Weekly Review I August 23, 2023

GENERAL SITUATION IN MEXICO

Weekly Review I August 23, 2023

RELEVANT NEWS

NEARSHORING UNLEASHES THE ‘MONTERREY DREAM’ AND DEMAND FOR HOUSING IN MONTERREY

Nearshoring has not only boosted the demand for industrial buildings in Nuevo Leon, but also the housing sector is showing great dynamism; in fact, the construction inventory in Monterrey is only expected to meet the demand for the next 24 months.

According to the president of the International Investment Council (IDEI), Alberto de la Garza Evia, the state capital has a unique opportunity due to the relocation of companies; in addition, in the last 8 years close to 500,000 people have arrived in the city in search of the “Monterrey dream”, both nationals and foreigners.

“There are more than 60 companies that are already willing to incorporate in our area of Nuevo Leon, to produce the goods needed both in our country and in the United States, mainly, and also in the European and Asian markets”, said De la Garza Evia in a press conference for the placement of IDEI bonds in the Mexican Stock Exchange (BMV).

In this sense, Jorge Martinez Paez, IDEI’s Vice President of Operations, commented that there is a great need for housing in Nuevo Leon and it is estimated that around 500,000 houses will be needed in the state in the next 10 years.

He pointed out that although part of this is due to the demographic bonus, there is also the nearshoring factor, since there are already strong migrations to the state, so they are looking to meet the demand that will exist in the future.

“It is very interesting on the housing side, the average inventory that exists against what is being bought, we have less than 24 months of inventory, that is, if housing projects are stopped in less than 24 months, it will be absorbed,” he said.

Martinez Paez explained that a project takes approximately 3 years to develop and they are sold at that same stage, so it is necessary to boost the housing sector to meet the needs of the industry.

IDEI PLACES 800 MILLION PESOS IN THE BMV; IT IS GOING AFTER MORE NEARSHORING MARKETS

As part of its business plan, Internacional de Inversiones (IDEI) carried out an issue of 800 million pesos in a green bond linked to sustainability, in order to build 400,000 square meters with certifications over the next 5 years; however, it is also analyzing expanding its operations to other regions where nearshoring is booming in the country.

Alberto de la Garza Evia stated that within the next

24 to 36 months they will seek to replicate the operation they have in the city of Monterrey in other markets in Mexico, where companies are also arriving.

“The studies indicate to us that it is the Guadalajara market and all that is around in first place; the Bajio market, based in Leon or Queretaro in second place and the Tijuana market in third place.”

Regarding the destination of the 800 million pesos, Jaime Escamilla Tienda, vice president of Administration and Finance of IDEI, specified that they have a commitment to build 400,000 square meters with certifications for the next 5 years, both in vertical and horizontal projects.

“We have to build 380,000 square meters that save at least 20% in energy consumption, water consumption, and carbon footprint,” he added. “Ten percent of the total, which is 20,000 square meters, we have to save at least 40% in energy or water consumption.”

SOURCE: FORBES MEXICO

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

August 18-22, 2023

POLITICAL AGENDA

• President´s agenda: Lopez Obrador announced upcoming visits to Baja California, Guerrero, and Oaxaca. He also revealed plans to visit Colombia on September 8-9 and Chile on September 10-11.

• Judicial Power: The Mexican Government is preparing to file a formal complaint against Justice Luis Maria Aguilar. The complaint alleges that he has contributed to the delay in dispensing justice and displayed neglect in a case involving substantial tax evasion by major taxpayers. The complaint will be presented to the full bench of the Supreme Court, according to Secretary of the Interior Luisa Maria Alcalde. This situation is being contrasted with a previous case where the same justice swiftly suspended the distribution of textbooks in Coahuila. The President criticized this decision as arbitrary and politically motivated. In response, he suggested the possibility of distributing the textbooks as gifts, highlighting the perceived inconsistency in the justice system’s actions.

• Agrarian Archive of Mexico: The head of the Federal Executive branch shared that the construction of the Agrarian Archive of Mexico is underway in the Historic Center of Mexico City. This

facility will store historical documents related to agrarian matters, including titles granted during colonial times, documentation of communal land ownership, and presidential decrees in this area. This initiative is important, and the archive is expected to be completed by September 2024.

INTERNATIONAL

• Transgenic corn: A reporter asked about Mexico’s scientific evidence on the harm caused by GMOs and glyphosate, linked to a U.S.-requested transgenic corn panel under USMCA. The president mentioned a decree restricting yellow corn for human consumption due to pressures from U.S. farmers with ties to legislators, who receive corporate campaign funding. The government intends to form a research team to investigate GMO health risks. Mexico won’t permit GMOs for human consumption, and discussions will include the Ministry of Economy and CONACyT. The president asserted this isn’t USMCA-violating and will adhere to the resolution.

• Bilateral relation: President Lopez Obrador will visit San Francisco in November and sent a letter, accompanied by Alicia Barcena, Mexico’s Foreign Secretary, to his U.S. counterpart discussing the

KEYPOINTS

OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

border wall and Texas’ border buoys. In the letter, he invited President Joe Biden to Mexico to discuss energy matters, focusing on Tamaulipas’ liquefaction plant and Salina Cruz Port in Oaxaca.

• Migration: In response to a reporter’s question about actions concerning undocumented migrants in Sinaloa, the president revealed plans to convene his cabinet to address the migrant issue due to recent increases. They will discuss simplifying procedures for migrants from their home countries and assess shelter conditions. Governors from southeastern states, including Chiapas, Tabasco, Veracruz, Campeche, and Oaxaca, will also be present. The president highlighted the consideration of a bilateral program with the U.S. to stimulate community development, including financing plans for needy countries, aimed at curbing the migrant flow.

• Central America elections: The president acknowledged Bernardo Arevalo’s victory in Guatemala and revealed he had communicated with him recently. They agreed to meet once Arevalo is officially the elected president to foster mutual cooperation. He emphasized Mexico’s support for Guatemala to address the factors driving migration from their communities. Regarding Ecuador, he mentioned that Luisa Gonzalez won the first round, with the second round to take place in a month. He congratulated the Ecuadorian people for their active participation in the elections.

• USMCA: Regarding the energy topic within the framework of the USMCA (T-MEC), President Lopez Obrador emphasized that there is no disagreement because energy resources are a part of the nation, and thus, Mexico maintains full sovereignty over them.He clarified that current-

ly, there’s only one ongoing process related to transgenic maize (genetically modified maize), as his administration decided not to allow its domestic use. He highlighted that maize is native to Mexico and comes in a diverse range of varieties. While Mexico is self-sufficient in white maize, it lacks self-sufficiency in yellow maize. As a result, the investigation aims to determine whether the allegedly transgenic maize is harmful to people’s health. This work began prior to the US government’s request for consultation. President Lopez Obrador stressed the importance of Mexico’s relationship with the United States beyond economic or commercial ties. He hopes that respectful communication will lead to the best solutions and emphasized his government’s commitment to cooperation on issues like migration and fentanyl trafficking due to their humanitarian nature. He recognized President Biden’s efforts in migration matters and affirmed the intention to continue collaborative work between the two countries.

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

ment’s savings, generated from citizens’ tax payments and the cessation of tax exemptions for large companies. Additionally, he mentioned a savings of 270 billion pesos due to curbing fuel theft. He noted that the sale of the presidential plane contributed to savings and shared that he personally uses commercial airlines for official visits.

ELECTIONS

• Morning conference: Regarding the continuation of morning press conferences in the upcoming administration, the president emphasized the vital importance of the right to communication and information in this era. He noted that this ongoing dialogue helps secure this right and is crucial to counteract advantageous groups. It’s important for the governing authority to maintain a continuous communication channel with the people. He acknowledged that businesses might seek advertising opportunities but cautioned that these profits must be reasonable. Leaders should uphold moral and political authority and not be swayed by communication companies’ attempts at manipulation.

• 2024 Elections: When asked by a reporter about his message to Mexicans at the end of his presidency, Lopez Obrador emphasized the need to combat corruption and maintain an austere and modest government. He highlighted the govern-

• Marcelo Ebrard: Regarding Marcelo Ebrard’s statements about the potential use of government resources through the Ministry of Welfare to support Claudia Sheinbaum’s candidacy for MORENA’s presidential nomination, the president clarified that such activities are not being carried out by the State. He denied any favoritism in the contest but acknowledged reasonable doubts during the process of defining a candidate.

SECURITY

• Security: President Lopez Obrador highlighted continued support from the National Defense Secretariat and the Navy to protect Mexicans. He outlined the military’s missions, including national sovereignty and internal security. The National Guard aids in public safety. The military also contributes to social development, infrastructure projects, and disaster relief. Regarding his Cabinet, he emphasized the importance of public support and a dedicated team. He discussed the “Jovenes Construyendo el Futuro” program’s 100 billion peso investment to assist 2.6 million young individuals. Additionally, he mentioned wage payments to Mexicana workers, ranging from 40,000 to 250,000 pesos.

• Lago de Moreno: President Lopez Obrador addressed the case of the disappearance of 5 young

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

individuals in Lagos de Moreno, Jalisco. He stated that collaboration with state authorities is underway to clarify the situation and emphasized that nothing will be hidden. He cautioned about the accuracy of information shared on social media and highlighted that inaccurate or false information can also be picked up by major media outlets and disseminated in a manipulated manner.

HEALTH

• IMSS Bienestar: IMSS BIENESTAR is a healthcare model in Mexico aimed at providing medical services, medications, tests, surgeries, and other healthcare provisions free of charge to individuals without social security coverage. The goal is to establish it as a comprehensive healthcare system accessible to a significant portion of the population. Zoe Robledo, the head of IMSS, is leading efforts to implement this model and expand healthcare access to underserved communities. The intention is to make IMSS BIENESTAR the best healthcare system globally by the end of the current administration.

INFRASTRUCTURE

• Train in Hidalgo: In response to a journalist’s mention of a potential train project to connect the Mexico City International Airport (AIFA) and the State of Mexico with municipalities in Hidalgo, the president did not rule out the idea of promoting railway projects in the region. He emphasized Hidalgo’s growth potential due to its geographical factors, particularly its water availability.

• Mayan train: Javier May Rodriguez, Director General of FONATUR, discussed the progress of Tramo 2, mentioning that 224 kilometers of tracks have been completed, with only 10 kilometers remaining to be finished. Maite Ramos Gomez, Director General of Alstom, added that the testing phase for Train 2 involves capacity validation, dynamic traction, and braking trials. President Lopez Obrador mentioned the complexity of the Tren Maya project.

• Movility in Veracruz: President Lopez Obrador discussed mobility challenges in the Alvarado-Boca del Rio area and the Paso del Toro toll booth on federal highway 150. He expressed intentions to evaluate existing projects and explore solutions. He emphasized completing the Istmo communication project’s first phase, mentioning his plan to ride a passenger train from Salina Cruz to Coatzacoalcos on September 17. He aims to ensure projects are prepared for the following administration to initiate and address right-of-way obstacles that impede progress. In response to Panama’s drought affecting trade routes and the Panama Canal, he highlighted the Istmo project as an alternative. He stressed the Istmo’s potential for connecting the Pacific and Atlantic Oceans. He noted that oil remains vital for development in the next 25-30 years as alternative energy sources evolve.

KEYPOINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S MORNING PRESS CONFERENCE

contamination of the Sonora River would be requested. Currently, he assured that the Comprehensive Cananea Plan is in progress to address this issue.

• Water scarcity: Puebla farmers are protesting claims of using airplanes to prevent rain, affecting their crops. President Lopez Obrador said more information will be shared next week, suggesting many cases are mere rumors. He mentioned efforts to induce rain, especially in drought-hit northern states. Farmers also want to contribute “energized” seeds to the Sembrando Vida program. The president plans to visit the region to assess integration. Additionally, one million tons of fertilizers are being distributed to farmers across the country.

ENVIRONMENT

• Water: President Lopez Obrador discussed efforts to improve water access across Mexico. Notable projects include a completed aqueduct in Sinaloa, irrigation systems in Baja California and Nayarit, and a health-focused initiative in La Laguna. He acknowledged challenges in domestic water access despite perceived sufficiency. These projects, backed by the Ministry of Finance and BANOBRAS, might involve foreign bank loans. Regarding San Luis Potosi’s water scarcity issue, the president will seek a report from CONAGUA’s director, German Martinez.

• Sonora Oil Spill: A journalist raised concerns about the lack of a detailed report on the spills in the Sonora River and simultaneously questioned the employment status of Cananea mine workers. In response, the president stated that reports on the labor progress of the mine workers and the

• Solar Panels: A reporter raised concerns about the installation of solar panels in Calpulalpan, Tlaxcala. The residents are opposing these panels, which were set up by the same company involved in constructing a gas pipeline connecting the US gas to the Riviera Maya. The construction of the solar panels did not lead to reduced energy generation costs or decreased environmental impact. President Lopez Obrador acknowledged the issue and mentioned that Secretary Maria Luisa Albores will investigate it. He noted that this situation involves a private agreement, making it distinct from the Puerto Peñasco project in Sonora, which is being carried out in collaboration with CFE (Federal Electricity Commission).

NEWS BY STATE

BAJA CALIFORNIA

The Ministry of Environment and Natural Resources approved the “Cimarron Wind” wind farm that will be developed in the municipalities of Tecate and Ensenada. The ministry resolved in favor of the Environmental Impact Study which consists of site preparation, construction, operation, and maintenance, which will have an installed capacity of up to 330 megawatts. According to the project presented, an annual generation of approximately 1,025.8 gigawatts per hour is estimated, and it will be made up of 68 wind turbines.

SOURCE: INDUSTRIAL NEWS BC

SONORA

The NEPO Industrial Park is inaugurated in Hermosillo, Sonora. It seeks to provide a competitive option of industrial lands to companies that wish to establish their operations in Sonora, since the property is far from the urban sprawl, avoids inconvenience to homes and traffic, gives access to wide streets, and has the necessary services.

SOURCE: REAL ESTATE MARKET

CHIHUAHUA

French businessmen begin trade missions to Chihuahua.

The intention is to promote the different states of the Mexican Republic as attractive areas for investment and business development.

The announcement was made by Hajer Najjar, General Director of CCI France Mexico in the company of Adalberto Flores, Industrial Promoter of the state of Chihuahua.

During her participation, Hajer Najjar indicated that the commercial context of Mexico and France is supported by the Free Trade Agreement between Mexico and the European Union, which has been in force since 2000.

SOURCE: ALCALDES DE MEXICO

NUEVO LEON

Faced with the current water crisis in Nuevo Leon, the industrial sector in the state affirmed that it will continue to coordinate with the authorities of the three levels of government to face the problem and one of its bets will be focused on a greater use of treated water.

For this reason, the industry will continue to make responsible use of this important resource by reusing water in its processes, increasing the use of treated water, using water-saving equipment, and carrying out water-saving awareness campaigns among its collaborators.

SOURCE: EL HORIZONTE

TAMAULIPAS

The Programa Impulso para MIPyMES has more than one billion pesos to promote the development of micro, small and medium-sized companies in Tamaulipas.

This was announced when Governor Americo Villarreal Anaya launched this program, at which event he delivered economic resources for eight million 885 thousand pesos that benefit 400 entrepreneurs.

SOURCE: EL UNIVERSAL

JALISCO

The Government of Jalisco promotes the presence of 9 companies from the food and beverage sector at the food expo pro in Hong Kong. It is the first time that Jalisco companies attend this fair, so they seek to open this new market and position the exportable supply of the entity. The companies will be in Hong Kong from August 17 to 21 and will have meetings with the Consulate of Mexico in Hong Kong, B2B meetings, and a tasting of Jalisco products with potential retail buyers.

SOURCE: GOVERNMENT OF JALISCO

AGUASCALIENTES

The production value of Aguascalientes’ manufacturing industry in the first six months of this year was 163 billion current pesos. Thus, compared to the same period of 2022, it had an increase of 11%, which was the second highest rate among the 32 entities in the country, as it was only surpassed by Campeche’s 15%.

SOURCE: DESDE LA RED

GUANAJUATO

The Mexican Association of Women Entrepreneurs (AMEXME) held in Uriangato the conference “Personal growth drives business and entrepreneurial success”, given by Juan Antonio Reus Montaño, General Director of IDEA GTO.

During his participation, Reus Montaño spoke about the impulse given to entrepreneurial ideas, pointing out that an example of this is the Mentefacturalo Fund, of which 350 projects are supported, some of which have already traveled to India, Singapore, Germany, Spain, Italy, France and more.

SOURCE: LIDER EMPRESARIAL.

QUERETARO

15 Italian companies joined Queretaro’s Circular Economy System, through a chain headed by the firm Eurotranciatura, as announced by the head of the Secretariat of Sustainable Development (SEDESU), Marco Antonio Del Prete Tercero.

During the event, the state official pointed out that Queretaro is the second state in the country with a circular economy law and the first to make a public policy through a system.

SOURCE: LIDER EMPRESARIAL

CDMX

In his second Monthly Activity Report, the Head of Government of Mexico City (CDMX) shared key achievements, including fiscal responsibility and revenue growth. He revealed that the city contributes 58.5% of the total annual expenditure. As of June, CDMX had collected 3.9% more revenue compared to the same period in 2022, reflecting improved income generation and austerity measures. Notably, CDMX ranks first in attracting foreign investment with 38%, benefiting from a favorable environment for foreign direct investment. The report also highlighted the city’s low unemployment rate, ranking third globally. The Chief of Government emphasized that due to administrative simplifications and the national economic climate, Mexico City is an excellent destination for investment and business establishment. Additionally, he discussed the expansion of social programs, reaching over four million residents receiving government support. The report was presented at the Teatro Esperanza Iris, attended by the government cabinet and special guests.

STATE OF MEXICO

The National Chamber of Industry Transformation (Canacintra) is organizing forums across its 76 branches nationwide to address the needs of the 14 industry sectors and compile proposals for presentation at four regional forums. The outcomes of these discussions will be presented at the National Convention of Branches, Sectors, and Divisions. The objective is to involve various stakeholders, including academics, specialists, and civil society, in formulating these proposals, promoting cross-sector collaboration. The resulting policy document will be shared with candidates in the 2024 electoral race, from the president to local officials, aiming to establish a platform of public policies for the industrial sector and identify areas for improvement and problem-solving. The upcoming regional forums, set to begin in September, will focus on topics such as Security, Innovation and Technological Transfer, and Industrial Public Policy. The initiative seeks broad participation and aims to generate valuable insights to support industry advancement in the lead-up to the elections.

SOURCE: MILENIO

SOURCE: MAS POR MAS

INVESTMENT NEWS

NORTHEAST

CRRC NANJING PUSHEN

A consortium of Mota-Engil Mexico and Chinese company CRRC Nanjing/Pushen is investing $175.44 million in a Marin, Nuevo Leon prefabricated plant for Metro Lines 4, 5, and 6 construction materials. This facility will produce essential elements and support sustainable mobility advancements.

PARAMOUNT NEW

Chinese company Paramount New Materials will invest $200 million in Derramadero, creating 1,225 jobs. The project focuses on aluminum casting and extrusion for the automotive and solar sectors. The complex, starting operations in December 2024, aligns with the trend of Nearshoring from Asia to northern Mexico, strengthening Coahuila’s automotive cluster and local economy.

CENTRAL MEXICO

DONALDSON

American company Donaldson Filtration Solutions opened a $75 million plant in Leon, Guanajuato, creating 600 jobs. The facility will produce filters for diverse industries. Governor praised the company’s contribution to the region’s growth. Founded in 1915, Donaldson is a global leader in filter manufacturing.

MEGACABLE

Mexican telecom Megacable is investing $417 million to expand coverage in Puebla, Chiapas, Oaxaca, and Tlaxcala, reaching 73% coverage. They’re adding 1,740 km of network for 1.8 million homes. Their 5-year $2 billion investment plan includes expanding fiber optics in Puebla. They’ve introduced cybersecurity solutions and disaster recovery services with AWS.

ENGIE

French company Engie plans a $1.6 billion investment in Coatzacoalcos, focusing on enhancing energy infrastructure and expanding gas pipelines. They serve 4 million people across 22 states with 13,200 km of distribution networks and have a gigawatt capacity in the electric sector.

GRUPO CHEDRAUI

Chedraui Group is constructing a new store in Toluca, Mexico, creating jobs and driving the local economy by creating over 178 new jobs. This Mexican company plans additional stores and is a significant employer with over 44,000 workers across 425 locations, including the U.S.

GRUPO MODELO

Grupo Modelo will invest $300 million in a state-ofthe-art corn processing plant in Salamanca, benefiting Mexican farmers, creating 1,000 jobs, and promoting sustainability with minimal water usage. This underscores confidence in Mexico’s business climate and public-private collaboration for growth.

SOURCES: CLUSTER INDUSTRIAL, BNAMERICAS, EL HERALDO, PLAN MAYOR, MEGA NOTICIAS