McAllen EDC: Manufacturing firms looking to move from Mexico to U.S.

MCALLEN, RGV – McAllen Economic Development Corporation President Keith Patridge says he is seeing the first signs of companies wishing to move from Mexico to the U.S., a potentially significant development that could be beneficial for the Rio Grande Valley.

Patridge gave his monthly report on business retention and recruitment in the McAllen area at a recent board of directors meeting. He said was optimistic about potential investment in the area.

“What’s really interesting is we’re now beginning to see companies from Mexico looking at moving into the US side and we are actually working with two right now that are looking at moving operations from Mexico to the U.S.,” Patridge said.

“Some of it has to do with violence; some of it just has to do with the fact that they’re capital-intensive rather than labor-intensive and they’re looking at costing and it makes sense to be on the U.S. side rather than Mexico.”

Patridge said MEDC is currently working on bringing more investment, but some companies are looking for financial inducements from cities before committing to a region. He said this can make things very competitive between cities fighting for the same jobs.

“Hopefully if we’re successful, we’re working with the mayor and the (city) commission on a couple of them. Of course, everybody wants incentives when they come to a community, so we’re working through incentives for those companies,” Patridge said.

“So hopefully we’ll be able to land them. It is pretty competitive out there. We’re working (competing) with another location on one of them. That is a Texas location that has offered them $10,000 a job for each new job they create. That’s substantially more than we have ever done, so it’s becoming much more competitive out there.”

The company in question is looking for 60,000 square feet of space for a manufacturing operation.

Janie Cavazos, vice president of MEDC for U.S. operations, said the company that they’re competing for was “impressed with the quality of life in McAllen” when they visited, and hopes to finalize the deal soon.

“We have a total of four companies looking at the U.S. One of them, Keith mentioned, is looking at another city in Texas that we’re competing against. They make the stretch film extrusion operation,” Cavazos said. “What is really exciting about this company is the entry wage is about $19, so that’s really great. Even though it looks like they’re only going to create maybe 86 jobs, they are good paying jobs, so we’re really hoping that we can finalize that at the end of this month.”

Another company looking at McAllen manufactures power tools. It is looking for a facility with 270,000 square feet of space and would hire 500 people. “The company visited with a real estate team. They commented that McAllen is still the ideal place for the operation but we are competing with North Carolina for this division,” Cavazos wrote in her report.

Cavazos also reported that Kazam Finishing expanded their facility in McAllen by 10,000 square feet and created new 20 jobs. The company asked MEDC if it could assist in scheduling meetings with potential maquiladoras in Reynosa. “It is a small operation, but they are in McAllen so that’s what the goal is,” Cavazos said.

Spectrum, the Time-Warner charter, also plans on expanding and adding more employees by the end of the year, Cavazos said.

“Activity continues to be really, really, great with Spectrum currently at 286 employees, very active, and they’re currently in rehiring mode. So, by the end of the year they do plan to be at least 500 employees.”

Cavazos also spoke about an expo put on by Alpine and Alps in McAllen at the end of June. “We had about 145 suppliers in attendance. We are getting some inquiries via email from some of the suppliers that attended the expo.”

South Texas Manufacturers Association

Cavazos also announced that the South Texas Manufacturers Association will be celebrating its 25th Anniversary with a party on Oct. 19.

During a recent RGG LIVE event on Facebook, Trung Nguyen, plant manager of Royal Technologies, said some of the proceeds from the celebration will go to STMA’s scholarship program that supports the Advanced Manufacturing Technology Program at South Texas College.

“This event will not only be about STMA. We are using the occasion to promote careers in manufacturing and increase awareness of the growth opportunities we see going forward in the region,” said Mike Willis executive director of STMA, in a news release about the celebratory event.

“We will recognize 25-plus manufacturing companies who are STMA members and who have manufacturing facilities that have been operating in the region for 25 or more years. This will include several maquilas and many U.S.-side manufacturers.”

Cavazos said Bryan Daniel, director of economic development and tourism for Governor Greg Abbott, will be the keynote speaker. “South Texas Manufacturers Association has over 180 members. It covers the whole region, including Brownsville.”

ScanTech

McAllen is also helping develop a food sterilization facility for fresh produce, Patridge said, referring to ScanTech Sciences.

“It is pretty exciting. We hosted with TIPA, the Texas International Produce Association, a meeting with all the agricultural officials from Mexico City and most of the agriculture producing states in Mexico. The mayor addressed the group and gave them a welcome. It was very appropriate timing because there was an outbreak of listeria in papayas and a person died. Food safety is top of mind,” Patridge said.

“I think that this sterilization facility puts us in a very strategic position with agriculture from Mexico,” Patridge said. “I think it gives us an opportunity to not only help improve the quality and safety of the food chain coming in, but also to provide economic development opportunities for McAllen and Reynosa area.”

Editor’s Note: Reporter Steve Taylor contributed to this story from McAllen, Texas.