Cross-border families facing acute uncertainty

No me llames frijolero

No me llames frijolero

Since the election of Donald Trump as President of the United States, concern over how this will affect Mexico has vaulted to the forefront of public debate on this side of the border.  We worry about all the new problems we (probably? maybe?) will have from topics on the table such as NAFTA repeal, mass deportations, the border wall, etc. We wring our hands publicly about the plight of Mexican migrants in the USA, but mostly we’re thinking about what will become of us here at home.  For this reason, we asked a colleague based in the United States to provide us some perspective from north of the border, particularly with regard to the impact on binational families such as his.  Journalist Steve Cannon lived in Mexico City for many years before moving to the United States with his family in 2016.  As a family including both U.S. and Mexico passport holders – of which there are many in both countries – the Cannons now face challenges and uncertainty that may not have seemed apparent before last November’s presidential election.  Mexico Business Blog greatly appreciates the thoughts that Steve has shared with us, which follow below. 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:

  • Retail: Mexican corporate group FEMSA will invest approximately US$1.3 billion in Mexico this year across its retailing, beverage bottling and gas station operations, the company reported. Key projects include 50 new gas station-convenience store combination locations under the company’s Oxxo brand. (Dinero en Imagen, February 28, 2017)
  • Logistics: DHL Express, courier subsidiary of German logistics multinational DHL, reported plans to invest approximately US$200 million to expand operations in Mexico. Projects include upgrades to the company’s air freight terminals in the Monterrey, Guadalajara and Querétaro airports and the opening of new service centers, among others. (El Financiero, February 23, 2017)
  • Dairy: Mexican dairy giant Grupo Lala plans investment of approximately US$175 million to expand operations, the company reported. Lala specified only that resources will support “innovation and productivity.” (Dinero en Imagen, February 21, 2017)
  • Mining: Canadian mining company Goldcorp reported plans to invest US$300 million in its Peñasquito mine in the northern state of Zacatecas. The company is seeking to increase its gold-producing holdings by 20%. (El Financiero, February 20, 2017)
  • Industry: Mexican corporate group Grupo KUO reported plans to invest approximately US$170 million in Mexico operations during the present year. Resources will support the group’s activities in areas such as pork production, automotive transmission manufacturing, rubber and auto parts. (El Financiero, February 17, 2017)
  • Electronics: German electronics manufacturing conglomerate Siemens will invest approximately US$200 million in Mexico over the next 10 years, the company reported. Areas of investment will include technology innovation, industrial digitalization and modernization of energy management. (Forbes, February 15, 2017) Read the rest of this entry »

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New electricity rules to bolster solar market

Distributed generationIt’s hard to imagine that nearly seven years have passed since we published our last post on net metering in Mexico, but maybe it shouldn’t be surprising considering how painstaking and fraught with challenges the move toward energy market liberalization has been.  For generations, production and sale of electricity in Mexico was reserved for the state and carried out principally by the public enterprise Federal Electricity Commission (CFE).  The current administration’s 2014 energy sector reform, however, sought to modernize energy markets across various sectors such as oil, gas and electricity.  In the electricity market, the proposed changes include not only permitting private companies to generate and sell electricity, but to permit and incentivize distributed generation by independent small-scale producers.  Now, regulatory changes published over the past two months appear to mark an important step forward toward the development of a smart grid and distributed generation. Read the rest of this entry »

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Mexico frantic to diversify export markets for some reason

He loves me, he loves me not

He loves me, he loves me not

Now that the United States is loudly breaking up with Mexico on social, Mexico is suddenly on the prowl for hot rebound trade with other markets.  This is how it looks from here anyway, with Mexican officials popping up all over the media saying some country or other is going to be a big new market for Mexican exports.  The new U.S. administration’s threats to dismantle the North American Free Trade Agreement (NAFTA) are currently stoking the flames of economic terror in Mexico, but we all know that Mexico’s dependency on the U.S. export market has been the stuff of economists’ nightmares for decades.  To put it in perspective, the share of Mexico’s annual exports shipped to the USA has not dropped below 79% since some time before 1993, if it ever has.  From 1998 to 2001, the concentration of Mexican exports destined for the U.S. market hovered near a truly bloodcurdling 89%.  So it’s not like we didn’t know we were exposed to risk from overdependence on one market, but after 25 years of trade-loving U.S. governments, we became accustomed to living in denial. 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:

  • Glass: Mexican glass manufacturer Grupo Millet reported plans to construct a new production plant in the southeastern state of Yucatan. The US$70 million site will produce architectural glass for export to the United States and elsewhere in Latin America. (El Financiero, January 25, 2017)
  • Casual dining: Mexico’s leading casual dining franchise operator Alsea plans investment of approximately US$190 million to open a record number of new locations across its portfolio in 2017, the company reported. Plans include some 250 new stores, in formats such as Starbucks, Burger King, Domino’s Pizza, Chili’s and others. (Reforma, January 24, 2017)
  • Technology: U.S.-based Deloitte Consulting inaugurated a regional service delivery center in the central Mexican state of Querétaro. The US$10 million center is planned to provide development, testing, support and maintenance services for the firm’s application maintenance, enterprise resource planning (ERP) and IT consulting clients throughout the Americas. (El Economista, January 25, 2017)
  • Natural gas: Mexican fuel distribution company Grupo Energéticos (Energex) plans to build four service stations to offer vehicular natural gas in the country this year, the company reported. The US$4 million project will provide compressed natural gas for vehicular use as an alternative to conventional gasoline, which has risen sharply in price during the current year. (Reforma, January 23, 2017)
  • Energy: Spanish energy infrastructure developer Iberdrola will invest approximately US$600 million to construct an electricity generation plant in the northeastern state of Nuevo León, the company reported. The combined cycle plant is planned to be powered by natural gas. (Mundo Ejecutivo, January 19, 2017) Read the rest of this entry »

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