Taiwanese Battery Maker to Build Factory in Tijuana

A Taiwanese battery maker became the latest Asian company to fuel what has become a billion-dollar manufacturing boom in Mexico’s Baja California, disclosing plans Thursday to build a 700-worker factory in Tijuana this year.

Taipei-based CSB Battery Technologies said it will spend $42 million on a plant to make sealed lead-acid batteries for use in uninterrupted power supplies for computers and as power sources for wheelchairs. CSB expects the factory to open in early 1998.

Mainly because of an influx of Japanese, South Korean and Taiwanese firms, foreign investment committed to Baja’s maquiladora plants last year alone jumped 35% to a record $1.15 billion, according to figures released Thursday by the Baja California secretary of economic development.

Maquiladoras are foreign-owned plants in Mexico that make products for export and are set up to take advantage of Mexico’s low labor costs. Their ranks are growing principally because provisions of the North American Free Trade Agreement let companies send products duty-free into the United States, Mexico or Canada if the products are made in any of those countries.

The biggest such investment in Baja last year was Sony Corp.’s $300-million videocassette recorder plant in Tijuana.

“There’s little doubt that the foreign investment surge will continue for the next couple of years, especially by Asian companies, as they try to comply with NAFTA and as more use Mexico as a springboard into South and Central American markets, which are virtually untapped,” said Tony Ramirez, vice president of Made in Mexico, a San Diego-based maquiladora management company and director of a maquiladora trade group.

CSB Battery is the No. 2 producer of sealed lead-acid batteries, with about 15% of the $600-million worldwide market. The batteries are prime elements in power sources, devices that ensure a stable and steady flow of electricity to computers.

The leading producer is Japanese electronics giant Matsushita, the maker of Panasonic brand batteries, which last year announced plans for a $26-million battery plant in Tijuana.

CSB President Richard Chen said $35 million of the company’s investment in the 10-acre Tijuana complex will be spent on equipment. Its biggest battery customer is APC of Rhode Island, a maker of power supplies.

Chen said the company chose Tijuana over other sites in the central Mexican states of Puebla and Hidalgo because of its proximity to the U.S. border.

The majority shares of closely held CSB are owned by Taiwan industrialist Chau Hai Chen; a subsidiary of Hitachi of Japan owns 26%. Chen is considering moving more of his operations to Baja California.

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Baja Boom

A Taiwanese battery company is the latest Asian manufacturer to move into Baja California. Sixty foreign companies committed to a record $1.15 billion in plant investment in 1996. The 10 biggest investments, by foreign and Mexican companies, in Baja last year:

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Investment Company Product Location (millions) 1. Sony VCRs/computer monitors Tijuana $310 2. Daewoo TVs/computer monitors Mexicali 250 3. Samsung TVs/computer monitors Tijuana 200 4. 20th Century Fox film studio Rosarito 100 5. Acer computer terminals Mexicali 80 6. Zapetas del Norte disposable diapers Tijuana 70 7. Zinc de Mexico zinc, copper processing Ensenada 45 8. Telefonos Noroeste phone infrastructure Statewide 29 9. Rockwell microelectronics Mexicali 28 10. Matsushita computer batteries Tijuana 26

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Source: Baja California Secretary of Economic Development