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back to index backLATINtalk August,  2005


FOCUS: Electronics industry in Costa Rica

General Aspects

The electronics industry has had a presence in the country for more than 20 years, making it one of the strongest industries in the country to date.

A number of factors contributed to their selection of Costa Rica as an ideal overseas production site: an educated and highly productive workforce, its strategic location in the center of the Americas, a history of remarkable political stability, and a friendly business environment are among the key factors that position Costa Rica on the map of world investment destinations.

In turn, multinationals provide highly skilled job opportunities and a new and revitalized culture in the workplace. Companies in this industry has brought about 11,000 skilled jobs -which represents approximately 30% of the total free zone workforce- in the following manufacturing and service areas:

* Microprocessors

* Microwave / Telecommunications

* Consumer Electronics

* Electronic Components

* Refurbishing

* Automotive Components & Devices

* Electrical Assembly

In 2001, merchandise exports totaled US$ 5 billion and imports US$ 6 billion. Total electronics exports accounted for US$ 1.3 billion, or 26% of total exports, with Intel being the most significant company in this sector.

Costa Rica has increased its manufacturing and export activity in some areas of the electronics industry, including microwave/telecommunications, refurbishing and automotive components.

Human Resources

Costa Rica provides for a wide range of human resources, from operators to engineers, for the electronics industry. In addition to its well-known strategy of strengthening education, computer literacy and information technology to accelerate its growth and raise income levels.

With a literacy rate of 95.7% and some of the highest rankings in the several indexes of human development in the hemisphere, as stated in the Human Development Report 2001, Costa Rica offers an ideal location for high tech companies.




Adult Literacy Rate

(% population over age 15)

Poland

99.7

Hungary

99.3

Argentina

96.9

Chile

95.9

Costa Rica

95.7

Philippines

95.1

Panama

92.1

Mexico

91.4

Brazil

87.3

China

85.8

Dominican Republic

84.0

El Salvador

79.2

India

58.0

Source: 2003 Human Development Report, UN.


Education in Costa Rica has been universal, free and compulsory since 1870. Elementary schools employ a new approach to education aimed at achieving a world-class literacy rate in computer sciences and English as a second language.

At a technical level, free training programs have been developed through the National Learning Institute (INA) in order to address appropriately the requirements of both local and international corporations in specific sectors, in areas such as microelectronics, plastics, metal, electromechanical fields and tooling, therefore allowing Costa Rican technicians not only to work on the cutting edge of technology but to maintain at the same time a productivity rate 20% higher than that of workers of other countries in the Americas. Education centers offering this type of training, as well as university education, are the following:

Training centers

81 Technical High Schools. Graduates technicians in electronics, precision metal work, computer, microelectronics, and also in the administrative areas

National Training Institute (INA)

Offers on-site technical training, with centers for electronics with the most modern equipment and laboratories, precision metal-mechanics, plastics, among others

Center for training trainers (CEFOF)

Emphasis in quality norms such as ISO, QS, 5S, best practices and lean practices

Universities

4 state and 51 private.There are two state universities particularly linked with this sector: University of Costa Rica and Technological Institute of Costa Rica Degrees: Associate, Bachelor, Licentiate, Master, Doctorate (PhD)


Engineers and technicians also offer a highly complex profile that guarantees quality, productivity and cost competitiveness.

The electronics sector directly employs 10,000 workers. The talent base ranges from operators to technicians, engineers and managerial staff.

Infrastructure

Telecommunications

Costa Rica has direct worldwide fiber optic access through Maya 1 and Arcos 1 underwater cables, permitting a redundant fiber optics network.

Moreover, international communications services are provided through a wide variety of alternatives responding to specific customer needs. These include:

* Dedicated Internet access

* Digital point to point links

* Transportation networks with fiber and wireless digital technology (Frame Relay, TDMA, GSM)

* Leased channels using satellite facilities (RACSASAT)

* VSAT networks

* X.25 networks


Electrical Power

Abundant and reliable power, available throughout the country, is generated by hydroelectric (92%), geothermal (7%) and other sources (1%).

Costa Rica generates sufficient electricity to not only fulfill domestic needs, but to export electrical power to other Central American countries. According to the National Electric Company (ICE) the total installed energy capacity was approximately 1756 MW, with a maximum demand of 1221 MW, for a surplus availability of more than 500 MW.

Detailed information about specific energy services can be found in this same site through the following link Infraestructure/Electric Energy


Strategic Location

Costa Rica is strategically located in the center of the Americas, providing excellent access not only to the USA, but also to other markets in Latin America. In fact, there are 25 daily flights to the USA and Miami is only 2.5 hours away. Besides its geographic proximity, excellent market access is provided through duty free entrance to the US and European Union markets, as well to other important markets like Mexico, Canada and Chile through free trade agreements, and to Central America due to the existing Central American Common Market. Recently, the Costa Rican government has currently signed and is in the process of ratifying a free trade agreement with the USA.


More on Costa Rica´s strategic location


Incentives

Special incentives regimes have been an important complement for the development of the electronics industry in the country. Detailed explanation of the benefits and incentives available for manufacturing operations oriented towards exports can be found at the following link: Types of Incentive Regimes

Companies established

Microprocessors/Sensors

Intel

Microwave/Telecommunications

Sawtek

Remec

EMC Technology/Smiths Group

L-3 Communications/Narda

Merrimac/Multimix Microtechnology

Panduit

Suttle

Consumer Electronics

Conair/BaByliss

Atlas Electric/Electrolux

Saco International

Xeltron

Marysol Technologies

Panasonic

Electronic Components

Bourns Trimpot

ITT Canon

Micro Technologies

Pharos/Vishay

Current Controls

Hitronics

Magnéticos Toroid

Refurbishing

Teradyne

Pycon

Kes System

Automotive Components & Devices

IDI Internacional/Sylvania

Wai Semicon

Electrical Assembly

Panasonic

Phelps Dodge

Schneider/Square D

Sylvania

Bticino

Eaton/Cutler-Hammer

Electronic, electromechanical, metalwork and injection molding contractors

Many local companies have perceived the opportunity of providing electronics companies with the necessary supplies, a factor that has allowed Costa Rica to constantly improve its local supply chain. As a result, there are many suppliers in the healthcare industry which may enable your company to focus on your core business by establishing it in the country, some of which are included in the following list:

Aetec

Camtronics

Metalwork

Oberg Industries

Olympic Machining

Techshop

Ryan Group

Plastic Injection Molding

Electroplast

Plásticos Star

Plásticos Modernos

Engineering Services

AEC

Capris

Main location of electronics

1. Technological Corridor:

* Training centers: CEFOF, technical schools, universities, INA

* Seven Free Zone Parks

* Infrastructure: Redundant electrical service from several substations (San Jose, Heredia and Alajuela), fiber optic network, telecommunications infrastructure for Internet and voice phone lines, water supply, international airport, precision machining and plastic injection services, freight forwarders, in bond warehouses, and many more.

* Electronics companies located in the area: Intel, Bourns, Remec, Sawtek, EMC Technology, Aetec, Teradyne, Micro Technologies, Suttle, Cortek/Coopers, IDI, Pharos, ITT/Canon, Panasonic, Merrimac Industries, L-3 Communications, Hitronics, Magnetic Toroid, and many more

* Population: Surrounded by the nation's three largest cities-San Jose, Heredia, and Alajuela-the area has some 2.5 million inhabitants, providing ample availability of human resources from nearby populations

2. Cartago:

* Training centers: Technological Institute of Costa Rica, technical school, research center, Technological Base Incubator, INA.

* Two Free Zone Parks.

* Infrastructure: Electricity, water, telecommunications, precision machining and plating services. Located 15 miles from the international airport.

* Electronics companies located in the area: Camtronics, Conair/BaByliss and Xeltron.

* Population: The Cartago area has approximately 454,000 inhabitant

Source: Cinde.org - GAI


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