Heidi Robinson, was appointed Country Manager for Yazaki Guatemala and during a visit this week, reported on the progress of the first phase or pilot plan that includes a plant between Ayutla and Pajapita, San Marcos, which will operate within the Economic Development Zone Special Public (Zdeep), Puerta del Istmo.
In the first instance, there is already space and facilities and they are waiting for the respective machinery and equipment. In addition, 32 Guatemalan workers have already been trained at Intecap for a period of five weeks, who have graduated in mechanical and electrical measurements, programming of PLC programmable logic controls, programming of HMI man-machine interfaces, industrial Ethernet and Profibus networks, as well as such as pneumatics and electropneumatics.
Soon 105 more people will be hired to be trained in October and the 137 new workers will be transferred to the company’s plant in Tapachula, Chiapas, Mexico (some 30 kilometers from the border) to complement their training, since The Guatemalan factory is expected to start operations in January 2023, the executive announced.
Investment and expansion
For now, the company is executing an initial investment of US$10 million and expects to hire about a thousand workers in the pilot plant. For the second phase they still do not have a date and a planned amount, but Robinson said that during this week he will be in Guatemala investigating and exploring the different options to develop the financial strategy, for which he has met with different entities and multilateral financial institutions to refine the financing. He also hope to have a very close coordination with the Ministry of Economy.
The executive also commented that in El Salvador there is already a plant operating that generates 3,000 jobs and in Nicaragua they have several others with 16,000 jobs. “It took us 18 years to reach 16,000 jobs in Nicaragua, so talking about 4 plants in Guatemala in 4 years is an important advance,” he added, confirming that the plans are to install three more plants in western Guatemala, one per year, in the period from 2023 to 2025, although the exact place has not been decided. When this happens, 10,000 jobs will be generated.
“We have a plant in Santa Ana, El Salvador, with more than 3,000 employees, in Nicaragua we have a presence of more than 16,000 and here in Guatemala we hope to have very similar figures, apart from bringing other administrative services that we currently have in Mexico,” Robinson said.
more plans
Robinson believes that favorable conditions have been created for the company to make the decision to settle in the country and he knows that the investment will be a success, since among the plans is not only the manufacture of electrical harnesses, but also to expand to other business.
This is how they are preparing to start the quality control process of the products they will be making in the coming months, and in the first half of 2023, start production.
One of the reasons why they decided to settle in the country is that during the pandemic, their supply chain suffered a lot because many materials were being brought in from Asia and elsewhere, so they analyzed that it was more effective and more efficient, to place more plants in Central America. “And Guatemala offers favorable conditions for the company, apart from the fact that it lends itself to vertical integration, since the company will be closer to its clients who are in the United States to be able to bring them the finished product.
Start nearshoring
Yazaki joined the Call to Action initiative, launched by the United States government to promote investments in the countries of the Northern Triangle of Central America, in order to improve the generation of employment and living conditions in the area and prevent migration .
Initially, the company announced an investment of US$10 million in Guatemala, in the aforementioned plant, but in the information provided to the United States they indicate that they could reach US$160 million between El Salvador and Guatemala, with investments mainly in our country.
When asked if only the pilot plan or the entire investment plan will be part of the US initiative, they indicated that they joined that initiative, but to date they have not been notified or given the subsidy. However, they assured that they will continue with their plans.
The company supplies electrical cable harnesses for vehicles to companies in the United States such as General Motors, Ford, Stellantis and other automobile manufacturers worldwide, including Japanese and others, it was recently reported by the aforementioned initiative. Also for electric vehicles, hybrids.
Yazaki will be applying to be a beneficiary of the incentives offered by the electric mobility law that was recently approved and which includes tax incentives for manufacturers, assemblers, importers, from 2 to 10 years, from the date the law comes into force.
Another law that can be used is the one that was recently approved in Congress, such as the Foreign Capital Investment Promotion Law, said Economy Minister Janio Rosales, who met with Robinson.
Support for electrical installation
Among other operational factors, Heidi Robinson indicated that the first plant in Puerta del Istmo will be supplied with electrical energy connected to the national system, but for the rest of the planned plants they plan to promote their own generation with a renewable approach.
The Minister of Economy, Janio Rosales, offered support for this type of investment in the country, to help make the experience positive and not only have legal certainty, but also for other investment conditions, since a company must be supported which will generate more than a thousand initial jobs and is expected to reach 10 thousand jobs in the coming years.
The minister also spoke about the positive aspects of going from US$10 million of initial investments to some US$200 million during the years of development of the project.
Mainly in municipalities like Ayutla, which had traditionally been a generator of migration, and now there is a wall of prosperity, through these investments and the consequent job creation.
Yazaki’s investment was viewed from USAID’s Creating Economic Opportunities project.
Do you need updated data on Guatemala to make decisions? Subscribe to Microdosea high-value statistical content service from Prensa Libre, produced in partnership with ProDatos.