GENERAL SITUATION IN MEXICO
Weekly Review I July 24, 2024
RELEVANT NEWS INDUSTRIES
AEROSPACE
Mexico recently participated in the Farnborough International Airshow in the UK with the aim of attracting investment to its aerospace industry. The Mexico Pavilion was inaugurated by the Foreign Ministry’s Global Economic Promotion department in collaboration with the Mexican Federation for the Aerospace Industry (Femia). Key figures like Femia’s President Carlos Robles Álvarez and others led the ceremony, attended by Economic Development Secretaries from several Mexican states, along with industry leaders and university representatives.
Rodrigo Morales Castillo, representing Foreign Secretary Alicia Bárcena, highlighted Mexico’s capabilities and commitment to the aerospace sector. At the airshow, Mexican officials engaged with major aerospace companies like BAE Systems, Embraer, and Safran, resulting in discussions about expanding operations and future investments in Mexico. The country’s aerospace industry has seen significant growth, with substantial foreign direct investment and a strong manufacturing presence, positioning Mexico prominently in global aerospace rankings.
The participation at Farnborough International Airshow underscores Mexico’s strategic focus on attracting investments that benefit its economy and society, reaffirming its status as a key player in the global aerospace market.
SOURCE: GOVERNMENT OF MEXICO
RELEVANT NEWS INDUSTRIES
EV:
BMW Group has announced a significant investment of 724 thousand euros across several Latin American countries, including Argentina, Brazil, Chile, Colombia, Costa Rica, Mexico, Panama, and Peru. This investment is aimed at enhancing the public charging infrastructure for electrified vehicles in the region. The initiative seeks to expand access to charging points for BMW and MINI electric cars, as well as BMW Motorrad electric motorcycles. Reiner Braun, President and CEO of BMW Group Latin America, highlighted the company’s commitment to an electric, digital, and circular future, emphasizing that every BMW and MINI model sold in Latin America comes with a personal or corporate charger. BMW Group is a leader in premium electric mobility and aims to further support public charger installations to meet growing customer demand for electromobility solutions.
SOURCE MEXICO INDUSTRY
NEWS BY STATE
BAJA CALIFORNIA
Baja California, led by Tijuana, has become crucial for attracting new investments, especially under the Nearshoring strategy. José López Castellanos from Grupo LOGIX highlighted the region’s dynamic industrial ecosystem, skilled bilingual workforce, and improving infrastructure as key factors driving high-value investments. The Nearshoring trend has bolstered economic growth in Mexico, facilitating trade optimization and enhancing operations across national and export markets. Local industries, like electronics and automotive, have adapted to global challenges by expanding production capacities. Government infrastructure initiatives in cities such as Tijuana and Mexicali further support the region’s role in export industries and national commerce.
SOURCE: UNIRADIO
SONORA
Governor Alfonso Durazo Montaño of Sonora has overseen significant infrastructure development across 19 municipalities with a 2.1 billion peso investment approved by the state congress in 2023. Progress stands at 60%, with 31 projects completed, 78 ongoing, and two set to begin. The initiatives focus on productive infrastructure in various cities, including roadways, social projects, hydraulic works, and highways. A total of 110 projects have been tendered, amounting to 2.085 billion pesos, with one project yet to be tendered worth 15 million pesos.
SOURCE: NOTIO SONORA
NEWS BY STATE
NUEVO LEON
Elon Musk announced that Tesla’s $5 billion gigafactory project in Santa Catarina, Nuevo León, Mexico, is on hold until after the US presidential elections in November. This decision is influenced by potential policy changes regarding tariffs on Mexican-produced vehicles, proposed by former President Donald Trump if re-elected. Despite earlier plans and discussions with Mexican authorities, Tesla has suspended further progress until the political landscape clarifies post-election. The company’s current focus remains on expanding production capacity at existing facilities worldwide.
SOURCE LA JORNADA
COAHUILA
The former National Steel facility in Monclova, previously owned by Altos Hornos de México, has been sold along with its buildings. Following the closure and liquidation of the company in February, a new Tierra Norte Industrial Park has been announced at the site. Despite efforts to obtain information, no executives or government officials were available. Local business chambers are unaware of developments, but preparations are underway to convert the site into an industrial park, offering rental opportunities for investors in Monclova and Frontera.
SOURCE: EL SIGLO DE TORREON
NEWS BY STATE
GUANAJUATO
Japan aims to solidify its position as Guanajuato’s primary trade partner, with Japanese companies in clean energy, automotive, and agribusiness sectors expressing interest in establishing operations in the state, according to Katsumi Itagaki, Consul General of Japan in Guanajuato. He highlighted the importance of advancing towards renewable energies under the new federal government, emphasizing the need for streamlined processes and permits to facilitate Japanese investments. Itagaki mentioned ongoing plans for Japanese firms to invest in clean energy production in Guanajuato, alongside the expansion of automotive plants producing hybrid vehicles for the US market by 2030.
SOURCE: EL SOL DE LEON
QUERETARO
Airbus, the French aerospace company, has announced plans to expand its operations in Querétaro, Mexico. This expansion aims to increase production of single-aisle commercial airplanes and grow the workforce to 800 employees by the end of the decade. The agreement was signed during the Farnborough Airshow, reflecting Airbus’s strategic commitment to Querétaro due to its competitiveness and skilled workforce. Local officials praised Airbus for driving innovation and economic growth in the region, highlighting the company’s role in promoting technological development and job creation.
SOURCE: MEXICO INDUSTRY
NEWS BY STATE
CDMX
Adal Ortiz Ávalos, president of Coparmex Mexico City, and Martí Batres Guadarrama, head of government of Mexico City, agreed to collaborate on creating economic conditions to foster prosperity, employment, and development for all social sectors. The meeting emphasized working towards a happy and prosperous Mexico City. Batres shared the meeting details on social media, highlighting the importance of a strong business sector. The meeting was attended by key figures, including José Luis Jiménez Barrera and Fernando Mercado. Ortiz also mentioned plans for close cooperation with the entire government cabinet and mayors.
SOURCE: FORBES
STATE OF MEXICO
Fitch Ratings reaffirmed the State of Mexico’s long-term rating at ‘AA+’ (mex) and ‘BBB-’, indicating stability due to its solid and diverse economic structure. Paulina Moreno, Secretary of Finance, highlighted that this decision reflects the government’s strong foundations, strengthened revenues, a historic budget with no public debt, and balanced spending. Fitch praised the state’s effective tax collection methods, including fiscal intelligence, technology, and municipal agreements, and noted the government’s sustainable public debt with favorable terms and conditions.
SOURCE: EL FINANCIERO
INVESTMENT NEWS
NORTH
INGETEK
With an investment of 6 million dollars, DEACERO inaugurated the 7th plant of its subsidiary INGETEK in Ciudad Juárez, Chihuahua, which will focus on rebar production. The number of jobs has not been disclosure.
ASK INDUSTRIES
The Italian company, with an investment of 33 million dollars, will generate between 1,200 and 1,500 jobs from 2024 to 2026 in Hermosillo, Sonora.
KBI DONGKOOK
The South Korean supplier company invested around 30 million dollars to complete a new expansion in Pesquería, Nuevo León.
SAF HOLLAND
The German truck manufacturer invested 33 million dollars, and it is expected that 270 new jobs will be created in Piedras Negras, Coahuila.
AIRBUS HELICOPTERS
Airbus will expand operations in Querétaro and increase the staff to new 800 jobs by 2030. The investment amount has not been disclosure.
MCDERMOTT
With an investment of 50 million dollars, McDermott, a company that constructs oil platforms in the Gulf of Mexico has resumed its activities in Altamira, Tamaulipas. The project will generate 900 jobs.
HOME DEPOT
In Tijuana, Baja California, Home Depot constructed the 8th store in the state, investing 113 million dollars. This store will also create 90 new jobs.
CENTER
UNIVERSAL SCIENTIFIC INDUSTRIAL
USI manufactures electronic products for industrial applications. They inaugurated their second manufacturing plant in Tonalá, Jalisco. The investment amount is 82 million dollars and will generate 3,000 new jobs.
NOVEM
Novem is expanding its plant in Querétaro, creating 180 jobs. The plant produces decorative parts for premium car interiors.
FERRERO
The company is evaluating the expansion of its plant capacity in Guanajuato with an investment of 350 million dollars.
NATIONAL
DFAC DONGFENG
The Chinese brand DFAC plans to invest in Mexico in an assembly plant, which could be ready by 2025. Neither the location nor the amount has been made public.
SOURCES: CLUSTER INDUSTRIAL, MEXICO INDUSTRY
LEGISLATIVE CHANGES AND INITIATIVES
ENVIRONMENT
• DECREE ISSUING THE ENVIRONMENTAL LAW OF MEXICO CITY
Presented by: Office of the Government of Mexico City
Purpose: Repeal the Environmental Protection Law, in effect since 2000.
Require environmental impact assessments for those undertaking works or activities with potential environmental effects.
Producers, companies, or business organizations complying with current environmental legislation can agree with the Secretariat on establishing self-regulation processes.
Managers of fixed sources and establishments (industrial, commercial, service, and entertainment) wishing to undergo an environmental audit must apply in writing to join the program and comply with resulting recommendations. The productive sector must develop sustainable production schemes, promote responsible consumption, and utilize post-consumer byproducts and waste, extending the materials’ lifecycle in the environment.
Granting concessions, permits, construction licenses, and land use, and all authorizations for water use and wastewater discharges will be subject to resource availability based on a feasibility study.
Status: 2024-07-18 - Published in the Official Gazette.
Nuevo León: Governor Samuel García published the State Climate Change Program for the State (PECC) in the Official Gazette of the State, which is composed of eight axes encompassing 26 strategies and 141 lines of action for mitigation, adaptation, and programming.
The axes are:
• Water security in a changing climate.
• Accessible, clean, and low-emission mobility system.
• Resilient urban system and sustainable buildings.
• Productive and low-emission industry.
• Waste, circular economy, and climate culture.
• A resilient natural system enabling neutrality.
• Transition to a clean and secure energy system.
• Programmatic Axis – Enable the implementation and monitoring of the PECC.
• The program is available here.
PRODENSA INSIGHTS
Explore our latest blogs and stay updated with valuable insights! Visit our website today: www.prodensa.com
THE EXPORT BOOM: REVOLUTIONIZING MANUFACTURING IN MEXICO
Mexico’s manufacturing sector is a powerful engine driving the country’s economic growth and international trade. Here’s a breakdown of its key aspects:
• Transformation & Growth: Mexico’s manufacturing journey started with import substitution, evolving into a globally integrated powerhouse.
• NAFTA/USMCA Impact: Free trade agreements with the US and Canada boosted foreign investment and global value chain integration, especially in automotive, aerospace, and electronics.
• Sectoral Diversity: Mexico exports a wide range of manufactured goods, with automotive leading the pack (23% of production, 4.5% of GDP). Other key sectors include electronics, aerospace, machinery & equipment, and chemicals & plastics.
• Geographic Spread: Manufacturing hubs are strategically located across the country, with clusters in the north (near the US), Bajío region (automotive & aerospace), and central-west (electronics & IT).
• Export Strength: Manufacturing is the backbone of Mexican exports, accounting for a significant portion of GDP and showing consistent upward trends.
• Shifting Export Landscape: The US remains the primary destination, but Mexico is strategically diversifying its markets (EU, Asia, Latin America) through trade agreements and product quality improvements.
LOOKING AHEAD:
• Positive Outlook: Experts predict continued growth in the manufacturing sector, with diversification and a focus on emerging areas like ICT, renewable energies, biotechnology, and advanced manufacturing.
• Challenges & Opportunities: Short-term moderation and challenges in some sectors are anticipated, but overall resilience and investments in innovation and infrastructure position Mexico for continued success.
• In essence, Mexico’s adaptable and growing manufacturing sector is poised to solidify its position as a global leader in the years to come.
VISIT OUR WEBSITE TO READ FULL BLOG