The COVID-19 pandemic and the Russia-Ukraine war have caused major disruptions in supply chains. This has led companies to relocate some or all of their production to regions closer to their main markets. This phenomenon is known as nearshoring, and Mexico is one of the main destinations. This represents an opportunity for several Mexican industrial sectors. However, access to renewable energy is one of the main challenges that need to be overcome in order to accelerate the development of the nearshoring model in Mexico. This is why nearshoring has become the main driver for the construction of sustainable industrial parks.
Sustainable Benefits of Nearshoring in Mexico
The health crisis made it difficult for US manufacturing companies to obtain raw materials. It also made it difficult to maintain active production lines and get products to consumers. As a result of these challenges, the cost of shipping a 40-ft container on eight routes from the East to the West increased by more than 360 percent by mid-2021 compared to the previous year.
On the other hand, Mexico offers speed and cost advantages in supply chain management. Producing in Mexico reduces shipping distances, lowers the carbon footprint, and mitigates commercial risks caused by delays.
Mexico’s existing infrastructure is also an advantage, offering companies a range of cost-effective and sustainable transport options. Ships, trains, and trucks expand the logistical options while reducing distances and carbon emissions.
Challenges to the Creation of Sustainable Industrial Parks
In order for Mexico to attract even more nearshoring investments, the country must develop its energy sector and provide access to the grid with the type of energy required, according to American industry. The Centro Nacional de Control de Energía (CENACE) has stated that the peak demand on the system increased by 3.5 percent in 2022 compared to 2021. However, the annual growth of the electricity transmission network was only 1.6% between 2013 and 2021, well below demand. 2022 was also the first year with a decrease in solar and wind power production, with 3.5 and 4.6 percent respectively compared to 2021. This decline shows the need to further expand the use of renewable energy and to decarbonize the Mexican economy.
Read also: Sustainable industrial production: What is the Carbon Tax?
Additive Manufacturing: Towards Sustainable Industrial Parks
Additive manufacturing has ushered an industrial revolution focused on efficiency and sustainability.
Unlike traditional manufacturing, this process adds material progressively, layer by layer. This means it is more adaptable and adjustable, and also allows for less material use and less waste.
With this growing trend, Tecnológico de Monterrey has announced the creation of Core Labs: spaces with equipment and personnel specialized and dedicated to this technology and to working with businesses and researchers. The lab was inaugurated in September 2022.
Alex Elías, Head of the Unit for Accelerated Development of Materials at the Instituto de Materiales Avanzados para la Manufactura Sostenible, assured that the lab will focus on the industry’s demands, especially those related to nearshoring. In fact, the institute is currently working with Honeywell Aerospace, which manufactures components for airships in Mexico.
Elías also commented that “We want to prove that we are capable of creating materials and integrating them into a sustainable manufacturing process, as well as presenting disruptive technologies.”
As the global operations are reestablished, a new challenge is emerging. Sustainability has become a growing concern for the industrial world, and demand from governments and consumers is raising the standards of acceptability. At Advance Real Estate we recognize this, and our ESG (Environmental, Social, and Governance) strategies enable us to offer properties in sustainable industrial parks in line with the environmental objectives of any company.
Information Sources:
- https://tecscience.tec.mx/en/tech/2nd-international-conference-on-advanced-materials-and-additive-manufacturing/
- https://www.americanindustriesgroup.com/blog/renewable-energy-the-key-to-mexicos-nearshoring-wave/
- https://www.ivemsa.com/is-nearshoring-to-mexico-sustainable/
- https://www.ivemsa.com/impact-nearshoring-manufacturing-sustainability/
- https://www.thenearshorecompany.com/how-nearshoring-can-support-manufacturing-sustainability/
