics.

•INEGI Industria Manufacturera maquiladora y de servicios de exportacion (May 2012) IMMEX. •Cd. Juárez figures collected internally - Asociacion de Maquiladoras A.C. (AMAC) (May 2012)

Updated: August 2012.

Business Environment

Foreign Direct Investment in Chihuahua

75%

17%

2%

1% 1%

1% 3%

JUAREZ

CHIHUAHUA

CUAUHTEMOC

PARRAL

CASAS GRANDES

DELICIAS

OTHERS

Mexico will become the seventh largest economy

in the world in 2020

and contribute 7.8% of Global GDP, more than

Russia and India.

Jim O'Neill. (Director of Investment Funds at Goldman Sachs

Mexico Maquiladora industry proven platform to build

highly-competitive industrial products U.S. and Mexico

Natural trade partners, to compete as a region in global

competition.

It is no longer U.S. versus Mexico.

It is Mexico and U.S. competing together as

partners.

Maquiladora Overview 2013