Weekly Review I February 28, 2024

GENERAL SITUATION IN MEXICO

RELEVANT NEWS

MEXICO’S GDP TO GROW 2.5% THIS YEAR DRIVEN BY NEARSHORING

Mexico will achieve a Gross Domestic Product (GDP) growth of 2.5% this year, supported by the arrival of productive investments, as a result of the relocation of companies, estimated the Organization for Economic Cooperation and Development (OCDE).

This forecast is in line with the forecast made by the same entity in October and is at the bottom of the range estimated by the Ministry of Finance for this year, which is between 2.5 and 3.5 percent.

According to the agency, next year economic activity will continue to moderate, impacted by the expected performance of the United States, which will leave GDP growth at 2 percent.

At the presentation of the biennial report for Mexico, the OCDE Secretary General, Mathias Cormann, explained that if the country manages to make the environment for productive investments more competitive and favors the integration of SMEs and rural areas in value chains, the opportunity represented by the intention of multinationals to bring their operations to North America can be multiplied.

He recommended simplifying state and municipal regulations, reducing licensing barriers, and applying online operations to reduce the time it takes to open and operate a business. He suggested finding clean sources of energy generation and promoting an improvement in the rule of law.

In the Pan-American Hall of Flags of the National Palace, next to the Undersecretary of Finance, Gabriel

Yorio, he suggested using nearshoring as a lever to improve the educational system and strengthen the training of human capital.

In order to achieve all these changes, it is necessary to improve taxation and take advantage of the opportunities offered by taxes such as Income Tax, VAT, and Property Tax.

Representing the Secretary of Finance, Rogelio Ramírez de la O, the undersecretary acknowledged that Mexico has a long way to go as a member of the OCDE.

SOURCE: EL ECONOMISTA

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

February 21-27, 2024

LEGAL ISSUES

• Reform to the INPI: Adelfo Regino, the head of Mexico’s Instituto Nacional de los Pueblos Indígenas (INPI), announced President López Obrador’s initiative to recognize the rights of indigenous and Afro-Mexican communities. The initiative aims to acknowledge Mexico as a pluricultural and multiethnic nation and empower these communities with legal rights and their own heritage. It strengthens their self-determination and autonomy across various aspects including governance, cultural preservation, language, and intellectual property. The government will be obligated to allocate budget, protect cultural heritage, provide culturally relevant health services, ensure rights of indigenous and Afro-Mexican women, and consult them on matters affecting them. Additionally, plans include creating a General Law to regulate these issues and harmonizing local laws.

• Energy Reform: President López Obrador emphasized the need to present an energy reform to strengthen the public company CFE, prevent electricity price hikes, and counter ongoing privatization efforts. The reform aims to amend the constitution to bolster both CFE and PEMEX, preventing a return to neoliberal policies and corruption. Secretary of Government Luisa María Alcalde Luján stat-

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

ed that the reform would clarify that the electrical system and public internet service are not monopolies. Manuel Bartlett Díaz highlighted the importance of energy sovereignty and criticized the current system’s flaws, proposing changes to prioritize public interests over private ones. The reform seeks to ensure social justice, prevent private companies from overshadowing state enterprises, and guarantee affordable public services like electricity and internet access.

• Austerity Reforms: Secretary of Government Luisa María Alcalde discussed President López Obrador’s initiatives on austerity, salary caps for officials, and eliminating autonomous bodies. The proposals aim to establish republican austerity, clarify salary caps, and redistribute savings to the IMSS pension system. The plan also involves dissolving redundant autonomous bodies to streamline government functions. Alcalde provided examples, such as the INAI, COFECE, and CONEVAL, suggesting their functions be integrated into other government departments for more efficient operation.

AGRICULTURE AND ENVIRONMENT

• Transgenic Corn: The president expressed unfamiliarity with the “NON-GMO” label on U.S. cereal boxes and promised to investigate its absence in Mexico. He mentioned failed attempts to conduct joint corn studies with the U.S. and highlighted that Mexico prohibits genetically modified corn for human consumption, allowing only white corn.

MEDIA AND INFORMATION

• New York Times Article: The president displayed an “ultimatum” that the New York Times correspon-

dent in Mexico gave to Jesus Ramírez Cuéllar, to respond to a series of questions related to another investigation regarding the alleged financing of resources from drug trafficking to his 2018 campaign and the alleged involvement of his children and collaborators. In response, the president pointed out that the same report indicates that the investigation was closed and he was responding to several of the questions, reiterating that the accusations are false and in no way represent an impairment to the bilateral relationship with the United States. Also, the president stated that revealing the phone number of the New York Times correspondent in Mexico was not a mistake, as he believes the journalist is not in danger. He denied violating personal data laws and criticized the media for biased reporting. Additionally, he questioned the New York Times for publishing false information about him and his family, emphasizing his administration’s support for freedom of expression and denying any censorship.

ECONOMY AND TECHNOLOGY

• Pemex debt: The president addressed concerns about tax forgiveness for PEMEX, explaining that the

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

reduction in taxes from 65% to 30% aims to support the company’s rescue. He highlighted PEMEX’s significant contributions and outlined measures taken to strengthen its finances, including increased revenue, investments in assets like refineries, and a rise in oil production. The president emphasized Mexico’s low debt levels during the pandemic and asserted that the country no longer relies on international financial institutions. He criticized Moody’s downgrade of PEMEX’s rating, arguing against a neoliberal model and emphasizing the importance of domestic oil processing.

• Meeting with BlackRock’s CEO: The president referred that during the visit to Mexico of Blackrock’s CEO, Larry Fink, on February 22nd, they both discussed the issues affecting the world, with one of the most important being the excessive consumption of fentanyl in the United States by young people. He considered this to be an issue of education, a problem of “family disintegration.” He pointed out that he proposed to the businessman the design of a plan that includes the granting of scholarships to counteract conditions of susceptibility to violence and encourage the continuation of studies.

POLITICS AND ELECTIONS

• Electoral Reform: Secretary of Government, Luisa María Alcalde, highlighted that Mexico’s electoral system is one of the most expensive globally, exceeding several countries. She proposed reforms aiming to streamline the system, including reducing public funding for political parties by half and eliminating specific action budgets, resulting in significant savings. Other proposed reforms include creating a National Institute of Elections and Consultations (INEC), reducing the number of councilors,

eliminate 200 deputies and 64 senators, abolishing state tribunals, and allowing infrastructure projects to be subject to popular consultations. Additionally, the reforms aim to lower the required participation percentage for binding popular consultations and allow political parties to register every 3 years instead of every 6.

• Release of Emilio Lozoya: Regarding Emilio Lozoya’s case, it was highlighted that he was granted procedural freedom only for the Odebrecht case on February 20, refuting media claims about his complete release. The president emphasized that legal matters should be reviewed by the Attorney General’s Office, attributing failures in such cases not to the government but to the judiciary’s leniency towards white-collar criminals and organized crime suspects. He criticized the judiciary for serving elite interests, particularly in protecting foreign companies involved in the country’s electricity industry. The president advocated for judicial reform through popular vote selection of judiciary members. Additionally, the president discussed Odebrecht’s bribery schemes in Latin America, highlighting Lozoya’s involvement in Mexico’s presidential campaign.

• Conflict between AMLO and YouTube: President López Obrador respected YouTube’s decision to

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

remove his morning conference but criticized it as authoritarian censorship. He claimed that YouTube’s actions were influenced by conservative figures linked to a political party and highlighted a double standard in applying community guidelines, citing past instances of slander against him and his family without repercussions. He expressed his intention to contact YouTube’s owners regarding the issue.

INTERNATIONAL RELATIONS

• Mexico-United States relationship: President López Obrador mentioned a call with President Biden, highlighting discussions on migration policy. Proposed measures include regularization of long-standing Mexican residents in the US, allocating funds for migration in Latin America and the Caribbean, suspending sanctions on Cuba and Venezuela, and maintaining a respectful relationship without building a border wall. He noted a positive relationship with the Biden administration and Ambassador Ken Salazar, contrasting it with a single issue with the Trump administration regarding tariffs on Mexican imports.

• North American Leaders’ Summit: President López Obrador stated that the date for the North American Leaders’ Summit is not yet set. This week, Mexico’s Secretary of Foreign Affairs will visit Washington and Canada to discuss economic and migration cooperation. The administration has prioritized respecting Mexican migrants in the U.S. and Canada. The Summit will focus on regularizing “Paisanos” and highlighting progress in economic integration. Mexico remains the US’s top trading partner, with record foreign investment. López Obrador emphasized Mexico’s openness to dialogue with all governments while criticizing the removal of Peru’s

President as a technical coup. Relations with the U.S. are strong, despite past differences with the Trump administration. López Obrador also mentioned reducing international travel, except for attending the Leaders’ Summit.

NEWS BY STATE

BAJA CALIFORNIA

During the First U.S.-Mexico Semiconductor Collaboration Forum, held at Intel’s Design Center in Guadalajara, Baja California was announced as the next venue for this event, in recognition of its leadership in the strategic sector, informed the Secretary of Economy and Innovation, Kurt Honold Morales.

He mentioned that Baja California has actively participated in events such as the North American Semiconductor Conference, held last year in Washington, D.C., convened by Arizona State University (ASU) and the Semiconductor Industry Association (SIA), which brought together executives, federal officials and representatives for a day of dialogues.

SOURCE: EL MEXICANO

SONORA

The national income received by Sonora’s export industry, excluding manufacturing, grew by 45.7% in one year, according to information published by the National Institute of Statistics, Geography and Informatics (INEGI).

This classification includes reports from establishments engaged in activities such as agriculture, mining, commerce, and services; which, at the end of 2023, reported revenues originating in the domestic market of 7,846 million 148 thousand pesos.

SOURCE: EXPRESO

NEWS BY STATE

NUEVO LEÓN

The Nuevo León Chamber of the Transformation Industry (Caintra) reported that in January 2024, manufacturing had the second-highest number of jobs created in more than two decades.

At the beginning of 2024, Nuevo Leon was positioned as the state with the most new jobs, which translates into greater welfare for the people of Nuevo Leon, who are able to obtain a livelihood for their families, said the business organization.

SOURCE: FORBES

COAHUILA

With an investment of 300 million pesos, the first stone was laid for the “Aeropuerto” Industrial Park, located on the Carlos Salinas de Gortari Highway in the municipality of Frontera, Coahuila.

The park will have a capacity for around 120,000 square meters of construction in industrial buildings, which seek to attract national and foreign investments for the economic and labor development of the state.

SOURCE: MEXICO INDUSTRY

NEWS BY STATE

TAMAULIPAS

During 2023, exports in Tamaulipas amounted to 11 billion 176 million dollars.

This was announced in a meeting between the governor of the state, Américo Villarreal, with the president of the National Council of the Maquiladora and Manufacturing Export Industry (Index), Humberto Martínez.

The purpose of the meeting was to identify collaboration opportunities to promote new investments and expansions.

In a press release, the state government said that the potential of the entity to increase its exports in the Maquiladora, Manufacturing and Export Services Industry (IMMEX) was highlighted.

They agreed on the need to take advantage of the opportunities generated by Nearshoring.

CHIHUAHUA

The year 2024 will be an economic opportunity for the construction sector, as announced by the president of the Mexican Chamber of the Construction Industry (CMIC) Julio Cesar Mercado Rodriguez, with the creation of five industrial parks.

In this sense, the leader of the builders commented that large investments from the private sector are coming to Chihuahua; manufacturing companies will expand their industries.

SOURCE: ENTRELINEAS

SOURCE: THE LOGISTICS WORLD

NEWS BY STATE

AGUASCALIENTES

Tere Jiménez, governor of Aguascalientes, held a meeting with Japanese diplomats and businessmen to reaffirm ties with Japan.

This event was attended by the Consul General of Japan in Leon, Katsumi Itagaki, and the representative of the Japanese Chamber of Commerce and Industry of Mexico in Aguascalientes, Koji Tabata.

SOURCE: SDP NOTICIAS

JALISCO

It is estimated that 1.2 billion pesos will arrive in Jalisco this year in investments from companies that will create around 65,000 jobs, says the Public Affairs Manager of Coparmex, Dario Loria:

“Jalisco has had a vocation in the part of the technology industry, software development, the part of artificial intelligence. Just in this transition that Jalisco had before from a part of more manufacturing has become mindfacture, where we already have software development, artificial intelligence, the part of agriculture is an important part”.

SOURCE: NOTISISTEMA

NEWS BY STATE

GUANAJUATO

In the last five and a half years, Guanajuato has established itself as a national model in areas such as economic, agricultural, and rural development, tourism, and innovation.

In economic development, Guanajuato has positioned itself as the fifth-largest economy in the country. It is the first place in exports as a non-border entity. And it registers 7,000 million in investment.

SOURCE: NDL NOTICIAS

QUERÉTARO

The state government is planning a tour in March to promote Querétaro to businessmen in Texas, in the United States, as part of the international missions it will undertake this year.

During this trip, the Secretary of Sustainable Development (Sedesu), Marco Antonio Del Prete Tercero, stated that he will seek to increase the links between the aerospace industry in Texas and Querétaro.

SOURCE: EL ECONOMISTA

NEWS BY STATE

CDMX

The Mexico City Film Commission (CFILMA) presented the “Audiovisual Capital of Latin America” document in collaboration with the Mexican Association of Filmmakers (AMFI). The document highlighted the significant economic impact of the audiovisual industry in Mexico City, with over $2.5 billion in investments and half a million jobs generated from 2019 to 2023. The presentation also announced the launch of the Cinematographic and Audiovisual Industry Certification (ICA Certification) to ensure good practices in audiovisual production companies, with eleven companies already committed to certification.

SOURCE: ADLATINA

STATE OF MEXICO

Hidalgo-based companies have the opportunity to join the Metropolitan Automotive Cluster, aiming to boost the automotive sector in Hidalgo, Estado de México, and Mexico City. The initiative promotes collaboration, innovation, and leveraging existing human capital in the region. Secretary of Economic Development Carlos Henkel invites entrepreneurs to join, emphasizing Hidalgo’s work in electromobility. Elisa Crespo Ferrer, president of the Automotive Cluster of Estado de México, highlights the importance of inter-state collaboration for sector competitiveness. The meeting aimed to foster synergies and promote automotive industry development in Hidalgo, encouraging participation in the cluster for efficient project implementation and economic growth.

SOURCE: LA JORNADA

INVESTMENT NEWS

ASPEN AEROGEL CONSOLIDATES MEXICO’S ELECTROMOBILITY HUB

Apodaca, Nuevo León, Mexico – 22 February 2024

– Aspen Aerogels, a pioneer in the development of innovative aerogel technology, inaugurates two state-of-the-art electromobility manufacturing facilities in Apodaca, Nuevo Leon, Mexico. Originating from Massachusetts, Aspen is a technology leader in sustainability and electrification solutions. The Company’s aerogel technology enables its customers and partners to achieve their own objectives around the global megatrends of resource efficiency, e-mobility and clean energy.

The company inaugurated two facilities in the Monterrey metropolitan zone. The first plant starts the conversion process of the aerogel rolls. The second completes the assembly of the final product, which is an encapsulated aerogel that is sent to its customers, among them: General Motors, Toyota, Audi, Scania, Stellantis-ACC and Magna.

The strategic move will generate 1,000 jobs for the local community. This marks a significant step forward in fostering economic growth and technological advancement in the region. Additionally, the investment

Prodensa’s President, Marco Kuljacha, with Aspen Aerogel executive team and government officials in the ribbon cutting ceremony on February 22, 2024 in Apodaca, Nuevo León.

INVESTMENT NEWS

from Aspen Aerogel will further consolidate the electromobility hub in Monterrey. It will create robust synergies between U.S. and Mexican supply chains and bolstering the electric vehicle (EV) industry across the United States and wider North American territories.

Prodensa is proud to partner with Aspen Aerogels on The Mexican Journey. We take pride in our partnership with Aspen. It signifies not only our collaborative efforts but also our shared commitment to advancing electromobility in the region.

About Aspen Aerogel

Aspen Aerogel is a leading provider of aerogel technology. They offering innovative solutions that enhance energy efficiency in a wide range of applications. The company was founded in 2001 and is headquartered in Northborough, Massachusetts. Aspen’s mission is to revolutionize industries through the application of aerogel technology, contributing to a cleaner, more sustainable world.

SOURCE: PRODENSA

Aspen Aerogel and Prodensa teams.

Aspen Aerogel CEO, Don Young, with Prodensa’s President, Marco Kuljacha.

INVESTMENT NEWS

NORTH

BBVA

The banking services company inaugurated a new headquarters in Monterrey with a 33 million dollar investment. The project will relocate 553 jobs in the new corporate facility.

GRUPO INMOBLIARIO MTY

The construction of a shopping center complex named Canada City Center has been announced, with an investment of 1.15 billion dollars. The number of jobs that will be created has not been disclosed yet.

AEROPUERTO INDUSTRIAL PARK

The government of Coahuila announced the groundbreaking of a new industrial park with 17.5 million dollars in Frontera, Coahuila. The number of jobs that will be created has not been disclosed yet.

CENTRAL MEXICO

KIRCHOFF

The German company announced the groundbreaking of a new facility in San José de Iturbide, Guanajuato with a 40 million dollars investment. The project is set to create 300 jobs in the region.

CHANG SUNG CORPORATION

The metal dust manufacturing company announces a 13.9 million dollar investment in Querétaro. The number of jobs that will be created has not been disclosed yet.

AMAZON

The company announced the investment of 5 billion dollars for new Data Center Hub in Querétaro. The investment will take place over the next 15 years. The number of jobs that will be created has not been disclosed yet.

CDMX

SUMITOMO ELECTRIC WS

The automotive company announces an investment of 10 million dollars for a wiring harness production in Cunduacán, Tabasco. The project estimates the creation of 650 jobs.

SOURCES: CLUSTER INDUSTRIAL, MEXICO INDUSTRY