• 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.

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.

• 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 200^th 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.

• Logistics: Costco Mexico, a joint venture between Mexico’s CCM and U.S.-based Costco Wholesale Corporation, inaugurated a major new distribution center in the central state of Hidalgo. The facility, built at a cost of approximately US$98 million, will serve Costco’s 32 Mexican stores.
• Automotive: U.S.-based Cummins, Inc. announced it will boost production at its Cummins Filtration division plant in San Luís Potosí, Mexico. The increase in filter production at the site comes as the result of consolidation of manufacturing operations at Cummins plants in other countries.
• Automotive: General Motors announced plans to increase production at its Mexico plants located in the states of Guanajuato and Coahuila. The hike in output of vehicles such as the Chevrolet Avalanche and Silverado and the GMC Sierra and Cheyanne, among others, is expected to help reactivate the area’s hard-hit autoparts supply chain as well.
• Beverage: The Coca-Cola Company announced grand plans to invest US$5 billion in its various Mexico operations over the coming five years. The announcement came at the inauguration of the US$200 million upgrade of the company’s Jugos Del Valle juice bottling plant in the State of Mexico, on the outskirts of Mexico City.
• Environmental: New legislation took effect in August requiring retailers to substitute biodegradable bags for plastic where plastic bags are provided to customers. Although the law gives businesses up to one year to begin complying, some major retailers have already begun switching to bags made from alternative materials.
• Automotive: General Motors de Mexico inaugurated a new manufacturing plant in the north eastern state of San Luís Potosí. The plant, built at a cost of US$300 million, will produce six-speed transmissions for GM vehicles.
• Logistics: Major Mexican grocery and general merchandise retailer Soriana announced plans to invest approximately US$18 million in upgrades to its distribution centers in the states of Jalisco and Nuevo León. Soriana plans to install advanced automation equipment in the facilities to increase operational efficiency.
• Electronics: U.S.-based electronics manufacturer Jabil announced plans to expand its Guadalajara production plant. The company, which operates plants at three locations in Mexico, will invest US$60 million in the Guadalajara expansion in the face of a projected 30% increase in its exports this year.
• Financial services: Spanish financial services giant Grupo Financiero Santander launched a new customer services call center in the central state of Queretaro at a cost of approximately US$192 million. The company is lauding its new facility as one of the most modern and technologically advanced in the world.
• Food processing: Mexican dairy product maker Chilchota Alimentos will invest US$10 million this year in the construction of a new processing plant in the northern state of Durango. The new facility, to be located in Mexico’s Laguna dairy region, is planned to bottle 100,000 liters of milk daily.
• Water management: Mexico City mayor Marcelo Ebrard revealed publicly that his administration is studying the possibility of privatizing the management of the city’s water supply, currently managed by the municipal government. The plan purportedly considers participation by multiple private companies in the distribution and billing of the city’s water system, which would presumably generate major upgrades in systems and equipment for water management.