Industry profile

Generation and Distribution of Electricity Equipment industry

The Generation and Distribution of Electricity Equipment industry in Mexico

The generation and distribution (G&D) of electricity equipment industry is constituted by two segments: electric engines and generators and electricity distribution and control equipment. The first segment refers to direct and alternate current generators, universal engines, rotational converters, electrical transformers and static converters, among others. The second focuses on electrical devices to connect or protect electrical circuits, as well as cutting or sectioning devices, frames, panels, dashboards, etc.

Mexico is the leading producer of G&D of electricity equipment in Latin America and has positioned itself as one of the main investment destinations in the industry. In addition, it is the leading supplier to the US market of energy distribution products, transformers, engines and generators.

This industry has become stronger. In 2011, the sector's total production reached 19.374 billion dollars, of which 59.8% is focused on the electricity distribution and control equipment segment and the rest in the electric engines and generators segment.

The industry's exports reached 11.815 billion dollars; the main destination market was the US and the rest was sent to countries such as Canada, the Netherlands and China, among others.

Some of the most exported products are engines and generators, watt-hour meters, cables and transformers.

Attraction of Foreign Direct Investment

The manufacturing of G&D of electricity equipment had an accumulated investment of 5.3190 billion dollars, during the 2000-2011 period. Only in 2011, the FDI figure was 558 million dollars.

FDI in this sector focused mainly in the states of Chihuahua, Tlaxcala and Baja California, which combined earned more than 80% of investment received in Mexico.

Companies established in Mexico

According to INEGI's last census, there are 669 economic units in Mexico that specialize in the G&D of electric equipment industry; in addition, the industry has close to 126 thousand employees.

Some of the leading companies in the industry are ABB, Eaton, Furakawa, ACME, Belden, Cooper, General Electric Company, Hammond, Schneider, Siemens, Thomas and Betts, Mitsubishi, WEB, etc. They are located mainly in the Federal District, Nuevo León, Chihuahua, the State of Mexico and Jalisco.

Strengths of the Industry in Mexico

•Talent. According to ANUIES, there are more than 790 thousand higher education students in engineering and technology programs, and according with the Ministry of Public Education, 115 thousand students graduate each year from these programs.

•Competitive Costs. According to KPMG, Mexico has the lowest operating costs in the Americas in processes related to manufacturing of G&D of electricity equipment.

•Logistics Access. Mexico's closeness to the North American market has important advantages.

•Supply Capacity. Mexico has the capability to supply a series of processes used in the G&D of electricity equipment industry, such as machining, casting, extrusion, assembly, stamping, plastics injection, aluminum injection, forging, laminating, welding, boilermaking and thermal surface treatments.