Hengli Hydraulics Mexican factory is put into production to enhance supply chain resilience
Against the backdrop of continued fluctuations in global supply chains, Hydraulics International recently announced the official start of production of its Mexican factory, marking a key step in the company's global layout. The factory is put into operation to enhance supply chain resilience, reduce geopolitical and logistics risks, and better serve North American and Latin American markets. The following are the related data and analysis of popular topics on the entire network in the past 10 days:
| Hot Topics | Related Events | Popularity Index (1-10) |
|---|---|---|
| Global supply chain reconstruction | Hengli Hydraulics Mexican factory is put into production | 8.5 |
| Manufacturing industry returns to America | Several companies announced the construction of factories in Mexico | 7.9 |
| China's manufacturing industry goes overseas | Hengli Hydraulic Overseas Expansion Cases | 7.2 |
The strategic significance of the Mexican factory
Hengli Hydraulic Mexico factory is located in Monterrey, Nov. 30,000 square meters, with an initial investment of US$120 million and an estimated annual production capacity of 500,000 hydraulic equipment. The factory will mainly produce core products such as high-pressure cylinders, hydraulic pumps and valves, and supply North American heavy machinery manufacturers such as Caterpillar and John Deere. The following are the factory key data:
| project | data |
|---|---|
| Production time | October 15, 2023 |
| Investment amount | $120 million |
| Annual production capacity | 500,000 hydraulic equipment |
| Localization rate | 60% in the first period, reaching 85% in 2025 |
Supply Chain Resilience Improvement Analysis
The start-up of the Mexican factory will significantly shorten the delivery cycle of Hengli Hydraulics to North American customers, from the original 45 days to within 15 days. At the same time, the factory adopts the "China core components + Mexico assembly" model, which not only guarantees technical advantages but also evades tariff barriers. The following is a comparison of Hengli Hydraulic America market data in the past three years:
| years | Sales in the Americas (billion yuan) | market share | Logistics cost proportion |
|---|---|---|---|
| 2021 | 18.6 | 12% | 9.2% |
| 2022 | 23.4 | 15% | 8.7% |
| 2023 (Estimated) | 30.0+ | 18%+ | 6.5% |
Industry experts' opinions
Secretary-General of China Hydraulic Pneumatic Seals Industry Association pointed out: "Hengli Hydraulic's overseas layout has a demonstration effect, and the Mexican factory will help Chinese companies better respond to the trend of 'near-sea outsourcing'." At the same time, a research report by Morgan Stanley shows that foreign investment in Mexico's manufacturing industry increased by 34% year-on-year in 2023, of which 62% of the automobile and machinery sectors account for.
Future Outlook
Hengli Hydraulics said that the second phase of the Mexican factory will be launched in 2024, focusing on the construction of R&D centers, and planning to cooperate with local universities to cultivate technical talents. The company aims to achieve a revenue share of more than 25% of the American market by 2025, becoming a benchmark for supply chain resilience in the global hydraulic field.
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