By Lauren Villagran / Journal Staff Writer – Las Cruces Bureau
PUBLISHED: June 23, 2016
Jerry Pacheco has spent most of his professional career stumping for southern New Mexico’s industrial hub of Santa Teresa: attracting new companies, advocating for state investment and linking U.S. and Mexican businesses.
Pacheco has done this for years, even when Santa Teresa couldn’t get much love in New Mexico and had to fend off West Texas competitors.
Now the payoff for all that hard work is coming. More than a dozen new businesses have located in Santa Teresa in the past two years; the state’s exports to Mexico have more than doubled over the same period, and there are more deals in the pipeline. But something has been missing from the picture: homegrown New Mexico companies outside the border region.
Pacheco – who serves as president of Santa Teresa’s Border Industrial Association and senior business recruiter of the state’s marketing and recruiting agency, New Mexico Partnership – has just come off a three-month campaign that took him to Albuquerque and Gallup, Clovis and Carlsbad, Santa Fe, Española, Rio Rancho, Roswell and Hobbs in hopes of getting more New Mexico businesses in on the border action.
The idea, he says, is that even small businesses could “supply the suppliers”: provide goods and services to the midsize companies in Santa Teresa that serve the huge corporations operating maquiladora assembly plants in Mexico.
“The whole objective is to bring the benefit of what is happening at the border to the rest of the state,” he told me recently at an event in which Gov. Susana Martinez was announcing the location of another business to Santa Teresa. “We are trying to develop a local supply base with New Mexico companies that are not directly on the border.”
“Albuquerque has to be one of the big prospective bases,” Pacheco told me. “Dallas is probably supporting our industry base more than Albuquerque.”
Jami Grindatto, chief executive of the Sandoval Economic Alliance, met with Pacheco during his tour.
Grindatto told me in an email that the alliance’s focus on “manufacturing sectors that export their products including aerospace fabrication and parts repair, metal fabrication, such as machining parts and metal refining, and electronic manufacturers” could marry well with cross-border commerce.
“Those sectors could plug into the maquiladora industry supply chain directly or export their products internationally,” he said.
Meanwhile, a spokeswoman for Albuquerque Economic Development told me that group “is working to help identify companies in the Albuquerque metro area that may be a great fit as suppliers or vendors for the work happening in Santa Teresa.”
A few Albuquerque-based engineering and construction firms do work for the border industrial base, but that’s about it, Pacheco said.
Nowhere is the interest more acute than in the state’s oil and potash patch. Hobbs-based companies hit hard by plummeting commodities prices reacted warmly to Pacheco’s pitch during a recent visit.
As it turns out, some suppliers to the oil services industry may be well-suited to supply the Santa Teresa companies that supply Mexico’s maquilas. Two Lea County businesses are now in talks with Santa Teresa companies, says Steve Vierck, president of the Economic Development Corp. of Lea County.
Vierck explained the potential this way: “I think it can be a very lucrative diversification and retention and expansion strategy for us. Some firms are at risk at staying in business. Most have already laid off people. We think this is a good path to keeping more of those operations in business and helping them pick up additional contracts that would allow them to hire back their skilled workers.”
Room to grow
New Mexico broke the billion-dollar mark in trade with our southern neighbor for the first time in 2014, when the state’s exports to Mexico nearly doubled to $1.55 billion. Exports grew again in 2015, to $1.68 billion.
But 26 other states did more business with our southern neighbor than we did.
The three other border states ranked in the top four, along with Michigan. Indiana, Iowa, Wisconsin, Georgia and Alabama all notched bigger export numbers. New Mexico barely topped Connecticut, which logged $1.3 billion in exports to Mexico last year.
All that is to say that New Mexico has plenty of room to grow, as long as Mexico’s maquila industry continues to expand – it’s been growing at a double-digit clip for nearly two years now.
The Border Industrial Association surveyed its 110 members to find out what they need. The answer: Everything from fabricated metal, lubricants, packaging materials, labels, pallets, maintenance services, quality control services to toilet paper.
The challenge for New Mexico companies will be to prove they have the know-how, volume capacity, quality and competitive pricing to win deals that could give Albuquerque, Hobbs and other parts of the state more stake in the border economy.