Weekly Review I September 20, 2023

GENERAL SITUATION IN MEXICO

Weekly Review I September 20, 2023

RELEVANT NEWS

A NEW WAVE OF INVESTMENT FROM SPAIN TO MEXICO IS EXPECTED

Antonio Basagoiti Pastor, president of the Spanish Chamber of Commerce (Camescom), foresees a new wave of capital from Spain to Mexico by 2023. In recent months, he has received more requests from Spanish companies to invest in Mexico than in the previous four years.

“If before there were maybe two or three (companies interested in investing) a month asking about Mexico, now that number is multiplied by three or four,” says the Banco Santander executive.

“We have significantly increased the number of sector consultations so that there will be a new wave of Spanish investment in Mexico, partnering with Mexican companies,” he told Forbes Mexico.

Those who are now betting on Mexico are those sectors and industries that have seen that due to nearshoring, Mexico will need suppliers of the automotive industry, electrical components, and agri-food, explains the business leader.

“Spanish investment in Mexico has a very important historical background, in fact, we have lived through all kinds of governments, all kinds of external problems, earthquakes, devaluations,” explains the businessman.

“We are not moving at the political level, but at the level of the potential that Mexico has for investment,” says the representative of the Spanish companies that have established themselves in the Mexican economy.

RELEVANT NEWS

Today, foreign investments show that Mexico is a country with a lot of capacity for growth, especially due to the relocation of companies from Asia, the United States, and Europe; it also has a great labor force, committed collaborators, and is a welcoming nation, says the president of Camescom.

In this sense, Mexico is one of the most important places in the world for the business sector to invest in the coming years, says Basagoiti Pastor.

During the first half of 2023, Spanish companies increased their investments in the Mexican economy by more than 100%, according to the Ministry of Economy (SE).

Spanish companies invested more than $4.224 billion between January and June 2023, compared to $2.075 billion last year.

According to the agency in charge of Raquel Buenrostro Sanchez, from 2006 to the first semester of 2023, Spanish companies have invested more than 57.375 billion dollars in banking, automotive, contact centers, telephony, hotels, restaurants, agribusiness, and other productive activities in Mexico.

Spanish companies are the second largest investors in Mexico, after the United States, with a capital of more than $233.949 billion.

In Mexico, more than 7,000 companies of Spanish origin operate in the electricity, banking, telephone, and contact center industries.

There are currently more than 500 Mexican companies in Spain, generating more than 30,000 jobs, according to the Mexican Embassy.

In recent years, there have been 16 mergers or acquisitions of national companies in the Spanish market for nearly 1 billion euros, according to a report on global investment by the United Nations Conference on Trade and Development (UNCTAD).

Mexico also leads Latin American investors in greenfield business projects in Spain, with 79 operations. The deals are heterogeneous and cover a wide range of business sectors.

In addition to the entry into Spain through the acquisition of companies such as Cinepolis or Bimbo, there is a clear interest in the real estate sector, with operations such as Colonial, Metrovacesa, or Realia, as well as hotels such as the Villamagna and numerous properties in prime locations, mainly in the city of Madrid.

SOURCE: FORBES MEXICO

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

September 13-19, 2023

HEALTHCARE AND MEDICATION

• The President addressed corruption in healthcare, emphasizing an unlimited budget to strengthen healthcare.

• He mentioned the availability of the COVID-19 vaccine for all, despite initial indications, and potential vaccine sales in the private sector.

PUBLIC FINANCES AND FISCAL RESPONSIBILITY

• Addressing the budget’s debt ceiling, President Lopez Obrador acknowledged a budget deficit due to infrastructure projects but stated it remains within the legal framework.

• He emphasized an increase in social projects, infrastructure completion, wage stability, and inflation control, ensuring responsible public finances.

PENSIONS FOR SENIOR CITIZENS AND SOCIAL PROGRAM STREAMLINING

• The President discussed ensuring pensions for senior citizens, reflecting on the previous doubt about budget sufficiency.

• He credited corruption elimination for funding these social programs, emphasizing the completion of Banco de Bienestar branches, and reducing reliance on intermediaries.

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

INFRASTRUCTURE PROJECTSWATER SUPPLY AND TRANSPORTATION

• During the inauguration of a new aqueduct, the President emphasized the Cuchillo II aqueduct’s significance and the need for additional projects due to Monterrey’s above-average growth.

• He also noted the Rio Panuco project, emphasizing state government collaboration.

• Advancements in infrastructure projects, such as railway rehabilitation, bridge renewal, and drainage works, were presented, improving cargo and passenger transportation. A second phase involves connecting Coatzacoalcos with Palenque.

TREN MAYA AND TRANSPORTATION

• The Governor of Quintana Roo announced the Tren Maya’s inauguration and the Yum Kaax international trade market’s opening, designed for affordable regional and imported product trading.

• General Oscar David Lozano Aguila highlighted job creation through the construction of Tren Maya segments spanning Campeche and Quintana Roo.

MEXICO-TOLUCA TRAIN “EL INSURGENTE” AND TRANSPORTATION EFFICIENCY

• The Secretary of Infrastructure reported the successful usage of “El Insurgente” and its investment, enhancing transportation.

INFRASTRUCTURE ADVANCES AND REGIONAL INTEGRATION

• Advancements in infrastructure projects, such as

railway rehabilitation, bridge renewal, and drainage works, were presented, improving cargo and passenger transportation. A second phase involves connecting Coatzacoalcos with Palenque.

• The Governor of the State of Mexico acknowledged the project’s potential benefits and integration into the city’s mobility system.

• Corridor Interoceanic Train and Regional Integration:

• The Governor of the State of Mexico acknowledged the project’s potential benefits and integration into the city’s mobility system.

PENDING INFRASTRUCTURE PROJECTS AND ECONOMIC IMPACT

• The President listed pending projects, highlighting his focus on completion and pension assurance for senior citizens, achieved by eliminating corruption.

• He mentioned the Banco de Bienestar branches as part of streamlined social programs without intermediaries.

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

SECURITY REPORT AND CRIME REDUCTION

• Rosa Icela Rodriguez presented a security report showing reduced federal crime incidence and homicides.

• She highlighted specific states with high homicide rates.

ENVIRONMENT AND CONSERVATION

• The President emphasized reforestation through the Sembrando Vida program and protected natural areas for public use.

• He mentioned previous beach privatization trends.

• He discussed the CALICA case and emphasized the company’s lack of response, highlighting the importance of the tourist area.

• Near Cancun, entrepreneurs dedicated mangroves to become protected areas, contributing to tourism.

BILATERAL RELATIONS AND DIPLOMACY

• The President emphasized Mexico’s strong bond with Colombia and Chile due to shared history.

US RELATIONS AND IMMIGRATION

• He noted the government’s response to U.S. requests and criticized the use of such issues for political agendas in the United States.

POLITICAL PRACTICES AND UNITY

• The President reiterated the need for judicial reform, allowing citizens to elect judges and criti-

cized judicial alignment with the oligarchy.

• He mentioned Claudia Sheinbaum’s leadership and denied any rupture in MORENA, highlighting past practices like vote-buying.

• He expressed confidence in party and public unity, cautioning against polarization and emphasizing the impact of social media.

CEREMONY OF BASTON DE MANDO AND INDIGENOUS COMMUNITY SUPPORT

• The President highlighted the symbolism of the Baston de Mando ceremony for indigenous communities and his government’s commitment to addressing their needs.

• He also mentioned his role in overseeing responsible resource use for electoral purposes.

MEETING WITH INDIGENOUS COMMUNITIES AND HEALTHCARE INCLUSION

• He reiterated his government’s support for indigenous communities, highlighting the elimination of intermediaries in direct support.

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

CATEGORY ONE AIR SAFETY AND AVIATION IMPACT

• Regarding air safety status, the President mentioned potential benefits for tourism and airline commitments to the Felipe Angeles International Airport.

MEDIA AND CORRUPTION AND INFORMATION ACCESS

• The President criticized media manipulation and urged the public to stay informed through social media.

• He contrasted this with past practices.

NATIONAL EMERGENCY ALERT SYSTEM AND DISASTER PREPAREDNESS

• Laura Velazquez mentioned the Second National Simulation to assess population responses to emergencies and the national alert system project for mass text messages on cell phones.

NEWS BY STATE

BAJA CALIFORNIA

Baja California dominates in labor quality due to nearshoring. According to El Economista’s State Occupational Quality and Competition Index (ICCOE), Baja California and Chihuahua were the only states with a green light, or high level, in the second quarter of the year.

Both states obtained 83.2 points out of a possible 100, but for Baja California it is the second consecutive quarter at the top, due to its constancy shown in the eight complementary rates considered by the ICCOE, highlighting that it presents the lowest indicator in the country in partial occupation and unemployment.

SONORA

Sonora’s economy has undoubtedly achieved great growth in just two years of government, including being the leading border state in industrial production with a growth of more than 6%, said Governor Alfonso Durazo Montaño.

The state governor highlighted that, during 18 months, exports grew by 14.6%, generating historic profits, and achieving a 3.23% increase in the employment rate in the last year.

SOURCE: EL ECONOMISTA

SOURCE: EL IMPARCIAL

CHIHUAHUA

Authorities from Chihuahua attended The Battery Show 2023, the largest exhibition of advanced battery technology, new electric vehicles (EV), and next-generation energy storage systems in America.

The purpose of their visit was to promote the competitive advantages of the state and attract foreign investment. This convention, held in Detroit, Michigan, is considered one of the most important globally, focused on electromobility.

SOURCE: CLUSTER INDUSTRIAL

NUEVO LEON

Governor Samuel Garcia assured that Nuevo Leon has the capacity to grow economically by up to 10% each year during the remainder of his administration due to nearshoring.

During his message at the presentation of the 2040 Strategic Plan, the governor assured that the benefits of the phenomenon will result in higher income for future governments.

TAMAULIPAS

With the “Courage in Action” model, the Reynosa Maquiladora and Manufacturing Association (INDEX) promotes women’s well-being by strengthening self-esteem, self-worth, respect, emotional management, and healthy relationships.

The program, which consists of conferences, open forums, and personalized exercises, was designed by Edith Lopez, a coach specializing in humanism and emotional management.

SOURCE: EL HORIZONTE

SOURCE: MEXICO INDUSTRY

SAN LUIS POTOSI

To strengthen knowledge in the digital field and improve the competitiveness of companies, the State Government through the Ministry of Economic Development (Sedeco), in coordination with the Internet Association MX and the Mexican Association of Secretaries of Economic Development (AMSDE), will hold in San Luis Potosi the seminar “Digitalizing SMEs”, on September 20.

Following the economic development strategy of the Governor of San Luis Potosi, Ricardo Gallardo Cardona, this event will provide participants with the necessary tools to increase the productivity of small and medium-sized companies, since in a world of constant digital transformation, access to technological skills and knowledge is essential for the growth and prosperity of businesses.

SOURCE: PLAN INFORMATIVO

JALISCO

Of the more than 400 Asian companies seeking to relocate to Mexico through nearshoring, Jalisco is focusing its efforts on 19 Chinese companies in sectors such as electromobility, fiber optics, and high technology.

In addition, the state will attract Foreign Direct Investment (FDI) from the United States, Germany, and Israel, Xavier Orendain, strategic general coordinator of Growth and Economic Development, told El Economista.

SOURCE: EL ECONOMISTA

QUERETARO

Micro, small, and medium-sized companies (MSMEs) in the industrial sector are expected to close 2023 with growth of 4.7 to 5%, a trend that has been maintained from January to July, according to information from the Queretaro Industrial MSMEs Association (Amiqro).

The demand for suppliers, the post-pandemic economic reactivation and the supply requirements generated by companies such as Tesla, are part of the factors influencing the performance of local companies, said the president of Amiqro, Jose Luis Camara Gil.

SOURCE: EL ECONOMISTA

CDMX

Mario Delgado, the national president of Morena, announced that he is considering running for the position of Mayor of Mexico City in the local elections of 2024. However, he emphasized that he would need to resign from the national presidency of Morena to avoid conflicts of interest. He stated that he will make a decision in the coming days, based on the issued call for candidates. Delgado argued that he has experience in key areas such as security, finances, and education and that this experience would serve him well in effectively governing the city. He also expressed his support for the current head of government, Claudia Sheinbaum, and criticized the opposition in the city for their focus on the real estate business and corruption in that sector. Regarding criticisms about a lack of proposals, Delgado stated that he would continue to communicate the country’s project led by President Lopez Obrador. He will decide based on what is in the best interest of the movement and the continuity of Morena.

SOURCE: PROCESO

STATE OF MEXICO

President Andres Manuel Lopez Obrador announced an upcoming working tour in the State of Mexico, accompanied by the new governor Delfina Gomez (Morena). During the tour, he will oversee the progress of the Felipe Angeles International Airport Train (AIFA) to the Lecheria station and the development of the Lago de Texcoco Ecological Park. Additionally, he will visit Tecamac, Chimalhuacan, Ciudad Nezahualcoyotl, Ecatepec, and Texcoco to supervise the delivery of federal government social support. This tour will focus on reviewing infrastructure projects and welfare programs in the region.

SOURCE: EL UNIVERSAL

INVESTMENT NEWS

NORTHEAST DEACERO

Mexican steel industry giant DeAcero is investing $1 billion over the next three years to build a new steel mill and upgrade equipment in Saltillo, Coahuila, and Celaya, Guanajuato, Mexico., it is projected to create 1,000 direct jobs.

TECO

Taiwanese company Teco has invested $10 million in a new plant in Nuevo Leon, Mexico, to manufacture industrial electric motors. The facility in Cienega de Flores will create 180 jobs and aims to produce 150,000 high-efficiency low-voltage motors annually by the end of 2024.

CENTRAL MEXICO CLOUDHQ

American company CloudHQ is investing $3.6 billion to build Mexico’s first data center campus in Colon, Queretaro. This significant investment demonstrates a commitment to state-of-the-art technology infrastructure in Mexico and offers substantial potential for job creation and local industry development.

MINCER HD

English Tier 2 automotive supplier, Mincer HD (MAT Holdings, Inc.), is set to establish plants in Hidalgo, Mexico, dedicated to drum casting and machining. This venture will create 350 direct jobs and 1,500 indirect jobs in its initial phase. The investment is valued at approximately 70 million dollars.

JUDD WIRE

Japanese company Judd Wire, a harness supplier for the automotive industry is set to establish its new plant in the VESTA Industrial Park in Aguascalientes, Mexico. This expansion will create 300 new jobs, with operations expected to commence in early 2025. The company’s investment is over 25 million dollars.

CDMX

ENDURANCE MOTIVE

Spanish firm Endurance Motive will open Mexico’s first lithium battery plant in Puebla in March 2024. This marks a significant step for Mexico’s electric vehicle industry. The company, specializing in lithium-ion batteries, chose Puebla for its strategic location.

HEINEKEN

Dutch brewer Heineken is set to invest $511 million in building its first brewery in Mexico’s southeastern region, Yucatan. This move will create 2,000 jobs and represents Heineken’s eighth brewery in the country.

SOURCES: CLUSTER INDUSTRIAL, MILENIO, EXPANSION