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The group first came to Korea to establish networks with companies in the early 1980s. In 1983, the PISMA Group convinced LG (called Lucky Goldstar at the time) to get involved with a facility in Mexicali, the state capital of Baja California.
Rivas explains that the reasoning behind this key decision was manifold. He says, “As Mexico is part of NAFTA [the North American Free Trade Agreement that encompasses Mexico, the United States and Canada], companies working in Mexico can benefit from NAFTA regulations. Moreover, being right next to the United States is a crucial factor.”
Indeed, as Rivas is quick to point out, costs are relatively low, and can sometimes even amount to 18 to 20 percent less than those incurred by Chinese companies. The group boasts 22,000 employees, and has partnership deals with companies such as LG and DMT from Korea, Bosch from Germany and British company GKN Aerospace. Several American companies, such as Rockwell, Chromalloy and Data Products, also have deals in place with the PISMA Group.
However, Rivas explains that he is here in Korea to talk to companies of all sizes. He says, “We are here to meet with companies big and small. We want to speak to people who are not only interested in the United States’ market, but also emerging markets in Latin America. Because we have been working on projects like these since 1984, we have highly experienced, expert staff who can deal with manufacturing solutions. We have a ‘think tank’ department that stores industrial intelligence resources for Korean companies. We provide more than just low-cost labor, we also provide technical assistance.”
The PISMA Group receives grants from the Mexican government for innovation incentives and new machinery, offering the company a boost that helps it remain highly competitive.
In times of shifting global economic focus, Rivas argues that the Latin American market can provide an enormous opportunity for expansion for companies from Far East Asian countries like Korea. In fact, he says, Latin America and Korea represents a perfect match for business ventures. “Korean companies need to diversify their positions,” says Rivas.
But, according to Rivas, the signs are promising. He notes, “I asked the CEO of a Korean company what factor most allows Korean enterprises to succeed. He replied, ‘As a company, we stay hungry.” That means that Korean companies are always interested in innovation, in modernizing and improving their products. Further business cooperation between Korean and Mexican companies would only be of mutual benefit to both parties. It may even lead to a free trade agreement between Korea and Mexico.”
At present, the PISMA Group says it is especially targeting partnerships with companies involved in aerospace industry, the medical sector and automobile manufacture. The company already boats an Aerospace Cluster, with American and international companies involved in projects. Rivas says that opportunities exist for for Korean companies to provide supplies for the aircraft makers.
Korean auto giant Kia Motors has already struck a deal to establish a car assembly plant in Mexico, as has Hyundai Motor. Japanese car maker Nissan also has a factory in the country. Rivas says, “As Mexico has become a leading auto industry producer, factories in states like Baja California are in need of both parts and suppliers.”
Changing social needs have also opened the door for companies involved in the world of medicine, says Rivas. He explains, “The population is aging in the United States. That means that Americans need more medical supplies than ever before. The time is right for all sorts of medical companies to get involved.”Even though these sectors offer plenty of opportunities, Rivas says that the horizons are broad for a wide range of Korean companies who wish to make headway into the North and South American markets.
“There is a great opportunity for all sorts of Korean businesses,” explains Rivas. “Millions of square meters have been built in Mexico for international companies. Korean enterprises could also get involved in sterilization, as we have a great need for expert companies in that regard. All sorts of metalworking companies, and forging, machining, plastic injection and robotics ventures could do well there. Our hope is to one day embark on a joint venture that will see us build a special Korean industrial park in Mexico.”
By Lee Jae-sueng([email protected]