Weekly Review I March 6, 2024

GENERAL SITUATION IN MEXICO

RELEVANT NEWS

AMCHAM ASKS FOR USMCA TO BE INCLUDED IN 2026 REVIEW

Despite the uncertainty that Mexico and the United States are facing due to the change in their respective administrations, Carlos García, the new president of the American Chamber of Commerce Mexico (AmCham), promised that the members of his organization will work to ensure that the review process of the T-MEC in 2026 has a “cordial, proactive and successful character” that “will lead to the strengthening of the three countries and the North American region,” while strengthening nearshoring.

In the framework of the 107th General Assembly of AmCham members, the representative of U.S. companies in Mexico stated that, given the current situation, the USMCA is a “cordial and successful process” that will lead to the strengthening of the three countries and the North American region”, while nearshoring is strengthened.

Carlos Garcia, who serves as CEO of Valero Mexico, became president of AmCham for the period 2024-2025, and as a commitment, he proposed to work between both nations with a vision for 2030, regardless of changes in government. On both sides of the border, it will be possible to take advantage of phenomena such as the relocation of global supply chains, known as nearshoring, which he said: “we have capitalized on and which has great potential”.

He emphasized that the North American region is characterized by breaking paradigms as a global leader, which is why the three signatory countries of the Mexico-United States-Canada Agreement (USMCA) are increasingly integrated through regulatory homologation, trade facilitation, and nearshoring.

During his speech, Carlos Garcia mentioned that 2026 will be a year in which North America will face two new historic events: the revision of the USMCA and the World Cup, the first to be organized on a regional level.

“Both events are fundamental for the three countries because we are declaring our will to build a bloc vision,” he said.

There are upcoming electoral processes in both countries that will lead to changes in the economic and political landscape, creating uncertainty, although he also acknowledged that there are challenges and areas of opportunity, such as nearshoring.

Daniel Baima, outgoing president of AmCham, warned that there are pending issues that concern the business community, such as security, followed by energy and investment incentives by region and type of industry.

“AmCham’s DNA is rooted in strengthening integration between Mexico and the United States to promote greater trade,” he said.

SOURCE: EL ECONOMISTA

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

February 28- March 5, 2024

TRANSPORTATION

• Constitutional Reforms for Passenger Trains: The Secretary of Infrastructure, Communications, and Transportation in Mexico, Jorge Nuño, highlighted the country’s current transformation in the railway sector, particularly focusing on the revival of passenger railway services after a 30-year hiatus. This revival is being facilitated through projects like the Maya Train. The constitutional reform aims to use existing freight routes for passenger transportation and prioritize the development of passenger railway services. The reform recognizes passenger railway transportation as a priority and ensures the coexistence of freight and passenger trains. Major freight service companies have shown interest in this initiative and are conducting feasibility studies, expected to take between 5 and 7 months. Ferromex is working on the studies for the following routes: Mexico-Querétaro-León-Aguascalientes, Manzanillo-Colima-Guadalajara-Irapuato, México-Querétaro-Guadalajara-Tepic-Mazatlán-Nogales, and Aguascalientes-Chihuahua-Cd. Juárez. Ferrosur is studying the feasibility of the Mexico-Veracruz-Coatzacoalcos and Tren Interurbano AIFA-Pachuca routes. Finally, Kansas City Southern is working on the studies for the México-Querétaro and Querétaro-San Luis Potosí-Monterrey-Nuevo Laredo routes.

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

• Maya Train: The president inaugurated the Great Museum of Chichén Itzá after a 6-hour journey on the Maya Train, highlighting its significance as the world’s most important project with extensive railway construction. Quintana Roo’s governor emphasized the importance of the newly inaugurated sections of the train route, noting substantial investments and projects triggered by the Maya Train, contributing to regional well-being and competitiveness. The Minister of National Defense reported on the pre-opening of a section of the train route, detailing operational statistics and passenger numbers. Various consortiums reported successful completion and delivery of railway sections, with significant progress in track installation and equipment.

INTERNATIONAL RELATIONS AND TRADE

• Steel conflict with the United States: In response to a reporter’s inquiry about protests in the United States regarding Mexican steel, President López Obrador stated that they are reviewing the issue as they have noticed conservative groups in Mexico lobbying in the United States and Canada ahead of elections through conservative organizations. He added that this is part of the U.S. election campaign, where Mexico is often blamed for the country’s problems. Regarding Canada, AMLO mentioned there are also intentions to take unilateral measures against Mexico due to migration flows, and they are collaborating to control the migration flow. He confirmed that Foreign Affairs Minister Alicia Bárcena will hold a meeting with Prime Minister Justin Trudeau and emphasized their good relationship.

• Visas for Mexicans in Canada and Trilateral Summit: The president clarified that the new visa requirement to enter Canada only affects 40% of Mexican visitors. He reiterated his respect for each country’s decisions but sent a “fraternal reproach” to Prime Minister Trudeau, recalling Mexico’s fundamental role in including Canada in the USMCA, as President Trump initially opposed their participation, and he managed to convince him.

• Trilateral Summit: López Obrador mentioned that, given the situation that has arisen regarding steel with the U.S. and Canada, he would not participate in the North American Leaders’ Summit if there was no respectful treatment. Also, AMLO stated that the summit “is difficult to achieve” due to electoral timing, noting that the organizers failed to take that into account. He added that critical current issues such as migration, drugs, weapons, and development cooperation are progressing positively. He acknowledged having a very good relationship with the United States government.

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

ECONOMIC SITUATION AND BUSINESS AFFAIRS

• Conflict with AHMSA company: The president, in response to a reporter’s question about the power outage in Coahuila and the conflict with the company AHMSA (Altos Hornos de México), stated that they are addressing the problem. Additionally, he added that former president Carlos Salinas de Gortari privatized it and his associates had shares. When it was public, it worked very well, but when it was privatized, it was poorly managed, taxes were not paid, money was squandered, and politician’s programs were financed. In the previous six-year term, it was decided to nationalize a company of Altos Hornos, with an inflated valuation, reflecting a lot of corruption. In this regard, he said that with investment, it can be rescued for the development of North America and steel production and invited serious investors to invest in the company. He mentioned that there are three companies that have shown interest in payment terms.

HEALTHCARE AND SOCIAL SERVICES

• Healthcare system: The president informed that a meeting is scheduled for the afternoon of March 21 in Oaxaca to evaluate the public health system. He announced that he will tour at least 23 states in the next few days to supervise the progress in the healthcare system. The objective of the tour is to develop a diagnosis at health centers, medical units, and hospitals, as well as an evaluation of medical equipment, specialists, staffing of workers, and medication supply. The tour ends on March 17th.

• ISSSTE (Institute of Security and Social Services for State Workers): President López Obrador announced that the new General Director of the ISSSTE

is Bertha Luján. This change occurred because the person who was in charge of the ISSSTE decided to leave for another task, according to the mandatary.

ENERGY

• Energy sovereignty: The president emphasized that sovereignty in energy matters is being recovered, particularly in electricity. Thirteen plants were purchased from Iberdrola, so the Federal Electricity Commission (CFE), which used to produce 39% of electricity, now will produce 54%, and with the new plant that is about to be completed, production will be above 60%. There is no cheaper or cleaner energy than that produced by hydroelectric plants, but they were not considered clean energy sources. This was achieved through a decree, but a judge granted an injunction in favor of an Italian company. Subsequently, the electricity industry reform was presented, approved by Congress, but the conservative bloc filed a lawsuit, and two ministers annulled the law.

NEWS BY STATE

BAJA CALIFORNIA

In order to have a roadmap to guide actions to boost the semiconductor industry, the State Government through the Ministry of Economy and Innovation (SEI) joined the study conducted by the U.S. Embassy in Mexico and the U.S.-Mexico Foundation for Science (FUMEC), said Secretary Kurt Honold Morales.

He added that the delegation integrated by members of FUMEC and the U.S. Agency for International Development (USAID) conducted interviews and visits in Mexicali, Tijuana and Ensenada with companies in the semiconductor and electronics sector, as well as educational institutions to learn about their vision, challenges and opportunities.

SOURCE: INFOBAJA

SONORA

Training young people in the new standards required by international companies, thus achieving a more competitive state and generating greater investments in clean energy is a fundamental part of the Sonora Plan, therefore, it is important to specialize students in human capital, which are: electromobility, automation and semiconductors, said Francisco Acuña Mendez.

During his participation in the International Congress Administration: CIA 3.0 Administration and Sustainability, the Green Future, the honorary president of the Council for Sustainable Development (Codeso), emphasized that the Sonora Sustainable Energy Plan is creating an industrial policy to attract more investments to the state, which is why it requires prepared and certified young talents.

SOURCE: TERMOMETRO EN LINEA

TAMAULIPAS

While participating in the Glosa of the Second Report of the Governor, Américo Villarreal Anaya, the Secretary of Energy Development of Tamaulipas, José Ramón Silva Arizavalo, said that the state has a great renewable potential, both wind and solar, which can help decarbonize the economy, not only of the state, but of Mexico.

Regarding the reclassification of rates he said that they are going ahead with a discount for all, the people who consume the least will receive a 15 to 50 percent discount and a proportional part for the rest, but all the municipalities will receive a discount.

SOURCE: MILENIO

COAHUILA

The wave of automotive suppliers that has hit Nuevo Leon, after the announcement of Tesla’s gigafactory in Santa Catarina, has caused a strong increase in the price of industrial warehouses of up to 50%, and Coahuila has also felt the impact.

The expectation for the development of the automotive industry with the arrival of Tesla has led Coahuila to confirm itself as the main producer of auto parts, since from January to November 2023 it registered a global value of 17,164 million dollars.

SOURCE: VANGUARDIA

NUEVO LEÓN

In Nuevo León, the nearshoring boom has generated high expectations for multiple sectors.

Announcements of expansions or the arrival of new companies are frequent

Mexico captured $36,058 million dollars in foreign investment in 2023, of which 7%, or $2,537 million dollars, corresponded to Nuevo Leon.

The Secretary of Economy of Nuevo León, Iván Rivas, said that the report made by the Ministry of Economy differs from the data offered by local authorities because, in some cases, these are based on the companies’ announcements, while the official investments are those already accounted for by the RNIE (National Registry of Foreign Investments).

SOURCE: ABC NOTICIAS

NEWS BY STATE

AGUASCALIENTES

Under the administration of Governor Tere Jiménez, Aguascalientes has experienced remarkable economic growth, becoming a benchmark for attracting investment and comprehensive support for micro, small and medium-sized enterprises (SMEs).

The region has managed to attract significant foreign direct investment, reporting an annual growth of 130% in 2023, with 1.379 billion dollars invested.

SOURCE: LIDER EMPRESARIAL

JALISCO

The Association of Maquiladora and Manufacturing Industries of the West (Index) expects that this year companies in the sector will invest at least 350 million dollars and generate more than 10 thousand jobs in Jalisco.

Guillermo del Río Ochoa, president of Index Occidente, explained that this year companies in the sector will be cautious in terms of investments due to the electoral season and other challenges, such as the lack of energy and labor.

SOURCE: INFORMADOR

NEWS BY STATE

GUANAJUATO

On the first day of the working tour of Asia to attract investment, the Guanajuato delegation led by Governor Diego Sinhue Rodríguez Vallejo visited telecommunications companies.

With these companies, they agreed on the growth of investments in Guanajuato. The delegation met with executives from the Japanese company NTT Data, which specializes in the integration of communication systems.

SOURCE: AM

SAN LUIS POTOSI

In the third quarter of 2023, San Luis Potosí’s informal economy registered a 5.4% growth compared to the same period of the previous year, accompanied by an annual increase of 0.10% in its contribution to the national Gross Value Added (GVA).

This analysis was presented by the National Institute of Statistics and Geography (INEGI), as part of its report on the Quarterly Informal Economy by Federal Entity (MEITEF).

SOURCE: LIDER EMPRESARIAL

QUERÉTARO

The local automotive industry expects 2024 to be a year of growth, with the possibility of a double-digit increase in the production of auto parts, according to the Director of the Querétaro Automotive Cluster, Daniel Hernández Camacho.

Expectations regarding the recovery of the market and pre-pandemic sales in the United States, he pointed out, will have an impact on the demand for parts produced in the state. However, the sector is fine-tuning its forecasts for this year.

SOURCE: EL ECONOMISTA

NEWS BY STATE

CDMX

The major telecom companies in Mexico, Telcel and AT&T, are set to roll out their 5G networks in Mexico City this summer, marking a significant step forward in the country’s adoption of this technology. Despite challenges such as government procedures and spectrum costs, efforts are underway to accelerate the transition to 5G, with companies like Ericsson collaborating with operators to optimize the process. The benefits of 5G are evident from examples like Jio in India, where rapid adoption has led to substantial growth in data usage and subscriber numbers.

SOURCE: EL HERALDO DE MÉXICO

STATE OF MEXICO

Walmart de México y Centroamérica, the largest supermarket chain in Latin America, said it plans to invest 1.253 billion pesos in the State of Mexico for the period from 2023 to 2025. The company said it contemplates 45 projects in 29 municipalities in the state, which include 43 new stores and two last-mile warehouses, which will allow the creation of 1,250 permanent jobs.

SOURCE: EL ECONOMISTA

INVESTMENT NEWS

NEMAK

The automotive company announced the intention to invest 404 million dollars in Mexico during 2024. The location and the creation of job details remain unconfirmed.

RAMKRISHNA

The Indian automotive manufacturer announced its arrival to Mexico with a 10.8 million dollar investment. The location and the creation of job details remain unconfirmed.

NORTH

TT ELECTRONICS

The electronics components manufacturer opened

a new facility with a 40 million dollar investment in Mexicali, Baja California. The project estimates the creation of 250 jobs.

TASTIOTA SOLAR PARK

Recurrent Energy company inaugurated a new solar park in Tastiota, Sonora, with 137.5 million dollars investment. The Government of Sonora announced a tour to attract investments from companies in electromobility and solar energy in China.

MEXICO PACIFIC LIMITED

The company inaugurated its headquarters in Hermosillo, Sonora to start the construction of a gas pipeline in Puerto Libertad, Sonora. The Saguaro Energía LNG project is a 13 billion dollars investment and the creation of 13,000 jobs in the region.

INVESTMENT NEWS

TERNIUM

The steel company announces the 1,800 million dollar investment to expand its facility in Pesquería, Nuevo León. The number of jobs that will be created has not been disclosed yet.

EMERGENT COLD

The food logistics company announces the 50 million dollar investment for new facilities in Monterrey and Apodaca, Nuevo León; and Villagrán, Guanajuato. The number of jobs that will be created has not been disclosed yet.

POSCO

The battery manufacturer announces the expansion of a new facility in Ramos Arizpe, Coahuila with a 100 million dollar investment. The number of jobs that will be created has not been disclosed yet.

ZIEMMAN HOLVRIEKA

The German food logistics company announced the groundbreaking of its first facility in Ramos Arizpe, Coahuila with 29 million dollars investment. The project will create 150 jobs in the new facility.

TOP PARK LAGUNA

The construction of a light industry center complex has been announced by Top Desarrolladores, with an investment of 20 million dollars.

HORTON AUTOMATICS

The automotive manufacturer will open a new facility in Matamoros, Tamaulipas. The project represents a 20 million dollar investment. The number of jobs that will be created has not been disclosed yet.

VOSS

The automotive manufacturer announced the groundbreaking of a new facility in Matamoros, Coahuila, with a 40 million dollars investment and the creation of 500 jobs in the region.

CENTRAL MEXICO

BRAKES INDIA

The Indian brakes manufacturer announced its arrival to Mexico with a 70 million dollars investment and the creation of 700 jobs in Aguascalientes.

METALISTIK

The automotive manufacturer announced the expansion of its production line production with a 2 million dollars investment and the creation of 50 jobs in Aguascalientes.

CDMX

HOLCIM

The cement company announced the investment of a new facility in Macuspana, Tabasco with a 55 million dollar investment. The project is set to create 300 jobs in the region

SOURCES: CLUSTER INDUSTRIAL, EL ECONOMISTA, MEXICO INDUSTRY, FORBES