Bordo Poniente closure brings opportunities and challenges

Destination unknown

Destination unknown

As Mexico City residents slowly returned to work and normal life after the holidays, we discovered we had a garbage problem.  Not just the bags of empty liquor bottles by the door; a real problem for the whole city and surrounding State of Mexico.  The largest solid waste disposal facility used for city garbage was shut down in December, and suddenly the city’s sanitation department wasn’t sure what to do with the garbage.

The dump in question, called Bordo Poniente, was closed with great fanfare on December 19, 2011 after over 25 years of service.  In line with Mayor Marcelo Ebrard’s ongoing effort to implement ecologically friendly public policies, city agencies developed a plan to recycle the site’s estimated 70 million tons of garbage in a number of ways.  According to the plan, the city will issue a tender for private companies to compete for a contract under which the winner will partner with government agencies to build a plant to harvest biogas from the decomposing organic waste.  Read the rest of this entry »

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Recent and upcoming investment

Information collected from media reports over the past month:

  • Telecommunications: Finland-based telecommunications technology provider Nokia Siemens Networks inaugurated a new Service Delivery Center in Mexico City.  The US$2.4 million facility will provide design, planning, optimization and assurance support for telecommunications networks in Latin America, according to the company. (Nokia Siemens Networks, December 7, 2011)
  • Metals: U.S.-based metals processor Ryerson Inc. recently opened a new processing center in the northwestern city of Tijuana.  The facility will provide services such as cutting, slitting and laser burning for the area’s large maquiladora and manufacturing industries. (Made in Mexico, Inc., November 7, 2011)
  • Aviation: Mexican airline VivaAerobus announced plans to invest US$20 – 25 million in 2012 for the acquisition of five to seven new aircraft.  The company has registered strong growth since its launch in 2006. (Mexican Business Web, December 3, 2011)
  • Mining: Canadian mining firm Excalibur Resources announced that it will proceed to develop a major gold and silver production facility at its Catanava mining property in Zacatecas, Mexico, following approval of permits by the Mexican government.  Plans for the development include the construction of office and warehouse space as well as crushing, milling, conveyance and laboratory installations. (Canadian Mining Journal, November 25, 2011)
  • Retail: U.S.-based electronics retailer Best Buy announced plans to double the number of its sales locations in Mexico next year.  Best Buy, which entered the Mexican market in 2008, plans to expand from eight to 16 stores in Mexico in 2012. (Reforma, November 29, 2011) 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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Hot trade pact action under the wire as year expires

Welcome friend

Welcome friend

Since the launch of the North American Free Trade Agreement (NAFTA) in 1994, the Mexican government has pursued additional trade liberalization pacts aggressively.  Remarkably, legislators recently managed to advance on three trade fronts before tearing off to have fun for the holidays.

The first step forward was the November 22 signing of a new single free trade agreement between Mexico and Central America, which our Mexico Today colleague Sean Goforth discussed in a recent post to Foreign Policy Blogs.  Economy Minister Bruno Ferrari and his team had a tougher time, however, with their effort to push through an expanded trade liberalization agreement with Peru.  The proposed pact spent much of this year under consideration in the Mexican Congress before being rejected by the Senate Trade and Industrial Development Committee on December 14, to the supreme aggravation of the Calderón administration.  Despite having the support of various industrial sectors, the Peru deal was initially blocked by influential agricultural interests over fears of increased competition from Peruvian avocados, beans, potatoes and other farm products.  Ferrari faced not only the vexation of the jilted Peruvians but a potential blow to Mexico’s free trade bona fides as it flirts with possible inclusion in the developing Trans-Pacific Partnership trade bloc.  In a surprising turnabout, however, the treaty squeaked through in a vote by the full Senate on December 15, and now goes to President Calderón for signing. Read the rest of this entry »

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Mexico pouring on the green energy initiatives

Plugged in

Plugged in

On the heels of its recently concluded year-long presidency of the United Nations Conference on Climate Change (COP16), Mexico is soldiering on with its sustainability policy blitz.  In late November, the Federal Regulatory Improvement Commission (Cofemer) issued its approval of proposed new regulations under which independent entities generating power from renewable sources may connect to the national electricity grid.  Last year, we reported with great satisfaction that the Energy Regulatory Commission (CRE) had created a contract that allowed independent producers of energy for their own consumption to connect to the grid via a net metering system.    The new regulatory document, under the nimble title “General Rules of Interconnection to the National Electric System for Generators or Permit-holders with Renewable Energy Sources or Efficient Cogeneration,” is intended to streamline the process and lower the overall cost of grid integration for independent producers.  The administrative, legal and technical requirements, formerly distributed among various prior documents published by different agencies, will now be incorporated into the single regulatory document.  The Energy Ministry (Sener) may now publish the new regulations in the Official Gazette, with the hope that facilitating the process will hasten the contribution of new and more environmentally friendly generating plants to the country’s energy supply.  If you feel you must, you can read the Cofemer’s final opinion on the new regulations here (oh go on, we did). Read the rest of this entry »

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Recent and upcoming investment

Information collected from media reports over the past month:

  • Beverage: Netherlands-based Heineken International, through its Mexican brewing operation Cuauhtemoc Moctezuma (CM), invested over US$37 million to boost sales of the brewery’s Carta Blanca beer brand.  Resources were channeled into areas such as a new returnable bottle, label design and delivery truck modifications.  CM was acquired by Heineken in 2010. (Vanguardia, October 28, 2011)
  • Energy: Mareña Renovables Capital, S.A.P.I. de C.V., controlled by an investment consortium led by Australia’s Macquarie Group, will build Mexico’s largest wind farm to date in the southern state of Oaxaca.  The 396 MW electricity generating site will supply energy to beverage giant FEMSA, which will co-finance construction with assistance from a US$72 million loan from the Inter-American Development Bank (IDB). (Inter-American Development Bank, November 24, 2011)
  • Logistics: Mexico’s rail freight operators are projecting combined investment of approximately US$350 – 450 million annually in the coming years, according to the Mexican Railroad Association.  Resources are targeted principally for modernization and upgrade of infrastructure. (Reforma, November 9, 2011)
  • Energy: Mexico’s Federal Electricity Commission (CFE) is projecting that public agencies and private companies will invest a combined US$10.5 billion to expand the country’s natural gas pipeline network.  Projects include eight new pipelines, which will help support planned conversion of power plants from fuel oil to natural gas. (Reforma, November 9, 2011)
  • Automotive: U.K.-based auto parts manufacturer GKN Driveline is projecting total investment in its Mexico operations at US$46 million for 2011.  The expenditures are focused on reinforcing metal forming, machining and assembly operations to increase production at the company’s three plants in the central state of Guanajuato. (Reforma, November 21, 2011)
  • Pharmaceutical: German pharmaceutical manufacturer Boehringer Ingelheim inaugurated a new production plant in the western state of Jalisco.  The US$10 million facility will produce biological veterinary products for poultry, swine and cattle applications. (NAFTA Works, November, 2011)
  • Retail: Mexico’s national retailers association ANTAD is projecting total investment of US$3.6 billion in new store openings and remodeling for 2011.  The sector has performed well this year despite the uncertain economic climate, with leading grocery and general merchandise chains Wal-Mart and Chedraui reporting total sales growth of 12% and 11.9%, respectively, through September. (Reforma, November 7, 2011) Read the rest of this entry »

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Mexico hosts Green Solutions international sustainability conference

carbon creditAs Mexico’s year-long presidency of the 16th edition of the United Nations Conference on Climate Change (COP16) drew to a close, ProMéxico hosted the Green Solutions conference and exposition November 23 – 25, 2011 in Mexico City.   The event consisted principally of three days of panel discussions on public policy related to climate change, amidst an exposition area featuring innovative products and services aimed at reducing greenhouse gas emissions and overall depletion the world’s natural resources.   The first edition of the Green Solutions conference took place during the COP16 international conference held in Cancun one year ago.

The conference provided an excellent opportunity for those involved or interested in climate change mitigation to exchange perspectives on the outlook for greenhouse gas reduction and learn about projects and initiatives taking place in various parts of the world.  With the COP17 conference kicking off in Durban, South Africa today, at the forefront of discussion is the question of what will happen once the Kyoto Protocol expires at the end of 2012.  The agreement currently establishes ostensibly binding greenhouse gas reduction targets for participating developed nations, and key signatories such as Japan, Russia and Canada are showing little enthusiasm for re-upping once the current period concludes.   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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Recent and upcoming investment

Information collected from media reports over the past month:

  • Automotive: German auto parts manufacturer Robert Bosch projected investment in its Mexico operations at US$78 million for 2011.  The resources are earmarked to support introduction of new technologies and preparation for the manufacture of new brake pad and battery products at the company’s 13 Mexico production locations. (El Informador, September 29, 2011)
  • Aerospace: Canadian aircraft maker Bombardier announced it will invest US$50 million to outfit its Queretaro plant to produce the aft fuselage for its new generation of long range business jets.  Mexico is now producing major composite structures for the company’s Learjet 85, such as fuselage lay-up and subsystem installation, wiring harness fabrication and installation, wing assembly and horizontal and vertical stabilizer assemblies. (The Montreal Gazette, October 25, 2011)
  • Recycling: Germany-based industrial services firm Ferrostaal AG announced plans to build a tire recycling plant in Mexico.  The facility will convert used vehicle tires into rubber granules for potential use in the manufacture of sports and recreation surfaces, soundproofing insulation or water hoses, among other uses.  The amount of investment in the new plant was not specified. (Ferrostaal, September 26, 2011)
  • Mining: Minera Autlán, subsidiary of Mexican mining group Grupo Ferrominero (GFM), is projecting investment in its Mexico mining operations of up to US$300 million over the next five years.  GFM’s energy subsidiary GFM Energía also plans to build three hydroelectric plants and one wind power generating plant in the coming years. (Reforma, October 6, 2011)
  • Steel: U.S.-based Steel Technologies announced plans to build a new steel processing facility in the northeastern state of Nuevo León.  The US$78 million plant is planned to provide steel cutting and surface treatment services for the region’s thriving automotive industry. (NAFTA Works, October 2011) Read the rest of this entry »

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