Mexico Aerospace Success Story

A Mexico Aerospace Success Story

Successful manufacturers understand that behind great products and outstanding customer service are a myriad of best practices and a passion that drives people to be their best. That is why behind great companies are equally committed partners who share fundamental principles of value, risk and reward.

It is these shared principles that have earned The Offshore Group the no. 1 position as Mexico’s largest provider of support services to Manufacturers. Through outstanding performance for over 27 years, our team of committed professionals maintains this distinction by being our Clients’ most valuable ally in Mexico.

As a primary stakeholder in a vision to build a North American gas turbine engine manufacturing center of excellence, we are proud to have joined the efforts of the State of Sonora and the expertise of BCI Aerospace to host the first annual EngineForum SONORA. This publication highlights the essential factors which are key to attaining this vision.

The EngineForum SONORA was the perfect venue for aero-engine components manufacturers from around the world to share the vision and plans for building more efficient and capable supply-chains. To this end, The Offshore Group is proud to announce that its manufacturing communities in Guaymas and Empalme Sonora are home to Mexico’s largest cluster of aerospace precision machining and secondary operations in Mexico.

We know that our work has just begun and we invite the aerospace community to come and see why Sonora and The Offshore Group are positioned to serve the needs of the aerospace industry today and in the future. Come and create your own success story.

Luis Felipe Seldner III

President

We Do..copy.indd 3 7/3/14 6:43 PM

Eng

ineF

oru

m S

ON

OR

A 2

01

3

10

Comments from the Economic Development Council of Sonora

Enrique Ruiz SánchezDIreCtor of the eConomIC Development CounCIl for sonorA [email protected]

“The EngineForum SONORA was an event conceived two years ago for which we sought an

alliance of the Economic Development Council for Sonora with BCI-Aerospace (Business Conventions International), a French company with over 10 years in the aerospace industry in Paris, Montreal, Tokyo, Seattle, etc.

BCI-Aerospace is a strategic partner for Sonora, be-cause it places us on a global level. Our goal is to put Sonora as a part of a global circuit where business transactions for aircraft parts are conducted. Other companies like The Offshore Group and Rolls-Royce were invited as sponsors and partners for this event celebrated in Hermosillo on May 13-16, 2013.

We chose an event dedicated exclusively to engine components due to the capabilities we already have in the State, as we aspire to be the center of excellence for engine components fabrication in the world. Sonora already has casting, precision metal machining and surface coating capabilities; having this integration of the supply chain provides us with a global advantage. Currently, the parts manufactured in the United States are shipped to the UK and then to Mexico, consuming valuable time and complicat-ing the process, which slows down production and increases the cost of parts. Therefore, any opportunity to make this process more efficient is a business opportunity for the companies in the aerospace industry.

We also believe that within the strategy of large aerospace companies there is a search for region diversification, as it is not profitable for them to manufacture parts in countries where the currency is the euro or the pound sterling, since the aerospace contracts use the dollar and they are long term contracts. Fluctuations in the exchange rate cause operations that were competitive five years ago to be uncompetitive today.

The advantage that Mexico holds is that its currency maintains parity with the dollar as well as its com-petitive labor force, geography and technological adaptation.

Our strategy in Sonora is to attract an OEM (Original

Equipment Manufacturer) and engine manufacturers,

among such as Rolls-Royce, Safran, Pratt and Whitney,

etc.

BCI Aerospace supported this strategy and committed

to the first EngineForum SONORA, which, in addition

to strategic partners such as the State of Arizona,

had the participation of Rolls-Royce, Safran, Boeing,

Bombardier, among others, during conferences and

B2B meetings.

The aerospace cluster in the State has the presence

of companies that are now manufacturing parts for

these OEM’s, as is the case of JJ Churchill, a Rolls-Royce

certified supplier. They design their parts at their cor-

porate offices in the UK, activity that in the future can

be brought to Sonora.

Regarding aerostructures, the “Sonora Institute for

Aerospace and Advanced Manufacturing” (SIAAM) was

created in order to train young people in aircraft doors

assembly operations. The SIAAM study plan is based

on the Canadian aerospace school “EMAM” (Aerospace

Trade School of Montreal), with whom the State

has associated and now we have teachers trained

in France who will train the future employees of the

aerospace companies in the State.

The French aerospace company Latecoere, has

invested in Sonora to implement aircraft doors and

harnesses assembly processes. They began opera-

tions last year. This company will be the first tenant in

the new aerospace park near the Hermosillo airport,

where we aim to develop the supply chain for the

aerostructures sector. The project with Latecoere will

generate around 500 jobs in addition to an invest-

ment of approximately 28 million dollars and a large

potential for growth, once operations begin.”

www.sonora.org.mx

Government of Sonora and BCI-Aerospace partnered to boost the aerospace industry in Sonora


Eng

ineF

oru

m S

ON

OR

A 2

01

3

15

Q: So basically in your experience, do you recom-

mend Sonora to another company?

Yes! Absolutely! And I am delighted when I’m in the

UK to be, talking up Mexico but actually talking up

Sonora and Hermosillo as well because for a small

company it’s quite daunting, quite nerve-wracking to

take your first investment overseas. It’s a lot of money,

it’s a lot of senior management resources, but the help

that you can get from COPRESON and the Sonoran

government makes it a lot easier, a lot more straight-

forward and it reduces risk.

Q: Do you or your company have concerns about

the safety, the security? No. No. This is one of the

problems. As you get to know more about Mexico, it’s

quite interesting, that the homicide rate per thousand

people is about the same as in the US. If you go to

parts of London it can be dangerous as well. It’s about

where you are and being aware. Actually we’ve

found Sonora, incredibly relaxed and friendly. Of

course there’s some places we’ve been in other states

where we had to be a little careful but here I have a

General Manager, he is British, he has a young family

here with him and he is comfortable. It’s a wonderful

place, good climate, good food, friendly people.

Q: How common is it for small enterprises in this

industry to move to other parts of the world.

Quite unusual. We are leading edge in this area. We

have very high technology and therefore we are very

selective where we are going to go in the world. This is

why we haven’t gone to China. Now, I speak Chinese.

An easy decision would be for me to move business

to China. But our technology, our intellectual property,

our IP and know how, we need to protect. That means,

in China, I can’t protect it. It would leak. Actually,

Mexico has a good reputation here for looking after

technology, for growing businesses in a very nurturing

environment. So, I’m comfortable from that perspec-

tive even though I am a small business. And although

today we are about 30 million US dollar turnover and

it’s all in the UK we have set a target by 2020 to be 80

million US dollars and of that 30 million is going to

come from here in Mexico, so I’m quite optimistic.

Q: What do you think about the suppliers? Is

it difficult at this point to get suppliers from

Mexico?

I think it is difficult, but it’s changing very, very quickly

and the promotional activity that COPRESON and the

State of Sonora have been doing to encourage the

key elements of the supply chain to co-locate here,

to cluster here, is making a real difference. If you just

look around the show today, you have companies like

Incertec who are already here, already approved for

Boeing and other companies like Ellison who are look-

ing to come. There are many of these supply chain

outlooks that are coming in. It is difficult; it’s not like

the auto sector. In aerospace you do have to have the

supply chain all together. But the legal framework and

the shelter scheme means it is really possible to get

that going and it’s happening. So the only element

that we are missing at the moment would be preci-

sion forging but there is a lot of work happening on

that now to encourage that inward investment into

the state. So it is difficult, but frankly, wherever we go

in the world it is difficult. In my home base in the UK, I

have to send parts hundreds of miles away for coating,

here I would be able to have them coated eight miles

away, it’s an advantage.

Here I have a General Manager, he is British, he has a young family here with him and he is comfort-able. It’s a wonderful place, good climate, good food, friendly people.

“In my home base in the UK I have to send parts hundreds of miles away for coating, here, I would be able to have them coated eight miles away, it’s an advantage”


Rafael Navarro MoralesCommerCIAl mAnAger

[email protected]

Facing the United StatesElimco - Prettl Aerospace. We are a 100% Mexican joint venture but with equity 50% German 50% Spanish. We design and manufacture both electrical harnesses and control decks for civilian and military aviation as well as control units for civilian and military aviation.

Here I have found many possibilities not only to Mex-ico but also facing the United States and especially in ways of collaboration and the willingness to work of Mexican companies across different states, be it So-nora, Baja California or Querétaro desire to work with each other and that is very good.

Elimco - Prettl Aerospace only manufactures aero-space harnesses but Prettl Group is a very strong German group who also manufactures, in fact its main activity is the production of electrical harnesses for the automotive industry. They wanted to enter the aerospace sector and found a partner in Spain, which is the Group Elimco, who has been Tier1s of EADS Group for over 20 years and together, combining the experience of Elimco Aerospace and the financial capacity of Prettl. We work for major global OEMs as well as major Tier1. We are Tier1 or Tier2, depending on the project.

Xavier Poulin and Jean Laliberté of Atlas Aeronautik said: “It’s nice to see Mexico growing like that in the aerospace industry. We can see some potential busi-ness to do in the future but we see it as a new seed, coming, growing up and putting itself on the market. Compared with the automotive industry, years ago there was nothing going on with the automotive industry in Mexico and now it’s growing very fast, the assembly plants, the suppliers for the automotive industry. Same thing is happening in the aerospace business here in Mexico. The reason, I don’t know, it’s probably the good will of making business, getting along well with other countries and the specialization, there are many specialists here in your country of many kinds of products and people want to work and they work hard. This event is interesting. There are many, many com-panies and we’ve discovered new potential. Even with scheduled meetings with different customers we have had the chance to meet new visitors and create new opportunities. That’s interesting, very interesting for us. We will see the future.”

It’s nice to see Mexico growing in the aerospace industry

Xavier Poulin Solution Manager of Atlas Jean Laliberté Director Center of Excellence atlasaeronautik.com

Here I have found many possibilities not only to Mexico but also facing the United States

Eric Dolby mArKetIng mAnAger ellIson surfACe teChnologIes

“Quality is a given. Time is a require-ment. Relationship with customers is what differentiates.”


Eng

ineF

oru

m S

ON

OR

A 2

01

3

26ROCA FUERTE INDUSTRIAL PARK. Guaymas, Sonora, Mexico.


Eng

ineF

oru

m S

ON

OR

A 2

01

3

28

Manufacturers around the world are con-

tinually challenged to find competitive ad-

vantages. The global economy has expanded

the playing field and striking the right balance

between cost, quality, delivery, flexibility, and

innovation often results in achieving one ob-

jective at the expense of another. However,

one thing holds true for most manufacturers

trying to be great at everything, regardless of

where they operate, is an exercise in futility.

Which is why having the right partners, sup-

pliers, and service providers often makes the

difference between failure and success.

We also know that operating in the right

venue is the foundation for sustaining high

levels of productivity and efficiencies. Man-

ufacturing in locations with proximity to a

capable and motivated labor force, access to

skilled leaders, an established supply-chain,

access to logistics infrastructure, and within

a regulatory framework that is fair and pre-

dictable, provides an environment where

manufacturers can thrive.

Having a keen understanding of the ele-

ments that manufacturers need to succeed,

The Offshore Group operates a business

model that has proven effective for over 27

years. The model has three key components

that are seamlessly integrated:

Strategically located and fully integrated

manufacturing communities in Mexico

A legal framework commonly known as a

“shelter” that mitigates risk and exposure

A comprehensive set of world class support

services configured and delivered specifical-

ly for manufacturers

Today, over 59 manufacturers leverage The

Offshore Group’s infrastructure, knowledge,

and expertise resulting in the employment of

more than 16000 people in Mexico working

across 4 million square feet of industrial space,

and the processing of over $1.5 billion dollars

in Customs declarations.

Clients of The O ffshore Group include

Fortune 500 multinationals as well as small

to midsized manufacturers, serving the aero-

space, automotive, medical devices, electron-

ics, metal fabrication and machining, plastics

molding, appliances, office products, and

HVAC industries.

The Offshore Group’s Value Proposition

Foreign companies, regardless of their size,

have a number of options available to them

for establishing a manufacturing presence

in Mexico. The most common modes of op-

eration are standalone, shelter, joint venture,

and subcontracting. Each of these presents

Our services free companies to focus on what makes them competitive

You Manufacture... We do the rest


Eng

ineF

oru

m S

ON

OR

A 2

01

3

29

advantages and disadvantages in terms of cost, control,

and risk.

When conducting their due diligence, foreign com-

panies evaluating a presence in Mexico often compare

a standalone vs. shelter scenario and generally reach the

following conclusions:

Standalone operations retain full control over all as-

pects of the business in Mexico but also assume all the

risk and exposure associated with regulatory compliance

and the often costly learning curves of working in a new

business, legal, and social culture.

Shelter providers, and more particular the shelter

version that The Offshore Group delivers day-to-day to

its manufacturing clients, is a means for mitigating risk

and reducing operating costs. Most importantly, the

foreign manufacturer retains the control of all aspects of

production, engineering, quality, delivery, supply-chain,

customer service, assets, and manufacturing technology

and know-how. All production related activities are di-

rected and managed by the foreign manufacturer while

administrative and regulatory functions are carried out

by The Offshore Group’s team of experts, state-of-the-art

systems, and ISO 9001:2000 certified processes.

The Offshore Group’s Services Over 700 people make up The Offshore Group’s support

staff which is continually trained and motivated to pro-

vide outstanding service to its 56 manufacturing clients.

The services carried out include:

Labor recruiting and management, payroll & tax com-

pliance, and employee benefits management

Import, export, and cross border management and

regulatory compliance

Building maintenance and park security management

Environmental, health, and safety compliance

Employee transportation management and optimiza-

tion

In-Mexico procurement of MRO and services including

vendor accounts payable and VAT recovery

Fiscal compliance and controls

Government, community, and trade association affairs

and corporate social responsibility

Leveraging our Economies of ScaleManufacturers of any size who choose The Offshore

Group to help them gain a competitive advantage

in Mexico from day one, have immediate access to

economies of scale that only large multinationals are

able to build over a long period of time.

For example, The Offshore Group’s Mexico affiliate in

Guaymas and Empalme, Sonora is in fact the largest

private employer in the State of Sonora. Among the

benefits that Clients derive from operating within

The Offshore Group are lower costs on employee

transportation services and local procurement due to

volume negotiations, employee retention by providing

access to on site medical care and child care, access to

resources for workforce development, and preferential

response times from all utilities providers.

Through The Offshore Group’s size in Mexico, Clients

have a strong voice in national-level trade associations

that it turn regularly interface with governmental

bodies (such as Mexico’s Congress as well as State and

Federal Leaders), and have the ability to productively

engage with local labor union chapters.

By leveraging The Offshore Group’s economies of

scale, which have been steadily in the making since

the company’s inception 27 years ago, Clients enjoy

the peace-of-mind of being served by Mexico’s most

reputable and well established shelter provider in the

country.


Eng

ineF

oru

m S

ON

OR

A 2

01

3

30

HERMOSILLO

GUAYMAS EMPALME

SANTA ANA

PHOENIX

SONORA

USATUCSON

NOGALES SONORA

NOGALES

Guaymas/Empalme, Sonora is located in the Northwest Mexican State of Sonora, on the Gulf of California. This region is located 300 miles south of Tucson, Arizona. It is easily accessible by air, rail and four lane highway. The city’s universities and technical schools serve as a recruiting base for The Offshore Group client companies.

Bella Vista Industrial Park Empalme SONORA

The Offshore Group’s long-established facilities inGuaymas and Empalme, are home to Fortune 500multinationals as well as small to midsizedmanufacturers, serving the aerospace, automotive,medical devices, electronics, metal fabrication andmachining, plastics molding, appliances, officeproducts, and HVAC industries.

Roca Fuerte Industrial Park Guaymas SONORA

The Offshore Group’s Manufacturing Communities in Sonora

BellavistaIndustrial Park


Eng

ineF

oru

m S

ON

OR

A 2

01

3

40

By Eduardo SaavedraexeCutIve vICe presIDent of BusIness Development

the offshore group

Guaymas, Sonora is a small coastal manufacturing city situated in the country’s Northwest region. It is home to 150,000 inhabitants, and is host to one of the largest clusters of world class Mexican aerospace precision machining operations in the country. Although every major aerospace OEM knows about Guaymas, and its growing aerospace manufacturing acumen, few know that this manufacturing haven is proactively training a current and future workforce of precision aerospace machinists.

A new and practical way of teaching mathematics has recently been introduced to junior high school teachers and students in Guaymas. The method is called Metromatemáticas or “Metromathematics.” Its goal is to give teachers and students real world problems to solve using applied mathematics in classrooms. These classrooms, however, are more akin to metrology laboratories that might be found in some of the more advanced manufacturing facilities than the traditional classroom.

While “on the job,” the teachers and students dress for the occasion each day they go to class. Everyone’s attire consists of long white lab coats. Dressing in this manner instills a sense of professionalism in the participants, and gives the students’ parents a feeling of pride that their early teenagers are on a path to find a great job in the growing Mexico aerospace industry.

Metromathematics was conceived by Nahum Correa. He is a Six Sigma Master Black Belt and the owner of an authorized Mitutoyo equipment and machinery distributorship located in Hermosillo, the capital city of the state of Sonora. With financial and infrastruc-ture support provided by The Offshore Group, Mr. Correa has graduated 70 junior high school teachers and 140 junior high school students from the pro-

gram in a short 18 months. Aerospace manufacturers in the Guaymas area provide parts and raw materials used in their machining operations. Teachers use those parts along with metrology equipment such as calipers and coordinate measuring equipment (CMM’s), to understand tolerance requirements used in the emerging aerospace industry. The math being taught is immediately relevant. This captivates the at-tention of both the students and the teachers. The re-sult of this “real world” feel is that class time flies by. As one might expect, there is zero student absenteeism. Everyone shows up. All of the teaching conforms to the international standards of ISO/IEC 17025:2005.

One special feature of the program is the “tourna-ments” that are held periodically among teachers and students. The contests consist of solving challenging problems using newly acquired math skills. Winners get trophies and receive great distinction from their peers for their accomplishment. At the end of the program, all the graduates proudly parade through downtown Guaymas with banners and flags, to the accompaniment of local school bands. The parade makes the winners, as well as the rest of the students, feel great pride as their family and friends celebrate their victory in public.

When these students enter high school and college math programs, they will already have a superior academic foundation, a fearless attitude towards mathematical problem solving, and a level of comfort that will be conducive to exercising greater creativity in related subjects. The logical result will be higher skilled and more competent engineers and scientists than those produced by traditional math classroom programs and teaching environments and methods. These educated students will be prepared to take their place in a Mexico aerospace industry that is growing by the year.

These educated youth will be prepared to take their place in a Mexico aerospace industry that is growing by the year.

A new way to learn MathVisiting the Manufacturing Technology Training Center

A trip to Guaymas and tour of the Manufacturing Communities took place on the third day of the EngineForum SONORA. The tour included a visit to The Offshore Group’s Manufacturing Technology Training Center and the laboratory classroom of Metromathematics. The visitors received information and met with students that are currently studying mathematics in this innovative setting.


Eng

ineF

oru

m S

ON

OR

A 2

01

3

44

Worldwide thermal processing specialist, Bodycote, announced that it’s facility located in Empalme, Sonora, has achieved Nadcap accreditation as well as prime approvals for Rolls-Royce Aero Engines, MTU Aero Engines, and Pratt & Whitney Canada. The Empalme plant was established to support aerospace OEMs and the local supply chains in Mexico’s rapidly expanding aerospace industry.The facility conducted its official inauguration on May 16, 2013, with a ceremony attended by key dignitaries including Guillermo Padrés Governor of the State of Sonora,México; Justin McKenzie Smith, Chargé d’affaires of the British Embassy in Mexico Sarah Hildersley, Director of UK Trade and Investment in Monterrey; Matthew Alty, Vice-Presi-dent of Bodycote’s Surface Technology business and Mike Sobieski, Vice-President North America Op-erations of Bodycote’s Aerospace, Defense & Energy division, as well as distinguished guests from a range of regional aerospace companies and organizations. Tracy Glende, President of Bodycote’s global Aero-space, Defence & Energy division says: “Obtaining Nad-

cap accreditation is the key to unlocking new potential in the Guaymas region and beyond. It opens the way for Bodycote Empalme to widen its customer base and provides greater visibility of the capabilities of the plant. We look forward to driving on and adding to our thermal processing and coatings portfolio in the very near future.”Bodycote’s core business is to provide services that protect and improve the properties of metals and alloys, thereby improving the material properties of compo-nents, extending their operational life and making them safer. The company plays a vital role in the aerospace supply chain.Paul Dymond, Senior General Manager for the Em-palme plant, adds: “The presence of a Nadcap accredit-ed facility enables companies in the State of Sonora to access the highest quality heat treatment and brazing services, and provides a cost-effective option for avia-tion and power generation manufacturers within the region, enabling them to achieve complete processing without transporting parts back to the USA.”

Bodycote’s Empalme, Mexico plant achieves multiple aerospace accreditationsMexico plant supports nearby aerospace cluster in Guaymas, Sonora

To support aerospace OEMs and the local supply chains in Mexico’s

BodycoteGrand oppening of the facility in Empalme Sonora



Documents

Mexico Aerospace Success Story