Tijuana | The Door To

America!

Strategic Location

MEXICO has free trade agreements with 45 countries.

Excellent access to NAFTA Market

BC shares border with California

and Arizona, USA.

BC is the only Mexican state bordering with

California (7th economy in the world)

Los Angeles is 3 hours driving distance

Baja California is one of the

MOST COMPETITIVE Mexican States

Strategic Location

Source: Center for the Continuing Study of the California Economy.

265 Km. Border with

USA

1,550 Km. Coastline

Demographics

City Population Female Male Total % in Baja California

Tijuana 779,190 937,086 1,716,276 51.6%

Average age In Tijuana:

23 years

“The Main Resource of Tijuana: Its People” -Armando Tejeda Rivera, Director/Telvista

Tijuana’s Economy

Gross domestic product :

$17.4 US billion

* 35% is generated by manufacturing exports

•Over US$ 8 billion in FDI in the last 10 years. Making it one of the top 5 destinations in the nation. •The lowest un-employment rates in the country, with an average of 3.5% in the last 10 years.

Industry $6,112,288.60

Services $11,002,119.50

Agriculture and Maning

$349,273.60

Tijuana… Mexico´s manufacturing hub

• 50 years of experience in manufacturing

• 560+ Export Manufacturers

• #1 in Export manufacturing companies in Mexico

• 148,000+ Employees

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50,000

100,000

150,000

200,000

20

07

20

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20

11

20

12

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Employees

Tijuana’s work force profile

47%

26%

11%

6% 5% 4% 1%

“The ability of our Mexico workforce to develop advanced processes apace with the technological changes in our products while maintaining top quality standards is extraordinary…”3 - Ken Kannappan President & CEO, Plantronics

Area People

Direct Employees 138,015

Technicians/Engineers

35,435

Management 13,055

Total 186,505

•141 Companies •54.642 employees •47 Companies

• 43,268 employees #1 North America

• 55Companies • 22,956employees

•51Companies •17,318 employees

Electronics

Aerospace

Medical

Automotive

Our Key Industrial Sectors

•35+ universities •15 technical schools

•57 high schools •3 R&D Centers

Education

.

• Non-union environment

• More than 60% of the State´s budget invested in education

• Linkage Programs Leaders and National Pioneers (school – industry - government)

• Hard working, skillful and competitive labor cost

OUR PEOPLE PRO-BUSINESS COMMUNITY

• Top Private and State Universities with international standards

• 51 Universities in Baja California

• Total under graduates: 90,455

• Engineering Students: 2,200 per year

HIGH SKILLED AND STABLE HUMAN RESOURCES

Source: BC State Educational System 2012-2013

EDUCATION IN BAJA / Engineers In Baja California it graduates 2,200 engineers per year

(SEP-ANUIES)

Engineering

Electro mechanic

Industrial

Electric/

Electronic

Metal mechanic

Chemical

Software

Nanotechnology

Aerospace

Mechatronic

Biochemical

Software

Renewable Energy

Cybernetic Electronic

Information Technology

QUICK FACTS:

• Largest concentration of Medical Device companies in Latin America

• Labor experience with more than 45,000 people working on the industry

• Design, assembly, manufacturing, sterilization, and distribution centers

• Operating facilities in Baja California are FDA Approved

• 94% of the industry installed in Baja California have expansion projects

• Baja California has plenty of experience in the Medical Device Industry

World Class Infrastructure

SEAPORTS

Port of Ensenada: closest Mexican seaport to Asia operated by Hutchinson Group.

The Port of Ensenada is Mexico’s first port that receives the Green Port certification.

Destinations: Hong Kong, Japan, Singapore, South Korea, Australia, South America, among others

In addition, the Port of Long Beach, USA is only 3 hours away, while the San Diego Port is just 30 min away.

The new port in El Sauzal will have a 500,000 container capacity and along with the new El Sauzal railroad line, it will have interconnection to the US and Mexico.

Seaport shipping and receiving capacity is guaranteed for the next 10 years.

AIRPORTS

• 2 international airports with daily flights

to mayor cities in Mexico ( Tijuana &

Mexicali).

• Only Mexican state with direct flights

from city of Tijuana to Narita, Japan and

Shanghai, China

• Closeness to major international

airports in the United States: Los

Angeles LAX and San Diego SAN.

World Class Infrastructure

WATER

• While the Colorado River is the current main water source, desalination plants provide additional availability with 4m3/sec capacity in Rosarito, 2m3/sec in Ensenada and 300 lt3/sec in San Quintin.

• Water supply, is guaranteed in Tijuana for new companies.

World Class Infrastructure

ELECTRICITY

• Tijuana has one of the most competitive energy costs in the world.

• The average cost per green-sourced MW of electricity for 24/7 industrial use is under USD $58.

• With these alternatives, energy costs for industries are guaranteed to be at least 15% below CFE’s rate for the next 20 years.

World Class Infrastructure

World Class Infrastructure

NATURAL GAS

Tijuana has a storage and distribution

terminal that ensures the current and future

demand of this energy.

Natural gas is provided by Sempra Energy

and offers the most competitive price

nationwide.

World Class Infrastructure

WATER

31 – 1000 M3. $67.22 MX PESO.

1001M3 and more. $68.54 MX PESO.

ELECTRICITY Per kilowatt hour (kWh)

Base load Intermediate load Peak Load

$0.54 MX PESO. $0.62 MX PESO. $1.46 MX PESO.

GAS

MMBtU GCAL

$ 47.95 MX PESO. $ 185.13 MX PESO.

Industrial Development

5%

95%

Industrial Buildings Sq. Ft. In Tijuana

Available

Occupied

Total Sq. Ft. 71.2 million

Available 3.87 million

From Class A to Class C, Tijuana offers: An industrial real estate market of more than 51 industrial areas of pre-owned or new buildings located throughout the city.

Industrial Facility (USD per Sq. Ft.) Monthly Lease

$0.35 - $.80

Cluster’s Tijuana Overview World Class Cluster

- AEROSPACE

- MEDICAL DEVICE

- ELECTRONICS

- TI

87 COMPANIES

66 COMPANIES

+200 COMPANIES

72 COMPANIES

25,000 employees

42,000 employees

93,000 employees

8,000 employees

Another in consolidation: Logistics, Call Center, Medical Tourism, Biotechnology …

Baja California has the largest concentration of Medical device companies in México

TIJUANA 40+ Companies

46,000 employees

ENSENADA 3 Companies

1,500 employees

TECATE 6 Companies

1,200 employees

MEXICALI 17Companies

8,500 employees 60%

5%

14% 21%

Industrial Sectors

• AEROSPACE • AUTOMOTIVE • MEDICAL DEVICES • RENEWABLE ENERGIES • ELECTRONICS &

SEMICONDUCTORS • INFORMATION TECHNOLOGY • METAL MECHANICS • TOOLING & DESIGN • FOOD AND BEVERAGE • MEDICAL TOURISM • HOUSING • FURNITURE

Origin of Investment in Baja California

28 of the existing US companies in Baja California have their corporate Offices in California

USA 91%

MEXICO

5%

ENGLAND SWEDEN

2%

AUSTRALIA

2%

Business opportunities for local suppliers

93% Plastics

6% Packaging

1% Accessories,

metal, textiles

It is estimated that materials and direct parts annual consumption

Is up to $1,500,000 millions of USD

Business opportunities for local suppliers

The sector presents the opportunity for the development of

local. Suppliers in: Sterilization

Micro Life

Plastics Parts

Translation Packaging Materials

Clean Room and

Maintenance Certification

Diversify Training and Consultancy

Services

Calibration

Aerospace

• Tijuana has almost 50 years of aeronautical experience.

• Largest concentration of aerospace companies in México.

• 60% are AS9100 and/or Nadcap Certified.

• Workforce of more than 20,000, Includes: operators, technicians and engineers

• Design, assembly, manufacture & MRO.

• New & expansion investment projects.

AEROSPACE

• The Baja High-Tech Aerospace Training

Center is a project already underway

that will benefit the whole sector with

flexible and comprehensive training

programs an multiple certifications

available for trainees, with strong links

and supervision by the Aerospace

companies established in the region.

Outstanding Demand in Baja Cailfornia

Specific Supplier Needs Estimated local market

demand (millions of

USD).

Materials

1. Aluminum & metal alloys. 270

2. Advanced & composite materials. 177

3. Plastic parts thermoformed. 85

4. Optical fiber. 65

5. Foam pieces. 42

6. Extruded hoses & other materials. 25

7. Fiberglass. 45

8. Wires and harnesses 40

9. Fur & natural upholstery parts. 3

10. Synthetic microfiber or mixed fabrics. 2

Services 1. Precision machined, heat treatments and finishes (polished, anodized, chrome, etc.).

180

2. Design services. 120

3. Aircraft electronic parts (maintenance and repair).

100

4. Metal stamping. 80

5. Metal parts casting. 60

6. Modeling & flight simulation. 5

Estimated annual

market demand *

U.S. $1.18 Billion

GLOBAL INTEGRATION

THE BAJA CALIFORNIA PLATFORM TO MEXICO AND THE WORLD

MEDICAL DEVICES

• Tijuana leads the medical device industry in Mexico.

• More than 50 established companies with processes of design, assembly, manufacture, sterilization, among others.

• Workforce of 35,000 specialized employees.

• Tijuana’s cluster together with San Diego's on the U.S. integrates the most sophisticated and diverse binational medical device region in North America.

AUTOMOTIVE

• Toyota Tacoma truck (OEM) is being fully assembled in Tijuana.

• High skilled employees.

• Huge automotive after market suppliers.

• Growing off-road business with more than 25 companies.

ELECTRONICS

• First industry established in Tijuana.

• More than 200 companies operate in Tijuana manufacturing flat screen televisions, cell phones, computers, home appliances, among others

• All OEMs have changed to platforms like LCD and DLP

• Workforce of more than 70,000 employees

Electronic Companies

Mexicali Research and Technology Center

Development of technologies for future commercial

aircrafts

Considered as the first of its kind worldwide

Generates more than 350 jobs; 75% is represented by

Mexican engineering talent

Over 40 years of experience in semiconductor industry

Enables mobile connectivity through semiconductor

innovation

Provides assembly, test and finishing services for a wide

portfolio of semiconductors solutions

Winners of the National Quality Award 2013

HIGH TECHNOLOGY, RESEARCH AND DEVELOPMENT BAJA CALIFORNIA HAS TWO OF THE MOST IMPORTANT FACILITIES IN THE WORLD

STATE INCENTIVES

Up to 100% exemption on the payroll tax, for a 3 to 5 years period, based on the project. Becate Training Funds: Your Company will receive support for 2 minimum wages $70.10 MXP during training for a two month period plus a $20.00 MXN for transportation per worker base on the National Employment Service programs. 30% Water Discount on Consumption: For this incentive to take place, the company must use an in-house water treatment plant to recycle and reuse water within the facility, the 30% water discount goes on your monthly bill.

STATE INCENTIVES

Human Resources: The State will guarantee:

• Availability of talented workforce.

• A stable and union-free work environment.

• Full support in creating linkage programs with local, state, and

national universities, technical and vocational schools.

• Working together with the industry within Baja California, in

order to adapt the curricula to your industry needs.

• Assistance in recruiting personnel through the State Secretariat

of Labor in collaboration with the National Employment Service.

STATE INCENTIVES

Government Support: The State of Baja California guarantees:

• A fast-track process with all type of procedures in the three Government levels.

• A fast-track process for construction permits and acquisition.

Supply Chain Development: The State will guarantee:

• Two annual events for supplier development programs.

• Organize workshops abroad for potential supplying companies that might be interested in establishing operations in the region.

• A guaranteed incentive package for foreign and local suppliers.

STATE INCENTIVES

Innovation and R&D Funds (PEI): the State Government can help companies apply for the CONACYT (Consejo Nacional de Ciencia y Tecnología) funds, targeted to innovation and R&D projects.

These funds can cover from 22% and up to 75% of the total amount of investment, but limits it to no more than $1,000,000 USD. The incentive will be based on the individual project specification.

Supplier Incubation Programs and Facilities: Inside our Technology Consortium building, we have spaces and high tech laboratories available to develop new suppliers for the companies established in Baja California. We can also provide an incubation process, which will benefit your key suppliers or affiliate companies that wish to set up in our state and we guarantee a smooth landing .

WHY TIJUANA

Closest City to Asia Closeness to North American Markets Infrastructure & Communication development Young, educated & service oriented population Knowledge & technology transfer capabilities

Manufacturing flexibility

Pro-business environment & Clusters development orientation

Important Infrastructure Projects

Otay II Port Of Entry (POE)

Estimated Investment: $800 Million

CONTACT INFORMATION

LIC. JAVIER MICHEL PAYÁN MÉNDEZ DIRECTOR OF INVESTMENT PROMOTION jmpayan@tijuana.gob.mx (T): 664 973 70 36