Archive for category Economy

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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Mexico construction industry outlook for 2013

Construction 01The pace of growth of Mexico’s construction industry may have dived in the fourth quarter lat year, but the Mexican Construction Industry Chamber (CMIC) is feeling guardedly optimistic about the sector’s prospects going forward.

Mexico’s construction industry is among the country’s largest industries by value, contributing close to 7% of national GDP through mid-2012.   With an estimated value of US$83 billion in 2011, the sector is the sixth largest by contribution to GDP.   The industry was hit hard by the 2008-2009 recession and did not fully return to growth until late 2010.  After a period of fairly robust growth through 2011 and into early 2012, the pace of expansion slowed in the second half. 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:

  • Manufacturing: Spanish appliance manufacturer Fagor will invest US$3.5 million to expand capacity at its production plant in the central state of San Luís Potosí.  The project is aimed at boosting output of products such as refrigerators, dishwashers, ovens and other kitchen equipment. (Mexican Business Web, August 27, 2012)
  • Logistics: Mexican rail operator Ferrocarril Mexicano (Ferromex) plans investment of approximately US$2.3 billion over the next five years to upgrade infrastructure to meet projected growth in demand for rail service.  Resources will be used to expand and improve track and freight terminals to handle expected demand growth from the automotive and mining sectors. (El Economista, August 26, 2012)
  • Building materials: U.S. ceramic flooring manufacturer Daltile opened a new production facility in the central state of Guanajuato.  The US$65 million site becomes the company’s eighth manufacturing location in the country. (El Economista, September 4, 2012)
  • Security: Brink’s Panamericano de México, Mexican affiliate of U.S. secure transport firm Brink’s, is projecting investment of US$30 million over the next three years for upgrades and expansion.  Plans include upgraded armored trucks and equipment, technology enhancements and training for personnel. (Mexican Business Web, September 7, 2012)
  • Electronics: U.S. contract manufacturer Sigmatron inaugurated a new production facility in the northern state of Tijuana.  The US$2 million plant will produce electronic components for the medical, automotive and electronics industries. (Periódico Industrial Siglo XXI, September 11, 2012) Read the rest of this entry »

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Mexico housewares market looking up

You need one of these

You need one of these

In recent years, The Mexican market for fashionable kitchen, tabletop and other products for the home has registered important growth in size and quality. The entry into the market by Wal-Mart in the late 1990s increased the prevalence of foreign products on store shelves in Mexico.  Wal-Mart’s aggressive expansion has also driven its top competitors such as Comercial Mexicana, Soriana and Chedraui to step up their game with greater variety and innovation in their product lines, including housewares.

Upscale department store chains such as Palacio de Hierro and Liverpool have long featured departments offering expensive lines of kitchen gadgets, tableware and home décor items in Mexico, as have stores such as Sears and Sanborns.  Regional department store chains such as Chapur in the southeast, Dorian’s in the northwest and La Marina in the central west also offer similar product lines.  An important new trend is the recent emergence of specialty stores exclusively focused on products for the home.

Read more about how Mexico’s growing middle class is driving new markets for consumer goods in our post for Mexico Today.

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Brazil weasels on auto trade with Mexico

Setting trade policy?

Setting trade policy?

In March 2012, Brazil insisted on putting artificial curbs on imports of Mexican-made automobiles, contrary to the long-standing pact governing vehicle trade between Mexico and the Mercosur trade bloc comprised of Brazil, Argentina, Paraguay and Uruguay.  We’re in a snit about this, because the move creates problems for Mexico and in general adds to the list of alarming actions coming out of Mercosur countries lately that are undermining the environment for trade and investment.

The Economic Complementation Agreement No. 55, known as ACE 55, was negotiated between Mexico and Mercosur in 2002 as a means of reducing tariffs on vehicles and auto parts to facilitate trade in these goods between the five countries.  It worked; automotive trade surged and the deal seemed to suit Brazil just fine as the South American giant racked up a trade surplus in cars with Mexico year after year. Read the rest of this entry »

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Recent and upcoming investment

Information collected from media reports over the past month:

  • Aerospace: American aircraft maker Hawker Beechcraft is joining forces with Mexican executive jet operator Aerolineas Executivas to build a new maintenance facility to serve private aircraft in the northeastern city of Monterrey.  The US$2.2 million project is planned to provide repair and painting services in the country’s second largest private aviation hub. (El Financiero, January 2, 2012)
  • Automotive: Japan-based Nissan Motor Co. is preparing plans to build a new automobile factory in Mexico.  The new facility will add production capacity to the company’s two existing plants in Mexico which currently have capacity to produce over 700,000 vehicles a year. (Wall Street Journal, January 6, 2012)
  • Automotive: Japanese automaker Nissan announced it will construct a new vehicle assembly plant in the central state of Aguascalientes at an estimated cost of US$2 billion.  The large-scale plan includes a supplier park nearby the new manufacturing facility, which will become Nissan’s third in Mexico. (Autoweek, January 25, 2012)
  • Aviation: European aerospace manufacturer Airbus announced an order from Mexican airline Volaris for the purchase of 44 new A320Neo and A320 aircraft. The total value of the deal, planned for delivery 2015 – 2020, was estimated at approximately US$4 billion. (AFP, January 12, 2012)
  • Aviation: U.S.-based aerospace manufacturer Hawker Beechcraft announced the sale of six new T-6C+ training aircraft to the Mexican Air Force, with the possibility of additional future orders.  The value of the deal was not specified. (Defense Media Network, January 11, 2012)
  • Electricity: German electronics and electrical engineering giant Siemans inaugurated a Low Voltage Research and Development Center near the northeastern city of Monterrey. The company invested approximately US$22 million in the new facility, which will help to develop high efficiency electrical systems for Siemens products. (Reforma, January 13, 2012)
  • Retail: Mexican grocery and general merchandise retailer Soriana announced plans to open 50 new sales locations in the country this year.  The company currently operates 558 stores across its five formats. (Reforma, January 16, 2012)
  • Logistics: The Mexican affiliate of Philippines-based International Container Terminal Services Inc. (ICTSI) has begun construction on a new container handling terminal at the Pacific port of Manzanillo.  The new facility will require investment of US$250 million.  (Maquila Portal, January 17, 2012) Read the rest of this entry »

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Regulatory reforms aim to spur new business

Clear path to business startup

Clear path to business startup

Driven by a desire to stimulate employment and the internal market, as well as to scale the World Bank’s “Ease of Doing Business” rankings, the Mexican government approved a package of reforms in December 2011 aimed at facilitating the creation of new businesses.  The modifications, which affect laws such as the Foreign Investment Law, the General Law of Mercantile Societies, the Public Administration Law and others, are intended to reduce the time, cost and aggravation of registering a new company.  Some of the changes entered into effect as of January 1, 2012, and others will become operational as of June of this year.

Taken as a package, the reforms seek to concentrate the required procedures for forming a business within the Economy Ministry (SE), instead of having them distributed throughout various government agencies, each with their own offices, forms, procedures and fees.  The official reform decree also calls upon the SE to coordinate the harmonization of procedures across agencies and incorporate the overall process into a unified digital registration system, via the web portal www.tuempresa.gob.mx.  Examples of the regulatory modifications include:

•    Reduction of obligatory response time for new business approval applications
•    Elimination of fixed amount of initial share capital
•    Elimination of various fees from new business application process
•    Removal of requirement to establish a fixed duration for registered companies

Read the rest of this entry »

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Industries that had a good year in 2011

IndustryAs another year comes to a close we can’t help feeling some frustration that the economy just doesn’t seem to want to take off, both around the world and here in Mexico.  Between the Eurozone debt crisis and stubborn unemployment in the United States, among other topics, we’ve got plenty to keep us fretting for the foreseeable future.  But since the holidays are upon us and presumably it’s a time for good cheer, here are some of the talking points we’ll have in our pocket as we hit the punch bowl hard in the coming days:

GDP growth: Banco de México and Banamex are projecting final 2011 GDP growth in the range of 3.8%.  OK we’re not talking China numbers here but compared to 2009’s -6.1 we’ll take it.

Hot industries: While most sectors of the economy are merely shuffling along, certain industries are getting, or remaining, seriously hot.  The big star this past year was automotive manufacturing, which after suffering a rough patch during the recession has roared back, with production and exports well up over 2010 and a number of significant new investments announced.  Aerospace manufacturing also continued its unchecked expansion, with new international investments announced and exports projected to post double-digit growth for the year.  Outside of manufacturing, mining surged this year, led by demand for gold, silver, copper and industrial minerals, and is on track to exceed 2010’s record setting production value for the year. Read the rest of this entry »

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Recent developments in biotechnology in Mexico

Clear path to growth

Clear path to growth

Mexico’s biotechnology industry made an international splash this year when a biopharmaceutical treatment for scorpion stings developed in Mexico was approved for sale in the United States by the U.S. Food and Drug Administration (FDA).  The product, called Anascorp, was developed by the Biotechnology Institute of the National Autonomous University of Mexico (UNAM) and is manufactured by Mexico City-based laboratory Instituto Bioclon.  It is reportedly the first antidote of its type specifically for potentially lethal scorpion stings to be available on the U.S. market.

While Anascorp captured headlines, Mexico has quietly been building up its biotechnology industry in recent years.  Sporadic projects to develop hardier agricultural varieties began in the late 1980s, and since have grown into a concerted effort by government and academia to promote biotechnological research and development in support of industry.  Much attention has been given to the field as part of recent administrations’ drive to build Mexico’s international competitiveness in advanced industries such as aerospace, software and pharmaceutical manufacturing.  The majority of resources currently dedicated to biotechnological research in Mexico are reported to be concentrated in the development of pharmaceuticals, with agriculture and energy applications also receiving significant attention.  The Mexican Economy Ministry estimates the domestic market for products of biotechnological origin to be approximately US$1 billion with strong growth potential. Read the rest of this entry »

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Gold puts gleam in Mexican mining industry

Buried treasure

Buried treasure

Despite a mopey world economy that just can’t seem to snap out of it, Mexico’s mining industry looks to be headed for another banner year in 2011.  The Mexican Mining Chamber (Camimex) reported a record high of US$13.9 billion in production value for 2010, leading the sector to outstrip tourism among the country’s leading industries.  The current year is expected to exceed last year’s performance, with growth through the first half set at over 17% and still on pace through August, according to the National Statistics Institute (INEGI).  High demand for precious metals and certain industrial minerals has in turn led to a flurry of investment that should keep production strong for the foreseeable future.  Camimex is projecting total mining sector investment of US$4.7 billion for 2011, which would represent a healthy 42% increase from 2010 levels. Read the rest of this entry »

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