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Mexico in Brief, our monthly newsletter, is available in this section. Our Mexico in Brief summarizes the most relevant business news in Mexico, and also lists the main Mexican economic indicators. Our file is organized by issue number and issue date. Please consult it at your convenience and send us any comments through the link appearing below, or emailing us at .(JavaScript must be enabled to view this email address).
The Mexican Ministry of Education recently announced the requirements for the national bid for the lease of computers which will be installed in 163,000 classrooms of the 5th and 6th grades throughout the country. The Ministry of Education further announced that the lease could have a maximum lease price of approximately U.S.$1.6 billion for the five-year lifespan of the agreement.
Mexican-based Grupo Aeroportuario Centro Norte, or OMA, will invest approximately U.S.$196 million over the next five years to modernize the infrastructure of the 13 airports it operates and manages in Mexico. The company further announced that it will work to expand its business and expects a two percent increase in the flow of passengers in its airports.
Wal-Mart de Mexico, a subsidiary of U.S.-based Wal-Mart Stores Inc., recently announced that it concluded its investment plan in the Mexican State of Nuevo Leon for 2011, investing approximately U.S.$142 million and creating approximately 2,000 new job positions.
Abengoa Mexico, a subsidiary of Spanish-based Abengoa, recently announced that it will construct an electric power station in the Mexican State of Morelos for approximately U.S.$440 million, per a bid awarded to it by the Mexican Federal Electric Commission, or CFE. The power station is scheduled to be operational in two years and it will have the capacity to supply energy to approximately 280,000 homes.
Mexican-based hotel chain Grupo Posadas recently announced that it plans to invest approximately U.S.$500 million to open 35 hotels in Argentina, Brazil, Peru and Uruguay. The company further announced that their objective is to increase their availability in the region from 15 to 50 hotels of their Caesar Park, Caesar Business and One Hotels by 2016. Grupo Posadas currently operates 115 hotels, the majority of which are located in Mexico.
Monterrey-based Coca-Cola Femsa recently announced its merger with Corporación de los Ángeles, after merging with Corporación Industrial Mexicana last September. The merger transaction was valued in approximately U.S.$785 million, including an assumption of debt for approximately U.S.$144 million. In other related news, Coca Cola-Femsa recently announced its third merger transaction of the year with Grupo Fomento Queretano’s beverage unit, a transaction valued in approximately U.S.$471 million. With these recent merger transactions Coca-Cola Femsa increases its participation in the Mexican market to 54%.
Mexican mining giant Grupo Mexico recently announced that it will invest approximately U.S.$550 million in the construction of two electric generating plants for its companies Grupo Mexicana de Cobre and Buenavista del Cobre, located in the Mexican State of Sonora. The plants, contracted to be built by German-based Siemens, are expected to be operational in 2014, supplying electricity to all cooper mines of the company. In other related news, the railway business unit of Grupo Mexico, comprised of Ferromex and Ferrosur, recently announced that it foresees an investment of approximately U.S.$284 million for railway and train maintenance for 2012.
Mexico is currently the second country in Latin America holding Clean Development Mechanism, or CDM, projects financed through Certified Emission Reduction or CERs. Each CER entitles the emission of one ton of carbon dioxide. Mexico is followed by Chile, Colombia Argentina, Peru and others. Mexico’s increase in clean businesses allows companies and other legal entities to obtain and sell surplus CERs to other companies in other countries in the international market.
Televisión Azteca, a subsidiary of Mexican Grupo Salinas, recently announced that it was awarded a bid for an undisclosed amount for the construction and operation of a fiber-optic network in Colombia. The Colombian government will contribute approximately U.S.$230 million for the construction of the fiber-optic network.
Mexican President Felipe Calderon recently announced that the Mexican government will invest approximately U.S.$10.5 billion in the construction of approximately 4,500 kilometers of natural gas ducts, a project which is scheduled for completion in 2018. This energy infrastructure project will allow certain Mexican states to have a constant supply of natural gas, and in some cases, to duplicate their current flow capacity to benefit industrial and domestic users.
Mexican-based Mexichem recently announced that it made an unsolicited conditional offer for the acquisition of Wavin N.V., a leading supplier of plastic pipe systems in Europe, for an amount of €8.50 per share. Notwithstanding Wavin’s share increase after receipt of the offer, it is estimated that Wavin’s book share value is of approximately €11.54 per share, resulting in an estimated total acquisition value of approximately €750 million. Mexichem is a leader in the chemical, petrochemical and tube manufacturing businesses in Mexico.
Mexican-based Cinemas de la República, commercially known as Cinepolis, recently announced its plan to invest approximately U.S.$284 million in the expansion of its movie theater business in Brazil, taking advantage of the scarce availability of movie theaters per capita in the country, if compared to its Mexican domestic market. Cinepolis is currently the fourth largest movie theater chain in the world, with operations in Mexico, Guatemala, El Salvador, Costa Rica, Colombia, Peru, India, the United States of America and Brazil.
Mexican-based Concesionaria Vuela Compañía de Aviación, commercially known as Volaris, recently announced the execution of a memorandum of understanding with European Aeronautic Defence and Space Company N.V., or EADS, for the acquisition of 44 new Airbus A320 aircraft, involving an investment of approximately U.S.$3.7 billion.
Comercializadora Capo recently announced its investment of approximately U.S.$149 million for the construction of a solar energy farm in the Mexican State of Jalisco, which will harbor approximately 124,200 photovoltaic power modules. The company plans to conclude the solar energy farm by April 2013, at which time it will become the largest solar farm in Latin America. The company further announced that it will be selling its clean energy to the Mexican Comisión Federal de Electricidad, or CFE, and to private companies.
The Mexican authorities have announced that they will publish a bid for the construction of a new highway that will connect the municipalities of Palmillas and Apaseo, in the Mexican state of Queretaro. This highway will be of 86.5 kilometers length and is expected to require an investment of more than U.S.$200 million, as announced by the Mexican Secretary of Communication and Transportation.
The Mexican Federal Government announced new rules through which maquila companies have been granted with an extension in certain tax benefits designed exclusively for that sector. Among other benefits, the decree allows the maquila companies to continue paying for two more years the IETU, or flat rate tax, using the same base that applies to the ISR, or income tax. This tax benefit will be applicable to approximately 6,400 companies which are part of the IMMEX program.
Braskem, the Brazilian petrochemical company, has started operations for the construction of a new plant in Mexico which will produce 1.05 million tons of ethylene and polyethylene per year. The construction will start in 2012 and the production is planned to begin during the first quarter of 2015. This project represents a cost of approximately U.S.$3 billion, and includes a partnership with Mexico’s Idesa with 35% of the total project.
Mexico-based Grupo Ferrominero announced that it has invested more than U.S.$100 million in the construction of the new hydroelectric plant Atexcaco, in the Mexican state of Puebla. The plant is expected to reduce the electric cost of its affiliate company Minera Autlán by approximately 20%. . The hydroelectric plant will have a capacity of producing 211 gigawatts per hour of energy per year, which results in the elimination of the resulting outcome of 97,000 tons of CO2.
Mexican-based global baker Grupo Bimbo recently agreed to acquire the Spanish and Portuguese operations of Sara Lee for approximately U.S.$154 million. The transaction also includes other brands, such as Silueta, Ortiz, Eagle and Martinez, as well as seven plants and more than 800 distribution routes. With this acquisition, Grupo Bimbo will recover its business and presence in Spain.
Japan-based Mazda Motor Corporation recently announced that it will invest approximately U.S.$500 million in the construction of a new manufacturing plant in the Mexican State of Guanajuato. Mexico was the elected country to house Mazda’s first Latin American plant due to its access to international markets as the United States of America, South American and European countries, as well as Israel. The new plant will generate approximately 3,000 new job positions.
Soriana Hiper, one of the brands of Monterrey-based retailer Organización Soriana, the company will open, during the next year, five new market stores in its hyper format in Mexican developing cities, involving a total investment of approximately U.S.$70 million, and the generation of approximately 250 new job positions. These hyper market stores have up to 10 thousand square meters of retail area.
Monterrey-based Coca-Cola Femsa recently announced its merger with Corporación Industrial Mexicana, after merging with Grupo Tampico’s beverage unit last June. The merger transaction was valued in approximately U.S.$846 million, where Coca-Cola Femsa will take on Corporación Industrial Mexicana’s debt. The merger allows the company to obtain 50% of all of Coca-Cola bottling market in Mexico. In other related news, Coca Cola-Femsa recently announced that it will invest approximately U.S.$200 million in the construction of a new bottling plant in Colombia. Construction of the bottling plant will initiate in November and is expected to start operations next year.
Mexican government-controlled Petróleos Mexicanos, or PEMEX, recently announced its acquisition of 4.62% of Repsol YPF’s capital for approximately U.S.$1.5 billion, increasing its participation in the Spanish-based company to 9.5%. PEMEX further announced that it plans to close the acquisition of an additional 0.3% for approximately U.S.$120 million in the next few days, for a total participation of 9.8%. In other news, PEMEX recently announced that as part of its seven-year investment plan of U.S.$5.5 billion, it is currently constructing a 103 km long oil pipeline connecting the Mexican State of Hidalgo with the State of Mexico. The oil pipeline will increase transportation flow capacity from 70,000 to 140,000 barrels daily, whilst reducing alternate transportation costs.
Chilean-based bank Banco de Credito e Inversión, or BCI, recently announced that it placed approximately U.S.$154 million in bonds in the Mexican Stock Exchange, out of an aggregate of approximately U.S.$615 which it seeks to place over the next three years. BCI explained that placing the bonds in the Mexican Stock Exchange resulted much more favorable and attractive than placing the bonds in other known markets.
Mexican government-controlled power company Comisión Federal de Electricidad or CFE recently announced that it will invest approximately U.S.$1.1 billion in the construction of an electric generation plant in the Mexican State of Nuevo León. Anticipating the increasing levels of energy use, the bid for the construction of the plant is expected to be launched in 2014 and construction is projected to initiate in 2017. The plant which will be the largest in the State of Nuevo Leon, and may be followed with the construction of a second plant in 2020.
PepsiCo recently announced that before the year’s end its advanced baking unit will be inaugurated in the Investigation and Technological Innovation Park in the Mexican State of Nuevo Leon, with 100 employees. The advanced baking unit, where the company invested approximately U.S.$20 million, will serve as a strategic asset for the development of Quaker and Gamesa product prototypes. Currently the company is exporting Gamesa and Quaker products from Mexico to 12 countries, including countries in the European and Asian continents.
Minera Autlan, a subsidiary of Mexican Grupo Ferro Minero, recently announced that it will invest approximately U.S.$400 million over the next five years in diverse ferroalloy projects in Mexico. Among its most important projects is the exploit of a new mine, a new ferroalloy manufacturing plant, a new ferroalloy oven and the diversification process of magnesium ferroalloys. The company expects to maintain its growth alongside the ironwork plants, whilst anticipating that the investments will increase sales and therefore company earnings.
Mexican government-controlled Petróleos Mexicanos, or PEMEX, recently awarded English-based Petrofac and Mexican-based Administradora de Proyectos en Campos the first contracts under the new incentive agreements’ structure, allowing (for the first time since the petroleum sector was nationalized in 1938) private entities to perform the exploration and production of petroleum in Mexico. The bid winners will be working in three oil fields in the southern region of Mexico. Through the introduction of the new incentive agreements PEMEX is re-opening the petroleum sector to private entities, expecting to increase its petroleum production and whilst finding new petroleum sources in Mexico.
Mexican-based conglomerate Grupo Alfa recently announced that the Chinese manufacturing plant of its subsidiary Nemak recently entered into a U.S.$100 million contract to supply Ford with car manufacturing parts starting approximately in 2013. Nemak is also in the final stages of completing the construction of its manufacturing plant in India, from which it expects to continue launching the company’s operations in Asia.
The Mexican Federal Telecommunications Commission, or Cofetel, recently announced that this year it start the first bidding process for two digital television channels. The bidding program is set to initiate in September once the market studies are concluded by the Commission. Afterwards, the bid’s terms will be defined and the bid call will be launched. The process is expected to last approximately 18 months, including the review, analysis and resolution procedures.
Honda de Mexico, a subsidiary of Japanese-based Honda Motor Company, recently announced that it will invest approximately U.S.$800 million in the construction of a new manufacturing plant in the Mexican State of Guanajuato. The company will start construction in the first quarter of 2012, and estimates that it will generate approximately 3,200 new job positions when operating in full capacity. The new plant will strengthen Honda’s manufacturing capacity in North America.
Steel Technologies, a subsidiary of U.S.-based NuMit, recently announced that it has obtained the approvals for the construction of a steel sheet manufacturing plant in the Mexican State of Nuevo Leon, in which it will invest approximately U.S.$75 million. The construction of the manufacturing plant is set to start soon, as the company expects to start operations before the end of 2012.
The Ministry of Economic Development of the State of Nuevo Leon recently announced that direct foreign investment in the State increased 40.3%, in comparison to 2010. The Ministry further announced that the first two quarters of 2011 have brought the State of Nuevo Leon approximately U.S.$1.1 billion in direct foreign investment. Half of the investment corresponds to the expansion projects of existing companies and the other half are allocated to new companies starting-up in the State. In other related news, the Mexican Ministry of Economy recently announced that during the first semester of 2011 Mexico received approximately U.S.$10.6 billion from direct foreign investment, primarily focusing on the manufacturing, finance and commercial sectors.
Mexican-based Minera Frisco recently announced that it will invest approximately U.S.$1.2 billion in the expansion of its gold and silver mines. Their Concheno project in the Mexican State of Chihuahua is one of the projects currently being benefited as it is currently doubling its operation capacity, after the finding of additional reserves. The company additionally announced that it will also invest approximately U.S.$1.0 billion during the rest of the year in new mining exploration projects and equipment.
Mexico Power Group, a subsidiary of U.S.-based Cannon Power, recently announced its plan to invest approximately U.S.$2.5 billion for the construction of three wind energy farms in Mexico. The wind farms will be strategically located in the Mexican States of Quintana Roo, Zacatecas and Baja California, and it is estimated that they will generate 900 new job positions in each of such regions. The company further announced that with the energy generation from the wind farms, Mexico will save 8,600 barrels of petroleum daily and will reduce its carbon dioxide emissions by 1.6 million tons.
Canadian-based Northgate Minerals Corporation recently announced its acquisition of Primero Mining Corporation for approximately U.S.$383.7 million. The acquisition will allow the company to enter the Mexican mining market. Northgate Minerals Corporation has operations in Canada, the United States of America and Australia.
Unilever de Mexico, a subsidiary of U.K.-based Unilever, recently inaugurated its new manufacturing plant in the Mexican State of Morelos, which involved an investment of approximately U.S.$86.8 million. The company will generate approximately 1,700 new job positions and will be manufacturing products for both the local and international markets.
U.S.-based Stevedoring Services of America or SSA Marine recently announced that it was awarded a bid for the construction and operation of a container marine port in the city of Tuxpan, in the Mexican State of Veracruz, in which it will invest approximately U.S.$300 million. The SSA Marine project will generate approximately 4,500 new job positions and will allow it to compete for the import and export traffic with the ports of Veracruz and Altamira.
General Motors Company recently announced that it will invest approximately U.S.$900 million in its operations in Mexico with the purpose of increasing its manufacturing capacity in the country. The company recently confirmed such investment and added that it will be directed to expansion projects within its manufacturing plants in San Luis Potosi, Silao, Toluca and Ramos Arizpe.
Monterrey-based Marcatel COM recently announced that it has acquired 50% of STX Communications in the United States of America, through its subsidiary Vivaro Corporation. The transaction amount was not disclosed. With this recent acquisition, the company expects to boost its annual sales from U.S.$700 million to U.S.$1 billion. Currently, the company sells approximately 260 million prepaid phone cards in 130 countries.
Monterrey-based Banco Regional de Monterrey, or Banregio, recently launched an IPO in the Mexican Stock Exchange from which it raised approximately U.S.$156 million through the sale of approximately 17.5% of its capital. The company intends to use the proceeds in its geographic branch expansion plan in Mexico, and for general corporate purposes. Banregio currently operates in 33 cities of 13 Mexican States, with 101 branches.
The Dubai-based investment fund Maestro Investment recently announced that it will invest approximately U.S.$200 million in the Citadel project in the Mexican State of Jalisco. Maestro Investment together with Fortia Real State will initiate the construction of five 25 floor apartment complexes by year’s end. The Citadel project will be completed in six years and it will have a nearby mall and luxurious common areas.
BBVA-Bancomer, the Mexican banking subsidiary of Spanish-based BBVA, recently announced that it will invest approximately U.S.$2 billion over the next three years to grow and improve its business in Mexico. The company will focus primarily in improving their customer services by increasing their branch banks, ATM’s and payment terminals. Furthermore, the company announced that the investment will help them conclude its new corporate offices in Mexico City, which is expected to generate 14,000 new direct job positions according to the project’s original launching figures.
Grupo Posadas, one of the major Mexican hotel companies, recently announced that it will invest approximately U.S.$500 million in 50 projects in Mexico, Central America and South America. Grupo Posadas additionally announced that from such initial investment, U.S.$140 million will be destined for the construction of 40 Hotels in the Mexican States of Puebla, San Luis Potosi, Morelia, Guerrero, Quintana Roo, among others. Grupo Posadas operates Fiesta Americana, One, Aqua, Fiesta Inn, Caesar Park, among others brands.
The Japanese-based car manufacturing company recently announced that it will invest approximately U.S.$500 million in the construction of its first Mexican manufacturing plant, which will be located in the Mexican State of Guanajuato and is expected to generate approximately 2,000 new direct job positions. Construction of the manufacturing plant will initiate in the fourth quarter of 2011 and it is expected to be operational by the second half of 2013. In other related news, the Mexican Minister of Economy recently announced that Mexico will soon be announcing additional investments in the automobile sector for approximately U.S.$1.5 billion; approximately one-half of the investment is expected to come from Japanese companies. Additionally, the Mexican Automotive Association recently announced that vehicle manufacturing grew in Mexico by 19.4% last May, in comparison with May 2010’s numbers.
L’Oréal Mexico, a subsidiary of French-based L’Oréal, recently announced that it will invest approximately U.S.$50 million in the installation of its second production plant in the Mexican State of San Luis Potosi. The company further announced that it will be operational by the second half of 2012, generating approximately 1,200 jobs.
Siemens Mexico, a subsidiary of German-based conglomerate Siemens, recently announced that as a result of its operations’ restructuring it will relocate certain of its current operations in the United States of America, the Mexican State of Chihuahua and three other cities, into its new plant in the Mexican State of Nuevo Leon. The manufacturing facility will be generating 800 new job positions as a result of the restructuring.
Italian-based Tenaris recently inaugurated the first stage of a tube laminating plant in the Mexican State of Veracruz, involving an invest of approximately U.S.$850 million. The company further announced that it plans to invest an additional U.S.$750 million for the remaining stages of the project, which will employ a total of approximately 600 people.
Frisco, a subsidiary of Mexican conglomerate Grupo Carso, recently announced that it will invest approximately U.S.$210 million in the mining zone of El Porvenir in the Mexican State of Aguascalientes, with the objective of transforming the mine into the most productive in Mexico. The company further announced that through the investment it will generate approximately 9,000 direct and indirect new job positions.
Mexican-based retailer Comercial Mexicana recently announced that it will invest approximately U.S.$134 million in opening and remodeling or expanding existing stores, among them, Costco’s Mexican operations. The company recently celebrated 20 years of trading in the Mexican Stock Exchange.
DuPont México, a subsidiary of the DuPont conglomerate, recently announced that it will invest approximately U.S.$500 million in the construction of a titanium dioxide plant in the Mexican State of Tamaulipas. The plant is expected to be operational in 2014, will generate 200 direct job positions and will reassure the procurement of the company’s clients and partners.
Mexican conglomerate Mexichem recently announced that it will invest approximately U.S.$150 million in a coolant plant in Japan and a hydrofluoric plant in South Korea. Mexichem additionally announced that these investments will help it to avoid its current supply dependency from China. In other news, Coca-Cola Femsa, the Coca-Cola bottling company which is also a subsidiary of Monterrey-based FEMSA, recently announced that it will invest approximately U.S.$146 million in the construction of its fifth soft drink plant in the province of Minas Gerais, Brazil. The eco friendly soft drink plant is expected to have an annual capacity of 2.1 billion liters by 2015.
The Mexican Ministry of Economy recently announced that direct foreign investment in Mexico grew by 10.5% between January and March of 2011, compared to the same period in 2010. The sectors with higher investment were the manufacturing industry, followed by commercial and mining sectors. The Ministry further announced that the countries with higher investment participation were the United States of America, Switzerland, Canada and Spain.
The City of New York and automobile manufacturer Nissan recently announced the Nissan NV200 as the new official taxi service vehicle for the City of New York, replacing the Ford Crown Victoria. The company won a 10-year contract for the supply of the new taxis. The new taxis will be built in Nissan’s plant in Cuernavaca, Mexico and are expected to be in New York City by 2013.
Mexican telecommunications giant America Móvil recently announced that it will invest approximately U.S.$2 billion in its Claro affiliate in Chile over the next four years. The investment will be targeted to expand its international network of voice and data, installing fiber optics and strengthening their wireless network in the region.
Amidst the staggering insecurity in Northern Mexico, foreign investment and the transfer of manufacturing operations continues flowing into the country primarily due to the availability of low-cost and high-quality labor. According to KPMG’s article of Competitive Alternatives 2010, establishing a manufacturing facility is 18.2% cheaper in Mexico than in the United States, while labor is 40% lower. Many manufacturing projects that used to be conducted in the United States, Canada or Asia have been transferred to Mexico, increasing the country’s exports.
Mining giant Grupo Mexico recently announced that it will invest approximately U.S.$2 billion to modernize their Sonora and Arizona mines, with the purpose of increasing its copper production from 180,000 tons to 450,000 tons by 2016. The company further announced that this is the first investment out of U.S.$6 billion projected to be invested over the next 5 years.
Monterrey-based Katcon Global recently announced that it will invest approximately U.S.$25 million in a manufacturing plant in the U.S. State of Michigan. The company further announced that it is currently undergoing the necessary paperwork for an exhaust system manufacturing plant in Russia while evaluating the construction of a manufacturing plant in Brazil. Katcon Global has manufacturing plants in Mexico, Venezuela, Poland, India, South Africa, China and Australia.
Mexican-based Empresas ICA recently announced that it was awarded a construction contract for approximately U.S.$238 million for the expansion and reconstruction of a highway in Panama. The company further announced that the construction will be performed by Constructora MECO, a local construction company, partly owned by Empresas ICA. The highway reconstruction and expansion is expected to be concluded in approximately two years. In other news, Empresas ICA recently announced that its joint venture company CICE was awarded a construction contract for approximately U.S.$67 million for the construction of a sewage interceptor tunnel in Medellín, Colombia.
Monterrey-based conglomerate Grupo Alfa recently announced that it is evaluating potential acquisitions in the Asian markets. The conglomerate referenced its technological advantage derived from the acquisition of two U.S. plants in 2010 which ultimately helps it reduce production costs in comparison to any Asian competitor. The conglomerate anticipated that its expansion on Asia would be conducted through its subsidiary Nemak.
According to the Consulate General of the United States of America in Monterrey, U.S.-based companies will invest approximately U.S.$268 million in the State of Nuevo Leon during 2011. Among the companies to invest in the State are Walmart, General Electric and Pro Logis AMB. In other news, according to the statistics of the Mexican Ministry of Economy, the State of Nuevo Leon received approximately U.S.$234 million of foreign investment in the fourth quarter of 2010. In total, during 2010, the State of Nuevo Leon, attracted approximately U.S.$5.1 billion in foreign investment.
Mexican-based Grupo Peñoles recently announced that it will invest approximately U.S.$100 million in diverse projects related with operational improvements in the Mexican State of Coahuila. The company additionally announced that it will also invest approximately U.S.$200 million in the exploitation of a mine located in the Mexican State of Durango. In other news in the mining industry, silver producer Fresnillo, subsidiary of Grupo Peñoles, recently announced that it will invest approximately U.S.$800 million in projects related to exploration and expansion. The company expects to produce approximately 42 million ounces of silver in 2011.
Mexican-based Grupo Bimbo recently announced that it will increase its investment budget for the year in 38%, compared to 2010. The food industry manufacturing company plans to invest approximately U.S.$400 million in the U.S. and Brazilian markets, expecting to strengthen its operations in such locations.
Monterrey-based Grupo Villacero recently inaugurated a service center and a pipe manufacturing plant in the Mexican State of Nuevo Leon, after investing approximately U.S.$107 million – and generating approximately 460 new job positions. The company further announced that these two new projects represent a 20% expansion for the Group.
Danone México, subsidiary of French based Groupe Danone, recently announced an investment plan of approximately U.S.$50 million, intended to strengthen its manufacturing production lines, add distribution centers and renovate its cargo transportation units, with the purpose of renovating the access and availability to its products. In additional company news, Danone México recently opened its Latin American distribution hub in the Mexican State of Guanajuato, involving an investment of approximately U.S.$21 million, expecting to reach 45 different destinations.
Mexican-based Grupo Fragua recently announced that it plans to invest approximately U.S.$50 million in the construction of more than 100 of its Farmacias Guadalajara retail pharmacy and convenience stores, matching its 2010 construction and inauguration achievements. The company further announced that through its expansion plan it has been opening a new pharmacy every six days, creating approximately 2,000 new job positions each year.
After opening its first plant in the State of Nuevo Leon in December of 2009, Japanese-based Hitachi Chemical recently announced that it will invest approximately U.S.$100 million in its Montemorelos plant with the purpose of multiplying its production capacity times ten. The company further informed that since the plant’s opening it has quadrupled its work force.
Mexican government-controlled Petroleos Mexicanos, or PEMEX, recently announced the issuance of its first incentive agreements under the new PEMEX rules for the southern regions of Santuario, Carrizo and Magallanes, through which the company is targeting an increase in barrel production. The new Mexican energy reforms have sparked in motion a major agreement shift which would allow for private companies to work in activities which in the past could only be worked on by PEMEX, generating interest among major oil industry players which have the technology required by PEMEX. The company additionally informed that the current bids include six oil fields and expects to be opening additional bids in the near future for approximately 40 additional oil fields.
German-based Siemens recently announced that it was awarded a bid for the construction of an energy plant in the facilities of miner Grupo Mexico, in the city of La Caridad in the Mexican State of Sonora, involving an approximate value of U.S.$300 million. The construction and operation of the energy plant will allow the Mexican company to save approximately 40% of its current energy output costs. In other news, Siemens recently opened a new manufacturing plant in the city of El Marqués in the Mexican State of Queretaro, on which it will additionally invest approximately U.S.$50 million in research and development activities, generating approximately 600 new job positions.
The InterContinental Hotels Group recently announced that it will invest approximately U.S.$500 million over the next three years in the construction of 47 hotels in Mexico, which will house approximately 5,000 new hotel rooms. With this new investment the company seeks to continue to expand its brands, while betting in the continued success of tourism and business in Mexico.
Eurocopter Mexico, a subsidiary of European helicopter manufacturer Eurocopter, recently announced that it will construct a manufacturing plant in the Mexican State of Queretaro. Although the amount of the investment has not been disclosed, business sources estimate it in approximately U.S.$550 million. The construction is set to initiate by the end of March, concluding within a year.
Monterrey-based Deacero recently announced that it will invest approximately U.S.$750 million in the construction of its second steel manufacturing plant in the Mexican State of Coahuila. The company further announced that the first phase of the plant will be operational in December 2011 and it will be manufacturing approximately 1.5 million tons of steel, while the second phase will conclude in August 2012 reaching a manufacturing production of approximately 3 million tons of steel annually.
Spanish-based Iberdrola recently announced that it will invest approximately U.S.$365 million in the construction of an electric co-generation plant in the Mexican State of Guanajuato and a wind farm in the Mexican State of Oaxaca, which together will generate approximately 2,000 direct new jobs. Iberdrola is the leading company worldwide in the generation of wind energy, with operations in 40 countries.
Kansas City Southern Mexico, a subsidiary of U.S.-based Kansas City Southern, recently announced that it will invest approximately U.S.$126 million in equipment, technology and maintenance for its concession railway tracks. The company additionally informed that its investment will help them develop new and better projects while improving Mexico’s domestic and international commerce. In another news, Grupo Mexico’s subsidiary Ferromex recently announced that it will invest approximately U.S.$400 million in the acquisition 59 new locomotives and the conclusion of certain railway sidings which will improve cruising speed. The company hopes to maintain and increase its transportation volume for this 2011.
The economic activity increase in Mexico continues to dismiss analysts estimate figures, which in November estimated a 3.95% growth, while the economy effectively grew 5.83%. The National Institute of Statistics and Geography recently announced that Mexico’s gross domestic product grew 5.5% in 2010 and a great overall growth was achieved in the last quarter of 2010 with a 1.3%. Mexico’s economic growth had not seen such figures since 2000 when the country’s economic growth numbers resulted in a 6% increase. Although the economic growth did not reach the 6.1% economic deceleration of 2009, analysts believe that Mexico’s recovery is expanding to more sectors.
Mexican-based Grupo Financiero Banorte, or Banorte, recently announced that it will invest approximately U.S.$150 million in technological infrastructure, security and a new contact center. The third largest bank in Mexico increased its investment in comparison to 2010 and expects to improve its earnings in 2011 by boosting its clients’ base.
Monterrey-based Óptima Energia plans to invest approximately U.S.$500 million in a finance project to update the public lighting works of approximately 100 municipalities throughout Mexico. The project seeks to finance and execute the replacement of common public light bulbs with LED or magnetic induced lighting, which will help save approximately 60% in the municipalities’ lighting bill. In other news, Dutch-based Phillips recently announced its plan to expand its lighting manufacturing plant in the Mexican State of Nuevo Leon, for an undisclosed amount.
Mexican-based ABC Airlines, commercially known as Interjet, recently announced that it will invest approximately U.S.$740 million to expand its maintenance center, increase its Airbus 320 fleet and acquire 20 Sukhoi-Super Jet from SuperJet International. The company additionally announced that the investment will fuel its expansion plans of domestic routes, and in two years’ time, also in international routes.
The Regional Development Office of the State of Nuevo Leon recently announced that approximately U.S.$54 million are scheduled to be invested in the State during 2011, considering both public and private investment projects. In another news, IBM, Epicor and Infosys plan to invest approximately U.S.$6 million in the creation of approximately 400 jobs to boost the information technology sector in the State. In other news, amidst the insecurity news from the Northern part of the country, the Mexican State of Nuevo Leon continues to witness success, as the State came in second place in 2010 in job creation, closely trailing Mexico City. Product’s exports from the State also grew by 17% during 2010.
U.S.-based General Motors recently announced that it will invest approximately U.S.$840 million in its facilities in Mexico. The company informed that U.S.$300 million will be invested in the San Luis Plant expansion for the production of a new car, and U.S.$540 million will be invested in the Toluca plant for the production two new engine models. The investment is expected to create approximately 2,300 new direct job positions.
According with the most recent report of the United Nations Conference on Trade and Development, Mexico is the most attractive country for direct foreign investments within Latin America. Mexico jumped in only one year from approximately attracting U.S.$12 billion to U.S.$19 billion, followed by Peru and Chile. The report additionally states that this was the first time in which developing countries attracted more direct investments than developed countries, evidencing that the economic recovery is stronger among developing nations. In other news, the Mexican National Institute of Geography and Statistics, or INEGI, announced that in November the industrial activity in Mexico expanded by a 5.3%, mainly due to an increase in the manufacturing sector.
Mexican-based Mexichem recently announced an agreement to acquire the plastic compound business AlphaGary from Rockwood Inc. Although the amount of the transaction was not disclosed, AlphaGary has manufacturing plants in the United States, England and Canada and reports annual sales for approximately U.S.$231 million. Mexichem further announced that the acquisition will boost their research and development potential, creating important synergies for the business. In other news, Mexichem announced that over the next three years it will invest approximately U.S.$1 billion in the construction of a new manufacturing plant to increase its chemical business. The investment will increase their production capabilities and its independence from other companies for raw materials.
The Mexican Ministry of Economy recently announced that the direct foreign investment in Mexico grew by 21% between January and September of 2010, compared to the same period in 2009. The sectors with higher investment were the manufacturing industry, followed by commercial and financial sectors. The Ministry further announced that the countries with higher investment participation were the Netherlands, the United States of America, Canada and Spain.
Mexican-based Grupo Bimbo recently announced the initial construction phase of “Piedra Larga”, the largest wind farm for a food industry company worldwide. For this project Grupo Bimbo will partner-up with Desarrollos Eolicos Mexicanos, which will invest approximately U.S.$200 million. Through this plant, Grupo Bimbo will be able to generate all its electric energy needs in Mexico. In other news, the Spanish-based electrical company Iberdrola recently announced that it will invest approximately U.S.$400 million in Mexico between 2010 and 2012. Iberdrola is currently adding-up to its wind farm operations in Mexico, as it is currently constructing a 103 megawatts wind farm.
Ceramic manufacturer Daltile de Mexico recently announced that it will invest approximately U.S.$60 million in the construction of a new plant in the Mexican State of Guanajuato. The company further announced that this new plant, which is set to initiate construction in 2012, will focus on the Mexican ceramic market and will create 200 new direct job positions in its first phase.
U.A.E.-based Rubenius recently announced that it will invest approximately U.S.$4 billion over the next five years to construct a green energy storage unit in the Mexican State of Baja California. The company additionally announced that the facility will harbor wind and solar energy that will be utilized on both sides of the U.S.-Mexican border. The project is set to start construction in mid 2011.
Japanese-based car manufacturer Mazda Motor Corporation and Japanese-based Sumitomo Corporation recently announced that they will invest approximately U.S.$475 million venturing in the construction and operation of car manufacturing plant in Mexico. The joint venture plans to start manufacturing their Demio and Axela models in 2013, hoping to manufacture approximately 100,000 units per year.
Brazilian manufacturer Embraco recently announced that it will invest approximately U.S.$90 million in the construction of a new hermitic compressor manufacturing plant in the Mexican State of Nuevo Leon, which will create approximately 1,000 new direct job positions. The company expects to manufacture approximately 5 million refrigerator compressors annually.
Mexico climbed six positions in the World Bank’s and International Finance Corporation’s “Doing Business” Report for 2011, where it ranked 35 from 183 economies. The main author of the report informed that Mexico ranked higher than the BRIC economies, followed by China who is ranked 79th. The Doing Business Report measures nine factors, among them being company incorporation, construction permits, access to credit, availability of credit information for bank’s evaluation of clients, pledging personal property, protection to minority investors, tax payments, foreign trade, agreement enforcement and company liquidation.
Grupo Financiero Banorte and IXE Grupo Financiero reached an agreement to merge in early 2011 in a transaction involving approximately U.S.$1.3 billion. The merger will involve a stock-for-stock exchange. Once merged, the companies will be known as Grupo Financiero Banorte-Ixe, becoming the third most important banking institution in Mexico.
Fitness center chain Sports World successfully listed its shares in the Mexican Stock Exchange, obtaining proceeds for approximately U.S.69.6 million through its initial public offer to approximately 1,760 investors. The company informed its investors that proceeds will be used to increase its presence in Mexico, where it currently has 14 fitness centers.
Dak Americas, a subsidiary of Monterrey-based Conglomerate Alfa, recently announced that it has reached an agreement with Eastman Chemical Company to acquire three petrochemical plants in South Carolina for approximately U.S.$600 million. The conglomerate announced that the acquisition will strengthen its presence in the PTA and PET markets.
Italian tire manufacturer Pirelli & C. S.p.A. recently announced that it will invest approximately U.S.$210 million in the construction of a tire manufacturing plant in the Mexican State of Guanajuato, which will create approximately 700 new direct job positions. The company expects to sell 25% of its plant’s production to automobile manufacturers and the remaining 75% to tire retailers in the United States of America and Canada.
Mexican-based Grupo Bimbo recently announced its acquisition of Sara Lee’s bakery unit of North American Fresh Bakery for approximately U.S.$959 million. The company further announced that it will invest approximately U.S.$5 billion over the next five years in updating its manufacturing plants and improving the company’s infrastructure. Grupo Bimbo will incorporate new brands such as: Grandma Sycamore’s, Heinter’s and Rainbow into its existing brands.
Netherlands’ based Heineken recently announced that it will be increasing its investment in Mexico, specifically for the manufacturing of the Heineken brand at its plant located in the Mexican State of Veracruz. The company called for other investors to increase their investments in Mexico as well, expressing the benefits offered by the country and its people and additionally stating that amidst the recent increase in violence in the country, the company’s investment would not be hindered.
Multinationals Duquen, Héroux-Devte, GLB, Dishon Limited, Metal Finishing and Kaman Aerostructures recently confirmed that they will be landing their business in Mexico targeting to start operations in 2011 with investments of approximately U.S.$23 million. Other aeronautical companies operating in Mexico, such as Safrán and Aernnova have also recently announced the expansion or strengthening of their Mexican operations.
OHL Concesiones México, a subsidiary of Spanish construction company Obrascón Huarte Lain, or OHL, became listed in the Mexican Stock Exchange, where it plans to make an initial public offering to raise approximately U.S.$1.4 billion. The company additionally plans to make a public offering in other markets as it is concurrently seeking registration in foreign markets.
The Argentinean conglomerate Ternium Steel and the Japanese-based Nippon Steel Corporation recently announced that they will invest approximately U.S.$350 million venturing in the construction and operation of a steel sheet manufacturing plant in the Mexican State of Nuevo Leon. The joint venture will operate under the company name Tenigal and expects to begin operations in 2013, manufacturing approximately 400,000 metric tons of steel sheets for the automobile manufacturing market.
U.S.-based Easton-Bell Sports recently announced that it will invest approximately U.S.$50 million in a new football helmet manufacturing plant to be located in the Mexican State of Nuevo Leon. The company expects to start operations early in 2011 with approximately 200 employees. The NFL helmet manufacturer joins sport-sector businesses such as Callaway Golf and Polaris Industries, which have recently invested in the Mexican State of Nuevo Leon.
Danish-based toy manufacturer Lego Group recently announced that it will invest approximately U.S.$100 million to expand its building block manufacturing plant located in the Mexican State of Nuevo Leon. The construction plan will allow for the company to strengthen its production capabilities, while doubling the plant’s size. Lego Group has kept its strategic plan of investment in this plant, to strengthen its supply to its primary consumers the United States of America and Canada.
© Copyright 2012 J.A. Treviño Abogados S.A. de C.V.