Mexico in Brief
From Mexico in Brief Newsletter
AMAZON OPENS NEW CENTER IN MEXICO.
American e-commerce company Amazon has opened its third distribution center in Mexico, the largest in Latin America, located in the State of Mexico. The new center has the size of 18 soccer fields and, along with Amazon’s previous two distribution centers, required a total investment of around U.S.$125 million. In Amazon Prime Day 2019, the company broke its record of sales in Mexico, and the new center is aiming to continue growing its platform in the country.
BILLIONAIRE BOND PLACEMENT BY FEMSA.
Mexican bottler Fomento Economico Mexicano, or Femsa, has successfully placed a U.S.$1.5 billion bond for 30-year senior notes with a yield of 3.608%. The proceeds obtained from this placement will be used by Femsa for corporate purposes in general, improving the company’s financial cost and increasing their financial flexibility.
VIVA AEROBUS TO RECEIVE FINANCING.
Mexican low-cost airline Viva Aerobus recently announced that it entered into a capital subscription and financing agreement with an international capital fund, whose identity was not disclosed, for more than U.S.$200 million. Although the purpose of the financing was not revealed by the airline, increasing their passenger flow in up to 22% is among their projections for year 2020, by opening new routes and adding more aircraft to their fleet.
NESTLÉ BEGINS MODERNIZATION PLAN.
Swiss company Nestlé recently announced that it will invest approximately U.S.$700 million in modernizing its Mexican plants with state-of-the-art technology. The company’s modernization plan will increase its production capacity, streamline their processes and guarantee the responsible management of natural resources. Within the following years, Nestlé would generate more than 400 direct jobs in its Mexican plants, as well as 4,000 indirect jobs.
TWO NEW IBEROSTAR HOTELS ARE COMING.
Spain-based tourism group Iberostar has announced an investment of more than U.S.$200 million within the next three years for the development of two hotel complex in the Mexican beaches of Los Cabos and Punta Mita. The Punta Mita hotel will have 300 rooms and will begin construction in the second half of year 2020 aiming to begin operations by the end of year 2021, while the hotel in Los Cabos will be part of a complex with real estate development, hotels and a town for workers around the area, where Iberostar will develop 1,000 hotel rooms.
SOFTBANK CONTINUES INVESTING IN MEXICAN FINTECHS.
A group of investors led by Japanese SoftBank’s Latin America Fund will be investing approximately U.S.$125 million in Mexican fintech startup AlphaCredit, a financial technology platform providing consumer loans and financial solutions for SMEs in Mexico and Colombia. According to a press release by AlphaCredit, the investment will allow them to “continue its expansion and leverage the competitive advantages of its proven and profitable business model.”
IENOVA ANNOUNCED NEW OIL TERMINAL.
Mexican energy company Ienova has announced an investment of more than U.S.$159 million in an oil terminal located in the Mexican State of Sinaloa. The new terminal will begin operations this year and will have a storage capacity of up to 1.6 million gasoline barrels. Ienova is currently working in six other similar terminal projects which aim to contribute to Mexican national energy security by way of guaranteeing oil supply.
MEXICAN GOVERNMENT BEGINS YEAR 2020 WITH SEVERAL PLACEMENTS.
The Mexican federal government placed 1,500 million of investment units (UDIs) in the local market with a 3.5% coupon, and considering an UDI vale of approximately U.S.$0.35 per UDI as of January 1, 2020. Additionally, it also placed U.S.$2.3 billion in bonds in the international markets with a 3.25% coupon. Meanwhile, State-owned Pemex has issued U.S.$5 billion in bonds with 11 and 40-year maturities with a 5.95% and 6.95% coupon, respectively, which will be used to refinance Pemex’ existing debt.
FIRST MEXICAN LITHIUM MINE ON THE WORKS.
Canadian mining company Bacanora Minerals Ltd and Chinese company Ganfeng Lithium Ltd are working on developing the first lithium mine in Mexico, investing approximately U.S.$420 million in the first phase of development. Sonora Lithium is the name of the consortium created for this project, which will begin operations in year 2022 in the Mexican State of Sonora. According to a mining expert, the mine could potentially produce 17,500 tons of lithium initially and further reach 35,000 ton FIRST MEXICAN LITHIUM MINE ON THE WORKS.
mining company Bacanora Minerals Ltd and Chinese company Ganfeng
Lithium Ltd are working on developing the first lithium mine in Mexico,
investing approximately U.S.$420 million in the first phase of development. Sonora
Lithium is the name of the consortium created for this project, which will
begin operations in year 2022 in the Mexican State of Sonora. According to a
mining expert, the mine could potentially produce 17,500 tons of lithium
initially and further reach 35,000 tons per year.s per year.