f you’re looking for a company in Costa Rica where smart manufacturing, talent and sectors converge, electronics connector company Samtec fits the bill as well as its “solution blocks” fit customer needs. In its 16 years doing business in the country, the company also has encountered its share of solutions from others to support its growth.
It’s the sort of business connectivity that gave Intel the confidence to return its own assembly and test operations to Costa Rica from Asia two years ago with a $600 million, 600-plus-job investment. As CINDE puts it, “as the new nearshoring takes place to gain operational resilience, redundancy and optimization, Costa Rica has proven to be the right site to ensure business continuity for manufacturing companies while leveraging a robust network of free trade agreements that provides preferential access to two-thirds of the world’s markets, including USA, China, EU, Singapore and South Korea.”
In 2020 Samtec, based in the metro Louisville community of New Albany, Indiana, committed to a $13 million, 150-job manufacturing expansion in Alajuela. I recently spoke with José Sánchez, Costa Rica general manager for Samtec, about the company’s growth.
Describe how Samtec first decided to invest in Costa Rica: What were the driving factors, time frame, competitor locations and turning points in the process? How were you supported by CINDE or other agencies?
José Sánchez: In early 2006, Samtec decided to open a new plant in the same hemisphere as the United States and started the search for the best potential place. The requirements for the new location included easy access to the airport, staff with a certain level of education, good internet service, technical knowledge in the area, good service of freight forwarders and security for visitors of the parent company in the U.S. This last one requirement made the difference between Costa Rica and México, which was the other country that Samtec was considering. Given Samtec is very fast at taking actions, just four months later the company decided to open the plant in Costa Rica and by September of 2006 it started operating.
CINDE was a very important part of the process. Samtec contacted CINDE for guidance and assessment on all Costa Rican information and advantages regarding foreign investment. CINDE went with the Samtec executives from the United States to visit all the different plants and locations that best suited their requirements. In addition, after Samtec decided to start operating in Costa Rica, CINDE provided me with two of their own offices before Samtec’s building was ready, so I could get started with the new employees’ interviews.
How many times have you expanded in Costa Rica? What is your current headcount and physical footprint?
José Sánchez: We started in September 2006 with just 12 employees. After a year, when we were more than 100, we started to look for a new building to expand our operation. Until 2011, we rented four buildings, three in Heredia and one in Alajuela. However, in August 2011 we finished our 17,000-square-meter [nearly 183,000-sq.-ft.] building, which at the moment has 1,500 employees.
It seems like the target industries for your products are also strong industry sectors in Costa Rica. Have you found good business synergy from this convergence of industries?
José Sánchez: Yes, Samtec has many clients here in Costa Rica. However, not all the products they consume are made in our plant given that Samtec’s operational activity is complemented by other manufacturing plants around the world. We have also hired other national companies to produce some components that we use to make our own, creating therefore a good logistics network within Costa Rica.
Share with me your evaluation of the country’s logistics infrastructure, both for getting supplies in and for export.
José Sánchez: Given that we mainly use air transportation, and we are located a few minutes from the airport, the logistics for import and export are easy and convenient. Additionally, taking into account Costa Rica’s benefits for companies located within Free Trade Zones, our process is greatly simplified.
What are your personal observations about living and working in Costa Rica vs. other locations?
José Sánchez: I am Costa Rican and I have always lived in Costa Rica. However, having had the opportunity to travel to various parts of the world and working with foreigners, I can assure you that the way of life of the ticos [native Costa Ricans] is difficult to obtain in many other countries, either because of the weather, our political system, the social security, mandatory and free educational system, and life without an army. All of these make living in Costa Rica very satisfying, although, it would be even better if the country were not so expensive.
How would you characterize the talent and skills of the Costa Rican workforce?
José Sánchez: The Costa Rican labor force has a high level of education. People contribute to elevate the productivity and are always willing to help with new ideas for improvement. Samtec’s experience with Costa Rican people has been very positive. They are very hard-working and prepared. When Samtec started in Costa Rica the idea was to have a manufacturing plant only, but throughout the years the directors found out that in Costa Rica we have a high level of talent that can contribute to other areas. At the moment Samtec has several groups that give support globally, for example software developers, purchasing, planning, design and marketing, among others.
Have you benefited from partnering with specific educational institutions or programs?
José Sánchez: We work very close with different universities and training institutions for our employees’ benefit. Recently we were approached by the MEP [Costa Rica’s Ministry of Public Education], which is searching to improve the curriculum of students that graduate from technical schools.