In past posts, particularly comparing Mexico to Brazil, we have noted how Mexico historically has shied away from seeking a high profile role in the international community. As a top-20 economy and major exporter, Mexico could be forgiven for raising its aspirations, as Brazil seemed to do during its recent run in the economic limelight. Particularly with President Peña’s major push to attract foreign investment over the past two years, now might be the time for some calculated moves to increase Mexico’s international role. If the current administration harbored any notions of this type, however, they are likely stalled for the moment, what with recent news coverage dominated by tales of corruption and violence. Nonetheless, as Mexican political leaders continue to treat foreign adventures with trepidation, Mexican businesses appear to be finding ever more sure footing abroad.
We have addressed this topic before, pointing out with satisfaction in 2012 how Mexican companies were showing signs of feeling their oats in international markets. To our ongoing satisfaction, we find that in 2014 this trend continued in healthy fashion. As we mentioned in the prior post, international expansion is nothing new to several Mexico-based multinationals. Companies such as Cementos Mexicanos (Cemex), Grupo Alfa and Gruma are well established as worldwide players, and global powerhouses Grupo Bimbo and América Móvil have made headlines in recent years with acquisitions abroad. Cemex, Bimbo and Gruma were all active again over the past year (See table below).
Judging from our unscientific survey of media reports throughout 2014, the food and beverage industries were among the top targets for Mexican takeovers or expansion in other countries. In addition to Bimbo and Gruma, dairy products maker Lala, beverage bottler and snack producer Arca Continental, pasta maker La Moderna and preserved foods manufacturer La Costeña made inroads outside of Mexico over the past year. Mexican food and beverage brands have long been mainstays in Latin America, but it appears that new players are increasingly targeting the U.S. market as well.
On the industrial side, the United States also received investment not only from longtime hemispheric construction powerhouse ICA, but from emerging players such as Rotoplas (water tanks) and Solartec (solar energy) as well. Well established Mexican industrial multinationals Cemex (cement) and Mexichem (chemicals) expanded their presence in Europe.
Perhaps most interesting to us in our informal findings is the growing expansion of Mexican entertainment and retail service companies. Cinema operator Cinépolis, reportedly now the world’s fourth largest in its category, continued its takeover binge with acquisitions in India, Brazil and Chile. Mexico’s second largest cinema operator, Cinemex, announced it will begin operations in the United States via a luxury complex in Miami. Innovative “edu-tainment” theme park operator KidZania, a perennial overseas investor, opened a new park in Turkey and claimed plans to add new countries soon to its growing list of locations. Finally, retail food service operator Alsea, which manages franchises under license in Mexico for brands such as Starbucks, Domino’s, Burger King and many others, jumped the pond to take a majority stake in a Spanish restaurant group. If this trend continues in the future, it will be interesting to see how well established some industrial and consumer brands become without global consumers realizing they are Mexican in origin.
The following table was compiled from media reports and company press releases throughout 2014. It is neither scientific nor comprehensive and is intended only to provide examples of investment in other countries by Mexican companies.
|Mexican company||Industry/Product||Estimated Value (USD)||Location||Deal|
|Cementos Mexicanos (Cemex)||Cement||$54 million||Czech Republic, Spain||Acquired production and processing plants from Holcim|
|Cementos Mexicanos (Cemex)||Cement||$340 million||Colombia||Establish cement production plant|
|Grupo Bimbo||Baking||$103 million||Canada||Acquired Saputo Bakery|
|Grupo Bimbo||Baking||$1.5 billion||Canada||Acquired Canada Bread|
|Grupo Bimbo||Baking||n/a||Ecuador||Acquired baker Supan|
|Grupo Lala||Dairyproducts||$90 million||Central America||Acquired production plants in Nicaragua, Honduras, El Salvador and Costa Rica from Nicaragua-based Eskimo|
|ICA||Construction||$60 million||USA||Acquired Facchina construction company|
|Gruma||Tortillas||$50 million||Russia||Establish a plant to produce tortillas and related products|
|Gruma||Processed foods||$15 million||Spain||Acquired food processor Mexifoods|
|Mexichem||Chemicals||$260 million||Germany||Acquired PVC manufacturer Vestolit|
|Rotoplas||Water tanks||$10 million||USA||Established rotational molding plant in Merced, California.|
|Solartec||Solar energy||$31 million||USA||Establish a solar cell manufacturing plant|
|Arca Continental||Beverage||$80 million||Ecuador||Establish a Coca Cola bottling plant|
|Arca Continental||Processed foods||$40 million||Ecuador||Acquired dairy products producer Tonicorp|
|La Moderna||Processed foods||$30 million||USA||Establish a pasta processing plant in Cleburne, Texas|
|La Costeña||Processed foods||n/a||USA||Acquired vegetable canner Faribault Foods in Minneapolis, Minnesota|
|KidZania||Theme parks||$21 million||Turkey||Opened edu-tainment theme park in Istanbul|
|Alsea||Restaurant franchising||$128 million||Spain||Acquired controlling stake in Zena restaurant group|
|Cinépolis||Cinema||$77 million||India||Acquired multiplex chain Fun Cinemas|
|Cinépolis||Cinema||n/a||Chile||Acquired multiplex chain Cine Hoyts|
|Cinépolis||Cinema||n/a||Brasil||Acquired multiplex chain Cinemais|
|Cinemex||Cinema||n/a||USA||Open a multiplex in Miami|
Source: Combined media reports.
Please do not use this table without attribution to Mexico Business Blog