Contract Manufacturing and Contract Packaging

As US manufacturing costs continue to rise, manufacturers are constantly searching for ways to increase profits by reducing costs. One way many companies increase profits is to outsource labor intensive processes to lower cost, high quality providers.

Ellis Services provides competitive, high quality, outsourcing solutions including:

• Contract Manufacturing
• Contract Packaging
• Manual Assemblies
• Fulfillment
• Bindery

Ellis Services represents several manufacturing companies with processing facilities in Mexico.  Ellis Services will work with your organization to implement a "Shelter" manufacturing operation in Mexico.  We will provide a fully functional Mexican maquiladora manufacturing facility, staffed with quality people possessing the skills you specify to us. 

We will take care of all the requirements of customs and provide transportation for movement of your product across the border. 

With your equipment, raw materials, and your manufacturing process and our facility we will supply a fully operational department manufacturing your product at a lesser cost.

Contract Manufacturer News:

Q: What is a maquiladora?

A: The short answer is a maquiladora is a factory or assembly plant operated in Mexico under preferential tariff programs established by the U.S. and Mexican governments to encourage the development of industry in Mexico. Mexico allows materials to be used in maquilas to enter duty-free, provided the finished product is then immediately exported out of Mexico. The U.S. in turn charges these products a much lower tariff than products from other countries.

The long answer is that the Maquiladora program was created on Sept. 1, 1965, when Mexico President Diaz Ordaz initiated the Border Industrialization Program, which had been developed by the Arthur D. Little Co. The program was patterned after a production-sharing model in use in Portugal. The concept is simple: each factory would be treated as an individual foreign processing zone, thereby allowing the plant to import duty free into Mexico all equipment, machinery and materials that were production related.

The program coincided with a 1964 ruling by the U.S. Congress that established a preferential tariff for U.S. made components that were sent offshore and assembled into finished goods that were subsequently exported to the United States. Upon their export back to the United States, export duties would be assessed only on the value of the imported good, minus the value of the U.S.-made components (value added).

Specifically, a maquiladora is a status granted by the Mexican government to an assembly or production plant that exports its work product out of Mexico. Under NAFTA, however, requirements on the amount of work product that must be exported out of Mexico have been removed.

Q: How do they work?

A: A maquiladora typically performs assembly, or sub-assembly, operations. Components are imported duty free to Mexico, whereupon a maquiladora performs the assembly needed to complete the work. The finished product is then exported out of Mexico, or in some cases to other maquilas where it is used in another assembly operation. (For example, a wire harness is assembled in Juarez and then sent to auto assembly operations in Hermosillo or Saltillo where it is installed in cars and trucks. The finished cars and trucks are then exported out of Mexico.

Before NAFTA, maquilas were required to export all of their production out of Mexico so as to avoid creating unfair competition for Mexican industry, which wasn’t able to compete globally. However, NAFTA eliminated requirements on how much production must be exported. Today’s maquilas can sell their product into the Mexican market, if they choose.