The Mexican Aerospace industry is poised to continue its pace of growth well into the next decade but there are challenges that will need to be met, says Luis Lizcano, Managing Director of the Mexican Federation of Aerospace Industries (FEMIA). Mexico is set to achieve its goal of being among the top 10 exporters in the world by the end of 2020, Lizcano told Daily News in an interview As a part of an effort to create a long term plan for the continued growth of the industry, FEMIA, the federal government, state governments, regional industry clusters, the military and various universities are working together, he adds. Following are edited excerpts from the interview:
What are the goals of FEMIA and how successful has it been in ensuring the development of the Mexican aerospace industry?
I believe FEMIA has contributed significantly, through its activities, to the growth of the aerospace industry in Mexico. We were founded a little over 11 years ago and we now have over 100-member companies. In 2004, Mexico’s exports in the aerospace industry was US $ 1.36 billion. Over the last fifteen years, the industry has seen a growth rate of over 14 percent. Our growth rate is still in the double digits. From 2017 to 2018, we grew by over $US 1 billion. I’d like to think we have played our part in ensuring the healthy growth of the industry.
How do events like FAMEX benefit the aerospace industry?
This is a big showcase of what Mexico’s aerospace industry has to offer; such exposure is very important for companies in the sector. We are very happy that the Mexican Air Force took the initiative for such an event and we are working hard with them to make the event a success. It has become the most important air trade show in Latin America surpassing some other reputed air shows in the region.
How successful has Mexico been in attracting foreign investment in the aerospace sector? How many international companies have a presence in Mexico?
We have been very successful not just in attracting international companies such as Bombardier, Safran, Rockwell Collins, Textron and Honeywell but also retaining them. These companies started conservatively but have grown their presence in Mexico. The industry has been able to attract about US$ 6 billion in accumulated foreign direct investment from 2007 to 2017. The availability of skilled labor and easy access to North American markets are major reasons why the country has managed to attract FDI in the sector. There is plenty of land available for development as well.
What are some of the incentives that Mexico provides to investors?
The country provides many incentives to investors, which have proved attractive for companies, and will continue to do so. We are now in the middle of a federal government change, but we are certain that the aerospace industry will continue to receive the government’s wholehearted support.
A record number of both passenger and cargo airplanes will enter the global fleet over the next two decades. Do you expect this to translate into a substantial increase in Mexico’s export of airplane parts?
Certainly. More people are traveling by air than ever before and this is great for the health of the industry. Mexico’s growth has undoubtedly been driven by the global demand for aircraft and we are glad to see that the demand for new aircraft is increasing. It is a win-win situation.
How many Mexican aerospace manufacturers currently exist? What was the situation like 10 years ago?
Currently, we have 350 companies in the aerospace sector. We do have MRO as well as companies involved in engineering and design, but manufacturing is our strength; about 80 percent of the industry are manufacturers. The industry provides direct employment to as many as 55,000 people. By the end of 2020, we will be among the top ten exporters in the world. You have to understand that we have come a long way in a short period. In 2004, there were only a handful of companies in the sector. We were not even on the charts.
A qualified labor force to meet the demand of aerospace manufacturer is a problem for many countries globally. How is Mexico different?
We are fortunate that we have many universities and technical institutes to produce an adequate number of skilled workers for the industry. We are good short term and even mid-term, but as part of our long-term plan, we are working with educational and technical institutions to ensure that there is an adequate supply of people with the right skills.
Where do you see the Mexican aerospace industry by 2030? Do you think the industry will be able to sustain its healthy growth for the foreseeable future?
I am confident that we will be able to sustain the healthy growth rate that we have seen over the last decade. As I said, we will be among the top 10 exporters in the world by the end of 2020. As part of an effort to create a long-term plan for the industry, FEMIA, the federal government, state governments, regional industry clusters, the military and various universities are working together.
What, if any, are the main challenges for the Mexican aerospace industry?
We have two main challenges, one being the development of a fully integrated supply chain. We have a good number of Tier 1 companies and OEMs here and we are currently in the process of developing the rest of the supply chain network. Another challenge is caused by the speedy growth of the industry. We do have skilled labor in aerospace, but the growth is so fast that it is a challenge to meet the demand for qualified workers.
What is FEMIA dong to address the challenge of developing the supply chain network?
We are helping local companies break into the productive chain. The association helps companies strengthen operations through training and certification and later links them up with Tier 1 companies and OEMs. We want local suppliers to meet the demand of the industry in Mexico. We are making good progress; the supply chain development program has definitely produced results.
Can you give our readers a brief idea about the different aerospace clusters of manufacturers that Mexico has? Do the different clusters have their own unique strengths? How much competition exists between the clusters?
The aerospace industry is present in 19 of the 32 states in Mexico. There are five regions or clusters where there is a higher concentration of aerospace companies – Sonora, Baja California, Chihuahua, Nuevo Leon, and Queretaro. Queretaro has Bombardier, which is a big magnet for industries in the region, and Safran while Chihuahua has Safran, Textron and Honeywell. Baja California has Collins Aerospace. The Sonora aerospace cluster is well-known for precision aerospace machining and for the production of tur- bine blades and engine components for major aerospace OEMs. Nuevo Leon has a number of Mexican companies that have recently entered the industry.
Which among the clusters has the highest growth potential?
Every region has its own unique qualities, but all the five regions have very robust educational programs tied to the industry. The strategies that the regions adopt for development are different from one another, but there is plenty of growth happening in all the regions. It is not just the five regions; there are a couple of other regions that are showing a lot of promise. Over the next decade, we might have one or two more aerospace clusters.