Tijuana plant proves good medicine for two biomedical entrepreneurs: maquiladora assembles plastic products for lab research.

The sterile environment inside Pacific Integrated Manufacturing is a stark contrast to the graffiti-lined walls scattered throughout the residential Tijuana neighborhood it calls home.

The 150-employee biomedical maquiladora, or manufacturing plant, is owned by San Diegan Chuck Peinado, who drives casually in his black Jeep through the security-manned gates leading to his 35,000-square-foot factory.

Tucked in the corner at the top of a hill lies the plant founded in 2001 by Peinado, 49, who has spent two decades in manufacturing, and Stephen Keane, also 49, who is vice president of business development at San Diego's Ambit Biosciences.

The discrete location fits Peinado's classification of the firm, "We like to keep a low profile."

Outside, the smell of chemicals and the sight of rusty barrels near what looks like a small junkyard aren't indicative of the interior operations--a facility that meets standards of the Food and Drug Administration, the U.S. Department of Agriculture, as well as Good Manufacturing Practice, or GMP.

Clients such as biomedical giant Beckman Coulter, based in Fullerton, and West Chester, Pa.-based VWR ship plastic parts to Pacific Integrated to be assembled.

The products are pretty much anything plastic that scientists use in a laboratory setting, said Peinado, such as tubes used for samples or strips for Johnson & Johnson's glucose test for diabetes patients.

Peinado and Keane, whose families have been friends since their youth, pooled some of their personal savings, $250,000, to get the plant going.

A Winner From The Start

"It supported itself from the get-go," said Peinado, who just purchased a beach home north of Rosarito in Baja.

The average employee earns about $90 per week, which is well above average, according to Kenn Morris, founder of Cross Border Business Associates, a firm that conducts border market research. Minimum wage in Mexico, he said, is about $4.50 a day.

Peinado wouldn't disclose Pacific's revenue, but said it is more than $2 million annually. He keeps overhead low by having little bureaucracy. There is no board of directors, for example.

"I'm a little bit of a control freak," Peinado said. "That's one of the reasons I wanted to go into business for myself. But you end up working for someone anyway, because your clients are your bosses."

Still, Peinado finds time to coach Little League for his children.

The company is about to purchase equipment to allow it to manufacture plastic parts for its clients.

While Peinado, who lives in Bonita with his wife and two children, crosses the border daily to oversee operations as company president, Keane plays a marketing and finance role. Both men hold bachelor's degrees. While Peinado studied business at the University of San Diego, Keane studied English at San Diego State University.

Keane began his post-college career as a writer for a newsletter for UC San Diego's radiology department. He then moved in-house to work investor relations/public relations for a couple of biotechnology firms, and eventually moved to Ambit.

"I didn't envision being a vice president or owning an outsourcing firm," he said.

Mexican Ties

Both men have attachments to Mexico. Peinado's grandparents were immigrants, and he formerly worked for San Diego's Continental Lab Products, which also made disposable lab products in Mexico.

Keane said he has fond memories of the region from his childhood.

"My father would take me and my three brothers to get our hair cut every Saturday in Tijuana," he said. "We'd get fresh tortillas and great food. I have always felt comfortable there because of my early positive experiences. ... I've always been fascinated with the culture on that side of the border."

Pacific has 10 steady clients, mostly California based. It says that while other companies were jumping on the China bandwagon, it seized an opportunity with a shorter commute. Peinado admits that companies might save more in China.

"But we have something they don't have," Peinado said. "We're right on the other side of the border. They can come to Mexico for the day. We can even chauffeur them in and out. It takes a week to visit China."

Companies that employ similar manufacturing services in America, Peinado said, would save 40 percent by using his firm. His employees' productivity is 20 percent higher, he said.

While some maquiladoras have a reputation for mistreatment of employees, Peinado said his workers enjoy an eight-hour shift with a half-hour break and two 15-minute breaks.

A Woman's Touch

Most of the employees are women, and Peinado and Production Manager Victor Rodriguez, a 34-year-old chemist who lives in Tijuana, say that's because their hands are smaller and their concentration better suited to work with the tiny plastic parts.

Zoila Rosas, a Tijuana resident who has worked for Peinado for three years, began on the assembly line and, after two years, was promoted to quality control supervisor. Speaking through a translator, she said she likes her job, her bosses and her co-workers.

"Maquiladoras are one of the best paying-jobs in all of Mexico," said Morris, the Cross Border marketing expert. "There is a flow every day from the interior of Mexico to work at these higher paying jobs."

He said Mexico's labor laws are stringent enough that some foreign companies "don't even consider going there," because he said law enforcement mostly targets foreign companies because they have more money.

"The percentage of maquiladoras abusing low wage employees is an idea from the 20th century, but the 21st century is about keeping the employees on board to make the company competitive globally," Morris said. "There's probably an equal number of companies in San Diego and Los Angeles that don't treat their employees well."

Pacific's turnover rate was 8 percent last year, Peinado said.

Other companies in the area also have locations in Mexico, such as DJO Inc., a Vista-based maker of orthopedics. DJO operates a nearly 300,000-square-foot manufacturing plant in Tijuana.

Biocom, the region's life sciences trade group representing more than 500 companies, said DJO is a member.

Biocom spokesman Tim Ingersoll said Biocom does not discriminate against maquiladoras.

But Peinado said venture capitalists don't look strongly at these companies.

"The fear for VCs is that if the assets are in Mexico, 'How can I get them if something happens?' "he said.

Family-Oriented

Peinado said one of the main differences between doing business in America and Mexico is that business on the south side of the border is more "relationship oriented."

"It's really about developing a relationship with someone and spending time with them," he said. "People go to their mother's house for dinner on Sundays. They are much more family-oriented, and you have to treat them like family."

Peinado said he's been known on occasion to lend employees money for home repairs or other expenses.

"But business is business everywhere you go," he said. "Everyone just wants to make a little money, and that's what it's all about."