Weekly Review I April 3, 2024

GENERAL SITUATION IN MEXICO

RELEVANT NEWS

CCE PREPARES STRATEGY TO TAKE ADVANTAGE OF NEARSHORING AND GROW AT 5% PER YEAR

Nearshoring, accompanied by a digital industrial policy, would allow Mexico to grow at 5% per year, said Francisco Cervantes, president of the Business Coordinating Council (CCE), which will present 14 strategic points to the next federal executive to achieve this goal.

With recommendations such as fiscal policy, digital industrial policy, sustainable development, infrastructure, investment attraction policy and rule of law, the business sector announced that it is preparing a document that will be a starting point to strengthen Mexico’s economic development strategy.

“Nearshoring, a geopolitical phenomenon, represents a great opportunity for Mexico to strengthen and promote national economic development, because it is an expression of the fact that strong industrial investments are seeking to relocate, especially in North America and especially in Mexico,” said Francisco Cervantes.

During the presentation of the book “Nearshoring. The Opportunity of a New Economic and Social Development for Mexico”, the business leader warned that “this relocation of investments, credits and industrial plants is by no means offered as a free event that will be installed, per se, throughout the geography of the country”.

The president of Concamin, Alejandro Malagon, regretted that the lack of energy, gas and water, as well as the bottlenecks in terms of road, rail, port, airport, logistics and multimodal infrastructure in some regions, represent a potential brake on investments related to nearshoring.

“This is a historic opportunity, but also a formidable challenge. Today, 70% of foreign direct investment goes to just eight states, while many states do not capture even one percent of this investment,” the industrialist leader added.

SOURCE: EL ECONOMISTA

KEYPOINTS OF PRESIDENT

ANDRES MANUEL LOPEZ OBRADOR’S

March 27– April 2, 2024

ELECTIONS

• Private sector intervention in elections: the president addressed the influence of the conservative elite in elections, citing past interventions and unsuccessful attempts to hinder his political movement. He described meetings where influential figures discussed strategies against him, highlighting efforts to counter his agenda. Despite challenges, he emphasized the success of his administration in achieving budget approval without resorting to corruption. Additionally, he rejected the possibility of annulling elections unless extreme circumstances warranted it, portraying such actions as akin to a technical coup d’etat.

• Electoral process: the president addressed concerns about electoral process violations, stating that the conservative bloc controls key institutions like the National Electoral Institute and the media. He emphasized that he hasn’t encouraged voting for any party, complying with regulations. Additionally, he criticized the lack of media fairness, highlighting their conservative influence. He emphasized his response as a defense against smear campaigns targeting the Presidency.

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

• Attack on candidate in Guanajuato: the president announced the assassination of Gisela Gaytan, a mayoral candidate in Celaya, Guanajuato, expressing condolences to her family. The Ministry of Public Security stated that investigations are ongoing to determine why she lacked protection at the time of the attack, as a protection request had been previously submitted. When asked about cartel involvement, the president mentioned that investigations have just begun. He presented data showing Guanajuato’s high homicide rate and reiterated his call for the removal of the state prosecutor.

ENVIRONMENTAL ISSUES

• Forest fires: The president addressed concerns about forest fires and their potential ties to organized crime, stating that the government is actively addressing the issue, with a focus on areas such as the State of Mexico, where incidents are prevalent. He emphasized the need to determine the cause of the fires, whether natural or deliberate, and noted a low fatality count so far, affirming the presence of permanent brigades to manage the situation. Additionally, he mentioned recent efforts to bolster personnel in affected areas, underscoring the priority of protecting citizens.

• Glyphosate: President Andres Manuel Lopez Obrador addressed concerns regarding the ban on glyphosate and the Ministry of Economy’s statement on continued importation. He highlighted a healthy debate within the administration and affirmed the decision to prohibit glyphosate until a safer substitute is found. Funding has been allocated to CONAHCYT to explore alternatives, with analysis nearing completion. However, the review and authorization process for these alternatives is still pend-

ing. Glyphosate is acknowledged as necessary for production, leading to a temporary “pause” on the ban until a suitable substitute is identified.

LEGAL AND JUDICIARY ISSUES

• Judicial System: as a journalist mentioned a case in which apparently two women have been left without legal defense due to the relationship between the President Justice of the Supreme Court, Norma Piña, and Isabel Miranda de Wallace, President Lopez Obrador responded that Rosa Icela Rodriguez, Minister of Public Security and Citizen Protection, is supporting the case. Lopez Obrador accused the judiciary branch of favoring conservative interests and defending economic policies that favor powerful agents. He advocates for judicial reform, proposing the popular election of judiciary members to address systemic issues, acknowledging that this is just one step towards reforming a sector he views as fundamentally flawed.

BAJA CALIFORNIA

Mexico and Japan will implement a work plan to strengthen investment in fisheries in our country, particularly with companies dedicated to the scallop shucking process (bivalve mollusks) in Ensenada, Baja California, informed the Ministry of Agriculture and Rural Development.

The initiative was the result of the meeting held by the Secretary of Agriculture and Rural Development, Victor Villalobos Arambula, with the Minister of Agriculture, Forestry and Fisheries of Japan, Tetsushi Sakamoto, during the trade mission held in early March in Japan as part of the activities of the Foodex Japan 2024 Food and Beverage Fair.

SOURCE: EL VALLE

SONORA

The automotive industry was the one that exported the most during 2023, accumulating 9,161 million 431 dollars out of the 26,567 million 830 dollars reported by the State, said Jesus Gamez Garcia.

The president of the Maquiladora and Manufacturing Export Industry (Index) informed that in 2023 exports growth was sustained at an average of 20% and for the first quarter of 2024 it is expected to be between 10 and 12%.

SOURCE: EL IMPARCIAL

NUEVO LEON

According to data from Mexico, Como Vamos?, Nuevo Leon’s economy registered an average expansion of 3.1% during the first two quarters of 2023.

In this way, it has managed to maintain an average annual growth rate of 1.8% between 2018 and 2022. It should be noted that the expansion also contemplates the decline in the economy of almost 25% during the second quarter of 2020 caused by the pandemic.

SOURCE: LIDER EMPRESARIAL

COAHUILA

The National Council of Index informed that the association Index Piedras Negras changed its name to Index Coahuila Norte in order to strengthen the interests and representation of the maquiladora industry in that region of the country.

The president of Index Coahuila Norte, Alejandro Rios Rueda, indicated that it means a change from 31 thousand to 148 thousand formal jobs and from 41 to 148 export manufacturing companies, covering the municipalities of Monclova, Castaños, Nueva Rosita, Muzquiz, Cinco Manantiales, Zaragoza, Allende and Nava, among others.

SOURCE: VANGUARDIA

AGUASCALIENTES

Exports from Aguascalientes in the four quarters of 2023 totaled 12.753 billion dollars. This figure was 15.3% higher than that of the year 2022, making the state the third in the country with the highest increase. But it was also much higher than the national growth (+2.4%).

SOURCE: DESDE LA RED

JALISCO

Expo Guadalajara announced that it is preparing to hold the Jalisco Industrial Fair, FEINJAL, a professional B2B and B2C exhibition created to promote manufacturing, services and tourism in the state.

FEINJAL, which will be held from November 19 to 22, will include the participation of sectors such as agribusiness, creative industries, diverse manufacturing, technology, science and innovation, and meeting tourism.

SOURCE: INFORMADOR

QUERETARO

The sector that contributes most to the economy in Queretaro is manufacturing with 36.71% of the total economy in the state, according to the organization Mexico ¿Como Vamos?

Nationally, manufacturing contributes 17.4% of the economy, making it the sector with the greatest weight in the country’s economy.

SOURCE: DIARIO DE QUERETARO

SAN LUIS POTOSI

San Luis Potosi’s manufacturing industry has acquired a strength that has allowed it to increase its exports to 22,913 million dollars during 2023.

This amount, according to the Ministry of Economy’s historical data, is 5 thousand 112.4 MDD, above the volume generated in 2022, when it accumulated 17 thousand 800.6 MDD.

SOURCE: PLANO INFORMATIVO

GUANAJUATO

Six states, including Guanajuato, account for 60% of Mexico’s exports, with a 7.2% share.

In particular, Guanajuato registered a 19% variation compared to the same period in 2022.

The entity added nine thousand 770 million dollars in the value of exports.

SOURCE: AM NEWS

CDMX

Clara Brugada Molina, the candidate for Head of Government of Mexico City, pledged to break records in public works investment starting next year. She made this commitment during a meeting with representatives of the Mexican Chamber of Construction Industry (CMIC) Mexico City Delegation. Brugada stated that she plans to invest at least 20% more in public works compared to the current administration, which collaborated with the incoming federal government led by Dr. Claudia Sheinbaum. During the event, Marcela Heredia, president of the CMIC Delegation in Mexico City, emphasized the significance of infrastructure for well-being and highlighted the importance of planning for development. She advocated for the reactivation of the Institute of Democratic and Prospective Planning. Heredia also discussed the CMIC’s proposals for housing and water, including affordable housing construction and improvements in water infrastructure efficiency.

SOURCE: EL ECONOMISTA

STATE OF MEXICO

During Q4 of 2023, the state of Mexico’s exports totaled USD 5,688.9 million, with a 6.7% annual growth, placing it 10th in export volume among Mexican states. Manufacturing exports dominated, comprising 98% of total exports, but none of the state’s exporting sectors ranked among the top five sectors in the country. Despite having numerous automotive plants, the exports in the sector were surpassed by other states. Additionally, it made minimal contributions to exports of electronics, electrical appliances, or agriculture.

SOURCE: ASI SUCEDE

INVESTMENT NEWS

CENTRAL MEXICO

WHIRLPOOL

The electronics manufacturer announces an expansion with a 65 million dollars investment in Celaya, Guanajuato. The investment is set to create 550 jobs in the region.

BMW

The German automotive company will start the groundbreaking of its new battery production center next May in Villa de Reyes, San Luis Potosi. The company will invest 863 millions dollars in the project. The jobs details remain unconfirmed.

NORTH

AMERICAN WOODMARK

The furniture manufacturer opened its first facility in Cienega de Flores, Nuevo Leon with a 45 million dollars investment. The project created 400 jobs in the region.

SOURCES: MEXICO INDUSTRY , MEXICO NOW

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