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Supply chain clogs could help some AZ business

Interest in Mexican factories---with AZ support
Posted at 7:07 PM, Oct 18, 2021

TUCSON, Ariz. (KGUN) — There could be a local business boost because of supply chain troubles from Asia. There’s a lot more interest in companies making products in Mexico, with supplies and expertise from Arizona.

Cargo ships stacked up off the California coast could end up delivering more business to Arizona.

Factories in Mexico called Maquilas were already doing a brisk business assembling products for U.S. companies often using parts and expertise coming from Arizona and the rest of the United States.

Medical devices are just one example of the wide range of sophisticated products Maquilas manufacture. And pandemic needs have boosted business for those medical goods..

Figures from the University of Arizona’s Eller College of Management say in last August alone, more than $919 million in products flowed from Arizona to Mexico.

Joshua Rubin is with Javid LLC, which operates 30 Maquilas for 28 client companies. He says when the Asian supply chain choked, and freight costs zoomed, more companies considered moving their factories to Mexico.

“I've been getting blown up with the attention of people wanting to move into Mexico. The last month and a half I've had about 10 different visits of companies coming in wanting to open up spaces in Mexico, The last month and a half I've had about 10 different visits of companies coming in wanting to open up spaces in Mexico.”

Some of those ships from Asia are holding materials the Mexican factories need but Ruben says maybe 30% of Mexican industries have had supply issues—and they’re been able to reduce supply delays by buying more at a time.

Ruben says in some cases his company may need just three months to have a factory turning out goods but he thinks Asian supply chain trouble will be persistent enough to prompt more companies to make permanent moves to Mexico—and bring jobs to Arizona to help those factories run.

“I can tell you that we've definitely seen from my clients alone, about four or five companies have moved their headquarters or moved at least distribution hubs, and are hiring 20 to 100 employees here in Arizona.”