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)

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.

Yuck

On July 26, 2011, Mexico City’s Department of the Environment (SMADF) published new guidelines for the production and consumption of plastic products in the city.  The guidelines are scheduled to enter into effect in July 2012 in order to provide affected parties time to prepare for compliance.  The legislation’s lengthy official title could probably be reduced to “the plastic bag law,” as it serves largely as the next step in the ongoing process of trying to figure out how to reduce the volume and degradation time of all the plastic bags discarded daily in the vast metropolis.  The new guidelines were eagerly awaited — so eagerly, in fact, that members of three opposition parties in the city’s legislative assembly (ALDF) called for Environment Secretary Martha Delgado’s removal over the delay.

Any Mexico City resident can tell you that local grocery store baggers are generous to a fault with the plastic bags.  Most of these grocery bags go right in the trash once the purchases are put away at home, contributing to the more than 1,000 tons of plastic garbage the city produces daily.  With the municipal dumps overflowing, in 2009 the city government formed a working group of plastics producers, retailers, academics and other specialists to develop policy recommendations for reducing the volume of plastic bags flowing into the landfills.  But for the city fathers, the plastic bag problem has turned out to be rather like Borges’ aleph: the closer they look at it, the larger and more complex it becomes.

The deliberations of the original working group produced mostly frustration and perplexity.  The ALDF took a stab at the problem in August 2010 by summarily prohibiting stores from providing non-biodegradable plastic bags to shoppers free of charge.  After about two days of absolutely nonpareil confusion at checkout counters across the metropolis — not to mention a hue and cry that would wake the dead — the city threw up its hands.  The measure was abandoned and the status quo was restored, but the problem, of course, remained.  One year later, the new guidelines appear to be more thoroughly pondered and represent progress, but still resemble a set of exhortations rather than specific regulations.  For example, the legislation calls upon plastic bag makers to:

• Orient their processes toward sustainable production that minimize environmental impact throughout the product’s life-cycle
• Give priority to the optimization of the use of renewable natural resources, minimization of emissions, avoidance of toxic components and use of efficient design

Retailers providing bags to customers are asked for slightly more concrete concessions:

• Define the type of bag that best promotes responsible and moderate use for their type of product
• Provide training for their baggers in the efficient distribution of bags
• Clearly label their bags with details on the material of which they are made
• Contribute to the dissemination of environmentally friendly practices in the consumption and use of plastic bags
• Plastic bags provided free of charge must be made of at least 10% recycled plastic
• Plastic bags made of materials that include ingredients to enhance biodegradation must be documented with the SMADF verifying that the material’s life-cycle is no greater than five years or that the bag material is suitable for recycling

(NOTE: English translation is for reference only, see original text of law for direct interpretation)

The complete text of the law is far more extensive and detailed than described above, but nonetheless the Ecologist Green Party of Mexico (PVEM) has already criticized the guidelines for lacking specific criteria to which producers and retailers may be held accountable.

Fair enough, but we’re still pleased that modest progress continues to be made in this regulatory environment.  We feel, however, that the most interesting and salient aspect of the law may be the subtle shift toward an emphasis on recycling rather than biodegradation.  If our interpretation is correct, this appears to be a win for the plastics manufacturers, who lobbied strongly for a recycling focus and against a push toward bioplastics.  Their interest, of course, is to maintain the high production levels of conventional plastics and avoid an erosion of their market share at the hands of alternative materials now being developed.

See the complete official text of the new law here.

To find out about our participation in the Mexico Today program, please go here.

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

• Steel: European and Japanese steelmakers Ternium and Nippon Steel Corp., respectively, announced an alliance to build and operate a new steel manufacturing plant outside Monterrey, Nuevo Leon.  Projected to come on line in 2013, the plant will produce galvanized steel sheeting for the automotive industry.
• Aerospace: Canadian aerospace giant Bombardier inaugurated a US$250 million expansion to its manufacturing complex in the central state of Queretaro this month.  The new facility will produce fuselages and electrical components for the company’s Learjet 85 model aircraft.
• Retail: Office products retailer Office Depot de México revealed ambitious plans to continue its expansion into the Central and South American markets.  The company, which currently operates sales locations in Guatemala, Panama, Costa Rica, El Salvador and Honduras in addition to its 188 stores in Mexico, is projecting US$50 million in investment to open 50 new stores in Colombia during the next five years.
• Manufacturing: U.S. sports equipment manufacturer Easton Bell Sports will invest US$50 million to open a production plant in Guadalupe, Nuevo Leon.  The company, which produces sports headgear for the NFL, MLB and NHL, initially will manufacture football helmets at the new plant for export to the United States.
• Telecommunications: Telefonos de Mexico (Telmex), Mexico’s largest fixed telephone and internet service provider, estimated investment in network and internet infrastructure upgrades at over US$880 million in 2009 and 2010.  The company plans to continue investing in internet infrastructure despite a slight decrease in the strong pace of growth in recent years.
• Manufacturing: Danish toymaker Lego announced it will undertake a US$100 million expansion of its production plant outside Monterrey, Nuevo Leon.  The plant extension will accommodate nearly 400 plastic injection machines.
• Manufacturing: General Electric will invest US$60 million between 2010 and 2012 to modify and upgrade plants in Ciudad Juarez, Monterrey and Queretaro to accommodate additional production.  The company’s 18 plants in Mexico produce products such as medical devices, motors and aerospace parts.
• Machinery: German machinery maker Hess Group invested US$2.5 million to launch manufacturing operations at a production plant in the south eastern state of Yucatan, the company’s first in Latin America.  The plant, to produce specialized construction machinery, will serve the Latin American market.
• Automotive: Mexican heavy vehicle manufacturer Grupo Dina, which returned to activity in 2007 after a multi-year absence for restructuring, announced plans to invest US$20 million over the next three years to boost production.  The company, currently producing only passenger vehicles, plans to launch new products including hybrid and articulated models of passenger buses, in addition to returning to truck production.
• Retail: Mexican retail leader Walmart de Mexico announced plans to invest US$330 million to open over 70 new locations in the north eastern state of Nuevo Leon over the next five years.  Walmart’s retail formats in the state include grocery stores, restaurants and clothes stores.
• Agriculture: Dutch seed producer Rijk Zwaan inaugurated a new seed breeding facility in the central state of Guanajuato.  The US$19 million purpose-build greenhouse will produce seeds primarily for tomatoes and peppers.
• Information technology: U.S. technology giant Cisco inaugurated a new Center of Innovation in Mexico City following investment of US$2 million.  The center is intended to identify needs in the local market and develop tailored solutions for them.
• Energy: Mexico’s Federal Electricity Commission (CFE) projects US$160 million in investment in 2011 in the central zone formerly served by the now-defunct Central Light and Power (LFC).  Resources will be channeled into construction, expansion, repair and maintenance of outdated infrastructure inherited from LFC.
• Food processing: Swiss food processing giant Nestle advised that it is incorporating sustainability guidelines into all areas of investment.  The company plans to invest US$400 million in its Mexico operations over the next three years, and has incorporated solar and biomass energy producing technology into local plants.
• Plastics: Companies in Mexico’s plastics industry have plans to invest a combined US$1.8 billion in 2011, according to the National Plastics Industry Association (ANIPAC).  Following two sluggish years, ANIPAC is projecting a rebound of 9% growth next year.
• Retail: Blockbuster Mexico revealed plans to maintain its expansion plans for Mexico, projecting the opening of five to 10 new locations annually in the country over the coming five years.  The movie and game rental chain currently operates 320 stores in the country.

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

• Plastics:  The Manufacturing Industry Chamber of Nuevo Leon (Caintra) announced an initial US$1 million investment to build the Mexican Institute for Technological Innovation in Plastic and Rubber in the Monterrey area.
• Electronics: IBM formally inaugurated new manufacturing installations in Jalisco developed at an estimated cost of US$20 million.  The facilities are intended specifically for the production of IBM’s high-end XIV Storage Systems for export to the United States, Europe and other areas.
• Toys: Spanish toy manufacturer and retailer Imaginarium announced ambitious plans to expand operations in Mexico with an initial investment of US$1.6 million.  The company plans to open over 40 new retail locations in the country by 2013, in addition to potentially manufacturing in Mexico.
• Retail: Despite underwhelming economic recovery, Mexico’s top retailer Wal-Mart de Mexico announced plans to invest over US$900 million this year.  The plans include the opening of 300 new locations across the company’s various retail formats and the remodeling of existing stores.
• Mining: Canadian mining company First MajesticSilver Corp. opened a mineral processing plant in the northern state of Coahuila in late 2009.  The US$22 million plant will produce gold and silver.
• Healthcare: The Mexican government announced plans to undertake a formal program to promote Mexico as a destination for ‘medical tourism.’  Medical services to foreigners traveling to Mexico for this purpose were valued at an estimated US$122 million in 2009, and the government projects that the promotional campaign will boost the sector to over US$1 billion by 2015.
• Retail: Leading grocery and general merchandise retailer Soriana announced investment plans worth US$300 million for 2010.  The firm’s expansion program for this year includes construction of 40 new stores.
• Automotive: Chrysler de México announced it will begin production of the new model Fiat 500 at the Chrysler’s Toluca, Mexico plant in December.  The company reported investment of US$550 million in advance of the new production program.
• Retail: DIY retailer Lowe’s finally opened its first two stores in Mexico in February 2010, following investment of US$100 million during an extended preparation process.  Lowe’s Mexico operation has plans in the works for three more stores in the medium term.
• Research: A US$200 million Research and Technological Innovation Park is set to begin operations in Monterrey by the end of this year.  The high technology research center will include sites for high profile companies such as Motorola and PepsiCo, and Mexican industry leaders Sigma Alimentos and Xignux.  Research areas will include nanotechnology, advanced materials, biotechnology and software, among others.
• Food Processing: Mexican snack foods manufacturer Bokados announced investment plans of approximately US$8 million in 2010 as part of an aggressive market expansion strategy.  The plans for this year include opening the company’s third production facility.
• Automotive: Chinese light truck maker ZX Auto will begin investing a planned US$100 million this year in the construction of a new manufacturing plant in the north western state of Baja California, according to state officials.  Baja California’s automotive manufacturing sector includes approximately 80 companies, including parts makers and maquiladoras.
• Paper: Consumer goods giant Kimberly-Clark’s Mexico subsidiary plans to invest US$100 million in plant and process upgrades this year in anticipation of a rebound in demand following a down 2009.  The company is projecting 7% sales growth in Mexico this year.