Engel Expands in Mexico

Engel has announced that it will build a multi-faceted facility in Queretaro, Mexico, as part of its “close to the customer” corporate philosophy. The maker of injection molding equipment based in Schwertberg, Austria, with its US headquarters in York, PA, said it wants to establish “optimal sales, logistics, and production structures for each of the three major regions — Europe, Asia, and the Americas.”

A place to find and develop talent.

The company chose Queretaro, because “it is the place to find, develop, and hold talent,” said Stefan Engleder, CEO of the Engel Group. The company currently operates two service and distribution centers in Mexico in Queretaro and Monterrey. Engel said it will purchase 70,000 square meters (753,474 square feet) of land in Queretaro, suitable for further expansion in the future.

The company also said it will invest approximately €30 million ($32.3 million) in the project and expects to double the number of employees by the end of the fiscal year. Customers in the United States, Canada, Mexico, and South America will all benefit from the capacity and expertise delivered by this expansion, added Engel in the announcement.

Manufacturing in Mexico on a tear.

Engel’s “close to the customer” business model follows the nearshoring trend — the company is by no means alone in expanding its manufacturing footprint in Mexico to service customers in North and South America. Ever since the great supply chain disruption of recent memory and somewhat exacerbated by the Chinese government’s more hard-line approach to geopolitics, companies have been sourcing products and services closer to home for those specific markets.

As noted in an article on CNN.com, “Mexico surpassed China as the top exporter to the US in 2023. Those exports were driven by manufacturing, which comprises 40% of Mexico’s economy, according to Morgan Stanley.”

Mexico’s advantages — relatively low labor costs, proximity to the US market, and a free trade agreement — are not lost on China, however, which is also investing in that market.

US imports from Mexico continued to increase in February, according to April 4 trade data released by the Commerce Department. Meanwhile, Chinese exports to the US were down 20% in 2023, compared to 2022.