• Retail: DIY retailer Home Depot announced investment of US$115 million in Mexico in the current year, principally for the opening of five new stores.  The leader in its segment in Mexico, Home Depot projects 85 retail locations in operation by the end of 2010.
• Environmental:  The North American Development Bank (NADBank) has ramped up its financing of environmental and other infrastructural projects in Mexico’s northern border zone over the past three years, local media report.  Projects in Mexico financed by the bank during this period include 32 water treatment plants, 50 drainage and potable water systems and 12 solid waste landfills.
• Telecommunications: Telecom service provider Nextel projects investing up to US$1.5 billion in the construction of new network infrastructure.  Nextel recently won a nationwide spectrum auction in Mexico in partnership with television broadcast giant Televisa.
• Aerospace: U.S.-based aircraft manufacturer Hawker Beechcraft is currently constructing a new production plant in the northern city of Chihuahua.  The US$108 million facility, set to produce aircraft assemblies and subassemblies, will become the company’s second manufacturing plant in Chihuahua, further bolstering Mexico’s robust aerospace sector.
• Automotive: General Motors de Mexico announced projected investment of US$500 million in the northern state of Coahuila to produce a new generation of eight-cylinder motors as well as a new vehicle platform.  Projects supported by the new investment are planned to begin this year with actual production set for 2011.
• Franchising: Fast-food chain Burger King announced 2010 investment of approximately US$15 million in order to open 20 new restaurants in Mexico.  The chain’s Mexico expansion also will include doubling the number of “dessert kiosks” from 18 to 36.
• Automotive:  Automaker Volkswagen announced new planned investments of up to US$1 billion over the next three years in its Mexico operations.  Projects under the program include modernization of the Puebla plant to produce the next generation Beetle and construction of a new plant to produce a new generation of motors for Mexico and U.S. auto production.
• Energy: Mitsui Power America, affiliate of Japanese multinational Mitsui, announced projected investment of up to US$2.5 billion in Mexico over the next five years.  The company recently acquired five electricity generating plants in the country and plans further expansion in the energy sector.
• Automotive: Nissan Mexicana plans to invest US$600 million to begin producing two additional auto models at the company’s Aguascalientes plant in 2011 and 2012.  Mexico was chosen over various Asian countries considered for the production of the new versions of Nissan’s March model.
• Food Processing: Mexican dairy processor Lechera Guadalajara opened the country’s second largest milk dehydrating plant, following investment of approximately US$10 million.  The company is also currently building an additional plant to produce cheese and candy.
• Energy: The western sate of Jalisco will get its first wind energy park by the end of 2011, currently in development by Eoliatec de Mexico.  The US$100 million facility is projected to have a total capacity of 60MW, which will be supplied to the Federal Electricity Commission (CFE).
• Real Estate: AMResorts announced plans to build two luxury hotels in Puerta Vallarta through investment of a projected US$150 million.  The project is hoped to help reactivate long sluggish hotel development in the area.
• Paper: Mexican paper and packaging materials manufacturer Bio-PAPPEL will invest approximately US$250 million over the next four years to build five new production plants.  Formerly known as Corporación Durango (Codusa), the firm plans to incorporate electricity generating plants into each of its new production facilities.
• Infrastructure: The Mexican government is projecting private sector investment in infrastructure development of up to US$34 billion between 2010 – 2012.  The largest share of the investment is expected to be in telecommunications, with roads, ports, water management and airports receiving significant capital as well.

• 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.    
• Real estate development: Cancun’s new mega convention center Cancun Messe, currently under construction, plans to open to the public to host the Latin American Food Show in September.  The expo center, which seeks to become the largest in Latin America, will have cost a projected US$270 million once complete.
• Aerospace: Bell Helicopter inaugurated a new manufacturing plant in the northern city of Chihuahua this month.  The plant will produce parts for Bell’s model 429 helicopter.
• Water treatment: Leading tequila producer Herradura inaugurated a new US$6.5 million water treatment plant at its production facility in Amatitan, Jalisco.  Herradura also announced additional investment of US$5 million to expand production capacity at the plant.
• Electronics: IT and electronics giant IBM recently invested US$20 million in its manufacturing plant at El Salto, Jalisco, to support production of data storage equipment for export.  The company reiterated its commitment to maintain and expand its Mexico operations.
• Rail freight: Railrod operator Kansas City Southern de Mexico announced plans to invest US$80 million to develop a freight terminal in the western state of Michoacan.  The terminal is intended to serve freight coming through the port of Lazaro Cardenas on Michoacan’s Pacific coast.
• Entertainment: Cinema operator Cinemex will invest US$9 million to develop a luxury movie theater complex in a large upscale shopping center currently under construction in the south eastern state of Tabasco.  The site will include VIP and 3D facilities.
• Aerospace: Canadian aerospace giant Bombardier announced plans to add five new plants to its existing manufacturing infrastructure in Mexico, via investment of US$300 million.  A stalwart of Mexico’s thriving aerospace industry, Bombardier advised it is considering investing a further US$100 million to increase its rail equipment manufacturing capacity in Mexico.

• 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.
• Poultry: U.S. poultry giant Tyson opened a new animal oil and protein processing plant in the state of Durango.  The US$1 million dollar facility is part of a projected US$16 million in investment in the company’s Mexico agriculture and food operations this year.
• Software: Indian IT consultants Tata Consultancy Services (TCS) announced plans to open a third software development center in the state of Jalisco.  Tata, which also operates offices in Mexico City, two software development centers in Guadalajara and one in Queretaro, is a key player in Jalisco’s burgeoning software industry.
• Logistics: Work is underway on major expansions at the port of Veracruz, Mexico’s key container terminal on the Gulf of Mexico.  The expansions will include a logistics center to the north of the port, improving accessibility, and new rail connections.
• Retail: Mexico’s leading retailers will invest approximately US$1.5 billion this year in new store openings and upgrades, according to the ANTAD retailers’ association.  Department stores Liverpool and Palacio de Hierro, convenience chain Oxxo and others announced plans to return to expansion this year after mostly suspending growth during recession-plagued 2009.
• Steel: Mexico’s national steel producers association Canacero announced projected investment in the sector of up to US$10 billion over the next five years.  A boost in production is planned to meet recovering demand on the world market anticipated to begin next year.
• Tourism: Resort operator Sunset World announced plans to invest US$26 million in remodeling and expansion of existing locations in the Riviera Maya area.  The company also reportedly intends to make additional investments to construct a large “eco-luxury” hotel in the same area.
• Lighting: Indian lighting products giant Havells plans to invest US$100 million to build or purchase a manufacturing plant in Mexico.  The company already produces lighting ballasts at a plant in the border city of Matamoros, Mexico.
• Tourism: Singapore-based resort developer Banyan Tree revealed plans to build two new locations in Mexico with investment of over US$200 million.  The company’s proposed plans include development of a luxury location in the Guadalupe Valley, Mexico’s leading wine producing region.

Read the fine print

Here’s one that, we confess, took us by surprise: in a recent study of tax attractiveness for business, when the final numbers were in, Mexico came in at a whopping…wait a moment…(removes glasses, rubs eyes, puts glasses back on)…number one??!!

Well, we are beaming, we must say.  It’s not that we feel Mexico is not tax competitive – it’s just that, well, we’re still a little grumpy after filing our own Mexican corporate and personal taxes earlier this year.  But in KPMG’s Competitive Alternatives 2010 Special Report: Focus on Tax, Mexico is ranked number one, with the lowest Total Tax Index (TTI) based on a study of 95 cities in 10 countries.   The three major tax components under analysis in the report are corporate income tax, other corporate taxes, and statutory labor costs.  Tax systems vary widely from country to country, of course, and the overall tax burden on businesses can vary significantly by industry within a country.  Any attempt to boil down the corporate tax environment to a single index score will be complex, and KPMG addresses the challenges to such an undertaking in detail in their report.  Nonetheless, at least in this document, we are number one, and we must say we are well chuffed.  Now, if we can only keep the momentum going into the World Cup…

For a look at KPMG’s full report, go here.

• 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.
• Automotive: Industry sources reported that Chrysler and Fiat plan to jointly produce a new model of SUV at the companies’ plant in Toluca, State of Mexico.  The model would join two other new compact models reported planned by Fiat for production at the Toluca plant.
• Automotive: German autoparts manufacturer Continental projected it will invest US$10 – 12 million this year, principally in equipment and software.  Continental is anticipating sales growth of 20% in 2010 as the automotive industry recovers from last year’s downturn.
• Electronics: Chipmaker Intel announced investment plans in the area of US$200 million over the next three years in support of its Guadalajara operations.  Planned projects include expansion of the company’s Design Center, the creation of a children’s technology museum and a center to promote relationships with small and medium sized Mexican firms.
• Renewable energy: The Inter-American Development Bank announced financing for four new wind farms for the generation of electricity to begun in 2012.  Total investment in the projects is projected at US$5 billion.

• 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.
• Retail: Mexican low-priced department store chain Coppel announced aggressive expansion plans, including forays into the Brizilian and Argentinian markets.  The program includes investment of approximately US$120 million and the opening of 100 new stores, principally in southern Mexico.
• Automotive: Japanese automaker Nissan announced it will begin producing its new model of the Micra compact automobile at the company’s plant in Auguascalientes, Mexico.
• Food processing: Mexican processed dairy products maker Chilchota reported plans to return to the retail milk market, which it had exited in 2000.  Chilchota will invest US$10 million to launch milk presentations for supermarket sale, despite heavy competition from market leaders Lala, Nestle and Alpura.
• Real estate: Spanish real estate developer Grupo Lar announced plans to reactivate stalled projects and launch new developments in Mexico in 2010.  The company will invest some US$40 million, principally in residential developments.
• Rail transport: Mexican railroad operator Ferrocarril del Valle de México (Ferrovalle) announced plans to invest approximately US$12 million this year in infrastructure and equipment upgrades.  The company is projecting an increase in container freight in 2010.
• Retail: Leading Mexican retailer Soriana revealed plans to invest US$200 million to open 42 stores under its new “Soriana Express” format.  The new format targets middle and lower middle class consumers in locations with populations of under 50,000.
• Retail: Leading office supplies retailer Office Depot announced US$60 million in upcoming investment, including the opening of 10 new stores in Mexico.  The chain opened seven stores in Mexico in 2009 despite the extremely depressed economy.
• Water management: The Mexican government announced upcoming tenders for water management infrastructure projects worth an estimated US$2.6 billion.  The government is seeking foreign investment for the projects which include aqueducts, water treatment facilities and desalinization plants, among others.
• Aviation: Mexican domestic airline Interjet announced plans to invest US$50 million to expand its MRO facilities at its base at the Toluca airport.  Since launching passenger service in December 2005, Interjet has grown to become Mexico’s fourth largest airline.  Interjet provides aircraft maintenance services to airplane leasing companies.
• Medical: Centro Medico ABC, one of Mexico´s leading private hospitals, will construct a new Neurosciences and Orthopedics Center in the upscale Santa Fe zone of Mexico City.  The announced US$16 million in investment in the project will include design services and acquisition of advanced technology clinical equipment, among other outlays.
• Industrial gas: U.S. industrial gases producer Praxair announced planned investment in Mexico of US$150 million in 2010.  Projects include a new air separation plant in Monterrey and upgrades to plants in the states of Hidalgo, Queretaro and Tamaulipas.
• Aerospace: Mexican industrial group Grupo Kuo, best known for its Herdez brand of processed foods, has announced it will enter the aerospace manufacturing industry this year.  The group, which also manufactures chemicals and autoparts, is in the process of obtaining SAE AS 9100B certification and hopes to begin manufacturing landing gear components by the end of this year.
• Logistics: The Queretaro Intermodal Terminal is projecting investment of up to US$100 million this year for expansion of land area and infrastructure.  The planned upgrades include construction of a new terminal for handling refrigerated cargo.

• Plastics:  The Manufacturing Industry Chamber of Nuevo Leon (Caintra) announced an initial US$1 million investment to build the Mexican Institute for Technological Innovation in Plastic and Rubber in the Monterrey area.
• Electronics: IBM formally inaugurated new manufacturing installations in Jalisco developed at an estimated cost of US$20 million.  The facilities are intended specifically for the production of IBM’s high-end XIV Storage Systems for export to the United States, Europe and other areas.
• Toys: Spanish toy manufacturer and retailer Imaginarium announced ambitious plans to expand operations in Mexico with an initial investment of US$1.6 million.  The company plans to open over 40 new retail locations in the country by 2013, in addition to potentially manufacturing in Mexico.
• Retail: Despite underwhelming economic recovery, Mexico’s top retailer Wal-Mart de Mexico announced plans to invest over US$900 million this year.  The plans include the opening of 300 new locations across the company’s various retail formats and the remodeling of existing stores.
• Mining: Canadian mining company First MajesticSilver Corp. opened a mineral processing plant in the northern state of Coahuila in late 2009.  The US$22 million plant will produce gold and silver.
• Healthcare: The Mexican government announced plans to undertake a formal program to promote Mexico as a destination for ‘medical tourism.’  Medical services to foreigners traveling to Mexico for this purpose were valued at an estimated US$122 million in 2009, and the government projects that the promotional campaign will boost the sector to over US$1 billion by 2015.
• Retail: Leading grocery and general merchandise retailer Soriana announced investment plans worth US$300 million for 2010.  The firm’s expansion program for this year includes construction of 40 new stores.
• Automotive: Chrysler de México announced it will begin production of the new model Fiat 500 at the Chrysler’s Toluca, Mexico plant in December.  The company reported investment of US$550 million in advance of the new production program.
• Retail: DIY retailer Lowe’s finally opened its first two stores in Mexico in February 2010, following investment of US$100 million during an extended preparation process.  Lowe’s Mexico operation has plans in the works for three more stores in the medium term.
• Research: A US$200 million Research and Technological Innovation Park is set to begin operations in Monterrey by the end of this year.  The high technology research center will include sites for high profile companies such as Motorola and PepsiCo, and Mexican industry leaders Sigma Alimentos and Xignux.  Research areas will include nanotechnology, advanced materials, biotechnology and software, among others.
• Food Processing: Mexican snack foods manufacturer Bokados announced investment plans of approximately US$8 million in 2010 as part of an aggressive market expansion strategy.  The plans for this year include opening the company’s third production facility.
• Automotive: Chinese light truck maker ZX Auto will begin investing a planned US$100 million this year in the construction of a new manufacturing plant in the north western state of Baja California, according to state officials.  Baja California’s automotive manufacturing sector includes approximately 80 companies, including parts makers and maquiladoras.
• Paper: Consumer goods giant Kimberly-Clark’s Mexico subsidiary plans to invest US$100 million in plant and process upgrades this year in anticipation of a rebound in demand following a down 2009.  The company is projecting 7% sales growth in Mexico this year.

• Automotive:  Nissan and Volkswagen have announced plans to begin production on new models in Mexico this year, expanding current production.  Nissan will build a new compact model at its Aguascalientes plant, in addition to adding production of its new Micra model also at the Aguascalientes location.  Volkswagen will launch production of a mid-size sedan as well as new models of the Beetle and Jetta at its Puebla facility.
• Electronics: Electronics industry leaders Samina-SCI and Hewlett Packard have announced plans to expand operations this year in Jalisco state, site of Mexico’s leading electronics cluster.  Sanmina projects investment of US$10 million in new machinery and equipment for manufacturing, and Hewlett Packard is investing US$5 million in infrastructure upgrades to expand staff at its Center of Excellence in Guadalajara.
• Manufacturing: Danish cleaning equipment manufacturer Nilfisk opened a US$10 million facility in the central state of Queretaro.  The new plant will produce industrial cleaning machines.
• Airports: Airport operator Grupo Aeroportuario del Pacifico announced planned investment of approximately US$42 million for this year in infrastructure upgrades.  Of the group’s 12 airports in Mexico, those at Guadalajara and Los Cabos are slated to receive the largest share of the upgrade investment.
• Electrics: French electric equipment and process control component manufacturer Schneider Electric inaugurated a new Technology Innovation Center in the north eastern industrial city of Monterrey.  The new center, which will simulate various applications for Schneider equipment such as industrial automation, critical power and energy efficiency, joins the company’s existing facilities in Monterrey and Mexico City.
• Railroad: Mexico’s cargo railroad operators have announced investment plans totaling over US$325 million for 2010.  Operators such as Kansas City Southern de Mexico, Ferromex, Ferrosur, Ferrovalle and Ferroistmo plan to boost spending this year in areas such as maintenance, infrastructure development and expansion, urban facilities and new technology, among others.
• Automotive: Ford de Mexico announced joint investment together with its suppliers of US$3.1 billion to produce the new model Fiesta at Ford’s Cuautitlan plant outside Mexico City.  Production of the new model is slated to begin sometime around mid-2010.
• Renewable energy: The Mexican government’s Shared Risk Fund (Firco) plans an aggressive program of rural renewable energy infrastructure installation to be financed with support from the World Bank and the Global Environment Fund.  The Sustainable Rural Development Program includes plans to acquire and install 500 thermal solar systems, 300 biodigesters and 100 photovoltaic energy systems, in addition to carrying out 180 analyses of agricultural energy efficiency by 2012.

Throughout the early and mid-‘00s, in the course of participating in export promotion events in the United States, we were struck by the stampede of prospective exporters and manufacturers begging to be led to China.  And not just blender manufacturers either – we had little old ladies knitting doilies looking to offshore to Guangzhou to boost margin.   While there’s no question that China offered a lot of manufacturers very attractive opportunities for cost reductions, we suspect that some portion of those who went tearing off to China with stars in their eyes looking for “money for nothing” probably wound up with more of the latter than the former.  The big attraction, of course, was the low cost of labor.

According to a report by Boston Consulting Group cited by Reforma, in 2002 China’s average daily manufacturing wage was USD0.80, far below Mexico’s comparatively lavish USD3.00 at the time.  Double-digit average annual GDP growth since then, however, has helped drive wages steadily upward in China, while manufacturing pay has remained relatively stable in Mexico over the same period.  As a result, a gap in labor costs of over 250% between Mexico and China just a few years ago is projected to drop to under 20% in 2010.  When factoring in 4:00 a.m. conference calls, frustrating communications and the cost and time of shipping, China may now be losing some of its former luster for manufacturers looking to offshore to serve the North American and South American markets.  Mexico would do well to keep a close eye on items such as electricity costs, targeted technical education and other industrial location decision factors in order to take maximum advantage of any opportunities created by China’s unprecedented development surge.