Mexican president Andrés Manuel López Obrador (herein AMLO or El Peje) announced last week that work would begin Monday, April 29 to convert a military air base outside Mexico City for commercial aviation. When multiple sources jumped to point out that neither the master plan nor the required environmental impact assessment had been presented, the aggravated president agreed to push back start of work until June. If this barmy caper has a happy ending we will be a monkey’s uncle, but Dear Leader is determined so it looks like we will find out. Continue reading AMLO in zany refurb airport caper
Information collected from media reports over the last month:
- Vegetable oil: U.S. agricultural commodities trader Cargill expanded its grain processing plant in the central state of Hidalgo to include an additional production and bottling line. The US$16 million upgrade will produce vegetable oil principally to supply Walmart stores, the company reported. (Expansión, March 28, 2019)
- Railroad: Mexico’s Grupo México corporate group reported investment plans totaling approximately US$555 million to support its railroad subsidiaries Ferromex and Ferrosur. Areas targeted for upgrades include locomotive maintenance, track materials and rehabilitation, new rolling stock and related equipment and land purchases. (Reforma, March 27, 2019)
- Ports: Major new infrastructure under construction at the Port of Veracruz on Mexico’s Gulf coast will begin entering operation later this year, the Veracruz Port Customs Agents Association reported. The US$3.7 billion upgrade includes four new specialized terminals for fluids, bulk agricultural products, bulk mineral products and containerized and loose cargo. (Reforma, March 25, 2019)
- Oil refining: The Mexican government invited international companies to bid on the construction of a new oil refinery in the southeastern Gulf coast state of Tabasco. The project, estimated to require investment of US$6 – 8 billion, will include 17 processing plants, 19 storage tanks, a rail line and ship docking facilities. (Reuters, March 18, 2019)
- Manufacturing: Mexican construction finishings manufacturer Lamosa announced a US$100 million investment plan that includes US$23.3 million to support Mexico operations. The company produces ceramic tile, adhesives and flooring materials at 13 production plants in Mexico. (Reforma, March 14, 2019) Continue reading Recent and upcoming investment in Mexico
The Mexican retail sector registered a sluggish year in 2018, posting same-store sales growth of just 0.1% and all-stores growth of 3.5% for the year, according to the National Retailers Association (ANTAD). Retail performance showed deceleration at year-end, posting the slowest fourth quarter expansion since 2014. On the plus side, sales during Mexico’s four-day “Buen Fin “ (Black Friday) promotion in 2018 grew 8% with respect to the previous year, the national chambers of commerce, services and tourism (Concanaco Servytur) reported. On-line sales during the promotion jumped 50% for the same period, demonstrating ongoing advances in consumers’ shift to shopping on line.
ANTAD is adopting a cautious outlook for 2019, projecting a 2.2% increase in all-stores sales but a contraction of 1% in same-store sales for the current year. The growth of electronic commerce remains a leading trend for the industry, with Mexico striving to exceed US$20 billion in on-line sales for the year with the hope of surpassing Brazil as Latin America’s top e-commerce market. Industry analysts project that policies proposed by the new Mexican administration could provide a boost to retail. These include monthly stipend programs for qualifying members of segments such as youth, elderly and the disabled, as well as a 16% increase in the minimum wage. Bodega Aurrerá is expected to benefit in particular from these measures across its formats. Also, the new government reduced the VAT tax in the northern zone along the U.S. border to 8% from 16%, which is expected to provide a sales bump to store chains well established in the area such as Soriana, Walmart, Casa Ley, HEB and Super Norte.