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Archive for category Economy

Recent and upcoming investment

Jul 13

Posted by Tom in Economy, Investment, Manufacturing | No Comments

Reports on some recent and upcoming investment collected from the local business media:

  • Water treatment:  Mexican sugar producer Grupo Azucarero México (GAM) revealed it will begin construction next month on a new waste water treatment plant.  GAM has invested US$35 million over the past four years in automation process technology, as well as a system for generating electricity through steam produced by burning cane bagasse.
  • Logistics: Guanajuato’s Guanajuato Interior Port multimodal logistics center will enter a new phase of expansion in the coming months.  Approximately US$55 million in new investment will be carried out to expand existing infrastructure at the site, which includes Customs facilities, a free zone, ground and air cargo handling services, industrial yards and related operations.
  • Automotive: German engine components maker Getrag Transmissions Manufacturing inaugurated a new production plant in the central city of Guanajuato.  The US$500 million facility will manufacture transmissions for the Ford Fiesta line being built at Ford’s Cuautitlan Izcalli plant outside Mexico City.
  • Manufacturing: French digital media manufacturer Technicolor will begin making 3D Blu-ray discs for Warner Brothers at its Guadalajara plant this year.  The company is investing US$11.4 million in the plant to boost production capacity.
  • Green building: Mexican developer Homex announced plans to develop four new housing complexes in north western Mexico based on the concept of Integrated Sustainable Urban Developments.  The first of these complexes will require investment of US$27 million and all will incorporate green building technologies.     Read the rest of this entry »

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Recent and upcoming investment

Jun 1

Posted by Tom in Economy, Investment, Manufacturing | No Comments

Reports on some recent and upcoming investment collected from the local business media:

  • Real Estate:  Mexican real estate developer Marhnos announced plans to build up to five office towers in Mexico City over the next five years.  The company is projecting investment of approximately US$1.5 billion in the projects, which will be carried out in alliance with New York-based developers Turner International.
  • Apparel: Sports apparel and footwear maker Grupo Charly is manufacturing in Mexico again after an absence of six years.  The  Mexican company offshored the last of its domestic production to Asia in 2004, but began to move some manufacturing back home last year to improve delivery times.  They project ramping up Mexico production to 600,000 pairs of sports shoes over the next three years.
  • Automotive: Nissan Mexicana has reported plans to invest US$600 million at its plant in Aguascalientes, Mexico, to manufacture a new model car.  The auto maker plans to build 50,000 units annually of the new model, which will include 75% components from domestic suppliers.
  • IT: Mexico’s top telco Telmex announced it will significantly expand its Triara Data Center over the coming two years.  The US$100 million facility provides integrated hosting services, data storage, backup and connectivity solutions to domestic and international corporate clients as well as government agencies.
  • Automotive: U.S. truck maker Navistar announced its Mexican subsidiary Navistar Mexico will increase production by 50% by the end of the current year.  The company’s US$250 million facility in Escobedo, Nuevo Leon is the largest truck and bus chassis manufacturing plant in Latin America. Read the rest of this entry »

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Recent and upcoming investment

Apr 29

Posted by Tom in Economy, Investment, Manufacturing | No Comments

Reports on some recent and upcoming investment collected from the local business media:

  • Beverage:  Mexican beverage giant and retailer FEMSA announced plans for US$750 worth of investment this year.  The lion’s share of the funds will go toward upgrades and expansions of bottling plants, while the remainder will support the company’s Oxxo chain of convenience stores.
  • Automotive:  Chinese autoparts maker Minth opened a manufacturing plant in the northern state of Aguascalientes.  The plant, representing a total investment of US$16 million, is planned to supply molding and interior components to Nissan, Ford, Chrysler and Fiat plants in Mexico.
  • Mining: Mining companies operating in Mexico will invest a combined US$13.8 billion through 2012, according to the Mexican Mining Chamber (Camimex).  The chamber projected that expansions and upgrades of operations in mining zones will contribute toward improvements in roads, electrification, potable water and other basic infrastructure in the areas. Read the rest of this entry »

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Recent and upcoming investment

Apr 7

Posted by Tom in Economy, Investment, Manufacturing | 1 Comment

Reports on some recent and upcoming investment collected from the local business media:

  • Steel:  Mexico’s steel manufacturing industry chamber of commerce Canacero projected investments of US$10 billion over the next five years to significantly boost production in the sector.  Canacero estimates production will increase 13.5% this year over 2009, when output dropped significantly.
  • Airports: The Mexican Ministry of Transport (SCT) announced plans for three new airports to be constructed in 2010, with investment of US$36 million.  The local airport developments are planned for La Pesca in the northeast and the tourist sites Creel in the north and Palenque in the south.
  • Transport: Inter-city bus operator Grupo IAMSA reported it plans to add 300 new luxury buses to its fleet this year.  The US$100 million investment is slated to go primarily to Volvo for the new buses.
  • Aerospace: French aerospace manufacturer Grupo Safran inaugurated two new plants in an aerospace park in the central state of Queretaro, site one of Mexico’s leading aerospace clusters.  The approximately US$150 million investment set up plants for Safran’s affiliates Messier-Dowty and Snecma to produce jet engine parts and undercarriages.
  • Solar power: BP Solar, the solar technology subsidiary of Great Britain-based energy giant BP, announced plans to subcontract the assembly of solar modules with Jabil Circuit in Chihuahua, northern Mexico.  Plans call for producing modules with a combined capacity of 45 MW, with the possibility for expansion as demand dictates. Read the rest of this entry »

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Recent and upcoming investment

Dec 24

Posted by Tom in Economy, Investment | No Comments

Reports on some recent and upcoming investment collected from the local business media:

  • Logistics:  Hong Kong-based Hutchison Port Holdings (HPH) announced major investments planned for Mexico in 2010 despite the down economy.  Projects anticipated by the global port leader, which invested over USD32 million in the Mexican port of Lazaro Cardenas in 2009, include further expansion of infrastructure at Lazaro Cardenas, an inland port and container terminal in the central state of Hidalgo, new warehouse space at the port of Manzanillo and a commercial development at the Ensenada cruise ship terminal.
  • Biofuels: Mexico’s own Integramex plans to invest approximately USD100 million to construct two plants to produce biodiesel and generate electricity from material extracted from landfills.  The plants, intended to provide fuel and electricity to the highly industrialized Toluca area outside of Mexico City, seeks to capitalize on opportunities to obtain carbon credits.
  • Telecommunications: Telmex, Mexico’s largest fixed telephony service provider, announced several hundred million dollars in projected investments for 2010.  The plans include the creation of 20 new customer service centers throughout the country.
  • Biofuels: Mexico-based BioFields, backed by Grupo Gondi, the country’s second largest producer of recycled cardboard, announced that in 2010 they will launch a long-term project to produce ethanol from algae.  The massive production facility, to be constructed in the north western state of Sonora, will require investment of approximately USD850 million and make use of technology developed in the United States.
  • Software: Jalisco’s software industry continues to register robust growth.  The Chapala Media Park, targeted to open by the end of December 2009, will concentrate companies specialized in multimedia and animation.  A second facility, the Ciudad Guzmán Software Park, is planned to open in 2010 and focus on information technology and agribusiness.
  • Tourism: Despite posting losses in 2009, two hotel groups announced they will move ahead with investments for 2010.  AMResorts will open new hotels in the beach resorts of Huatulco and Nuevo Vallarta with combined investment of over USD400 million, and Hilton Hotels intends to initiate presence in the cities of Guadalajara, Puerto Vallarta and Acapulco via franchising or administration contracts.

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Thoughts on the Mexican economy at year’s end

Dec 10

Posted by Tom in Economy, Manufacturing, Trade | 1 Comment

el-nopalAs 2009 draws to a close, Mexico, like many countries, will be happy to see the back of this year.  Not only did 2009 see the worst economic decline in decades, but the steep recession was exacerbated by the outbreak of the H1N1 flu in April, which had a devastating effect on tourism and, to a lesser degree, business travel.  Mexico’s deep economic integration with the United States is a key motor for the economy, and as a result, the contraction of demand for vehicles and other durable goods in the U.S.A. hit Mexico’s productive sector hard.  The first two quarters of the year were practically catastrophic, as the precipitous dropoff in demand for vehicles led to layoffs and temporary plant closings in Mexico’s large vehicle manufacturing industry.  Tourism, hit by the one-two punch of the slumping U.S. economy and then the flu outbreak in April, is showing tepid signs of recovery, but the sector is still expected to close the year approximately 20% below 2008 levels.

The good news is that for the moment, the worst appears to have passed.  Read the rest of this entry »

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Recent and upcoming investment

Dec 2

Posted by Tom in Economy, Investment, Manufacturing | No Comments

Some investment and other economic activity reported in local media over the past month:

  • Logistics:  Argentina-based logistics company Axis Logistica announced plans to build a new distribution center in Mexico in 2010, in anticipation of economic recovery.  The company entered the Mexican market in 2007 and has invested US$10 million since that time in construction and upgrades of its distribution infrastructure in the country.
  • Aviation: Private air transport for executives is a growth industry in Mexico, with positive growth projected for 2009.  The sector is led by Aerolineas Ejecutivas (ALE), which is projecting 12% growth for the year.  The company invested approximately US$35 million in a new terminal at Monterrey’s international airport this year.
  • Aerospace: Mexico’s aerospace industry continues to post impressive growth despite the worldwide economic slowdown.  The number of companies in aerospace manufacturing, maintenance and related support services in Mexico has grown from 61 to 194 over the past four years, with export sales projected at US$3.4 billion for 2009.
  • Automotive: Ford Motor Company inaugurated a new engine manufacturing plant in the northern city of Chihuahua, in the state of the same name.  Ford invested a reported US$838 million in the new plant, which will produce diesel motors for pickup trucks.
  • Laboratory: Coca-Cola de México launched operations at a new testing laboratory in Mexico City.  The US$8 million facility includes state-of-the-art technology and will be used to verify the safety of ingredients, materials and finished products.
  • Solar power: The State of Durango announced it is preparing to develop a major industrial park to produce solar power equipment and generate solar electricity.  The complex, to begin construction in 2010, is planned to house 20 solar technology companies.  Durango reportedly recently signed a cooperation agreement with a German solar power research institute.
  • Airports: Tourist resort developer Grupo Vidanta inaugurated a new international airport in the northwestern location of Puerto Peñasco.  Vidanta, which operates resorts in the area, invested US$40 million in the project, which was also supported by the Sonora state and federal governments.  In the future the developer seeks to construct a new highway linking Puerto Peñasco with the U.S. border.
  • Processed foods:  Swiss processed foods giant Nestle announced plans for major investment in Mexico manufacturing operations for 2010.  The program includes a US$15 million plant in the south eastern state of Chiapas to produce Coffee-Mate, and a US$100 million expansion of the company’s coffee processing plant at Toluca, near Mexico City.
  • Aerospace: Canadian aerospace manufacturer Bombardier initiated construction of a new plant – the company’s third – at the Queretaro Aerospace Park in the central state of Queretaro.  Bombardier has plans to invest US$250 million in the plant to produce fuselages, wings and electrical harnesses for Learjets.
  • Retail: Grocery and general merchandize retailer Soriana announced 2010 investment plans to the tune of US$300 million for store upgrades and new store openings.  The company is looking to focus on growth once again following a period of reorganization in the wake of its buyout of 198 stores from former rival Gigante in 2007.  Soriana, with 470 stores, is Mexico’s second largest grocery chain after Wal-Mart.
  • Metal tubing: Multinational metal products giant Luvata inaugurated a new production plant in the north eastern state of Nuevo Leon.  The US$40 million facility will produce copper tubes, coils and coolers for heating, cooling, air conditioning and refrigeration applications.  The complex includes its own water treatment plant.
  • Automotive: Luxury automaker BMW announced plans to source US$2 billion worth of auto parts from Mexican manufacturers over the coming two years, in anticipation of a rebound in sales.  The increase in sourcing from Mexico is intended to hedge the cost of parts currently purchased in Euros.
  • Solar power: Japanese energy technology manufacturer Sanyo Electric Co. inaugurated a new production plant in the north eastern industrial city of Monterrey.  The US$15 million plant will assemble high-efficiency solar modules for the North American market.

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Recent and upcoming investment

Oct 30

Posted by Tom in Economy, Investment, Manufacturing | No Comments

We’re still alive, trying to punch our way out of this rueful economic funk.  Here are some reports on recent and upcoming investment culled from local media:

  • Automotive:  Truck maker Daimler Vehículos Comerciales is reporting that it has doubled production from 35 to 70 units per day at its Saltillo plant over the past three months.  The company is investing US$300 million in its plants in the states of Coahuila and Mexico to increase truck production in anticipation of a recovery in demand in the United States in 2010.
  • Retail: Retail and real estate group Grupo Gigante recently opened its 200th Office Depot store in Mexico, and projected overall sales growth of 8-9% for 2009 across its formats, despite the steep recession.  Gigante projected total investment in Mexico this year at over US$100 million, with two shopping malls under construction and plans to begin work on another in Acapulco.
  • Mining: Mexican mining firm Piero Sutti announced the discovery of potentially colossal lithium deposits that could make Mexico one of the world’s largest producers of the metal in the future.  Various international manufacturers of electronic equipment have reportedly expressed interest in potentially sourcing lithium from the Piero Sutti mine.
  • Tourism: Hotel operator AMResorts recently inaugurated a new resort and spa in Cancun with following investment of US$117 million.  The hotel group is reportedly exploring opportunities to build or acquire hotels in Cozumel, Playa Mujeres and other locations in Mexico’s south eastern state of Quintana Roo.
  • Hospitality: Hotel operator InterContinental Hotels Group announced ambitious plans to invest US$550 million over the next three years to open 58 new hotels in Mexico.  The plans reportedly include the strengthening of the brands Holiday Inn and Holiday Inn Express in Mexico, InterContinental’s fourth largest market.
  • Electronics: Japan-based electronics manufacturer Yokogawa inaugurated a new manufacturing plant in the State of Mexico, just outside Mexico City.  The US$20 million facility is set to produce process control devices, current converters and other electronic equipment.
  • Airports: Grupo Aeroportuario del Sureste (Asur) is nearing completion of major upgrades to the international airport at Cancun.  Projects included in the US$67 million upgrade include the construction of a second runway, a control tower and a connecting bridge.
  • Automotive: Ford de Mexico is nearing completion of a massive US$3 billion rehabilitation of its former manufacturing plant in Cuautitlán, State of Mexico.  The remodeled plant is planned to begin large scale production of the Ford Fiesta in the first quarter of 2010.

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Signs of life in auto manufacturing

Oct 7

Posted by Tom in Economy, Manufacturing | No Comments

Plenty more where this came from

More to come

Mexico’s manufacturing sector will be pleased to welcome back into operation the Ford Motor Co. plant in Cuautitlán Izcalli, outside Mexico City, in 2010, local media are reporting.  The plant, shuttered since 2008, is currently being adapted to begin producing the Ford Fiesta automobile early next year.  In addition to helping skilled employment recover in the Cuautitlán industrial area, bringing the plant back on line will provide a much needed boost to some 20 autoparts suppliers located in the area.

While overall vehicle manufacturing continues to suffer worldwide, we have seen a number of instances in which Mexican manufacturing facilities have taken on additional production following plant closures in other countries.  While it’s not ideal for the industry, we won’t turn it down.

Read more about the Cuautitlán plant reopening here: http://www.eluniversal.com.mx/notas/631454.html

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Mexico heroically drinking wine during crisis

Sep 28

Posted by Tom in Economy, Trade | 1 Comment

Aux barricades

Aux barricades

A recent story in Reforma cites information from the Mexican Wine Council in reporting that consumption of wine in Mexico has weathered the steep economic downturn remarkably well.  The story maintains that while wine sales in restaurants have dropped 25% so far this year, sales in wine shops and liquor stores are up 35% and supermarket wine sales are up 30%.  This has to be a testament to the yeoman-like labor of the country’s wine producers, importers and distributors over the past ten years to boost consumption of wine in the country.  Although Mexico is the oldest wine producing country in the Americas, wine has never been a traditional part of the culture here.  In recent years, however, Mexico’s wine industry has really hit the salt mines in an effort to democratize wine consumption to include the commercially attractive middle class market.  The road is long and steep: A 2005 report on world per capita wine consumption by The Wine institute ranks Mexico at number 161 out of 189 countries, far behind the hedonistic sybarites of Burkina Faso, Uzbekistan and the Faroe islands, for example.    The good news, though, is that the trend is unmistakably upward.  Although domestic wine production still serves only about one third of the market, Mexico’s wineries, concentrated in the Baja California peninsula, have made tremendous strides in quality and are gaining recognition beyond the country’s borders.  The good ones are still on the spendy side though, and this will continue to be a tough obstacle for both domestic and imported wines to overcome in the battle to gain the hearts and minds of the middle class Mexican consumer.  Anyone who buys wine on both sides of the U.S.-Mexico border will notice right away how much more expensive the same bottle is south of the Rio Bravo.  A quick price check, for example, reveals that a bottle of Ravenswood Zinfandel costs about US$8.00 at BevMo in California, while the same bottle will cost you US$18.00 at the La Naval wine shop in Mexico City, which has pretty good prices by local standards.  Likewise, a bottle of Wolf Blass Shiraz Yellow Label generally costs about US$10.00 in the United States and runs about US$22.00 in Mexico, and so on.  I haven’t seen any bottles of Two Buck Chuck on the shelves here yet, but frankly I think I’d be scared to drink any wine that costs under 30 pesos in Mexico.

There is lots of information on Mexican wine on the web, here’s one place to start:   www.bajawine.info

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