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COVID-19

The accelerated contagion of COVID-19 continued to worsen during August, with seven states now classified as red (highest alert) on the national epidemiological traffic light system and 17 states at orange, the second highest level of alert.  The country is currently reporting approximately 6,000 new cases per day nationwide, however this is down from over 20,000 per day earlier in the month.  Health Ministry authorities have reported that at least 17 states are beginning to register declines in the number of new cases, raising hopes that the third wave is beginning to ease.

ECONOMY AND INDUSTRY

• Through the first six months of 2021, remittances to Mexico from abroad became the country’s single largest source of foreign currency, according to data from central bank Banco de México (Banxico). The US$23.6 billion in remittances during the period exceeded the value of other key income categories such as Foreign Direct Investment (FDI), petroleum exports and tourism. (La Jornada, August 18, 2021)
• The Mexican Social Security Institute (IMSS) reported the number of formal jobs registered nationwide in the system reached a historic high in July. The number of part-time jobs declined, indicating that the recent reform to reduce the outsourcing of employment is driving companies to bring formerly independent workers on staff. (Reforma, August 13, 2021)
• Income from international tourism in Mexico in June exceeded that of June 2019 by 4%, demonstrating significant recovery of Mexico’s tourism industry despite the ongoing pandemic, according to data from the National Statistics Institute (INEGI). The number of international tourists arriving in the country jumped 211% from June 2020, due to business shutdowns last year. (Citibanamex Reporte Económico Diario, August 11, 2021)

ECONOMIC ACTIVITY OF NOTE                                                                                             

• Plastics: Swedish industrial components manufacturer KB Components will open a new production site in the central state of Guanajuato, the company reported. The amount of investment was not specified for the new plant, which will produce injection molded parts for automotive OEMs and other industries in the region. (Cluster Industrial, August 17, 2021)
• Logistics: Mexican beer brewer Grupo Modelo, subsidiary of Belgium-based brewing multinational Anheuser-Busch InBev, reported plans to establish a logistics control center in the central state of Aguascalientes. The US$9 million electronic tracking facility will monitor the transport routes of over 6,000 trucks in Mexico and other Latin American countries to improve the safety of drivers and route efficiency. (Milenio, August 16, 2021)
• Solar power: Spanish solar energy developer X-Elio is nearing completion of a solar energy generation park in the central state of Guanajuato. The US$71 million site is projected to have capacity of 74 Mw of peak power and will become the company’s fifth plant in Mexico. (Invest in MX, August 2021)
• Optic fiber: Italian electrical cable manufacturer Prysmian Group announced it will expand its production plant in the northern Mexican state of Durango. The US$27 million expansion will allow the site to increase output of optic fiber cable for the telecommunications industry. (Zócalo, August 13, 2021)
• Metal processing: Mexican metal processing services provider FYMSA reported plans to expand operations at its plant in the northern state of Coahuila. The US$4 million investment will allow the company to increase capacity for processes such as casting, machining, shotblast and shot peening for the region’s automotive industry. (Cluster Industrial, August 12, 2021)
• Logistics: Mexican cargo transport services provider Estafeta reported plans to establish a new logistics hub on the outskirts of Mexico City. The US$17.5 million facility is aimed at boosting the company’s support for e-commerce, which now accounts for 48% of its business. (Forbes, August 12, 2021)
• Automotive: Ireland-based auto components maker Adient will expand production capacity at its plant in the central State of Mexico, the state government reported. Investment of US$24 million will support the addition of new production lines to manufacture automotive seats principally for Ford electric vehicles. (Transportes y Turismo, August 10, 2021)
• Chemicals: Mexican chemical products maker Iquisa, a subsidiary of chemicals group Cydsa, is currently constructing a new production plant in the eastern Gulf state of Veracruz, local media reported. The US$120 million site is planned to produce bleach and caustic soda. (Reforma, August 11, 2021)
• Automotive: U.S. automotive components maker Dana initiated construction of a new production plant in the northeastern state of Nuevo León, the state government reported. The US$40 million facility is planned to produce axles for electric buses. (Invest in MX, August 2021)
• Entertainment: U.S. toy and game maker Hasbro announced plans to establish its first theme park in Latin America on the outskirts of Mexico City. The amount of investment was not specified for the project, which will include entertainment activities based on the company’s brands including Transformers, My Little Pony, Monopoly, Power Rangers, Potato Head and Nerf, among others. (América Retail, August 4, 2021)
• Casual dining: Mexican casual dining franchise operator Alsea is projecting investment of up to US$225 million to open 150 new locations over the coming year, the company reported. The Domino’s pizza and Starbucks coffee brands will account for the largest number of new sites, with others to open under the Vips, Italianni’s, P.F. Chang’s and Chili’s brands. (Reforma, July 30, 2021)
• Security: Citibanamex, retail banking subsidiary of U.S. based Citibank, reported plans to invest a combined US$140 million to upgrade security systems. Areas of focus will include upgrading systems at bank branches as well as implementing advanced anti-fraud technology. (Reforma, July 30, 2021)
• Construction: Mexican developer Vinte plans to construct 11,000 new housing units in the central State of Mexico over the next two years, the state government announced. The US$140 million development program is expected to include sustainable construction techniques and EDGE green building certification. (Inmobiliare, July 7, 2021)
• Metal machining: Mexican machined parts producer Tecmur announced plans to expand its plant in the northern state of Coahuila. The US$10 million expansion will allow the company to increase production of machined metal components for the automotive and energy industries in Mexico and abroad. (Somos Industria, August 2021)
• Automotive: Japanese auto parts maker DENSO began construction to expand its manufacturing plant in the central state of Guanajuato, the company reported. The US$9.8 million expansion will provide additional warehousing space for the site, which produces alternators, tanks and spray systems for windshield washer fluid, among other automotive components. (Invest in MX, August 2021)
• Automotive: German auto and truck maker Daimler reported plans to invest US$30 million in upgrades to its plant in the central State of Mexico. Resources will support areas such as chassis production, coating processes and logistics. (Inmobiliare, August 3, 2021) 

POLITICS AND SOCIETY

• The United Kingdom added Mexico to its COVID-19 “Red List” of strict restrictions for arriving travelers. Under the guideline, non-UK residents are prohibited from entering the country from Mexico or if they have passed through Mexico within the previous 10 days, and UK citizens or legal residents arriving from Mexico must quarantine for 10 days at significant cost. (Aviacionline.com, August 5, 2021)
• Mexico’s Energy Regulatory Commission published new rules for LP gas setting limits on prices by geographical zone. The government price limits, part of President López Obrador’s campaign to return the energy industry to state control, are expected to be challenged in court by private sector gas companies. (Citibanamex Reporte Diario Económico, August 3, 2021)