Information collected from media reports over the past month:

• Aerospace: American aircraft maker Hawker Beechcraft is joining forces with Mexican executive jet operator Aerolineas Executivas to build a new maintenance facility to serve private aircraft in the northeastern city of Monterrey.  The US$2.2 million project is planned to provide repair and painting services in the country’s second largest private aviation hub. (El Financiero, January 2, 2012)
• Automotive: Japan-based Nissan Motor Co. is preparing plans to build a new automobile factory in Mexico.  The new facility will add production capacity to the company’s two existing plants in Mexico which currently have capacity to produce over 700,000 vehicles a year. (Wall Street Journal, January 6, 2012)
• Automotive: Japanese automaker Nissan announced it will construct a new vehicle assembly plant in the central state of Aguascalientes at an estimated cost of US$2 billion.  The large-scale plan includes a supplier park nearby the new manufacturing facility, which will become Nissan’s third in Mexico. (Autoweek, January 25, 2012)
• Aviation: European aerospace manufacturer Airbus announced an order from Mexican airline Volaris for the purchase of 44 new A320Neo and A320 aircraft. The total value of the deal, planned for delivery 2015 – 2020, was estimated at approximately US$4 billion. (AFP, January 12, 2012)
• Aviation: U.S.-based aerospace manufacturer Hawker Beechcraft announced the sale of six new T-6C+ training aircraft to the Mexican Air Force, with the possibility of additional future orders.  The value of the deal was not specified. (Defense Media Network, January 11, 2012)
• Electricity: German electronics and electrical engineering giant Siemans inaugurated a Low Voltage Research and Development Center near the northeastern city of Monterrey. The company invested approximately US$22 million in the new facility, which will help to develop high efficiency electrical systems for Siemens products. (Reforma, January 13, 2012)
• Retail: Mexican grocery and general merchandise retailer Soriana announced plans to open 50 new sales locations in the country this year.  The company currently operates 558 stores across its five formats. (Reforma, January 16, 2012)
• Logistics: The Mexican affiliate of Philippines-based International Container Terminal Services Inc. (ICTSI) has begun construction on a new container handling terminal at the Pacific port of Manzanillo.  The new facility will require investment of US$250 million.  (Maquila Portal, January 17, 2012)
• Manufacturing: U.S. based safety systems manufacturer IMMI will install a new production plant in the northern city of Coahuila.  The US$49 million facility will produce safety equipment for fire trucks, helicopters, ambulances and other applications. (El Diario de Coahuila, January 13, 2012)
• Aerospace: U.S.-based aerospace manufacturer Ducommun will invest US$6.6 million in machinery and other equipment to upgrade its factory at Guaymas, in the northwestern state of Sonora.  The project includes construction of a new industrial building at the facility, which provides electro-mechanical, sheet metal and composite assembly services. (NAFTA Works, January 2012)
• Logistics: U.S.-based rail carrier Kansas City Southern inaugurated a new rail freight handling terminal in the central State of Mexico.  Built at a cost of US$2.1 million, the terminal is equipped to handle a large volume of liquid cargo. (Info-Transportes, January 20, 2012)
• Aviation: Mexican airlines are projected to acquire 27 new aircraft in 2012, according to financial services firm Actinver.  Airlines expected to add to their fleets include Aeromexico, Interjet, Volaris and VivaAerobus. (Reforma, January 23, 2012)
• Retail: U.S.-based coffee shop chain Starbucks plans to invest US$25 million this year to open 50 additional locations in Mexico, the company reported.  Starbucks projects 24% growth in total Mexico sales this year, based in part on the country’s rising per capita coffee consumption. (El Financiero, January 24, 2012)
• Energy: Spanish bank Banco Santander will provide capital to build four wind farms in northern Mexico, in partnership with German wind energy developer SoWiTec.  The sites, to be built in the states of Nuevo León, San Luís Potosí and Coahuila represent combined capacity of 650 – 850 MW.  The amount of investment was not specified. (Milenio, January 23, 2012)
• Plastics: U.S.-based injection molding firm Century Mold Co. announced plans to build a new production plant in the central state of Queretaro.  The US$15 million facility will supply Tier 1 automotive component manufacturers in the region. (Plastics News, January 17, 2012)
• Retail: Mexican fast food franchise operator Alsea will open an additional 100 locations across its eight brands this year, the company announced.  Brands operated by Alsea in Mexico include Starbucks, Burger King, Chili’s and Domino’s Pizza, among others. (Reforma, January 26, 2012)
• Food processing: The Mexican affiliate of U.S.-based food processing giant Kraft Foods re-inaugurated its research and development center in Mexico City at a cost of US$50 million in technology and skilled staff.  The facility carries out research to improve the quality and development time for new products. (Reforma, January 26, 2012)

Clear path to business startup

Driven by a desire to stimulate employment and the internal market, as well as to scale the World Bank’s “Ease of Doing Business” rankings, the Mexican government approved a package of reforms in December 2011 aimed at facilitating the creation of new businesses.  The modifications, which affect laws such as the Foreign Investment Law, the General Law of Mercantile Societies, the Public Administration Law and others, are intended to reduce the time, cost and aggravation of registering a new company.  Some of the changes entered into effect as of January 1, 2012, and others will become operational as of June of this year.

Taken as a package, the reforms seek to concentrate the required procedures for forming a business within the Economy Ministry (SE), instead of having them distributed throughout various government agencies, each with their own offices, forms, procedures and fees.  The official reform decree also calls upon the SE to coordinate the harmonization of procedures across agencies and incorporate the overall process into a unified digital registration system, via the web portal www.tuempresa.gob.mx.  Examples of the regulatory modifications include:

•    Reduction of obligatory response time for new business approval applications
•    Elimination of fixed amount of initial share capital
•    Elimination of various fees from new business application process
•    Removal of requirement to establish a fixed duration for registered companies

The reforms are more incremental than revolutionary, but very welcome just the same.  Having hacked our way through a dense forest of procedures and fees to register our own companies in years past, we commend the current administration’s efforts to simplify the process for entrepreneurs.  To a similar end, the Federal Regulatory Improvement Commission (Cofemer) will be undertaking throughout the year a comprehensive examination of federal regulations and procedures to evaluate their cost-benefit efficiency.  The program, conducted with support from the Organization for Economic Cooperation and Development (OECD), seeks to implement best practices and harmonize systems at all levels of government with the lofty goal of reducing the overall cost of regulation to the economy by 25%.  Fun dayn moyl in gots oyern, we say!

With mere months remaining in his administration, we imagine President Felipe Calderon would be well chuffed to achieve an uptick in Mexico’s Ease of Doing Business ranking.  Even though we’re still *cough* 73 positions ahead of Brazil, there’s still plenty of room for improvement.

The decree detailing the new-business reforms can be found here.

Destination unknown

As Mexico City residents slowly returned to work and normal life after the holidays, we discovered we had a garbage problem.  Not just the bags of empty liquor bottles by the door; a real problem for the whole city and surrounding State of Mexico.  The largest solid waste disposal facility used for city garbage was shut down in December, and suddenly the city’s sanitation department wasn’t sure what to do with the garbage.

The dump in question, called Bordo Poniente, was closed with great fanfare on December 19, 2011 after over 25 years of service.  In line with Mayor Marcelo Ebrard’s ongoing effort to implement ecologically friendly public policies, city agencies developed a plan to recycle the site’s estimated 70 million tons of garbage in a number of ways.  According to the plan, the city will issue a tender for private companies to compete for a contract under which the winner will partner with government agencies to build a plant to harvest biogas from the decomposing organic waste.  The gas will be used to generate electricity to help run city services, and/or be converted into fuels for other applications.  In addition to the large scale biogas project, plans also anticipate other uses for the various types of waste once separated, such as compressed blocks to be sold as industrial fuel, recycling of metals and plastics, production of compost from organic residuals and shredding of construction waste to create sand.  The objective is that between the composting of organic waste and recycling of reusable materials, the reduced volume of remaining garbage will be distributed among various smaller waste disposal sites around the greater metropolitan area.  After some 20 years of composting and recycling, the Bordo Poniente site is intended to be converted to green space.  Just the type of ambitious, long-term sustainability planning the city needs to develop and carry through to fruition.

So the future looks promising, but alas, the present is rocky.  Following closure of the Bordo dump, immediate plans to redistribute the city’s daily garbage hit a snag when some local communities organized to block the additional waste from entering their disposal facilities.  As garbage piled up, trucks began dumping the increasing backlog outside the separation centers, in underutilized areas of the Bordo Poniente area itself, and reportedly in irregular dumps elsewhere around the Federal District.  At this writing, the city’s Department of Public Works has admitted it has a thorny problem on its hands but insists a solution is in the works.  We’re hoping they find a way to fast-track that biogas plant.

Read about our participation in the Mexico Today program here.

Information collected from media reports over the past month:

• Telecommunications: Finland-based telecommunications technology provider Nokia Siemens Networks inaugurated a new Service Delivery Center in Mexico City.  The US$2.4 million facility will provide design, planning, optimization and assurance support for telecommunications networks in Latin America, according to the company. (Nokia Siemens Networks, December 7, 2011)
• Metals: U.S.-based metals processor Ryerson Inc. recently opened a new processing center in the northwestern city of Tijuana.  The facility will provide services such as cutting, slitting and laser burning for the area’s large maquiladora and manufacturing industries. (Made in Mexico, Inc., November 7, 2011)
• Aviation: Mexican airline VivaAerobus announced plans to invest US$20 – 25 million in 2012 for the acquisition of five to seven new aircraft.  The company has registered strong growth since its launch in 2006. (Mexican Business Web, December 3, 2011)
• Mining: Canadian mining firm Excalibur Resources announced that it will proceed to develop a major gold and silver production facility at its Catanava mining property in Zacatecas, Mexico, following approval of permits by the Mexican government.  Plans for the development include the construction of office and warehouse space as well as crushing, milling, conveyance and laboratory installations. (Canadian Mining Journal, November 25, 2011)
• Retail: U.S.-based electronics retailer Best Buy announced plans to double the number of its sales locations in Mexico next year.  Best Buy, which entered the Mexican market in 2008, plans to expand from eight to 16 stores in Mexico in 2012. (Reforma, November 29, 2011)
• Automotive: German automotive and electrical components manufacturer Bosch estimated total investment in Mexico of over US$78 million for 2011.  The resources went principally to upgrade machinery and tooling for the company’s 13 production plants in the country, Bosch Mexico president Charles Visconti revealed. (NAFTA Works, December 2011)
• Automotive: Japan-based Neaton Auto inaugurated a new production plant in the central state of Queretaro.  Built at a cost of US$53 million, the facility will manufacture air bags for OEMs Nissan, Honda and Toyota. (Corresponsal del Bajío, November 3, 2011)
• Plastics: Spanish automation components and plastics manufacturer Matz-Erreka inaugurated a new expansion at the plant of its Mexican affiliate Erramex in the central state of Queretaro.  The US$3 million capacity addition will produce precision components for clients such as Valeo, Hutchinson, ZF Sachs and others. (El Financiero, December 5, 2011)
• Energy: Spain-based gas multinational Gan Natural Fenosa announced plans to invest approximately US$65-70 million annually in Mexico over the next 13 years to expand its gas distribution network.  The company seeks to double its existing 15,000 km of pipeline over this period. (El Financiero, December 15, 2011)
• Aerospace: French aircraft component maker Manoir Industries inaugurated a new manufacturing plant in the northern state of Chihuahua.  The US$10 million facility will join the state’s growing aerospace cluster, producing turbine blades and parts for braking systems. (Chihuahuan Frontier, December 1, 2011)
• Manufacturing: U.S.-based Mars company’s Mexico subsidiary inaugurated a new pet food manufacturing plant in the western state of Jalisco.  The US$60 million facility will produce moist food products for dogs and cats. (Excelsior, December 12, 2011)
• Logistics: Danish marine transport group A.P. Moller-Maersk subsidiary APM Terminals will invest US$900 million to construct a new container handling terminal at the Mexican port of Lázaro Cárdenas.  The facility is planned to include 5,000 feet of dock space and an on-dock rail yard. (El Financiero, December 30, 2011)

Read about our participation in the Mexico Today program here.

As another year comes to a close we can’t help feeling some frustration that the economy just doesn’t seem to want to take off, both around the world and here in Mexico.  Between the Eurozone debt crisis and stubborn unemployment in the United States, among other topics, we’ve got plenty to keep us fretting for the foreseeable future.  But since the holidays are upon us and presumably it’s a time for good cheer, here are some of the talking points we’ll have in our pocket as we hit the punch bowl hard in the coming days:

GDP growth: Banco de México and Banamex are projecting final 2011 GDP growth in the range of 3.8%.  OK we’re not talking China numbers here but compared to 2009’s -6.1 we’ll take it.

Hot industries: While most sectors of the economy are merely shuffling along, certain industries are getting, or remaining, seriously hot.  The big star this past year was automotive manufacturing, which after suffering a rough patch during the recession has roared back, with production and exports well up over 2010 and a number of significant new investments announced.  Aerospace manufacturing also continued its unchecked expansion, with new international investments announced and exports projected to post double-digit growth for the year.  Outside of manufacturing, mining surged this year, led by demand for gold, silver, copper and industrial minerals, and is on track to exceed 2010’s record setting production value for the year.

Renewable energy: In the energy industry, 2011 saw continued high interest in renewables, with major new investments in a variety of alternative energy sources.  New wind power generation plans were announced not only in Oaxaca, site of the largest wind developments, but also in northern states such as Zacatecas and Baja California and far south eastern Quintana Roo.  Interest in solar electricity generation appeared to surge as well, with a range of projects announced for manufacturing sites, corporations, municipal lighting and rural electrification, among others.  The growth in demand for solar panels is helping drive expansion of domestic photovoltaic equipment manufacturing.

Agriculture: The agriculture and livestock sector faced a severe challenge this year with devastating drought conditions in various northern states.  A bright spot, nonetheless, is the growing diversification of exports such as meat.  Mexican beef has found a new market in Russia, to which exports of frozen beef surged this year, and exports of pork to China and Japan are expected to rise in 2012 following recent regulatory moves.  Chinese authorities have certified a number of Mexican pork packing plants to export to the Asian giant in 2012, while Japan recently agreed to increase quotas for imported Mexican pork, as well as beef and chicken, beginning next year.

Read about our participation in the Mexico Today program here.

Welcome friend

Since the launch of the North American Free Trade Agreement (NAFTA) in 1994, the Mexican government has pursued additional trade liberalization pacts aggressively.  Remarkably, legislators recently managed to advance on three trade fronts before tearing off to have fun for the holidays.

The first step forward was the November 22 signing of a new single free trade agreement between Mexico and Central America, which our Mexico Today colleague Sean Goforth discussed in a recent post to Foreign Policy Blogs.  Economy Minister Bruno Ferrari and his team had a tougher time, however, with their effort to push through an expanded trade liberalization agreement with Peru.  The proposed pact spent much of this year under consideration in the Mexican Congress before being rejected by the Senate Trade and Industrial Development Committee on December 14, to the supreme aggravation of the Calderón administration.  Despite having the support of various industrial sectors, the Peru deal was initially blocked by influential agricultural interests over fears of increased competition from Peruvian avocados, beans, potatoes and other farm products.  Ferrari faced not only the vexation of the jilted Peruvians but a potential blow to Mexico’s free trade bona fides as it flirts with possible inclusion in the developing Trans-Pacific Partnership trade bloc.  In a surprising turnabout, however, the treaty squeaked through in a vote by the full Senate on December 15, and now goes to President Calderón for signing.

The administration fared better with its effort to upgrade Mexico’s Economic Association Agreement with Japan.  Protocols negotiated between the two countries to expand access to each other’s markets were approved by the Japanese legislature on December 9, sending the new framework back to the Mexican Senate for approval.  In contrast to the Peru agreement, the Japan protocols sailed through with nary a peep and were approved by the full Senate December 15.  The modified agreement will increase Japanese import quotas for Mexican beef, pork, chicken, oranges and agave syrup in exchange for accelerated duty reduction in Mexico for Japanese products such as paper and auto parts, among other stipulations.  Enhanced access for auto parts is presumably of particular interest to Japan in light of the roaring performance of Mexico’s automotive manufacturing industry, much of it composed of Japanese OEMs.  The protocols will now go to the President’s office for signature, where they are highly unlikely to meet resistance.

Read about our participation in the Mexico Today program here.

Plugged in

On the heels of its recently concluded year-long presidency of the United Nations Conference on Climate Change (COP16), Mexico is soldiering on with its sustainability policy blitz.  In late November, the Federal Regulatory Improvement Commission (Cofemer) issued its approval of proposed new regulations under which independent entities generating power from renewable sources may connect to the national electricity grid.  Last year, we reported with great satisfaction that the Energy Regulatory Commission (CRE) had created a contract that allowed independent producers of energy for their own consumption to connect to the grid via a net metering system.    The new regulatory document, under the nimble title “General Rules of Interconnection to the National Electric System for Generators or Permit-holders with Renewable Energy Sources or Efficient Cogeneration,” is intended to streamline the process and lower the overall cost of grid integration for independent producers.  The administrative, legal and technical requirements, formerly distributed among various prior documents published by different agencies, will now be incorporated into the single regulatory document.  The Energy Ministry (Sener) may now publish the new regulations in the Official Gazette, with the hope that facilitating the process will hasten the contribution of new and more environmentally friendly generating plants to the country’s energy supply.  If you feel you must, you can read the Cofemer’s final opinion on the new regulations here (oh go on, we did).

On another front, not content with the success of the incandescent-for-CFL light bulb exchange program we told you about a few weeks back, energy authorities have now hatched a new scheme to promote the use of LED lamps.  Under a pilot program set to begin January 1, 2012 in the Mexico City, Monterrey and Guadalajara metropolitan areas, residential electricity customers in good standing will be able to obtain LED lamps at subsidized prices.  Federal Electricity Commission (CFE) customers will receive an eligibility notice on their electric bill that they can take to selected stores and present in exchange for an LED lighting product, which will be charged to their electric bill at a discounted rate.  Sener is looking to popularize LED technology not only for its energy saving virtues but also with the hope of developing a domestic market appealing enough to attract investment to manufacture the lamps in Mexico.

In the throes of an energy saving frenzy, the federal government also announced last month the creation of a new multi-million dollar fund to assist businesses in replacing older and less energy efficient equipment.  The program, called CFEfectvo, will provide technical evaluations of the energy efficiency of industrial operations and access to subsidized credit for the acquisition of current technology.  Sener has set the lofty goal of achieving energy savings of 30% in the country’s industrial sector through full implementation of the program.

Read about our participation in the Mexico Today program here.

Information collected from media reports over the past month:

• Beverage: Netherlands-based Heineken International, through its Mexican brewing operation Cuauhtemoc Moctezuma (CM), invested over US$37 million to boost sales of the brewery’s Carta Blanca beer brand.  Resources were channeled into areas such as a new returnable bottle, label design and delivery truck modifications.  CM was acquired by Heineken in 2010. (Vanguardia, October 28, 2011)
• Energy: Mareña Renovables Capital, S.A.P.I. de C.V., controlled by an investment consortium led by Australia’s Macquarie Group, will build Mexico’s largest wind farm to date in the southern state of Oaxaca.  The 396 MW electricity generating site will supply energy to beverage giant FEMSA, which will co-finance construction with assistance from a US$72 million loan from the Inter-American Development Bank (IDB). (Inter-American Development Bank, November 24, 2011)
• Logistics: Mexico’s rail freight operators are projecting combined investment of approximately US$350 – 450 million annually in the coming years, according to the Mexican Railroad Association.  Resources are targeted principally for modernization and upgrade of infrastructure. (Reforma, November 9, 2011)
• Energy: Mexico’s Federal Electricity Commission (CFE) is projecting that public agencies and private companies will invest a combined US$10.5 billion to expand the country’s natural gas pipeline network.  Projects include eight new pipelines, which will help support planned conversion of power plants from fuel oil to natural gas. (Reforma, November 9, 2011)
• Automotive: U.K.-based auto parts manufacturer GKN Driveline is projecting total investment in its Mexico operations at US$46 million for 2011.  The expenditures are focused on reinforcing metal forming, machining and assembly operations to increase production at the company’s three plants in the central state of Guanajuato. (Reforma, November 21, 2011)
• Pharmaceutical: German pharmaceutical manufacturer Boehringer Ingelheim inaugurated a new production plant in the western state of Jalisco.  The US$10 million facility will produce biological veterinary products for poultry, swine and cattle applications. (NAFTA Works, November, 2011)
• Retail: Mexico’s national retailers association ANTAD is projecting total investment of US$3.6 billion in new store openings and remodeling for 2011.  The sector has performed well this year despite the uncertain economic climate, with leading grocery and general merchandise chains Wal-Mart and Chedraui reporting total sales growth of 12% and 11.9%, respectively, through September. (Reforma, November 7, 2011)
• Biotechnology: The central state of Morelos plans to invest approximately US$25 million to establish a biotechnology park in the city of Cuernavaca.  The state is offering a series of incentives that they project will attract some 40 – 50 research and manufacturing operations to the facility.  (Reforma, November 11, 2011)
• Logistics: U.S.-based university The Georgia Institute of Technology, in conjunction with Mexico’s Monterrey Technological Institute (ITESM), recently opened a Trade and Logistics Innovation Center in Mexico City.  The center will provide executive education and advanced research in areas such as lean supply chain, transportation, warehousing, inventory, trade and supply chain strategy.  (GlobalAtlanta.com, September 29, 2011)
• Automotive: U.S.-based auto parts manufacturer TRW Automotive Holdings Corp. announced it will open a new production plant in the central state of Queretaro in 2012.  The planned facility machine aluminum components and assemble advanced brake systems in a clean-room environment.  The amount of investment was not reported. (American machinist, November 23, 2011)
• Telecommunications: Mobile network operator Nextel de Mexico is projecting investment of approximately US$1.4 billion over the next five years.  The company currently reports a client base of 3.5 million subscribers in Mexico. (Mexican Business Web, September 21, 2011)
• Aerospace: Canadian aerospace manufacturer Héroux-Devtek inaugurated a new production plant in the central state of Queretaro this month.  The US$20 million facility will produce aerostructure components for OEMs also located in the fast-growing Queretaro aerospace cluster, the company announced. (Héroux-Devtek press release, November 15, 2011)
• Railroads: Mexico’s rail freight operators project investment of a combined US$500 million in 2012.  Companies including Ferrocarril del Sureste, Ferromex, Kansas City Southern, Ferrocarril Tijuana-Tecate and Ferrocarril Coahuila-Durango will channel the resources into infrastructure development and new equipment. (El Financiero, November 15, 2011)
• Automotive: German heavy vehicle manufacturer MAN Truck & Bus, via its Mexican subsidiary, will invest US$15 million to expand and upgrade capacity at its plant in the central state of Queretaro.  The resources are earmarked to outfit work stations and supply lines for the production of 14 new vehicle models. (Reforma, November 22, 2011)
• Retail: DIY retailer The Home Depot announced aggressive expansion plans for 2012, projecting investment of US$143 million in a drive to increase its Mexico stores from 91 to 100.  The Home Depot acquired Home Mart in Mexico in 2004 and is currently the country’s largest home improvement and construction products chain. (Mexican Business Web, November 24, 2011)

Clear path to growth

Mexico’s biotechnology industry made an international splash this year when a biopharmaceutical treatment for scorpion stings developed in Mexico was approved for sale in the United States by the U.S. Food and Drug Administration (FDA).  The product, called Anascorp, was developed by the Biotechnology Institute of the National Autonomous University of Mexico (UNAM) and is manufactured by Mexico City-based laboratory Instituto Bioclon.  It is reportedly the first antidote of its type specifically for potentially lethal scorpion stings to be available on the U.S. market.

While Anascorp captured headlines, Mexico has quietly been building up its biotechnology industry in recent years.  Sporadic projects to develop hardier agricultural varieties began in the late 1980s, and since have grown into a concerted effort by government and academia to promote biotechnological research and development in support of industry.  Much attention has been given to the field as part of recent administrations’ drive to build Mexico’s international competitiveness in advanced industries such as aerospace, software and pharmaceutical manufacturing.  The majority of resources currently dedicated to biotechnological research in Mexico are reported to be concentrated in the development of pharmaceuticals, with agriculture and energy applications also receiving significant attention.  The Mexican Economy Ministry estimates the domestic market for products of biotechnological origin to be approximately US$1 billion with strong growth potential.

Federal and state governments are now seeking to replicate the success of the country’s aerospace industry by promoting incentivized biotechnology clusters in certain locations.  The government of the central state of Morelos, for example, is investing US$25 million in a new science and technology park in the city of Cuernavaca specifically targeting producers of biopharmaceuticals.  The government is offering tax breaks and other incentives plus the existence of other biotech companies in the city to build an industry concentration that will gather momentum to continue expanding on its own.

The western state of Jalisco is taking a slightly different approach with its recently formed Biocluster de Occidente.   The initiative, launched through an alliance between a local university, a regional manufacturing chamber and a state research and technology agency, will provide resources and logistical support to organize workshops, conferences and networking events to develop linkages between academia, government and industry.  The objective is to generate collaboration across the sectors to support industrial competitiveness and entrepreneurship that will create economic growth.  The project will reportedly begin working with 37 area companies in industries such as food science and human and animal health technologies.

The northeastern state of Monterrey, in turn, is pursuing its own biotechnology cluster focused primarily on the agriculture and food processing industries.  The state’s Cluster Agroalimentario de Nuevo León launched last year to put government and research organizations’ resources in the service of area agribusiness operations such as those in the citrus industry.  The cluster committee is currently conducting a campaign to recruit new companies from around the world to join the existing core group.

Despite an adverse economy, Mexico’s biotechnology community continues to grow.  Mexican pharmaceutical manufacturer Landsteiner Scientific recently announced planned investment of US$45 million in research to develop biopharmaceuticals for treatment of cancer and chronic degenerative diseases in conjunction with the Monterrey Technical Institute and the University of Michoacán.  Another Mexican firm, Biosustenta, this year inaugurated a plant to produce environmentally friendly biofertilizers.  The facility, built with federal and state support, is reportedly the largest of its kind in Latin America.  This past October, German pharmaceutical producer Boehringer Ingelheim joined Jalisco’s biotechnology community, inaugurating a plant develop and manufacture vaccines for poultry and other livestock.

The rise in importance of biotechnology has brought with it an effort to update regulatory frameworks to keep pace with an evolving industry.  On October 19, 2011, Mexico’s Official Gazette (DOF) published modifications to existing regulations governing health products that specifically addressed biopharmaceuticals.  The updated legislation includes key provisions on registration of generic biopharmaceuticals once the original developer’s patent expires.  The new regulations establish the process for registration of generics and time frame within which manufacturers may register their products for testing prior to the expiration of an existing drug’s patent.

For the full text of the reforms to the Health Products Law, go here.

Read about our participation in the Mexico Today program here.

Buried treasure

Despite a mopey world economy that just can’t seem to snap out of it, Mexico’s mining industry looks to be headed for another banner year in 2011.  The Mexican Mining Chamber (Camimex) reported a record high of US$13.9 billion in production value for 2010, leading the sector to outstrip tourism among the country’s leading industries.  The current year is expected to exceed last year’s performance, with growth through the first half set at over 17% and still on pace through August, according to the National Statistics Institute (INEGI).  High demand for precious metals and certain industrial minerals has in turn led to a flurry of investment that should keep production strong for the foreseeable future.  Camimex is projecting total mining sector investment of US$4.7 billion for 2011, which would represent a healthy 42% increase from 2010 levels.

While a number of extractive products are performing strongly, gold may well be the star of the show.  With jitters over European debt and an unstable dollar sending investors scrambling, demand for gold on world markets sent prices soaring through the summer of 2011.  Gold producers in Mexico moved quickly to increase output, resulting in a 41% increase in production in 2010 over the previous year and further growth of 14% through the first half of 2011.  Since 2005, Mexican gold production by weight has increased by a torrid 139%, according to INEGI figures.  While still not among the world’s top producers, Mexico has advanced several positions in recent years and Camimex is now claiming 11th place for Mexico in world gold production.

Other key metals have contributed to Mexico’s mining boom as well.  Rising copper prices from 2009 through 2011 coincided with increased production to drive revenues and profits for Mexican copper producers.  Copper output through the first half of 2011 was 60% ahead of last year, according to INEGI.  Mexico regained the lead in world silver production in 2010 with production of 128 million ounces, according to the Silver Institute, with strong prices driving the development of new production sites.

In addition to splashy metals such as gold and silver, lesser known elements with important industrial applications such as fluorite, bismuth and molybdenum are quietly driving revenue growth for both domestic and foreign mining concerns in Mexico.  Fluorite in particular has been instrumental in the vertiginous growth of chemicals and plastics multinational Mexichem.  Mexico City-based Mexichem operates what they claim to be the largest single fluorite mine in the world in the northeastern state of San Luis Potosí, helping make Mexico the second largest producer of the mineral after China.  Across its range of products, Mexichem operates 95 production plants in 19 countries, and reportedly plans to launch new plants in Japan and Korea by the end of 2012.

Read about our participation in the Mexico Today program here.