Cross-border manufacturing growth enhances Tucson-Sonora ties
By Philip S. Moore, Inside Tucson Business
Published on Monday, August 29, 2005
Buoyed by continued growth in cross-border manufacturing at the company's operations in Guaymas, Sonora, and Saltillo, Coahuila, in Mexico, Offshore International is continuing to expand its Tucson administration and logistics center.
Offshore International has been expanding its local operations, from its original site at Park Avenue and Fair Street to the 132,342-square-foot former Caseworks Industries warehouse at 8350 E. Old Vail Road.
The company has signed four new manufacturing support service contracts since March 2005, with the Valencia, Calif., based Novacap, producer of ceramic capacitors for the medical, aerospace and telecommunications industries, as well as Reno-based Electronic Evolution Technologies, Clackamas, Ore., based off-road equipment maker Warn Industries and Rancho Dominguez, Calif., based Avalon Laboratories, maker of cannualae for heart surgery.
The manufacturing operations will occupy a total of 154,000 square feet at the Roca Fuerte Industrial Park in Guaymas and the La Angostura Industrial Park in Saltillo, said spokesman Steven Colantuoni.
He said Offshore International Group specializes in "shelter services" that making cross-border manufacturing easy for companies by coordinating the entire process, from providing the space to hiring and supervising the workers, to arranging for shipment of materials and finished products. "We have about two million square feet of industrial space in Mexico, and from here we do accounting, payroll and cross-dock handling of raw materials and finished products," he said. "Right now, business is good."
Colantuoni said there is $1.39 billion in finished products moving through the company's logistics centers in Arizona and Texas, with 85 percent coming through Tucson, which also provides consolidation, expedited air freight and other distribution services. "We're fortunate in that the maquiladora industries have been challenged in recent years by China, which has become a major player, but we've been able to grow at a pretty good rate, especially over the last five years."
He said that while the overall output from Mexican factories declined by more than 25 percent since 2000, Offshore International has recorded an 18 percent increase in business, making it the largest private employer in Sonora and the eighth largest maquiladora manufacturer in Mexico.
Calling it the "backyard supplier to the largest economy in the world," Colantuoni said his company has been recruiting those companies that make rapid product changes and need to meet "just-in-time" shipment schedules. "Our marketing effort is very research-driven and that has paid off in more business."
"If you have a product that's labor-intensive and you really don't care about how much time it spends crossing the ocean, you move your manufacturing operations to China and Southeast Asia," he said. "Mexico, on the other hand, is becoming more about lesser volumes, more product mix and higher technology."
Although the company only employs 75 people in Tucson, Colantuoni said, "What we do creates a lot of opportunities for people in Southern Arizona."
He said Offshore International has an ongoing relationship with the City of Tucson's BusinessLINC program, primarily because of the opportunity to integrate local materials and components into Mexican-produced finished goods.
"The city and a lot of local companies see Sonora as a big opportunity to sell things," he said.
Lee Smith, business development director for the Tucson Regional Economic Opportunities organization and coordinator of BusinessLINC, said companies that set up manufacturing operations in Guaymas are usually looking for suppliers. "Offshore helps us get in the front door with them. We're probably working with more than 100 companies in Sonora, where we're establishing relationships that benefit companies here."
Offshore International's operations are already responsible for almost $4 million in new business for Tucson suppliers and manufacturers, and they're likely to be responsible for more as Offshore's Sonoran business expands, Smith said.
"They're very focused on relationship building between Mexican manufacturers and suppliers in Southern Arizona, and we're focused on working with them on this because this is the type of program that benefits existing local companies," he said.
"Together we can identify new markets and new opportunities, and work together to help everyone to be more competitive."
Contact Phillip S. Moore at pmoore@azbiz.com
or call (520) 295-4238.
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