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)

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• Agribusiness: Mexican agricultural services provider Phytosan inaugurated a new phytosanitary radiation plant in the northeastern state of San Luis Potosi following investment of US$12 million.  The facility, the only one of its kind in Mexico, will be used to treat fruits and vegetables for export to the United States.
• Automotive: Japanese automaker Honda plans to invest US$800 million to build a new manufacturing plant in the central state of Guanajuato.  The new factory, planned to begin production by 2014, will produce energy-efficient subcompact autos. Honda currently operates an automobile factory in the western state of Jalisco.
• Hospitality: U.S.-based hotelier La Quinta Inns & Suites announced plans to invest US$60 million to expand operations in Mexico over the next three years.  Projects are expected to include new hotels in business hubs such as Mexico City, Ciudad Juarez, Reynosa and San Luís Potosí, among other locations.
• Automotive: Japanese automaker Honda will reactive investment plans at its manufacturing plant in the western state of Jalisco.  US$60 million in resources are earmarked to install equipment and technology needed to produce the company’s next model CR-V recreational vehicle.
• Automotive: U.S. auto parts maker TRW Automotive announced it will invest US$50 million to install a new manufacturing plant in the central Mexican state of Queretaro.  The new facility reportedly will produce anti-lock braking systems to supply Volkswagen Brazil.
• Mining: Mexican corporate group GFM has formed a joint venture between its heavy equipment subsidiary GFM Maquinaria and Singapore-based Singapore Technologies Kinetics to market mining equipment under the brand TRXBUILD.  The association plans to build a factory to produce equipment such as backhoes, tractors and off-road trucks in Mexico within five years through projected investment of US$20 million.
• Pharmaceutical: Mexican pharmaceuticals manufacturer Grupo Silanes will invest US$20 million to construct a new production facility in the city of Toluca, near Mexico City.  The plant will produce the company’s Anascorp antidote for scorpion stings, recently approved for sale in the United States by the U.S. FDA.
• Real Estate: U.S.-based real estate developer Bald Mountain Development is preparing to construct a luxury hotel and housing complex in the central Mexican city of San Miguel de Allende.  The US$250 million project may be followed by two similar developments elsewhere in the country, according to the company.
• Aviation: U.S. commercial air carrier Delta announced a US$65 million investment in Mexican carrier Aeromexico in exchange for stock and a seat on the Mexican airline’s board of directors.  The deal includes additional US$20 million investments from each company to expand joint maintenance and repair capabilities in Mexico.
• Steel: Mexican steel industry leader Altos Hornos de México (AHMSA) announced US$493 million in new investment to conclude an ongoing production capacity expansion project.  The steel giant seeks to enhance capability to produce specialized steels for automotive, metal mechanic and other manufacturing industries.
• Retail: Mexico’s ANTAD national retailers’ association announced combined investment of US$3.6 billion by its members projected for 2011.  First half retail sales were up 10.3% in nominal terms and 3.8% for same-store sales this year, the group reported.
• Mining: Mexico’s mining industry chamber Camimex reported its members will invest US$848 million in exploration of new deposits this year.  The record sum is driven in part by surging demand for gold on world markets.
• Logistics: Germany-based courier DHL Express will open 24 new sales locations in Mexico in 2011 at a cost of approximately US$2.5 million, in addition to opening a new gateway site in Monterrey this year.  The expansion is part of a five-year US$125 million investment program for the company’s Mexico operations.
• Infrastructure: Mexico’s Communications and Transportation Ministry (SCT) announced it will issue a tender for road construction in the western state of Michoacan by the end of this year.  The contract package for construction and widening of highways in the state will have a projected value of approximately US$450 million.
• Energy: British oil and gas infrastructure services provider Petrofac announced plans to invest US$200 million in Mexico over the next two years.  Petrofac recently was awarded two contracts by state oil monopoly Petroleos Mexicanos (Pemex) to increase output at mature oil production sites in Mexico.

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• Aerospace: Mexican aerospace manufacturer Hydra Technologies closed the first sale of its Ehecatl unmanned aircraft to a foreign customer at the Paris Air Show this month.  Hydra’s export order by a Canadian buyer, the value of which was not revealed, includes six aircraft, supporting equipment and services.  The contract represents the first export order of completed aircraft designed and built by a Mexican company, a major step forward for the country’s burgeoning aerospace industry.
• Automotive: Japanese automaker Mazda at long last confirmed rumors that it will build a major new production facility in the central Mexican city of Salamanca, Guanajuato State.  The US$500 million facility, planned to produce next-generation engines and automobiles, is scheduled to open in 2013.
• Trade: Chinese trade promotion agency Chinamex announced plans to build a Dragon Mart shopping center in Cancun, Mexico, via initial investment of US$150 million.  The complex, which will offer exhibition space, importation facilities, retail and wholesale outlets and restaurants, is intended to promote exports by small and medium sized Chinese companies.
• Logistics: Mexican courier and logistics company Redpack inaugurated a new Operations Center in the western city of Guadalajara, Jalisco.  The US$6 million facility provides freight yards, warehousing, loading docks and office space to facilitate the company’s freight management for the western region.
• Automotive: Platinum Tool Technologies, a Canadian manufacturer of molds for the automotive industry, formally inaugurated its plant in the northern state of Coahuila following US$1.75 million in investment. The facility provides high quality repairs, maintenance and engineering changes for molds and tooling.
• Health care: A consortium of public and private institutions in Monterrey, Nuevo León, is projecting investment of US$400 million over the coming years to develop a health care cluster to be called “Monterrey City of Health”.  The project involves hospitals, laboratories, universities and research centers, and is intended to attract patients and health professionals from elsewhere in Mexico and around the world for advanced care and professional opportunities.
• Steel: South Korean steel maker Posco announced plans to invest US$300 million to build the second stage of a galvanized steel plant in the northeastern state of Tamaulipas.  The producer of steel for Mexico’s auto industry announced that the pace of expansion of its Mexico operations was among the fastest in its history.
• Cosmetics: Turkish cosmetics laboratory B’iota will invest US$30 million in an effort to enter the Mexican market for their skin care products.  The company is specifically targeting the segment of depilatory products, which expanded by a reported 76% in 2010.
• Logistics: U.S.-based operator of industrial distribution facilities Prologis plans to invest up to US$88 million in its recently inaugurated Ladero Intermodal Terminal & Industrial Park outside of Mexico City.  US$14 million of the resources were used to open the first phase of the facility.  Prologis became the world’s largest operator of its type this year through a merger with AMB Property Corporation.
• Tourism: Mexico’s first domestically owned and operated cruise ship line, Ocean Star Cruises, is investing US$100 million in the first phase of its service launch this year.  The company began offering routes along the country’s Pacific coast in April 2011 with calls at Puerto Vallarta, Cabo San Lucas, Manzanillo, Ixtapa and other locations.
• Energy: Spanish energy multinational Abengoa will build a new electricity generating plant in the northwestern state of Baja California Sur.  The US$91 million power plant is projected to come on line in 2013.
• Energy: Spanish solar panel manufacturer Siliken inaugurated a new US$27 million production plant in the northern city of Tijuana, near San Diego.  Siliken joins Kyocera and United Solar Systems in Tijuana’s solar manufacturing community.
• Mining: Canadian mining company Goldcorp will invest US$400 million to expand gold and silver operations at three of its mines in the northern state of Zacatecas.  Goldcorp’s aggressive growth in the area is a key part of robust activity currently taking place in the Mexican mining industry.

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The Investment Tour, a series of events in Mexico highlighting opportunities for Mexican investors to invest in the United States, kicks off its 2011 program on April 7 at Expo Guadalajara in Guadalajara, Jalisco.   The seminars include speakers on the nuts and bolts of real estate purchasing, mortgages, tax environment, cross-border corporate structuring and trade logistics, marketing to the U.S. Hispanic market, visas, and more.  In addition to Guadalajara, seminars are planned this year for Mexico City, Monterrey, Queretaro and Xalapa.  For more information, visit www.theinvestmenttour.com .

Reports on some recent and upcoming investment collected from the local business media:

• Retail: DIY retailer Home Depot announced investment of US$115 million in Mexico in the current year, principally for the opening of five new stores.  The leader in its segment in Mexico, Home Depot projects 85 retail locations in operation by the end of 2010.
• Environmental:  The North American Development Bank (NADBank) has ramped up its financing of environmental and other infrastructural projects in Mexico’s northern border zone over the past three years, local media report.  Projects in Mexico financed by the bank during this period include 32 water treatment plants, 50 drainage and potable water systems and 12 solid waste landfills.
• Telecommunications: Telecom service provider Nextel projects investing up to US$1.5 billion in the construction of new network infrastructure.  Nextel recently won a nationwide spectrum auction in Mexico in partnership with television broadcast giant Televisa.
• Aerospace: U.S.-based aircraft manufacturer Hawker Beechcraft is currently constructing a new production plant in the northern city of Chihuahua.  The US$108 million facility, set to produce aircraft assemblies and subassemblies, will become the company’s second manufacturing plant in Chihuahua, further bolstering Mexico’s robust aerospace sector.
• Automotive: General Motors de Mexico announced projected investment of US$500 million in the northern state of Coahuila to produce a new generation of eight-cylinder motors as well as a new vehicle platform.  Projects supported by the new investment are planned to begin this year with actual production set for 2011.
• Franchising: Fast-food chain Burger King announced 2010 investment of approximately US$15 million in order to open 20 new restaurants in Mexico.  The chain’s Mexico expansion also will include doubling the number of “dessert kiosks” from 18 to 36.
• Automotive:  Automaker Volkswagen announced new planned investments of up to US$1 billion over the next three years in its Mexico operations.  Projects under the program include modernization of the Puebla plant to produce the next generation Beetle and construction of a new plant to produce a new generation of motors for Mexico and U.S. auto production.
• Energy: Mitsui Power America, affiliate of Japanese multinational Mitsui, announced projected investment of up to US$2.5 billion in Mexico over the next five years.  The company recently acquired five electricity generating plants in the country and plans further expansion in the energy sector.
• Automotive: Nissan Mexicana plans to invest US$600 million to begin producing two additional auto models at the company’s Aguascalientes plant in 2011 and 2012.  Mexico was chosen over various Asian countries considered for the production of the new versions of Nissan’s March model.
• Food Processing: Mexican dairy processor Lechera Guadalajara opened the country’s second largest milk dehydrating plant, following investment of approximately US$10 million.  The company is also currently building an additional plant to produce cheese and candy.
• Energy: The western sate of Jalisco will get its first wind energy park by the end of 2011, currently in development by Eoliatec de Mexico.  The US$100 million facility is projected to have a total capacity of 60MW, which will be supplied to the Federal Electricity Commission (CFE).
• Real Estate: AMResorts announced plans to build two luxury hotels in Puerta Vallarta through investment of a projected US$150 million.  The project is hoped to help reactivate long sluggish hotel development in the area.
• Paper: Mexican paper and packaging materials manufacturer Bio-PAPPEL will invest approximately US$250 million over the next four years to build five new production plants.  Formerly known as Corporación Durango (Codusa), the firm plans to incorporate electricity generating plants into each of its new production facilities.
• Infrastructure: The Mexican government is projecting private sector investment in infrastructure development of up to US$34 billion between 2010 – 2012.  The largest share of the investment is expected to be in telecommunications, with roads, ports, water management and airports receiving significant capital as well.

Mexico has taken a drubbing from China over the past decade in the attraction of foreign investment in manufacturing, maquiladora and otherwise.  While Mexico has by no means been abandoned by North American and Asian manufacturers, China became a veritable Klondike for foreign manufactures seeking to lower production costs in the early 2000’s.  But a recent story in Reforma reinforces our own anecdotal evidence that Mexico may be in the process of recovering some of the FDI that drank the China Kool-Aid over the past few years.

Throughout the early and mid-‘00s, in the course of participating in export promotion events in the United States, we were struck by the stampede of prospective exporters and manufacturers begging to be led to China.  And not just blender manufacturers either – we had little old ladies knitting doilies looking to offshore to Guangzhou to boost margin.   While there’s no question that China offered a lot of manufacturers very attractive opportunities for cost reductions, we suspect that some portion of those who went tearing off to China with stars in their eyes looking for “money for nothing” probably wound up with more of the latter than the former.  The big attraction, of course, was the low cost of labor.

According to a report by Boston Consulting Group cited by Reforma, in 2002 China’s average daily manufacturing wage was USD0.80, far below Mexico’s comparatively lavish USD3.00 at the time.  Double-digit average annual GDP growth since then, however, has helped drive wages steadily upward in China, while manufacturing pay has remained relatively stable in Mexico over the same period.  As a result, a gap in labor costs of over 250% between Mexico and China just a few years ago is projected to drop to under 20% in 2010.  When factoring in 4:00 a.m. conference calls, frustrating communications and the cost and time of shipping, China may now be losing some of its former luster for manufacturers looking to offshore to serve the North American and South American markets.  Mexico would do well to keep a close eye on items such as electricity costs, targeted technical education and other industrial location decision factors in order to take maximum advantage of any opportunities created by China’s unprecedented development surge.

We’re still alive, trying to punch our way out of this rueful economic funk.  Here are some reports on recent and upcoming investment culled from local media:

• Automotive:  Truck maker Daimler Vehículos Comerciales is reporting that it has doubled production from 35 to 70 units per day at its Saltillo plant over the past three months.  The company is investing US$300 million in its plants in the states of Coahuila and Mexico to increase truck production in anticipation of a recovery in demand in the United States in 2010.
• Retail: Retail and real estate group Grupo Gigante recently opened its 200^th Office Depot store in Mexico, and projected overall sales growth of 8-9% for 2009 across its formats, despite the steep recession.  Gigante projected total investment in Mexico this year at over US$100 million, with two shopping malls under construction and plans to begin work on another in Acapulco.
• Mining: Mexican mining firm Piero Sutti announced the discovery of potentially colossal lithium deposits that could make Mexico one of the world’s largest producers of the metal in the future.  Various international manufacturers of electronic equipment have reportedly expressed interest in potentially sourcing lithium from the Piero Sutti mine.
• Tourism: Hotel operator AMResorts recently inaugurated a new resort and spa in Cancun with following investment of US$117 million.  The hotel group is reportedly exploring opportunities to build or acquire hotels in Cozumel, Playa Mujeres and other locations in Mexico’s south eastern state of Quintana Roo.
• Hospitality: Hotel operator InterContinental Hotels Group announced ambitious plans to invest US$550 million over the next three years to open 58 new hotels in Mexico.  The plans reportedly include the strengthening of the brands Holiday Inn and Holiday Inn Express in Mexico, InterContinental’s fourth largest market.
• Electronics: Japan-based electronics manufacturer Yokogawa inaugurated a new manufacturing plant in the State of Mexico, just outside Mexico City.  The US$20 million facility is set to produce process control devices, current converters and other electronic equipment.
• Airports: Grupo Aeroportuario del Sureste (Asur) is nearing completion of major upgrades to the international airport at Cancun.  Projects included in the US$67 million upgrade include the construction of a second runway, a control tower and a connecting bridge.
• Automotive: Ford de Mexico is nearing completion of a massive US$3 billion rehabilitation of its former manufacturing plant in Cuautitlán, State of Mexico.  The remodeled plant is planned to begin large scale production of the Ford Fiesta in the first quarter of 2010.

Despite the sullen economy, the business press continues to report new investment. Here’s a few items from the past couple months:

• Logistics: Costco Mexico, a joint venture between Mexico’s CCM and U.S.-based Costco Wholesale Corporation, inaugurated a major new distribution center in the central state of Hidalgo. The facility, built at a cost of approximately US$98 million, will serve Costco’s 32 Mexican stores.
• Automotive: U.S.-based Cummins, Inc. announced it will boost production at its Cummins Filtration division plant in San Luís Potosí, Mexico. The increase in filter production at the site comes as the result of consolidation of manufacturing operations at Cummins plants in other countries.
• Automotive: General Motors announced plans to increase production at its Mexico plants located in the states of Guanajuato and Coahuila. The hike in output of vehicles such as the Chevrolet Avalanche and Silverado and the GMC Sierra and Cheyanne, among others, is expected to help reactivate the area’s hard-hit autoparts supply chain as well.
• Beverage: The Coca-Cola Company announced grand plans to invest US$5 billion in its various Mexico operations over the coming five years. The announcement came at the inauguration of the US$200 million upgrade of the company’s Jugos Del Valle juice bottling plant in the State of Mexico, on the outskirts of Mexico City.
• Environmental: New legislation took effect in August requiring retailers to substitute biodegradable bags for plastic where plastic bags are provided to customers. Although the law gives businesses up to one year to begin complying, some major retailers have already begun switching to bags made from alternative materials.
• Automotive: General Motors de Mexico inaugurated a new manufacturing plant in the north eastern state of San Luís Potosí. The plant, built at a cost of US$300 million, will produce six-speed transmissions for GM vehicles.
• Logistics: Major Mexican grocery and general merchandise retailer Soriana announced plans to invest approximately US$18 million in upgrades to its distribution centers in the states of Jalisco and Nuevo León. Soriana plans to install advanced automation equipment in the facilities to increase operational efficiency.
• Electronics: U.S.-based electronics manufacturer Jabil announced plans to expand its Guadalajara production plant. The company, which operates plants at three locations in Mexico, will invest US$60 million in the Guadalajara expansion in the face of a projected 30% increase in its exports this year.
• Financial services: Spanish financial services giant Grupo Financiero Santander launched a new customer services call center in the central state of Queretaro at a cost of approximately US$192 million. The company is lauding its new facility as one of the most modern and technologically advanced in the world.
• Food processing: Mexican dairy product maker Chilchota Alimentos will invest US$10 million this year in the construction of a new processing plant in the northern state of Durango. The new facility, to be located in Mexico’s Laguna dairy region, is planned to bottle 100,000 liters of milk daily.
• Water management: Mexico City mayor Marcelo Ebrard revealed publicly that his administration is studying the possibility of privatizing the management of the city’s water supply, currently managed by the municipal government. The plan purportedly considers participation by multiple private companies in the distribution and billing of the city’s water system, which would presumably generate major upgrades in systems and equipment for water management.