Mexico solar power industry poised for major growth

sun

We've got the power

We heard a lot of phrases repeated at the recent Mexican International Renewable Energy Congress (MIREC), but if we plotted a word cloud of the presentations we attended, the biggest word on it would have to be “tremendous potential” (OK it’s two words but let’s move on).  Only slightly smaller on the cloud but still dwarfing the competition would be “great opportunities.” Throughout the general sessions and those specifically dedicated to solar energy topics, these two phrases seemed to embody the feelings not only of government pitchmen but of private sector developers as well.  The optimism was palpable – but by the end of the conference many of us came away feeling like a bunch of seagulls standing around a giant clam shell.  You know there’s one hell of a clam inside, but the question is, how are we going to get at it? Read the rest of this entry »

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Recent and upcoming investment in Mexico

Information collected from media reports over the past month:

  • Plastics: U.S.-based plastics producer Sonoco Products is building a new manufacturing facility in the central state of Guanajuato.  The projected US$10.5 million plant will produce molded foam products for industries such as automotive, aerospace, medical and appliance manufacturing in the region. (NAFTA Works, April 2013)
  • Industrial: Sintermetal, a business unit of Germany’s Schunk Group, plans investment of US$6 million to expand capacity at its sintering plant in the central State of Mexico.  The facility produces highly complex sintered parts for the manufacture of rotors for oil pumps and variable valve timing systems. (NAFTA Works, April, 2013)
  • Automotive: Japanese auto maker Honda announced it will build an additional manufacturing plant to produce transmissions on the site of its vehicle plant currently under construction in central Mexico.  Production at the $470 million transmission facility is planned to serve both domestic and overseas demand, the company reported.  (Bloomberg, May 2, 2013)
  • Energy: Mexican renewable energy developer Gauss Energía plans to construct a new solar energy park at a cost of approximately US$100 million, the company reported.  The facility, planned for the northwestern state of Baja California Sur, is projected to have generation capacity of 30 MW. (Business News Americas, May 8, 2013)
  • Retail: Mexican franchise operator Alsea will invest approximately US$50 million to open 50 new California Pizza Kitchen locations in Mexico over the next five years, the company reported.  Alsea operates casual dining locations of brands including Starbucks, Domino’s Pizza and Burger King, among others, in the country. (Mexican Business Web, May 30, 2013) Read the rest of this entry »

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Peña Nieto presents National Development Plan

Plan Nacional de DesarrolloOn May 20, Mexican President Enrique Peña Nieto presented his National Development Plan (PND) for the period 2013 – 2018.  The plan outlines his administration’s principal objectives within the general themes of security, equity, education, economy and global responsibility.  Mexico’s PNDs are intended to present each new administration’s broad priorities as a guideline for the various federal and state government agencies, which in turn develop specific programs aimed at achieving the overall policy goals.  As such, the PND represents a “This is what we want to do” plan without a “And this is how we will do it” section attached.  More important nuts and bolts will be provided subsequently in the National Development Financing Program (Pronafide) and the Federation Spending Budget (PEF).  Nonetheless, the PND usually receives a fair amount of attention at the outset of each administration, particularly in sectors that are sensitive to government spending, such as infrastructure and research and development.

A highly summarized overview of President Peña’s PND, based on the transcript of his remarks at the presentation ceremony and the document itself, includes the following five principal goals and selected key strategy pillars: Read the rest of this entry »

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Will beachfront property reform bring the end of the fideicomiso?

Step away from the perimeter

Step away from the perimeter

Since bursting out of the gates on December 1, 2012, the Mexican administration headed by President Enrique Peña Nieto of the Partido Revolucionario Institucional (PRI) has gone so totally loco with reform initiatives that they’re starting to bunch up in Congress like a Talladega pileup.  As we discussed in a recent post, it’s remarkable how the new government seems to be taking on everyone and everything at once, including long-time PRI allies and interests heretofore so entrenched that they’re considered national institutions, such as Telmex and Televisa.  Of course, once you start combing through the nuts and bolts of the reforms, often they are not as radical as they are portrayed superficially and provide safety nets of sorts for the affected parties.  Peña and his team have intimated that there are no more sacred cows.  Here in Mexico, however, there are sacred cows and then there are supernaturally venerated pulsating bovine deities like the state oil monopoly, and the mere suggestion that perhaps it’s time they visit the slaughterhouse unleashes truly riotous rending of garments.  Peña’s highly anticipated energy reform is still a ways off as the administration heads into its running start, but in the meantime, the PRI is whetting our appetite with the legislative equivalent of a warmup band: a proposal that would amend the Mexican Constitution to allow foreigners to buy beachfront property in their own names. Read the rest of this entry »

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Recent and upcoming investment in Mexico

Information collected from media reports over the past month:

  • Hotels: U.S. luxury resort developer AM Resorts plans investment of approximately US$500 million in Mexico over the next three years, the company reported.  Locations for new developments under the company’s brands, which include Secrets, Dreams, Now and Sunscape, include Los Cabos and the Riviera Maya beaches of Akumal and Playa Mujeres. (Reforma, April 1, 2013)
  • Airports: Mexican airport operator Grupo Aeroportuario del Pacífico (GAP) will invest US$40 million to upgrade its international airport in the western city of Guadalajara.  Projects include expansion of capacity to receive international flights and two new departure gates, the company reported. (Reforma, April 1, 2013)
  • Beverage: Mexican beverage bottler Arca Continental, the world’s third largest bottler of Coca Cola, plans investment of approximately US$340 million this year.  Resources will be dedicated to maintenance and upgrades of bottling plants, and may include acquisitions abroad in the beverage and snack sector, the company reported. (Mexican Business Web, April 19, 2013)
  • Aviation: Mexican airlines plan investment of approximately US$20 billion to purchase up to 250 new aircraft, the National Air Transport Chamber (Canaero) reported.  Aeromexico plans purchases from Boeing, Interjet projects buys from Airbus and Sukhoi, and airlines Volaris, VivaAerobus and others also plan acquisitions, Canaero reported. (El Financiero, April 1, 2013)
  • Electrical: French electrical engineering multinational Schneider Electric will invest US$80 million in Mexico this year, the company reported.  Projects include completion of a research center in Monterrey as well as work on plants and clean energy projects for state-owned oil monopoly Petroleos Mexicanos (Pemex). (Reforma, April 8, 2013) Read the rest of this entry »

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Reform poised to shake up Mexico telecom market

Qué onda

Qué onda

The young administration of President Enrique Peña Nieto –  sworn in December 1, 2012 – has surprised with its zealous effort to push forward major reforms right out of the blocks.  Many of us viewed the return of the PRI with trepidation, considering the party’s long track record of dirty tricks and monkey business through most of the 20th century, but despite our customary distaste for the PRI we support the spirit of Peña’s reforms.  First came a labor reform  proposed by previous President Felipe Calderón and enacted in December.  Then came the education reform, whisked through Congress and signed into law in February against a backdrop of the sensational jailing of nefarious teachers-union despot Elba Esther Gordillo, about which we gloated uncontrollably here.  The big kahuna we are all waiting for is the energy reform, but Peña is working through his battles one by one (so far, mostly with success) and before we get to savor the political theatrics of the energy debate, we will have to resolve the current battle: Telecommunications reform. Read the rest of this entry »

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Recent and upcoming investment in Mexico

Information collected from media reports over the past month:

  • Beverage: Mexican beverage producer Organización Cultiba, exclusive bottler for PepsiCo in Mexico, plans investment of approximately US$157 million in Mexico operations this year.  Resources will be channelled into bottling and distribution operations as well as sugar cane production, the company reported.  (Mexican Business Web, March 6, 2013)
  • Telecommunications: Swedish telecommunications giant Ericsson opened a new Global Service Center in the central state of Queretaro.  The US$13 million center is one of four such sites worldwide, and will provide planning, design, implementation and support services to customers in the Americas and Europe , according to the company’s announcement. (TMC News, Ericsson, February 27, 2013)
  • Automotive: German auto parts manufacturer Hella will open a new production plant in the central state of Guanajuato this year, the company announced.  The US$100 million project is planned to produce headlamps and rear combination lamps for automotive OEMs in the region. (ProMexico, March 5, 2013)
  • Financial services: Spanish-owned bank Bancomer will invest approximately US$3.5 billion over the next four years to expand and upgrade operations in Mexico, the company announced.  Plans include renovating all retail branches in in the country,  upgrading technology platforms for data processing and completing construction of two new operations centers and a corporate office complex in the Mexico City area. (CNN Expansión, March 21, 2013)
  • Solar energy: Spanish solar energy developer Isofoton has signed an agreement with the government of the southeastern state of Yucatan to design and build a photovoltaic energy generation site in the state.  The US$360 million facility, planned to begin construction in 2014, is projected to produce 150MW once completed. (NAFTA Works, March 2013) Read the rest of this entry »

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Recent and upcoming investment in Mexico

Information collected from media reports over the past month:

  • Automotive: Japanese bearings maker NSK will invest approximately US$70 million to construct a new manufacturing plant in the central Mexican state of Guanajuato, the company announced.  The new facility, to begin production in 2014, is planned to supply the regional automotive industry in the face of rising demand from the NAFTA zone auto market.  (Reforma, February 5, 2013)
  • Animal feed: MaltaCleyton, subsidiary of French animal feed maker InVivo, opened a new pet food production plant in the southern state of Morelos.  The US$18 million facility, the company’s tenth in Mexico, will require corn, wheat, sorghum, vitamins, fat, chicken meal and meat, the company reported. (El Financiero, February 21, 2013)
  • Biotechnology: Mexico’s CIMMYT Maize and Wheat Improvement Center inaugurated a US$25 million advanced bioscience research center in the central State of Mexico.  The foundations of magnates Bill Gates and Carlos Slim contributed to the project, which will conduct research in support of seed improvement. (CIMMYT, February 13, 2013)
  • Transportation: The Mexican government plans to issue tenders this year for construction of two major new passenger rail lines at a total estimated cost of approximately US$3.2 billion, the Transport Ministry (SCT) announced.  The lines would run from Mexico City to the central industrial city of Queretaro and from the Yucatan state capital of Merida to the Riviera Maya region on the Caribbean coast. (El Financiero, January 29, 2013)
  • Retail: Coffee shop chain Cielito Querido Cafe, owned by Mexican inter-city passenger bus operator ADO, will invest approximately US$8 million this year to expand operations.  Plans include the opening of 24 new sales locations in the Mexico City metropolitan area. (El Financiero, February 18, 2013)
  • Solar power: Mexican solar panel maker Solartec is investing approximately US$63 million to bring equipment and technology from Belgium to Mexico to produce photovoltaic panels in the central state of Guanajuato.  Outlays will cover purchasing the assets of Belgian manufacturer Photovoltech and relocating them in Mexico to create a new firm to be called Solarcell. (Milenio, February 21, 2013) Read the rest of this entry »

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Elba Esther Gordillo thrown in jail

SNTEPolice helicopters are clattering overhead outside our window in Mexico City this morning as the town buzzes with a frenzy of marvel, speculation and no small dose of schadenfreude over the stunning news that union leader Elba Esther Gordillo was arrested on charges of embezzlement to the tune of over US$150 million.  The helicopters may just be chasing some bank robber, but it adds to the sensational atmosphere surrounding one of the most eye-popping political hits in decades here.

Gordillo, the longtime head of the 1.5-million member National Education Workers Union (SNTE) is charged with systematically diverting funds from union coffers into personal accounts overseas: that part is no surprise to anyone.  Since her rise to the top of the SNTE through an internal coup in 1989, Gordillo’s ruthless wielding of power, ostentatious flaunting of personal wealth and untouchability despite endless allegations of corruption, influence peddling and even murder have made her a symbol of all that is putrid in the Mexican political system.  In a nation renowned worldwide for corrupt politicians, her sheer venality towers above most others.  And to make horror perfect, the fact that Gordillo ran the nation’s massive public education system untrammeled like a medieval lord – sending millions to Swiss bank accounts while children went without schooling in much of the country – made her and the SNTE perhaps the single greatest impediment to the country’s development (see one of our past posts on this topic here). Read the rest of this entry »

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Media goes ga ga for bright future in Mexico

Lookin' good

Lookin' good

As we have crabbed before in this space, for the longest time it seemed like all you ever saw in the press about Mexico was nasty news about drug trafficking violence.  But at some point in 2012, it was like a new memo went out (and maybe one did), and all of a sudden stories started popping up about Mexico’s economic progress, bright future, and flashy manufacturing industries.  It’s not like our problems have gone away – they certainly have not – but it is nice to see something more positive in the media for once.  After a while we started collecting these stories to enjoy time and time again, so we thought we’d share them so that you can enjoy them as much as we have.

Go on, have a look.  Let’s savor our spell in the golden light of favor while it lasts: Read the rest of this entry »

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