Kansas City Southern, a 125-year-old company and the only U.S. railroad with a fully owned Mexican subsidiary, Kansas City Southern de Mexico, S.A. de C.V., is overcoming the European recession by increasing cross-border trade with Mexico. …
According to the most recent data from the Department of Transportation Statistics in Washington, cross-border merchandise trade between the U.S. and Mexico totaled $341 billion by the end of September this year. The statistic denotes a rise in revenue that was about 18 percent higher than it was at the same point in 2010. “This is the best organic growth story in the U.S. rail network,” says Matt Troy, an analyst at Susquehanna Financial Group in New York referencing the record trade between the two countries.
He estimates Kansas City Southern revenue will “grow two to three times faster than similar regional railroads for several years.” The fact is, Kansas City Southern’s shares have gained 18 percent since June 30, while the Standard & Poor’s Railroads Index has fallen 1.6 percent in the same period.
Due to rising labor and shipping costs in manufacturing hubs around the world such as those in Asia, a long list of companies including Nissan Motor Co., DuPont Co. and Honda to have shifted investments to Mexico. Now, many of the goods produced by their capital will head to the U.S., the destination for about 80 percent of Mexico’s exports.
According to another analyst, Neal Deaton of BB&T Capital Markets in Charlotte, North Carolina, traffic across the border should continue to pick up as Mexico’s production increases. “There’s been a strong manufacturing renaissance in Mexico over the last four to five years, and it’s only getting stronger,” Deaton says.
Inexpensive manufacturing costs and a competitive number of highly qualified engineers also support the surge in productivity, according to Mexican Economy Minister Bruno Ferrari in an interview at Expo México Emprende held in Los Angeles in August.
As more goods originate in Mexico, Kansas City Southern railways is trying to capture a larger portion of the $260 billion worth of goods that were shipped by truck across the U.S.-Mexico border in 2010. “We have invested to build a franchise,” says Patrick Ottensmeyer, executive vice president of sales and marketing. “We’re having very good conversations with almost every railroad, and they all want to participate in the growth that’s happening in Mexico.”
Part of the railways’ international holdings include Kansas City Southern de Mexico, S.A. de C.V.; the railway serves northeastern and central Mexico and the port cities of Lázaro Cárdenas, Tampico and Veracruz.
Lone Star Gold, Inc. is thrilled to announce that the company will move forward with signing a Definitive Agreement to acquire an undivided 65 percent interest in the San Antonio del Potrero mine tailings project. The agreement will be signed at the beginning of January 2012. …
A letter of intent committing to acquiring an undivided 65 percent interest on the Tailings Project, located in the city of Hidalgo Del Parral in Chihuahua, Mexico, was originally signed on 28 November 2011. The project represents a resource of 1.2 million tons of mine tailings which shows potential for Silver recovery and additional bi-products including Gold, Zinc, and Lead.
The President of Lone Star, Daniel Ferris, was looking forward to the opportunity. He said that the opportunity was a great fit for the company and aligned well with the company’s goal of rapidly becoming a mid-tier producer in the short term. After the Definitive Agreement is signed in mid-January, the company will be in a great position to begin 6-8 years of production as soon as February 2012.
The Definitive Agreement details how a total of 600,000 shares of Lone Star’s common stock will be incrementally transferred over a one-year period. The shares will carry current and appropriate legends in accordance with U.S. Securities laws. The agreement also outlines the cash commitments for initial and secondary project work/equipment/plant construction for the first two years. After the processing of the project’s estimated 1.2 million tons of mine tailings have been processed, Lone Star will forfeit its 65 percent interest in the Mexican company. This will release Lone Star from any further obligations with the project.
The project is estimated to have 1.2 million tons of mine tailings from previous activities over the past century. An agreement is in place to take 100 tons per day to a processing plant 20 minutes away in Parral for the first 4-6 months of the project. After the initial 4-6 months, throughput is likely to be increased to over 200 tpd for the remainder of the year.
While in the midst of building the $1 billion Boleo copper-cobalt-zinc project, Baja Mining said that it was in search of a manganese buyer willing to sign an off take agreement. The company is in discussions with a number of potential buyers. …
Manganese, used in steel making, has been unaccounted for in the economic outlines of Boleo until now. In 2010, Baja Mining only considered copper, cobalt, and zinc production. Without the manganese, the company expects to produce 84 million pounds of copper, 3.6 million pounds of cobalt, and 28,400 tons of zinc a year for a total mine life of 23 years. Baja Mining suggested it could fetch a $1.3 billion net present value and estimated a favorable cost of production of negative $0.29 per pound of copper, net of zinc and cobalt credits.
The production of manganese could lower production costs even more. A production study, to be released in the third quarter of this year, will determine by how much manganese helps the base case.
The manganese could potential end up making a large portion of the project’s output.
A research team suggested that Baja Mining could produce around 220,000 tons of manganese carbonate a year at Boleo.
Just ahead of the New Year, Mexican Energy Secretariat, Jordy Herrera Flores, has announced that starting January 1, there will be a new program that aims to save electricity in and around the Guadalajara area. In short, the program can be described as an awareness campaign on the use of Light… Emitting Diode (LED), which aims to alleviate the impacts of climate change. Speaking in accordance with President Felipe Calderon, Flores stresses the importance of saving this energy source in Mexico. To join the list of beneficiaries, you must be an active member and make payments to the Commission Federal de Electricidad (CFE).
The first stock of LED driving lamps technology will be $10,000, and will aim to save up to 200 gigawatt hours per year.
By 2012, Mexico hopes that 25 percent of the energy consumed will be generated by renewable sources. By 2025, the measures currently being implemented will save up to 37,000 megawatt hours.
The Mexican Stock Exchange recently launched its own Sustainability Index, the third of its kind in the world. Together with the Dow Jones Sustainability and FTSE 4Good indices, the Mexican Sustainability Index will allow member companies to realize an additional equity value as they implement sustainability… practices across their organizations. Also, through the Sustainability Index, member firms will support Mexico’s commitment to reduce greenhouse gas emissions by 30 percent in 2020.
In an exclusive video interview with MexicoToday, the Mexican Stock Exchange’s president Luiz Tellez Kuenzler shared, “The Sustainability Index puts the Mexican Stock Exchange at the level of the most important exchanges in the world. It is the first time we have had the sustainability process for Mexican companies implemented in the exchange, and puts Mexico in the forefront of the most important changes that are taking place in the financial sector.” When asked about what’s next following its launch, Tellez Kuenzler added, “We will have an ETF for the Index and those investors who are interested in investing in Mexican sustainability companies will be able to do that.”
The Mexican Sustainability Index is currently made up of by 26 companies, including Alfa, America Movil, Arca Continental, Bio Pappel, Cemex, Coca-Cola FEMSA, Compartamos, Controladora Comercial Mexicana, Casas GEO, Desarrolladora Homex, Empresas ICA, OMA, Kimberly-Clark de México, Aeropuertos del Sureste (ASUR), Mexichem, Organizacion Soriana, FEMSA, Industrias Peñoles, Grupo Financiero Banorte, Grupo Herdez, Grupo Bimbo, Grupo Modelo, Grupo Mexico, TV Azteca, Vitro, and Wal-Mart Mexico.
Member firms are evaluated by two fully-independent qualifying institutions, including EIRIS Empowerment Responsible Investment, which is headquartered in London and has a deep background with the FTSE Sustainability Index. The second institution is the South Anahuac University, a Mexican educational leader that participated in the development of the Index. And as part of the qualification process, member firms comply with international standards set by institutions such as the United Nations, the World Bank, and ISO14000, among others.
By 2015, Mexican mining company Grupo Mexico expects output at the Buenavista del Cobre copper mine to increase by 475,000 tons per year. Chief Operating Officer Xavier Garcia de Quevedo made the announcement in early December 2011. The new estimate has increased 6 percent since the last Mexican mining… industry estimate made in April 2011. If the new estimate were to become reality, it would double the current annual output.
“The mine has come back in great form,” Garcia de Quevedo said at a briefing in Mexico City.
In April, Grupo Mexico saw an increase of 450,000 tons per year at the Buenavista mine. The annual output rose to about 188,000 tons. Garcia de Quevedo believed that prices remained high because there were no new projects. Copper fell 20 percent in February, but rose to 18 percent in October.
The Buenavista mine near the U.S.-Mexico border had closed due to a mining strike in July 2007. It cost Grupo Mexico $3.5 billion in losses. However, the mine re-opened last year after a court order ended the mining strike. Damages caused by shortages in labor will cost Grupo Mexico more than $100 million to repair. The money will be well spent, as Buenavista is believed to have enough copper to remain in production for the next 70 years.
Mexico based Grupo Bimbo, Latin America’s biggest producer of baked goods, announced its acquisition of the U.S.-based Sara Lee Corporation bakery business in Spain and Portugal in October 2011. Grupo Bimbo completed the acquisition for 115 million euros ($153 million). …
Acquired brands included Bimbo, Silueta, Oritz, Martinex, and Eagle. The company will also take on seven manufacturing plants. The plants employ 1,900 people and facilitate commerce on more than 800 distribution routes.
“This acquisition positions Grupo Bimbo as the leading branded bread company on the Iberian Peninsula and enhances the Company’s international growth with a strong and established bakery business,” the company said in a statement.
In addition to the newly acquired Spain and Portugal units, Grupo Bimbo has 108,000 employees, manufactures more than 7,000 products, operates 102 plants, and organizes more than 1,000 distribution centers across 17 centuries in the Americas and Asia. The North American Sara Lee Corporation Fresh Bakery Unit had already been sold to Grupo Bimbo for $709 million.
International Monetary Fund (IMF) chief Christine Lagarde said in an interview that Brazil, Mexico and Peru have done remarkably well improving their economies over the past few years and can provide some lessons to other advanced countries.
The IMF chief has very specific ideas on how other economically stressed countries can benefit from the Latin American model. The chief explained that lessons “such as saving for a rainy day, and making sure that risks in the banking system are under control…I believe Latin America is now on a firm foundation, and can look ahead to lasting prosperity and stability that can lift the living standards of all.”
Lagarde identified social inclusion as one of the many factors behind the region’s recent economic progress, as issues of poverty, inequality, and human development have improved dramatically over the past decade.
Mexico’s Oportunidades programs have enjoyed particular success in breaking the intergenerational transmission of poverty—so much so that they are now models for the rest of the world.
“These countries have harvested the fruits of strong fundamentals, sound policy frameworks, and prudent macroeconomic policies and are now enjoying sustained growth with reduced vulnerabilities—an enviable sweet spot,” he added.
Lagarde went on to explain that Mexico in particular, is a country “in a unique position to shape our collective economic destiny over the coming year.”
Dave Lewis, President Unilever Personal Care, shares why Mexico's sustainable economy, commitment to free trade and the Mexican people are… key to Unilever.
This video details the Mexican Stock Exchange's recently launched Sustainability Index, which evaluates member companies using three sustainability pillars: environmental, social and ethical. The Sustainability Index includes 26 companies, such as CEMEX, Alfa, Kimberly-Clark and WalMart Mexico. In… 2012, companies like Alsea, Grupo Televisa and Minera Frisco could possibly join the Sustainability Index.
Mexico’s growing middle class is making its presence known at the cash register. Canadian Dale Wishewan noticed that Mexico City mall lobbies were filled with people dressed in Abercrombie and Fitch while eating at McDonald’s and Starbucks. Today more than 60% of Mexicans are considered middle class,… making between $6,000 and $25,000 per year.
“There is this middle class that wants North American brands,” says Wishewan, chief executive of Booster Juice, a juice and smoothie company. He quickly made a deal with a local investor. Today, there are five Booster Juice locations in Mexico and another five are scheduled to open in the next two years.
The 50 peso ($3.70) price of smoothies from Booster Juice would have been out of reach for most Mexicans a few years ago. However, as the economy recovers from the 2008 recession, more Mexicans are turning to more expensive North American brands.
Until recently, Mexico was mostly relying on trade with the United States. This trade skyrocketed after the signing of the North American Free Trade Agreement in 1994. By 2008, 88% most Mexican exports were sent to the United States. After the recession, Mexico had to decrease US exports by 6.1%.
Since 2009, Mexico has been working on rebranding efforts to establish a trade relationship with Latin America, Asia, and Europe. The economy grew 5.5% in 2010 and Mexican exports to Latin America grew 56%.
Mexico also takes security very seriously as gang violence is a concern of many foreigners.
“We could have kept a low profile and lurked in the bushes but we went the other way,” says Bradford Cooke, a Canadian mining executive. “All our trucks are branded, they usually go two at a time, and our drivers are all wearing our maroon and blue uniforms. Our stance is we are members of the local business community and we belong there, not the organized criminals.”
As one of the largest food and beverage companies worldwide, PepsiCo operates in more than 200 countries – with its largest international operations in Mexico and the United Kingdom. …
According to a recent Seeking Alpha article, the company has historically delivered healthy returns to its shareholders. For example, in 2011, the company’s dividend increased for the 39th consecutive year, from $1.89 to $2.06. This represented a 9 percent increase. Despite struggling global economies, PepsiCo reported solid results for the third quarter of 2011 – with revenue jumping up 13 percent, and operating profits up 7 percent.
PepsiCo makes more than just the popular beverage; its product portfolio now consists of many different brands, including Tropicana Juice, Gatorade, Lay’s Potato Chips, Diet Pepsi, Doritos, and Mountain Dew.
According to "The Evolving Workforce" survey conducted by Dell and Intel, Mexico, China and other developing economies are shifting to server virtualisation faster than the United States and the United Kingdom.
"The virtualisation rates are lowest where there are the highest legacy systems," said Bryan Jones, director of European marketing at Dell. He continued, saying that developing countries find it easier to be innovative by creating new systems, because there are no legacy systems in place.
As such, the U.K. is falling behind when it comes to technological innovations, due to restrictions on what employees can download, and what types of software they can use.
According to the survey, 83 percent of Mexicans and 76 percent of Brazilians believe that it’s good when "technology and the Internet to allow [them] to do business in different ways," compared with 43 percent of U.K. workers and 46 percent of U.S. workers.
Regarding technology in developing economies, Bryan Jones commented, "Organisations that provide technology freedoms and flexibility will not only be seen as desirable places to work, but at a competitive advantage."
Reynosa, Tamaulipas is often overlooked as a city for booming business and shopping in Mexico. New buildings, shopping centers, and factories seem to be popping up every week in this city over 1 million people. …
One of the most recent additions to Reynosa, Tamaulipas, is a WalMart that held its grand opening on Black Friday of this year. The new store is located at the intersection of Boulevard Hidalgo and Avenida El Pasito. This location is ideal as it is between Plaza Real and Plaza Perferico, two of the city’s busiest places from shopping in Mexico. The WalMart is also located near the Anzalduas International Bridge that only just recently started to appear on Google Maps. This will help both locals and tourists find the location. It is also expected to provide jobs for over 250 people.
WalMart did not start doing business in Mexico until the early 1990s and did not operate under their brand name until February 2000. Today, there are seven WalMart stores in the state of Tamaulipas. Even though this store is very close to the American boarder, sales should not be affected.
Mexico has the lowest tax burden among the most developed economies in the world, according to a recent report from the Organization for Economic Cooperation and Development (OECD). In its annual report, OECD detailed the tax burdens in place during 2010. The report shows that Mexico has the lowest tax to GDP ratio at 18.7%. …
The majority of OECD governments have stabilized the tax burden in place with the tax to GDP ratio. It has increased from 33.8% in 2009 to 33.9% in 2010, according to the OECD data from the annual Revenue Statistics publication. However, these numbers are still down from 2008 and 2007 when the ratios were 34.6% and 35.2%, respectively.
The OECD stressed that the findings show that changes in tax revenues reflect both changes in economic activity and policy measures.
“In those European countries most affected by the financial crisis and subsequent recession there was an initial sharp fall in tax revenues, but then a small recovery in the tax to GDP ratio in 2010,” the OECD stated.
“The data collected also shows that in a period when all levels of government have seen pressure on expenditure and revenues, the average tax ratio for state, regional and local governments has remained steady since 2007 while that for central government has declined,” the OECD explained.