The Chinese furniture manufacturer Kuka Home Mexico has inaugurated a US $150 million expansion of its plant in Nuevo León, which is expected to create more than 4,000 jobs.

Kuka Home first announced the expansion of its factory in the Interpuerto Monterrey industrial park in Salinas Victoria, just north of Monterrey, in 2022. It inaugurated the project on Jan. 18, in a ceremony attended by Nuevo León governor Samuel García and state Economy Secretary Iván Rivas Rodríguez.

Rivas said that the plant will employ 1,000 people from first opening, rising to 2,500 by the end of the year. By 2026, the company hopes that the factory will have a production value of $115 million and employ up to 5,000 staff.

Kuka Home currently employs around 25,000 people worldwide, with factories in China, Vietnam and Mexico. Its general director, Daniel Zhao, said that “the Monterrey factory provides basic services to customers in the North American market,” which accounts for most of its furniture sales.

Governor García used his inauguration speech to emphasize Nuevo León’s benefits for companies looking to supply international markets from Mexico.

“We have done everything to connect Nuevo León with the world,” he said. “We’re aiming for expansion and a double runway at the Monterrey International Airport, we will have 40 non-stop international flights, and soon another international airport will be ready.” He added that Nuevo León is also building six new highways in the next two years.

García has long been a passionate advocate for nearshoring – the relocation of plants from Asia to Mexico to be closer to U.S. markets. In March 2023, he predicted that the phenomenon could spur annual growth of up to 10% in Mexico, and this month he announced new tax breaks for companies setting up in the Nuevo León border region.

“The entire section of Puerto Colombia [on the U.S. border] is going to be a free zone,” he said at the inauguration. “A free trade zone means zero taxes… If I were Kuka Home, I would already be buying land to have a transfer or a warehouse in this fiscal area; it’s zero taxes.”

Rivas added that Nuevo León already has a portfolio of projects from more than 100 countries, which are looking to invest up to $10 billion in the state. Major investment announcements in 2023 included a $15 billion Tesla “gigafactory” and a $5 billion industrial park to be built by Chinese construction company LGMG.

With reports from Mexico Industry and El Economista