Nearshoring: BBVA’s differentiating factor with its clients

Nearshoring is a production outsourcing strategy that consists of transferring some or all of the operations to a company or supplier located in a geographically close country, which involves the relocation of production centers. As a result, shipments between suppliers and customers are faster and more efficient due to geographical proximity, with a positive impact on productivity, sustainability and the economies of the countries involved. Mexico, due to its privileged location, has been a key focus for this trend, accelerated by tensions between the United States and China, the COVID-19 pandemic and the war between Russia and Ukraine.

At BBVA Mexico, we have witnessed clients relocate their supply chain close to the world's largest market, the United States, in a sustained boom since 2016; this saw a further increase in 2018 with the start of the trade war between China and the United States. In 2023, there were investment announcements in Mexico worth 110 billion dollars (source: Ministry of Economy), i.e. six times the announcements made in 2022, and so far in 2024 we have seen announcements amounting to 36 billion dollars.  Current trends continue to show that while some projects are new investments, the vast majority of announcements are related to expansions or modernization of current output capacities in different industries.

BBVA's specialized service with a focus on nearshoring

From May 2023, at BBVA Mexico, we started working with a defined strategy to provide a specialized service to clients that are settling in Mexico to export to the United States and Canada. To facilitate the arrival of these clients in Mexico, we began by setting up periodic War Rooms with our bankers in Asia. By covering our clients at their head offices, these bankers allow us to speed up communication for different contracts and resolution of possible obstacles, in addition to fostering internal communication within the corporations themselves. This model was later expanded to the rest of the geographies where BBVA has a presence, such as Europe and the United States.

We also expanded our specialized service capabilities, reinforcing our team of bankers of Japanese origin with two additional people, to be able to serve Japanese corporations in the best way and in their native language. In the same way, we created a specialized International Desk in Monterrey, Nuevo León, with four new people specialized in serving international clients. Monterrey is a border area and it is very active economically with the arrival of clients whose main activity is production in Mexico for export to the United States. This new Desk provides differentiated service and solutions for the specific operations of these exporting clients.

To further strengthen our specialized care capabilities, we will soon be onboarding three new very specific profiles in the GTB area. It is a Desk made up of bankers of Chinese origin, working out of Monterrey and Mexico City, to cover the arrival in Mexico of Chinese companies, facilitating their establishment and start of operations as much as possible. 

In addition to these specialized Desks, BBVA Mexico is collaborating with different chambers of commerce, such as the United States Chamber of Commerce and the Chinese Chamber of Commerce; councils such as the India-Mexico Business Chamber; embassies like Canada's; as well as supporting Asian companies in trade missions.

As a sign of our differentiated client service, and with the aim of attracting new clients from the earliest possible stage, BBVA Mexico holds annual roadshows to visit our clients at their head offices in Asia, Europe and the United States. This has allowed us to increase coordination with decision-makers and use BBVA's robustness in Mexico as a lever for our growth in other geographies.

Another example of this specialized care is the organization of specific events for these clients. Hand in hand with our product specialists, economists and consultants, we connect the industry players to promote different strategies in their production chains and make their needs visible with the aim of developing 100% customized solutions.

BBVA's product range with a focus on nearshoring

In terms of product, we offer complete capabilities for these clients starting with accounts in pesos, euros and dollars; Cash Management products so that they can start receiving collections and payments, and make payroll payments; Global Markets so that they can exchange currency and hedging their positions; credit products, factoring programs for customers and suppliers and finance leases to start or expand their production; and of course, Trade Finance products to be able to assist them in their export and import activities and electronic payments for foreign trade finance (PECE). All this is complemented by our offer of sustainable products to accompany them in their transition to sustainability.

Also, we continue to work consistently to improve our offer by creating distinctive products and thus anticipating the specific needs of these clients. We drive innovative developments to improve and create new products, and we evolve our infrastructure to be able to adapt to the needs and languages of our clients. For BBVA, it is a priority to help our clients in their transition to sustainability. A key tool is the sustainability-linked Supply Chain Finance product, which allows for the optimization of their working capital and the reduction of their carbon footprint and that of their suppliers.

At BBVA Mexico, we are well aware of the unique opportunity that the nearshoring phenomenon represents for the country, and in the coming years we have very ambitious projects to contribute to the development of Mexico. For example, we are going to continue working to maximize the potential of SMEs, so that they are integrated into the value chains of these large corporations and can enter the international market.