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GENERAL SITUATION IN MEXICO

Weekly Review #92 I February 16, 2022

MANUFACTURING INDUSTRY AMLO ANNOUNCES THAT TERNIUM WILL INVEST $1 BILLION PESOS IN NUEVO LEON On Tuesday, President Andres Manuel Lopez Obrador announced that Ternium, one of the largest flat and long steel producers in Latin America for the energy and automotive industries, will expand its plant in Nuevo, Leon, for which it will invest around one billion pesos. The federal president explained that yesterday he held a meeting with the company’s CEO, Paolo Rocca, who expressed his confidence in the country and would invest in expanding his company’s capacities. “Yesterday an investor in steel, Paolo Rocca, Ternium, came to tell me that they are going to expand their plant in Nuevo Leon and that they are going to invest one billion dollars, they are dedicated to the manufacture of pipes,” said Lopez Obrador at a press conference at the National Palace. The head of the Federal Executive pointed out that according to Ternium’s estimates, there is a promising

SOURCE: Forbes Mexico

economic and commercial future in Mexico, translating into new employment sources. “With their market analysis they see a promising economic and commercial future for Mexico, they came to inform me of this, this means jobs, it is also being confirmed, the foreign investment data will be released soon, and it continues to grow, in January there was a record in job creation, see how we are doing in February, the economy is growing,” he added. In 2017, this firm invested around 1.1 billion pesos for the installation of a new hot rolling mill at its industrial center in Pesqueria, Nuevo Leon, which has an annual production capacity of 3.7 million metric tons.

Ternium is a steel producer in Latin America; it has plants in Mexico, Brazil, Argentina, Colombia, as well as in the southern United States and Central America.

MANUFACTURING INDUSTRY THE PLASTIC INDUSTRY EXPECTS TO GROW 4.2% IN 2022, INJECTING $3.5 BILLION DOLLARS. Recent years have been difficult for the plastics industry, after in 2020 suffered a break with the pandemic of COVID-19, to fall 9%, and last year did not record growth. Still, for 2022 there is a more optimistic outlook and economic recovery. For this year, it is estimated that the plastics industry will have a growth of 4.2% with the reactivation of other sectors such as the automotive and construction industries, while it is estimated that the investment will be around 3.5 billion dollars, considering production of 350 tons. Although the business environment is not the best, investors’ confidence remains, says Jose Navarro Meneses, CEO of Tarsus and partner of the National Association of Plastics Industries (Anipac), in an interview with Forbes Mexico. “The environment may not be ideal, but there is a lot of confidence because the growth in demand for plastic manufacturing is consistent in the different industries, which are demanding substitution of materials,” says Navarro Meneses. He also highlights the benefits of the USMCA: “the quota of the North American economic region, where Mexico is located, has increased from 63% to 75% of products that have to be of regional origin (in the automotive sector); this benefits a lot, our country, due to its manufacturing vocation, 80% are exported to this region, so there is the confidence that we will have growth to meet this demand”.

SOURCE: Forbes Mexico

GOOD NEWS MEXICO TO DONATE 12,000 COVID-19 VACCINES TO ST. VINCENT AND THE GRENADINES AND DOMINICA

Mexico will donate a total of 12 thousand vaccines against COVID-19 to Caribbean countries, informed Marcelo Ebrard, head of the Ministry of Foreign Affairs (SRE). During Tuesday’s morning press conference, the official explained that the biological vaccines will be sent this week to Saint Vincent and the Grenadines (10 thousand doses) and Dominica (2 thousand doses). The antigens are from the pharmaceutical company AstraZeneca, packaged in Mexico, at the Birmex plant. “We have two pending donations to be made in the following days. St. Vincent and the Grenadines and

to Dominica in the Caribbean. They are vaccines manufactured in Mexico”, the Chancellor pointed out. A week ago, Ebrard had also announced a donation of vaccines to several countries in Latin America and the Caribbean, such as Guatemala, El Salvador, Honduras, Jamaica, and Trinidad and Tobago. All this, as part of the program ‘Mexico’s Solidarity with the World.’ He also reported on the donation of more than one million medical supplies to Guatemala. “We have to be in solidarity with others as they are being in solidarity with us,” said the head of the SRE.

GOOD NEWS

INTERNATIONAL COOPERATION In this context, Marcelo Ebrard informed that Mexico signed agreements with South Korea and Singapore during a working tour made by a Mexican delegation to Asia-Pacific, including: • Meetings with pharmaceutical companies to favor drug supplies. • Triangular cooperation with Central America for economic recovery. • Agreement with Korea to promote cooperation and universal access to vaccines in the G20. In addition, joint research projects with the School of Medicine of the National University of Singapore. VACCINATION IN MEXICO The Undersecretary of Health Hugo Lopez-Gatell announced that so far, Mexico has received 202 million 459 thousand 735 doses of vaccines against COVID-19 from seven different pharmaceutical companies since December 23, 2020. Of this total, 173 million, 37 thousand 874 have already been applied in Mexico, corresponding to 84 million adults with the primary scheme. In addition, it was reported that 90 percent of adults in Mexico have already been vaccinated against the COVID-19, as well as 52 percent of adolescents between 14 and 17 years of age.

SOURCE: El Financiero

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S Morning Press Conference Feb 9-15, 2022

COVID-19 For his part, Undersecretary Lopez Gatell reported the third week of a sustained reduction in cases, with a decrease of more than 40% in the incidence of positive cases. There is a clear and sustained reduction regarding hospitalizations, with a current occupancy of 30% of covid beds. CASE OF JOSE RAMON LOPEZ OBRADOR It was mentioned that the negative notes of the President’s son are false and that he considers it to be a campaign against the President. The President’s son reported that he works with the lawyer Daniel Chavez of Grupo Vidanta and has also been informed about the acquisition of the property that was published in the news. It was reported that many people in the movement disagreed with disclosing the income of a private person. In this sense, Andres Manuel Lopez Obrador commented that it is a conservative and coup reaction against change in the country. The President pointed out that his son has no relationship with PEMEX or any company linked to the government, but the matter is not a conflict of interest but a hit. Also, there is a lot of money involved. He asked Twitter to help make transparent how these types of campaigns. The President requested an investigation of the reporter who initially published the news.

SOURCE: https://www.youtube.com/channel/UCxEgOKuI-n-WOJaNcisHvSg

MEETING WITH JOHN KERRY, UNITED STATES REPRESENTATIVE FOR THE ENVIRONMENT The President informed that the initiative of the electrical reform was discussed; he pointed out that it will be the legislators who will decide if it is approved or not. They agreed to work together and established that he is in favor of clean energy. He reiterated that this initiative seeks not to increase prices. Likewise, they asked the President about possible effects on the Treaty between Mexico, the United States, and Canada due to the electrical reform. The President said that the Treaty is not affected by common sense, confirming the commitment to comply and have a positive relationship. The Ministry of Foreign Affairs will be in charge of working together with the United States for the transition to clean energies. In a month, a document of understanding will be ready. RELEVANT AND PENDING CONSTITUTIONAL REFORMS The President highlighted some constitutional reforms with which progress has been made, such as the revocation of the mandate, the right to a pension for the elderly, medical attention, free medicines, among others. There are pending issues, and that is why the electrical reform and the electoral reform, among others, are being promoted.

MEASURES TAKEN BY STATES IN MEXICO

BAJA CALIFORNIA The State of Baja California remains high-risk or orange light with 1,270 active cases in the past 14 days. The vaccination plan continues daily in different municipalities, and this week the booster vaccination began for people over 30 years old. The industrial sector had a work meeting with the Director of the Fire Department where a work agenda that benefits and guarantees the safety of our companies will be reviewed. Also, they had a meeting with the Mexicali customs administrator in order to present his work plan.

SONORA The State of Sonora remains as high-risk or orange light. Official reports confirm 635 new cases in the last 24 hours. The vaccination plan continues this week in different municipalities with the booster application for people over 30 years old and the complete vaccination schedule for the adult population.

MEASURES TAKEN BY STATES IN MEXICO

COAHUILA Although there is no official date for the application of the COVID-19 vaccine booster for people between 30 and 39 years of age in Saltillo, it is expected to be during that it will begin during the first days of March. TAMAULIPAS Tamaulipas went to the yellow covid traffic light during this week. The Secretary of Health urged not to lower the guard or relax preventive measures since the risk of contagion and the possibility of a resurgence of the disease remains high. NUEVO LEON After almost two years of taking classes at home due to the COVID-19 pandemic, the face-to-face return of students to schools in Nuevo Leon has reached 77.01 percent. Of 6 thousand public and private schools, 5 thousand 542 returned to classes, representing 91% of all the schools.

MEASURES TAKEN BY STATES IN MEXICO

AGUASCALIENTES After the suspension of on-site school activities decreed after the Christmas vacations, due to the growing wave of infections and deaths caused by COVID-19 and the Omicron variant in Aguascalientes, this Monday, February 14, the 20212022 school year was resumed on-site -almost- in a generalized manner. According to data from the Institute of Education of Aguascalientes (IEA), this day, more than 90% of the basic education schools (preschool, elementary and high school) returned to on-site activities, with almost full enrollment. However, to guarantee a safe return to the classroom, the state government published an agreement stipulating the sanitary protocols to be implemented in schools to prevent COVID-19 infections. School activities will be carried out in an orderly and gradual manner in all types and levels starting Monday, February 14, guaranteeing that the access and exit of the schools and recess schedules are carried out in an orderly and staggered manner to avoid the concentration of the school community and to comply with the sanitary protocols. Parents and guardians will be free to voluntarily decide whether or not to send their children to the on-site classes. However, school authorities, teachers, and educational support and assistance personnel must attend their corresponding school

on a compulsory basis during their regular working day. QUERETARO Queretaro The Autonomous University of Queretaro Chancellor Teresa Garcia Gasca reported that in the entity, deaths have increased in the last two weeks. “This is something very important because, in some way, we are living the accumulated effect, the people who were hospitalized weeks ago and today, unfortunately, have died,” she said. However, he commented that active cases continue to decrease, so he said this will be reflected in hospitalizations and deaths in the coming weeks. Based on the epidemiological curve of the last month, he said that in the entity, the positivity of the infections has decreased, and the general positivity decreased to 75 percent, that is, two percent in relation to last week. “The age ranges that have presented more infections are from 19 to 29 and from 30 to 39 years old, but in this case, for all age ranges, we are going down significantly,” he concluded. On the other hand, the Secretary of Health of the State of Queretaro informed that there are 2,898 COVID-19 positive patients with mild symptoms in the state and reported 29 deaths.

MEASURES TAKEN BY STATES IN MEXICO

GUANAJUATO In Guanajuato, a total of 16 people died last Sunday due to the coronavirus, 5 of whom did not have comorbidities. Of these 5, only one had a complete vaccination schedule, so the death rate in unvaccinated people is higher, according to data from the State Health Secretariat. The rest of the people had diabetes, hypertension, obesity, smoking, and other comorbidities, which commonly represent a higher risk of mortality in case of contracting covid. This fact was pointed out as regrettable by the State Secretary of Health, Daniel Diaz Martinez, because in Guanajuato, there have been very extensive immunization days for people to go to receive their schemes, remembering that in the entity there are still more than 14 thousand doses available for the first application. The percentage by the brand of vaccination in people who have been hospitalized despite having both doses indicates that patients with AstraZeneca brand represent 39.4 percent, Pfizer BioNTech 31.8 percent, CanSino 10.6 percent, and Sputnik V just under 5 percent. Currently, the number of hospitalized patients confirmed for COVID-19 is 197, adding to the 30,064 patients who have been hospitalized for coronavirus so far.

JALISCO With a 39.5 percent hospital occupancy rate of the beds available to treat COVID-19 cases, the Jalisco Secretary of Health, Fernando Petersen Aranguren, insisted that there is a downward trend. However, the state remains in orange traffic light at the national level. However, the state official admitted that it is complicated to make forecasts and say that the pandemic could be overcome in a couple of months because COVID-19 has demonstrated that it is capable of surprising us on more than one occasion. It is necessary to maintain the requirement of the COVID-19 vaccination certificate in most recreational activities to avoid new closures and to have some control of places that could be susceptible to an increase in infections, clarified the Secretary of Health of Jalisco, Fernando Petersen Aranguren. Representatives of businesses such as bars and nightclubs have requested that it no longer be a requirement because they consider that it is not very useful and generates economic damage to some of the sectors most affected by the pandemic.

MEASURES TAKEN BY STATES IN MEXICO

SAN LUIS POTOSI In the last 24 hours in San Luis Potosi, 12 new deaths from COVID-19 were recorded in six women and six men, including the case of a 27-year-old young man and nine adults over 60 years of age who lost their lives. Only one person had no risk factors when acquiring the virus, while the remaining 11 people suffered from pulmonary disease, diabetes, and arterial hypertension. Only four people who died from the coronavirus were fully vaccinated. The State Committee for Health Safety authorities also reported that 857 new SARS-CoV-2 infections were recorded, corresponding to 437 women and 420 men, including one child under one month old who acquired the disease and 424 people with a complete vaccination schedule. So far, 163,734 infections and 7,290 deaths have accumulated since the beginning of the contingency. The hospital situation remains low, with 155 patients admitted to a Covid Unit, 50 in stable conditions, 75 in serious condition, and 30 incubated with a high risk of death.

MEASURES TAKEN BY STATES IN MEXICO

STATE OF MEXICO The recovery of formal employment in Mexico’s states is uneven. In January 2022, three out of four states surpassed pre-pandemic levels in formal employment generation and even surpassed them, according to the Mexican Social Security Institute (IMSS) data. However, eight states had not recovered the number of jobs they had at the beginning of 2020, two months before the COVID-19 health crisis was declared. According to official data, during January of this year, 24 of the 32 states surpassed the thresholds registered before the pandemic in the number of workers insured before the IMSS: Baja California, Nuevo Leon, Chihuahua, Tabasco, Jalisco, State of Mexico, Sinaloa, Coahuila, Queretaro, Guanajuato, Sonora, Yucatan, Durango and Hidalgo as the most outstanding; but in total 484,988 jobs were added. Although January 2022 saw a record increase in formal employment in Mexico, eight states, led by Mexico City, Quintana Roo, Puebla, Veracruz, Guerrero, Oaxaca, Campeche, and Tlaxcala, have still not recovered the jobs they had in January 2020, two months before the declaration of the COVID-19 health crisis.

CDMX In September 2020, the Government of Mexico City presented its Economic Reactivation Plan after the COVID-19 pandemic, whose main axis is promoting public and private works through the investment of 76,267 million pesos. In total, 987,183 direct and indirect jobs were projected to be generated. However, the strategy has not yielded the expected results because it was not comprehensive and only focused on one area of the economy, says Artemisa Montes Sylvan, an economics specialist at La Salle University’s Business School. “Promoting public and private works is not a strategy. Other sectors of the economy should have been strengthened,” she said. In that sense, she believes the Mexico City government should have taken aggressive measures to boost agricultural production in municipalities such as Xochimilco and Tlahuac and industrial activities in Azcapotzalco and not just focus on construction.

ECONOMIC RECOVERY COPARMEX URGES AMLO’S GOVERNMENT TO ALLY WITH THE PRIVATE SECTOR TO BOOST ECONOMIC GROWTH. The year 2022 is the ideal time for the government of Andres Manuel Lopez Obrador to move away from political ideologies and become an ally of the private sector, allowing them to complement each other to achieve economic growth above 4%, urged the president of the Employers’ Confederation of the Mexican Republic (Coparmex), Jose Medina Mora. “If we want to revert the stagnation situation, the deficit in the number of jobs, the growing inflation and the lack of investment, so necessary; we must identify coincidences, increase dialogue and act with generosity in public and private sectors,” said the employers’ leader. Through his Coparmex Signal message, the business leader said: “We want 2022 to be the year in which we manage to overcome adversity by reaching an agreement and working so that economic decisions move away from any ideology and adopt a human face”. He mentioned that there are great lags, especially in the labor sector. “Although the jobs lost after 2020 have been recovered, we still have a backlog of about 2.2 million jobs that should have been generated to meet the demand of young people entering the labor market,” he said.

SOURCE: El Economista

TOWARDS THE “NEW NORMAL”

DISTRIBUTION OF DEATHS PER STATE DUE TO THE PANDEMIC

INFORMATION UPDATED ON FEBRUARY 14, 2022 AT 19:00 HRS LOCAL TIME.

NEW CASES REPORTED: 7,831

SOURCE: https://www.gob.mx/salud/

CONFIRMED CASES: 5,300,537

NEW DEATHS REPORTED: 146

CONFIRMED DEATHS: 312,965

INCREASE OF CONFIRMED CASES SINCE THE FIRST REPORT MAP WITH THE DISTRIBUTION OF THE INCIDENCE RATE OF ACCUMULATED CASES OF COVID-19 BY ENTITY OF RESIDENCE.

National rate 70.60

0 to 10.0 (24 states)

40.1 to 50 (0 states)

10.1 to 20 (5 states)

50.1 to 60 (0 states)

20.1 to 30 (2 states)

60.1 to 70 (0 states)

30.1 to 40 (1 states)

>70 (0 states)

Elaborated by Prodensa with information from the Health Ministry of Mexico

PANDEMIC’S SITUATION IN THE WORLD • As of February 14, 2022, globally there have been reported 410,565,868 confirmed cases (1,655,116 new cases) of COVID-19 and 5,810,880 deaths (8,654 new deaths*). Lethal rate: 1.4%. In the last 14 days, 34,578,378 cases were reported globally.

SOURCE: https://www.gob.mx/salud/

TOWARDS THE “NEW NORMAL” INCIDENTS OF CONTAGIONS IN THE POPULATION BY REGION AS OF FEBRUARY 14

DEATH INCIDENTS IN POPULATION BY REGION AS OF FEBRUARY 14

SOURCE: https://www.gob.mx/salud/

EHS

DAVID ANTUNEZ

WHEN TO STAY HOME CALCULATING QUARANTINE If you tested positive for COVID-19 or have symptoms, regardless of vaccination status • Stay home for at least 5 days • Stay home for 5 days and isolate yourself from others in your home. • Wear a well-fitted mask if you must be around others in your home. Ending isolation if you had symptoms • End isolation after 5 full days if you are fever-free for 24 hours (without the use of fever-reducing medication) and your symptoms are improving. • Ending isolation if you did NOT have symptoms • End isolation after at least 5 full days after your positive test. Take precautions until day 10 • Wear a mask • Wear a well-fitted mask for 10 full days whenever you are around others inside your home or in public. Do not go to places where you are unable to wear a mask. • Avoid travel • Avoid being around people who are at high risk

Environmental, Health, and Safety Director.

LABOR

ALVARO GARCIA HR, Vice President

SENSITIVE PERSONAL DATA The recent disclosure of personal data, including salary information, during the morning press conferences has created a public debate regarding the limits for exposing sensitive information of private citizens. Companies can learn from this situation and take preventive actions. Now that the public debate focuses on personal data and confidentially, it is a good opportunity for employers to train their executives on the use of sensitive information, the proper treatment of data, and validate that the mandated privacy notices are being used. It is also a good time to educate about the use of digital media and information technologies and train in the correct safeguarding of information and data protection mechanisms. The internal education efforts and training should include various areas of the companies. Apart from HR, other company departments also use and have access to sensitive personal data, including the medical department, the finance and payroll executives, and the legal area, among others.