Scotiabank is in 50 countries around the globe, making them one of the biggest retail, commercial, corporate, investment and international banking services in the world. Brian Porter, Group Head of International Banking, considers Mexico's economic profile very exciting and is so impressed,… Scotiabank employs 11,000 workers in the country to staff the demand. Porter explains that Scotiabank "feels very fortunate to be part of the building on the economic fabric of Mexico and the bright economic future."
Audi has recently announced plans to build an auto plant in Mexico in order to boost its sales to two million units/year by 2020. The plant, which is expected to start producing Audi SUV models in 2016, will be the third plant in Mexico built by parent company Volkswagen. The Chairman of the Board… of Management of AUDI AG, Rupert Stadler, explained the decision for Audi to invest nearly $2 billion in Mexico instead of the U.S., “As an established car-making location, Mexico offers an excellent economic basis for Audi production operations.”
As many global car manufacturers have come to realize, Mexico is one of the world’s top ten automotive manufacturing locations due to its long experience in the industry. For those consumers concerned about the quality of the vehicles made abroad, Audi has confirmed that manufacturing in Mexico will not harm its luxury brand status, with Peter Schwarzenbauer, Member of the Board of Management for Marketing and Sales for Audi AG going on to explain, “It will be possible to supply customers worldwide with cars built in Mexico to Audi’s renowned standard of quality.” Schwarzenbauer added: “In launching production operations in Mexico, Audi will enhance its own competitiveness and move significantly closer to its sales target of two million units per year by 2020.”
Emphasizing the importance of an international presence ‘for international success’, Stadler, AUDI AG’s Chairman of the Board of Management, shed light on Audi’s latest strategic move, stating, “Good infrastructure, competitive cost structures and existing free trade agreements played a significant role in the choice of Mexico. This trailblazing move will help us safeguard our position on the world market. Our German locations, too, stand to benefit from it.”
In recent times, there has been more and more evidence that Mexico is developing into an influential contender in the globally rising aerospace manufacturing… industry. Rolls-Royce, a power systems company providing services on land, sea, and air, has decided to open a new supply chain office in Guaymas, Sonora, Mexico The office will be located in the northwestern part of Mexico at the Roca Fuerte Industrial Park (Parque Industrial Roca Fuerte). This area is in an emergent area for aerospace industries. Aerospace manufacturing has progressed significantly in the last decade and its development has become an important priority for the economic situation of Mexico. Auto companies from all over the world, for example, are migrating from all over to set up shop in Mexico.
The Executive Vice President of Supply Chain Management North America for Rolls-Royce, Beverly J. Gaskin commented on the new business venture by Rolls-Royce in Mexico. She stated, “Nearly a third of advanced manufacturing companies in the Mexican aerospace industry are based in the state of Sonora. Locating staff in the center of this cluster will help us improve supplier relationships and performance. Delivering excellence in our supply chain is critical in helping us meet our commitments to customers.”
Praxair Mexico, a subsidiary of the Fortune 300 Company and prevalent supplier of atmospheric and specialty gases, Praxair, recently signed a new agreement with principal Mexican steal company, Deacero. Praxair’s technological services, equipment, and gases help in the operation of many diverse… industries. Their services aid in the preservation of foods, in the production of computer parts, and in the recycling of contaminated water from waste.
In an impending project, Praxair Mexico will supply gases such as oxygen, argon, and nitrogen to a new innovative industrial plant in Ramos Arizpe, Mexico. Ramos Arizpe is a very strategic location for the construction of the steel plant. It’s located in the apex of a booming industrial hub in Mexico. The plant will have a production capacity of 500 tons of steel per day and is expected to open its facilities in early 2014. Praxair will act as a principal force in the construction and maintenance of this new steel plant. Praxair, as a company, is dedicated to maintaining environmentally conscious business and production practices throughout all of their international ventures.
The General Director of Operations at Mexican steel production company, Deacero, David Gutierrez commented on their new partnership with Praxair. He stated, “We are happy to have Praxair as a key supplier to our new steel plant and look forward to a joint effort that results in innovative solutions and productivity gains that benefit both companies.” Murilo Melo, President and General Director of Praxair Mexico and Central America commented saying, “Praxair Mexico is proud to be awarded this new contract and is committed to providing Deacero and the Mexican market with cutting edge technology, high quality products and reliable world glass gas supply services in order to support its growth, productivity and environmental initiatives.”
As the cost of manufacturing in China continues to rise, companies in the U.S. and abroad are having to rethink their global strategies. As The Wall Street Journal article that ran earlier this year - titled “China’s Export Pain May be Mexico’s Gain” -would indicate,… companies that once flocked to China because of its massive pool of cheap labor and attractive government incentives are now finding themselves at risk of losing the advantages that brought them to China in the first place. As a result, manufacturing companies are moving towards near-sourcing to Mexico.
Now, thanks to a joint venture between two major petrochemical producers in the Americas, Mexico will improve its manufacturing capabilities, boost job creation and become even more attractive for foreign businesses. This partnership between Brazil’s Braskem S.A. and Mexico’s Grupo Idesa will build a plant in Veracruz, Mexico which will bring high-volume, high-efficiency plastics production to the region. At present, Mexico imports about 70 percent of the total amount of polyethylene use in the country. Once the new polyethylene complex featuring GE hyper compressor technology goes online, Mexico will significantly reduce the amount of polyethylene it imports for manufacturing, packaging and other industrial applications.
"This project is very strategically important for business development in the area, and our expectation is for it to spur long-term growth, so it was imperative for us to be extremely selective with the solutions we chose," said Silvia Pires Migueles, purchasing director for Braskem Idesa. "GE's efficient, reliable compressor technology makes us more competitive from day one, and GE's strong local presence gives us installation, maintenance, service and expansion advantages that will pay dividends for the life of the installation."
"Officials expect the plant's technology to attract new businesses to the region, creating jobs and healthy growth," said Marco Caviola, leader of GE Petrochemicals Solutions for Latin America. "We are committed to supporting that growth long-term by expanding our local maintenance facility and providing operator and maintenance training to Braskem Idesa employees."
Construction of the complex will begin later this year.
Italian confectionery group Ferrero, the maker of chocolate delights such as Kinder Bueno, Nutella and Ferrero Rocher sold around the world, plans to invest $190 million to open a new production plant in San Josè Iturbide in the Mexican state of Guanajuato.
The new plant, located at the Parque Opcòn industrial park, about 260km north of Mexico City, will feature four production lines. These four lines will manufacture the new Kinder and Nutella products for the Mexico as well as for U.S. and Canadian markets.
With production expected to begin in May 2013, the creation of the new plant couldn’t be more timely according to industry analyst’s growth forecasts. With CAGRs (Compound Annual Growth Rates) of 2.8 percent and 1.7 percent for the U.S. and Canada, respectively, IBISWorld food industry analyst Mary Nanfelt believes manufacturing in Mexico will work to the advantage of Ferrero, which is planning on exporting approximately 40 percent of its production to North America. "Ferrero is primarily going to manufacture their Kinder and Nutella products, which will definitely benefit the company because U.S. consumers are developing a more complex palette and they are becoming more interested in foreign products," Nanfelt told just-food, a source for food industry news and information.
The biggest share of Ferrero's business, however, will be conducted in Mexico, a market that is showing potential for growth. Jonathan Thomas, principal market analyst at Leatherhead Research, says to this regard, ‘I think Mexico is a market that shows potential for growth given it’s high percentage of young people, and of course young consumers are a key target market for confectionery.’[…] ‘People are looking towards European brands, Swiss chocolate and products like that. And that trend may well improve as the economic situation improves and disposable income levels start rising. There is no reason why consumers might not turn back to more expensive forms of chocolate and Ferrero would be in an ideal position to take advantage of that.’
For the five-year period 2010-2015, the Mexican confectionary market is expected to achieve a value of $3.2 billion. Ferrero, which began Mexican operations in 1992, is looking to capitalize on the Mexican confection industry’s heightened expansion.
There are plans by the Silicon Border industrial park, a high tech manufacturing area, and Jones Lang LaSalle, a commercial real estate services company, to open up a manufacturing hub close to the Mexican border in Baja California for solar panels and wind panel equipment. This dedication to creating a hub for… renewable energy parts is an important step for both the United States and Mexico in terms of moving towards a sustainable green economy. This shift will occur with a stronger reliance on renewable resources and natural resources in Mexico and the United States.
President of the Silicon Border industrial park Daniel Hill and another environmentally conscious company, Baja Sun Energy, stated, “Most people feel the economy in the US is picking up. Everybody that you talk to sees the green sprouts of growth coming back.” Hill described how Baja California seemed like a suitable place for the manufacturing venture because of its vital location and the economic relationship between the United States and Mexico.
The sustainable manufacturing park center is “like a sustainable city”, said Hill. He went to state, “It’s designed and built to be eco-friendly.” With the appearance of the Silicon Border industrial park project, Baja California is expected to turn more towards developing their use of natural resources in Mexico by the creation of thousands of wind turbines in the area.
The IMF has recently released its latest Financial Sector Assessment, a program that looks to review the financial health of 25 major financial sectors, as part of the IMF’s economic surveillance and monitoring. “Our assessment of Mexico’s financial system is very positive,”… said Fernando Montes-Negret, a senior financial expert in the IMF’s Monetary and Capital Markets Department. The assessment, published on March 30, proves that Mexico has been implementing better tools for systemic crisis management and competent supervision, while going on to say that Mexico’s banking system is resilient and well capitalized. Stress tests also indicate that Mexico’s economic system would be capable of sustaining significant shocks. Due to Mexico’s important place in the global economy, it was important to monitor the country’s financial system and provide an assessment of its health. The IMF, along with a positive forecast, recommends a range of actions to further improve financial stability within Mexico such as:
• Fully implemented international banking regulation
• Improve legal framework for derivatives
• Broaden regulatory and supervisory powers to financial and mixed activity groups
This year is busy for the IMF, which plans to evaluate 18 countries’ financial health—ranging from France and Spain to Argentina and Armenia—to spot any potential trouble on the horizon. For more information on the positive outcome of Mexico’s assessment, along with spotted risks and suggested actions, click here.
Many Japanese automakers have started to consider building cars for export markets outside their home country, due to the strength of the Yen that can increase profits. Honda is a prime example, due to its recent decision to build the Honda Fit hatchback at its new plant in Mexico at the beginning of spring 2014. This new plant… in Guanajuato, Mexico is Honda’s third assembly plant in Mexico and is being built for the production of “fuel-efficient subcompact vehicles” for the Mexican and North American markets. The plant will raise Honda's North American production capacity to 1.83 million vehicles annually.
The plant in Mexico will be dedicated to supplying up to 200,000 subcompact vehicles per year, including the Fit hatchback, to the large United States, Mexican and Canadian markets. The new plant will cost Honda $800 million to build, will be completed in 2014 and will add 3,200 jobs to the region when it’s operational.
Honda, the Japanese automaker, already builds a huge number of vehicles in North America. In fact, more than 85 percent of the Honda and Acura models sold in America were built in the United States, Canada or Mexico. Thanks to the move of the Honda Fit to the Mexican assembly plant, all four of Honda's global nameplates will be produced in North America.
As the third and final day of the World Economic Forum on Latin America comes to an end, we’ve compiled the following articles that highlight Mexico’s contributions to the forum and to the global economy:
I am 27 years old and I am passionate about making things happen, turning ideas into actions and dreams into reality. I like to set high standards and persevere to achieve what sometimes seems unthinkable. This is the reason I founded Instituto de Pensamiento Estratégico Ágora A.C. – IPEA, (first Mexican think tank of young entrepreneurs) in 2008, to identify, train and connect young leaders with decision makers empowering them to become real agents of change…
Brazil and Mexico have relatively young populations representing a wealth of potential talent… This is the Human Age equivalent of a vast, untapped gold mine sitting under the surface, waiting to be discovered…
From where I sit as dean of Kellogg School of Management, key to this discussion is setting an agenda for how we best educate the Latin American workforce and its future leaders to face the complexities of the 21st century. In Mexico alone, for example, half of the population is under the age of 27. Bolstering and inspiring this younger generation, while cultivating their talents, insights and capacity for wise and complex thinking, is fundamental to the future vitality of the region….
Mexico Gender Parity Taskforce, an initiative that aims to close the economic gender cap in Mexico by 10 percent in the next 3 years, is launched at the World Economic Forum on Latin America.
Mexico has taken a lead in job creation from sustainable transportation through the country’s initiatives to scale up the use of biofuels in aviation. The national airport authority ASA found that aviation biofuel production in rural areas could create new jobs through sustainable agricultural production and revitalize the economy of underdeveloped areas…
Sustainable Growth Summit Co-Chairs Jordy Herrera, Mexican Minister for Energy, and Martin Senn, CEO of Zurich Insurance Group kicked off the discussion on an optimistic tone, highlighting the substantial progress that countries like Mexico and Brazil have made in advancing sustainable solutions such as renewable energy and energy efficiency…
Taking action to improve agriculture requires a coordinated approach by government, business, farmers and civil society. In Mexico, a group of leaders is taking such an approach with support from the World Economic Forum. Nearly 40 global and Mexican companies have joined forces with Mexico’s Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA) to strengthen productivity, sustainability and farmers’ economic opportunity. Called the Mexican Agribusiness Partnership for Sustainable Growth, the group is focusing its efforts on five major crop groups – grains, oilseeds, fruits and vegetables, coffee and tea, and fisheries…
Sally Blount of the Kellogg School of Management, Northwestern University will co-chair the World Economic Forum on Latin America April 16-18, 2012 in Puerto Vallarta, Mexico. Blount recognizes that convening to talk about Latin America, which has a population close to 6 hundred million people, is critically important for the future of… the world and the region.
As dean of one of the world’s leading business schools, Blount has devoted her life to education. “We have to talk about education, we have to talk about interconnections, workforce preparedness, and we have to talk about increasing the vibrance and dynamism of the younger parts of our population” Blount said. Understanding how to bolster, equip and inspire their youth is key to the region’s success. Mexico is a great example of this need, considering that 50 percent of their population is under 27 years of age.
The Kellogg School of Management has long recognized the region’s potential and several years ago opened a campus in Miami to begging addressing their needs in terms of business education. Now they are moving into Sao Paulo to deepen their ties in Latin America. At the forum, Blount looks forward to meeting with Latin American leaders to discuss how her school can help in their mission of economic growth and vitality by better equipping the workforce of tomorrow.
His Royal Highness Crown Prince Haakon of Norway will be one of the co-chairs at the World Economic Forum on Latin America April 16-18, 2012 in Puerto Vallarta, Mexico. Prince Haakon points out that Latin America’s recent economic progress is impressive and that hosting this forum as well as the G20 and the Rio+20 in the upcoming… months goes to show the importance of the region.
When discussing important items that need to be addressed at the forum, the Prince pointed out that addressing the region’s youthful demographics was of great importance. For example, 50 percent of Mexico’s population is under the age of 27, so it is important to discuss how to best use that tremendous resource.
At the forum, the Prince also plans to discuss the economics surrounding big issues like poverty alleviation, climate change, low carbon technologies, and clean energy. He also points out that throughout these discussions it is important to remember that “values are actually the foundation of what we are doing” and that how they see each other and interact with each other will be a contributing factor of the forum’s success.
One of the world’s leading aerospace manufacturing companies, Southwest United (SU) has begun to recognize the benefits of doing business in… Mexico. CEO of Southwest United, Bill Emery claimed, “The infrastructure in Querétaro is every bit as good as in Oklahoma.” Southwest United has been in a business partnership with the Mexican aerospace manufacturing company Galnik since 2009 and ever since has seen considerable developments in their business infrastructure as a result of this alliance. Mexico’s aerospace manufacturing industry is growing at a fast rate because of its strong ties with the United States and Canada and its desirable geographical location for expansion.
In recent years, Mexico’s aerospace influence has increased significantly by 25%. Emery, in describing Southwest United’s decision to move into Mexico for production stated, “In Querétaro, the local government introduced us to Galnik, a family-owned business offering coatings to automotive and appliance manufacturers.” He went on to say in referring to Mexico’s aerospace development abilities, “They are as capable and comparable to engineers you will find in the U.S. or Canada.” Mexico has begun to become a hub for aerospace activity. In addition, Mexico’s emerging aerospace industry market is an important occurrence for the country’s growing and modernizing economy.
Jeffrey Joerres, President and CEO of the ManpowerGroup, a world leader in workforce solutions, will be one of the co-chairs at the World Economic Forum on Latin America in Puerto Vallarta, Mexico April 16-18, 2012. As a leader in his field, Joerres keeps his eye on the world scene, and has observed that Latin… America is taking on a much stronger role in commerce. Specifically thanks to strong economies and powerful demographics. These shifts are causing American companies to look south instead of east, which had previously been the case.
Joerres believes the summit will bring a lot of focus on Latin America’s workforce, with an emphasis on government regulations and their predictability. This, he says, is an amazingly important factor that foreign investors consider when they are looking to put assets and capitol on the ground.
When looking at Latin America, Joerres believes its labor market is a lot like other global emerging markets or even developed countries. ManpowerGroup “puts millions of people to work every year and trains tens of tens of thousands” Joerres says. He believes that at the World Economic Forum, as well as at the G20 and B20, it will be very important for governments, business leaders, and NGOs to focus on unemployment and how it can be reduced, in order to prevent what he calls a “festering long term unemployment problem.”
The vehicle, manufactured by Nissan Motor Co. in the city of Cuernavaca, Mexico, was engineered to be durable enough to handle the city’s 6,300 miles of ‘pothole-ridden streets’, according to Nissan officials.
The modernity of the vehicle is the reason behind the choice for the Mexican-made taxi: “The fact that we have been selected means a lot about the versatility of the platform”, said Carlos Ghosn, chief executive officer of Nissan of the Nissan NV 200 model, after presenting the cab at a reception yesterday attended by New York City Mayor Michael Bloomberg. “You can adapt this product exactly to the city’s very demanding needs in terms of safety, comfort, fuel efficiency, emissions and modernity.”
For instance, NYC’s new cab is the first New York taxi to be crash tested with the partition between driver and passengers installed, Mayor Bloomberg said. The sliding doors will protect riders from the risk of getting clipped by passing traffic, and the new seats will consist of a leather-like fabric woven with an antimicrobial vinyl resin, he added. According to the city’s Taxi and Limousine Commission, the Nissan cab will be equipped with a wide-range of improved features, including a transparent roof, fuel-efficient engine, completely flat floors, more legroom than a Crown Victoria (the iconic NYC cab), and more luggage space than most cabs. Additionally, Nissan says on its website that the new taxis will include passenger-controlled air-filtration and cooling systems for increased odor-control. As for the technical aspects, the vehicles will be produced in Mexico and fitted for taxi use by American workers, city officials said last May.
New York City is currently the only established taxi market for the NV200 minivan, now sold as a delivery vehicle in Japan and Europe. However, Nissan, Japan’s second-biggest automaker after Toyota Motor Corp., expects the cab to receive significant exposure in its newest role as New York’s official taxi.
For exclusive photos of the ‘Taxi of Tomorrow’, go to Flickr.com/MexicoToday.