Low Cost Molding: Mexico Versus China

It seems apparent that Mexico is emerging as the favored low-cost manufacturing location for the United States market. Look at Lego’s decision to build a mammoth molding plant there as a recent example. According to a story in today’s New York Times, workers at a indexFlambeau plastics plant in central Mexico earn just $17.79 a day. That’s a day not an hour.

Meanwhile costs are rising rapidly in China, where supply chains can be more problematic, communications are more difficult and deliveries take longer. It would also seem likely that investments in China will grow riskier as tensions rise over the countries increasing efforts to flex its muscles in Southeast Asia.

Mexico has its own issues: lack of trained workers, focus on quality, official corruption, organized gangs, and border-crossing logjams.

China, I’m sure, will still see greater foreign direct investment in plastics manufacturing due to interest in the Chinese market for cars, medical devices, packaging and all the other stuff that plastics go into.  But it seems to be diminishing as a place to manufacture for American consumption.

About Doug Smock

Former Chief Editor at Plastics World and Senior Technical Editor Design News

Asia, Management, South America

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