Showing posts with label production. Show all posts
Showing posts with label production. Show all posts

Sunday, May 3, 2015

Jaguar: 'Mexico a Strong Option for Land Rover Plant'


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May 1, 2015

Land Rover's Range Rover Vogue and Range Rover Sport are top sellers in the U.S. and could possibly be produced at a new Mexico factory because it would be tied to the U.S. market, ChamaSrour said.
 

























Mexico City - Jaguar Land Rover is considering building a plant in Mexico, following other luxury car makers lured by cheap labor and free trade agreements.

Mexico is a "very strong option" for Jaguar Land Rover to invest in, possibly more than $500 million, said Joseph ChamaSrour, Jaguar director general for the brand in Mexico. "Three years from now it could be interesting to have a plant in North America, and Mexico would definitely be a very strong candidate because of the cost of labor, the logistics and the expertise of the whole supply network," he said in an interview in Mexico City.

Jaguar, owned by India's Tata Motors Ltd., would tread a well-worn path to Mexico, Latin America's top vehicle producer, which has already wooed Germany's premier luxury brands. Last year, BMW AG committed $1 billion to start turning out 150,000 cars in 2019, following Volkswagen AG's Audi and Daimler AG's Mercedes-Benz in deciding since 2012 to build cars in Mexico.

Last month Toyota Motor Corp., the world's best-selling automaker, said it will spend about $1 billion to begin producing Corollas in 2019 in Mexico, its first car factory in the country as it ends a self-imposed freeze on new plants following the financial crisis. Hyundai Motor Co. may also build a factory in the country, its managing director in Mexico said earlier this month, joining a roster of other Asian manufacturers including Nissan Motor Co. and Honda Motor Co.

Automakers are flocking to Mexico to take advantage of a low-wage yet highly experienced labor base, and export access to the U.S. and other countries through the North American Free Trade Agreement.

Land Rover's Range Rover Vogue and Range Rover Sport are top sellers in the U.S. and could possibly be produced at a new Mexico factory because it would be tied to the U.S. market, ChamaSrour said. He didn't rule out producing Jaguars at the plant.

Original article

Friday, May 1, 2015

Firm unveils prototype of all-Mexican plane

The Pegasus, created by Oaxaca Aerospace.
 
Mexico’s aerospace industry, experiencing an annual growth rate of more than 14%, is on a roll and a small company in Oaxaca wants to be part of it.
 
Oaxaca Aerospace has unveiled its prototype of an airplane completely designed and developed in Mexico, the Pegasus, a single-engine, two-seater plane that is agile, fast and inexpensive.
 
The father-and-son team of Raúl and Rodrigo Fernández began their project four years ago, developing what they describe as a completely different aircraft. A team of highly-qualified engineers has worked with them, using the latest computer software to design it.
 
“Most airplanes today are designs that were born in the 1950s, and they have only been modified in terms of avionics and engines that are more modern,” says Rodrigo Fernández, who is general manager of Oaxaca Aerospace. “There has not been any basic modification to make them more efficient and aerodynamic.”

The Pegasus is expected to have a range of 1,600 kilometers and a maximum speed of 400 km/h and fly at a maximum altitude of 16,000 feet. Its design makes it ideal for aerial surveillance, said Fernández, so potential clients are police services and armed forces. It could also serve for pilot training.

Although the Pegasus has not yet flown, the company hopes to build 12 of its planes in 2019, and sell them for US $550,000 each. Their principal challenge is financial: the Fernández have invested $3 million of their own money into the project, and assistance has also come from Conacyt, the National
Science and Technology Council, and the business accelerator TechBA. Collaborative help has come from the National Polytechnic Institute, which has been participating in runway trials.

Certification of the airplane is also something of a challenge because the Mexican authority, the Director General of Civil Aeronautics, has little experience in that process.

It is, after all, the first 100% Mexican plane, one that could well help propel the aerospace industry to greater heights.

Source: Milenio (sp)
 
- See more at: http://mexiconewsdaily.com/news/firm-unveils-prototype-of-all-mexican-plane/#sthash.p02mxHcJ.dpuf

Sunday, April 26, 2015

You May Say 'Hola' to Your New Car as Mexico Ramps Up Auto Production

nbcnews.com


American motorists are used to driving imports. Brands like Toyota, Volkswagen and Hyundai account for a solid majority of the U.S. market. But before you say "konnichiwa," (hello) to that new Honda Fit you might want to take a closer look.
       
Most of the models sold by Japanese brands these days are actually built in North America — and a growing number of those are coming from plants south of the border. When it comes to automotive manufacturing, Mexico's production base is growing nearly as fast as China's. Most of that is earmarked for export, notably to the U.S.
Toyota this month announced plans to build its first major assembly plant in Mexico, at a cost of $1 billion. The company's North American CEO Jim Lentz said the new plant is part of a "strategic re-thinking of how and where we build our products."
       
Just last month, Volkswagen AG said it would invest $1 billion to expand its sprawling assembly complex in Puebla, a couple hours from Mexico City. And Ford Motor Co. is expected to soon announce a $2.5 billion investment to boost the capacity of its various Mexican operations, including two assembly lines and an engine plant.
       
A quick rundown of the list of major global makers reveals that few have not already begun investing in Mexico. Those who have yet to set up shop are racing to open up their first plants - a list including Toyota, Kia, Audi and Mercedes-Benz.
       

'Spectacular growth'

 
Even before the latest plans were revealed, automakers from around the world had committed to investing $20 billion in the Mexican automotive production base over the last five years, according to the Mexican Automobile Industry Association, or AMIA.
       
"The growth in production and in exports has been spectacular," Eduardo Solis, the trade group's president, said earlier this year. "The growth reflects the confidence the industry has in our country."
 
There are a variety of reasons why Mexico's auto industry is booming. Sales are on fire; local demand is increasing at almost double the rate of the U.S. automotive recovery. That said, Mexicans are expected to purchase less than 1.5 million vehicles this year, hardly enough to justify the huge spate of investments.
       
"The growth in production and in exports has been spectacular."


The bulk of the rapidly growing production base is targeted for export -- about 2.9 million of them this year, AMIA forecasts, with 70 percent headed for the U.S.   
        
Manufacturers benefit from extremely low labor costs, generally about $10 an hour for wages and benefits, or 20 percent of U.S. costs. But they also take advantage of the fact that Mexico has negotiated free trade agreements with 54 countries, more than any other nation except Israel.        
 
"Mexico is a great place to make a reliable investment," said President Enrique Pena Nieto as he helped Nissan dedicate its third assembly complex, in Aguascalientes, in November 2013.
 
Like the majority of the Mexican auto plants, it focuses on small vehicles which can become much more competitive thanks to low labor rates. Along with the Nissan Sentra, Mexican plants roll out models like the Honda Fit, the Volkswagen Golf, Chevrolet Cruz and, in a couple of years, the compact Toyota Corolla which is currently being assembled in Canada.
       

Change coming

 
But that is about to change. As part of a growing partnership between Daimler AG and the Renault-Nissan Alliance, the German automaker will help set up a second assembly line at Nissan's Aguascalientes plant. It eventually will produce both Mercedes-Benz and Infiniti models.
 
"Our biggest project yet, it takes our partnership to the next level," noted Dieter Zetsche, the Daimler CEO and head of the Mercedes brand, during a joint news conference held with Nissan's chief executive Carlos Ghosn.
       
Audi, meanwhile, is setting up a plant of its own an hour away from its mainstream sibling Volkswagen's facility in Puebla. The luxury maker is optimistic: "We may even double production" in the near-future, suggested Audi AG Board Member Berndt Martens during a tour of the partially completed site.
       
The launch of new luxury models has raised concerns about whether Mexican assembly plants can match the quality of lines in the U.S., Europe or Asia. But data from the likes of J.D. Power and other research firms has shown little to no quality gap.
 
And that means that the growth of Mexican auto imports will likely only to continue expand in the years ahead.

Thursday, April 23, 2015

Mexico moves up in copper production

Buenavista copper mine in Sonora.
Record copper production last year by mining conglomerate Grupo México propelled Mexico into 10th place on the list of the world’s top copper producers.

Mexico moved up one from 2013, bumping Indonesia out of the No. 10 spot, with total production increasing 11% to 522,000 tonnes, according to the latest annual copper survey by Thomson Reuters.
 
Grupo México-owned Southern Copper, with operations in Mexico and in Peru, finished the year as the fifth-largest copper producer in the world with output of 665,000 tonnes, the same ranking it held last year.
 
Chile is the world’s biggest producer by far, with production last year totaling 5.7 million tonnes. China was second with 1.6 million.

Southern Copper’s record-breaking output was attributed to the US $1.38-billion investment it made last year in its controversial Buenavista mine in Cananea, Sonora, where a devastating toxic spill took place last August.

The company was fined 23 million pesos for releasing 40,000 cubic meters of copper sulphate solution into two rivers.

Source: El Financiero (sp)
 
- See more at: http://mexiconewsdaily.com/news/mexico-moves-up-in-copper-production/#sthash.237udklU.dpuf

Tuesday, April 21, 2015

Coming Soon: Buildings Made From Tequila Waste

banderasnews.com


go to original
April 20, 2015

The startup Plastinova is using recycled plastic and agave bagasse left over from making tequila to produce strong composite lumber. The company spent a year testing and developing the leftover tequila lumber.
 

Jalisco, Mexico - The company Plastinova is working with two local tequila-makers in Jalisco, Mexico to turn leftovers from making tequila into a composite building material. The leftovers – called agave bagasse – are key to creating this recycled composite lumber that's stronger and more durable than the ones on the market today.

Agave bagasse wasn't exactly piling into landfills before Plastinova started working on this new building material, though. Before Plastinova came on the scene, companies were using the organic material to fuel boilers. It took some negotiating to get these tequila companies to sell their agave bagasse to Plastinova, and that's definitely going to impact the finished product's price.
It basically takes three steps to turn agave bagasse into a building material:
1. They physically remove the alcohol, sugar, bone and shell, so just the fiber remains.
2. They dry the remaining fiber, then pulverize it into a powder.
3. They add a compatibilizing agent to make the powder behave like a plastic and interact well with the recycled plastic.

So, if agave bagasse wasn't going to waste, why use it?

The agave bagasse is key to this material, because it's stronger than materials like wheat straw that are in composite lumber currently on the market. Plastinova is paying a premium for agave bagasse, but will consumers pay?

Jeff McIntire-Strasburg at our sister site Sustainablog hipped us to this cool industrial reuse for food waste, and he thinks that they will. Jeff says the fence in his backyard is also made from a recycled plastic composite. This one is mixed with wheat straw.

"I know plenty of people love this concept and are willing to pay a premium for materials," he explains. "In my case, a material I didn't have to paint was very appealing!"

This is just step one for Plastinova. The company spent a year testing and developing the leftover tequila lumber, and now they've set their sights on other food waste. They're now working on how to replace agave fibers with ones from coconut, which they think will provide an even stronger finished product. Before they can start developing the coconut lumber, though, they'll need more investor support.

Along with turning food waste into something useful, this new composite lumber would keep tons of plastic waste out of landfills and replace conventional lumber, protecting forests. Would you pay a premium up front for a sustainable, food-based building material? Would a bonus feature like never having to paint it make it more worth it to you?

About the Author

Becky Striepe (rhymes with "sleepy"), is a crafts and food writer from Atlanta, Georgia with a passion for making our planet a healthier, happier, and more compassionate place to live. her mission is to make vegan food and crafts accessible to everyone! If you like Becky's work, you can also find her on Twitter, Facebook, and Google+.

Original article

Friday, April 10, 2015

First Quarter Auto Sales up Almost 22%

by Murry Page
8 Apr 15
mazmessenger.com
 
According to the Mexican Association of the Automotive Industry (AMIA), during the first three months of 2015 a total of 306,157 vehicles were sold in México, the highest number in the history of the domestic automotive industry for the first quarter.

The AMIA noted that the first quarter sales were up 21.9 percent over the first three months of 2014. The 21.9 percent increase is the highest percentage increase in the past 15 years, the AMIA said.
Guillermo Rosales, Director General of the Mexican Association of Automobile Dealers (AMDA), attributed that increase in sales to a lagging demand and better incentives offered by car dealers, such as more accessible credit, promotions and discounts.

The automaker that sold the highest number of vehicles during the first quarter was Nissan with 81,233 units sold, giving Nissan a 26.5 percent market share. General Motors came in second with 56,530 units sold and an18.5 percent market share. Volkswagen followed with 42,910 units sold and a 14 percent market share.

(from El Financiero)

Monday, April 6, 2015

Mexico's Manufacturing Sector Continues to Grow

stratfor.com

Summary

Mexico's economy has performed well relative to other major Latin American economies in recent years, largely because of its thriving manufacturing sector. Unlike Brazil and Argentina, whose manufacturing sectors are slumping, Mexico has continued to see solid growth because of its integration with and dependence on the U.S. market. Although low global oil prices will put pressure on Mexico's economy, the performance of the manufacturing sector — especially in high-end manufacturing — will be a key driver of Mexico's economic growth this year and beyond.

Analysis

In the late 1980s and early 1990s, Mexico underwent a profound economic and political reorganization. The economy liberalized, culminating in the North American Free Trade Agreement. Major state-owned companies privatized, transforming Mexico from a closed economic and political system into an export-oriented industrial economy. As a result, trade increased between Mexico and the United States, and a manufacturing belt sprung up at the countries' shared border. From 1990 to 2000, Mexican trade became even more closely tied to the United States. In 1990, the United States accounted for 69 percent of all Mexican trade; by 2000, it accounted for nearly 80 percent.
But at the turn of the century, China's special economic zones became cost-competitive alternatives to

Mexican factories. Mexico responded by making more valuable products, such as automotive, aeronautical and electronic products. Thus, even though clothing exports dropped 43 percent (from $7.6 billion to $4.3 billion) between 2002 and 2012, automotive exports increased by 152 percent ($27.9 billion to $70.3 billion) and electronic exports increased by 73 percent ($43.3 billion to $74.9 billion) over the same period. Asian alternatives to high-end products notwithstanding, these Mexican products remained cost-competitive because of NAFTA.


Mexico's Primary Intermodal Networks and Population
   
Moreover, rising wages in China have once again shifted the equation in global manufacturing. Average manufacturing labor costs in Mexico are now almost 20 percent lower than in China, whereas in 2000, Mexico's labor costs were 58 percent more expensive than China's. There is also an important regional distinction that should be taken into account. A significant portion of U.S. export-oriented middle- and high-end manufacturing takes place in northern Mexico, especially around Monterrey, which is major steel producing area where GDP per capita exceeds $40,000. The electronics industry is also important and contributes greatly to the economy of northern states like Chihuahua, Baja California and Tamaulipas. On the other end of the spectrum, low-end manufacturing of goods like clothing and textiles is continuing to expand in southern Mexico, in cities like Campeche and Veracruz, making this particular region a beneficiary of China's growing labor costs.

Since the implementation of NAFTA in 1994, Mexico's real GDP climbed by about $383 billion to nearly $1.3 trillion. This growth, which placed Mexico second in Latin America and 15th in the world in terms of GDP, rose primarily because of the advantages that come with Mexico's proximity to the United States. Mexico has planned its economic strategy around these advantages, which include short transport distances to the world's largest consumer market and low wages compared with those of the United States — low wages that have spurred investment in manufacturing (with the United States as a leading investor) for decades. The manufacturing value-added sector now makes up 18 percent of Mexico's GDP.

The Manufacturing Sector's Current Status

This orientation toward the U.S. market and the diversification of Mexico's manufacturing production has benefited the country significantly in recent years. While Brazil and Argentina (which, along with Mexico, make up more than 80 percent of Latin America's manufacturing output) have seen a slump in their manufacturing sectors due to both countries' slowing economies and growing restrictions within their Mercosur trade bloc, Mexico has performed much better. In large part this is structural: Mexico has been much more open in its economy and supportive of free trade than Brazil or Argentina, which have followed a protectionist import-substitution model. The South American countries' overall trade with the United States is also much lower than Mexico's. As a result, Mexico's manufacturing output increased by 3.4 percent in the first nine months of 2014, while Brazil and Argentina's contracted by 1.8 and 2.4 percent respectively.

Several subsectors are driving this manufacturing growth, most notably in high-end manufacturing, such as the automotive, plastics and aerospace industries. Mexico's auto sector has been particularly strong, experiencing double-digit export growth every year since 2010. The plastics industry, which is valued at more than $20 billion per year, has averaged 13.4 percent growth in exports over the past five years. Meanwhile, Mexico's small but burgeoning aerospace industry based in the central state of Queretaro has grown even faster in recent years.

On the lower end of manufacturing, there has also been steady growth, though not as rapid as in much of Mexico's high-end manufacturing. Exports of textiles have averaged 9 percent growth over the last two years, while clothing exports have averaged 3.5 percent growth. This suggests that the high-end sectors concentrated in northern Mexico are more attractive within the country's manufacturing sector and are larger, both in terms of growth and absolute value, than the low-end sector in southern Mexico.



 

Outlook and Broader Implications

One of the factors impacting Mexico's economic growth this year will be the accelerating U.S. economic recovery, although growth for the first quarter of the year is likely to be small. As mentioned previously, a substantial portion of Mexico's manufactured goods are exported to the United States, and U.S. demand for these products will increase as long as the U.S. economy continues to build momentum. Mexico's manufacturing output is projected to increase between 4 and 4.5 percent for 2015 and 2016, and the Boston Consulting Group expects that the manufacturing sector could add between $20 billion and $60 billion to Mexico's economy through 2018.

All of the subsectors that have performed well in recent years are also projected to continue strong growth in the coming years. The growth rate for plastics is expected to accelerate to 6 percent in 2015, while the automotive and aerospace sectors are projected to sustain strong growth for the next several years. Machinery and appliance manufacturing could also see strong growth, and exports of textiles and carpets are likely to continue to see moderate growth.

However, some less positive factors will also affect Mexico's economic performance. Although Mexico's security situation has not significantly harmed the country's manufacturing growth, water availability in the country could become a long-term constraint in manufacturing development. Falling oil prices and a difficult global economic environment have also put more immediate pressures on Mexico's economy. Crude petroleum is Mexico's largest export. Because of lower global oil prices, Mexico's central bank recently cut its growth outlook for this year from 3-4 percent to 2.5-3.5 percent. Meanwhile, the peso fell by 13.1 percent during the course of 2014 and has fallen another 1.4 percent in 2015.

Low global oil prices also have important regional ramifications. From a manufacturing perspective, low oil prices can be a boon, especially for manufacturers of goods such as plastics and machinery.

On the other hand, low oil prices add to employment problems and push wages down in Mexico's primary oil-producing zones, which are low-end wage zones in the country's south. For Mexico's state finances, this is a broader problem, and there is no short-term fix. The government thus will have to rely on tax reform to close the gap somewhat until Mexico's energy reforms begin benefiting the energy sector. But overall, the strong performance and growth prospects of Mexico's manufacturing sector, particularly high-end manufacturing, will continue to boost the country's economy for years to come.

Toyota to build new Plant in Guanajuato, Mexico

theyucatantimes.com

Toyota Motor is planning new Chinese and Mexican factories, ending a freeze on plant construction to better compete against Volkswagen and other global rivals.

The Japanese automaker will make an announcement later this month.

It expects to spend some 150 billion yen ($1.25 billion) on the new facilities, opening them in 2018 in China and 2019 in Mexico. Together, they will boost Toyota’s annual production capacity by up to 300,000 vehicles.

These will mark the first new Toyota factories since a Thai facility that opened in 2013, when the company halted plant construction to focus on honing profitability.

The Chinese plant will be built in the city of Guangzhou, where Toyota has a joint venture with Guangzhou Automobile Group, and make the Yaris subcompact. It will churn out up to 100,000 cars a year. Eyeing the growing demand for autos among the middle class in China, Toyota aims to raise its market share there from 4% by offering more small cars.


Yaris
Toyota will make the Yaris subcompact at the new Chinese plant (Photo: nikkei)


In Mexico, Toyota’s factory in the state of Guanajuato will have a maximum output capacity of 200,000 cars a year. The plant will operate around the clock, building a new version of the Corolla sedan for North America. A Canadian factory that now builds Corollas will instead make bigger vehicles. Toyota sees low Mexican production costs helping it achieve more competitive pricing in the U.S., where it holds a 14% market share.

The new factories will require 40% smaller initial investments compared with 2008 outlays. Toyota has cut setup costs by reducing assembly line steps and using stripped-down production equipment. The new plants will be able to retool for different models in a few days, as opposed to nearly a month at older facilities. Such cost-saving adaptations should help them maintain profitability even when output drops sharply.

Until around 2008, Toyota had added 200,000 to 300,000 vehicles of new capacity a year, propelling its global expansion. But this buildup created fixed costs that left it exposed to the crash in automobile demand that followed the global financial crisis. Stung by a full-year operating loss, Toyota announced a three-year freeze on plant construction starting in fiscal 2013. It has since concentrated on boosting earnings capacity and has something to show for it: group operating profit for the just-ended fiscal 2014 is seen coming in at an all-time high.

Once the new factories are up and running, Toyota’s worldwide production capacity will reach 11 million vehicles.

Source: http://asia.nikkei.com/

Thursday, March 26, 2015

Mexican Economic Activity Up 2.6% in January

laht.com

MEXICO CITY – Mexico’s IGAE economic activity index rose 2.6 percent in January relative to the same month of 2014, driven by growth in the agricultural sector, the National Institute of Statistics and Geography, or Inegi, said Wednesday.

In a statement, Inegi said the rise in that index was the result of 13.4 percent growth in primary activities (agriculture), an 0.8 percent increase in secondary activities (services) and a 3.1 percent rise in tertiary activities (manufacturing).

In seasonally adjusted terms, the IGAE rose 0.2 percent in January compared to December thanks to a 6.7 percent increase in agricultural activity and a 0.4 percent rise in the services sector, while manufacturing contracted by 0.4 percent.

The IGAE is a preliminary indicator that indicates the direction of Mexico’s economy in the short term.

Mexico’s gross domestic product rose 2.1 percent in 2014, up from the 1.4 percent growth rate registered in 2013 but well short of the government’s forecast for 3.9 percent growth.

Tuesday, March 24, 2015

GM to invest $350mn in Ramos Arizpe

 
General Motors in Ramos Arizpe
Coahuila plant built 173,000 vehicles last year.vanguardia
News

 

In automotive news this week, Toyota is back in the spotlight though with nothing concrete, and General Motors is too, though with nothing completely new.

GM announced in December it would invest US $3.6 billion in Mexico over four years. Today it revealed that $350 million of that will be spent on preparing its plant in Ramos Arizpe, Coahuila, to build a new generation of the Chevrolet Cruze.
 
The plant has already churned out more than 3.4 million units of that model since it was launched in 2008.

In a prepared statement, the firm’s president and general manager in Mexico, Ernesto Hernández, noted that Mexico is the seventh largest producer of GM vehicles at 7% of global production.
The Ramos Arizpe plant opened in 1981 and built 173,400 units last year, 25% of the firm’s production in Mexico. It has become a key element of the automotive industry in the region, said plant manager Héctor de Hoyos, contributing 21% of the Gross Domestic Product of the state of Coahuila.

Ramos Arizpe has also produced the Century, Cutlass, Chevrolet HHR and the Chevy.
GM announced earlier this month an $87 million investment in its factory in San Luis Potosí to add two new stamping presses.

Toyota Motor Corp., meanwhile, is — once again — said to be finalizing plans for its first passenger car assembly plant in Mexico. Its board could approve the plant within weeks, according to several speculative reports, which give the location as Guanajuato.

Rumors in September of expansion into Mexico were scotched shortly after but surfaced again in January.

Sources: El Economista (sp)
 
- See more at: http://mexiconewsdaily.com/news/gm-invest-350mn-ramos-arizpe/#sthash.LBjPcIry.dpuf

Thursday, March 19, 2015

Corona-Maker Announces Billion Dollar Investment In Mexico

forbes.com


Constellation Brands, the company that distributes Corona, Modelo Negra, and Modelo Especial in the U.S. announced plans to invest more than one billion dollars to expand production at its facility in Coahuila Mexico from  10 to 25 million hectoliters a year, a move that the company expects to help it increase its share in the U.S. beer market from 7 percent to 14 percent. The investment in the Coahuila factory is expected to top US$1 billion. According to company spokesman Edgar Guillaumin,”imported beer and craft beer are growing a lot in the U.S. We want to keep pushing premium Mexican brands in the U.S. market. We’re concentrating on beer that’s where we have aggressive plans for growth.” Mexico currently exports more than $1.5 billion dollars worth of beer annually, a figure that should rise as Anheuser-Busch owned Grupo Modelo and Heineken-owned Cervezas Moctezuma, makers of DosEquis, continue to expand production. 
 
Workers unload cases of Corona beer in Michoacan, Mexico. Photo by N. Parish Flannery. Instagram: @nathanielparish
Workers unload cases of Corona beer in Michoacan, Mexico. Photo by N. Parish Flannery. Instagram: @nathanielparish
 
Bud Light may still be the top-selling beer in the U.S., but as I explained in a recent article, “As more consumers in the U.S. have turned away from longtime favorites such as Budweiser and Coors, Mexican beers have enjoyed a boost an now account for 15 percent of U.S. sales.” 

Wednesday, March 18, 2015

Mezcal Girl’s product wins state support

 
The Mezcal Girl.
Adela and a bottle of La Palenquerita.milenio
News

 

You’re 14 years old, in the sixth year of primary school and your father, a worker in a mezcal distillery, falls ill. Your family’s economic situation becomes precarious, along with the opportunity to continue your studies.

What do you do if you’re an indigenous girl from San Dionisio Ocotepec, in the Central Valley of Oaxaca?
You make mezcal.

La Palenquerita is the result of the efforts of that 14-year-old girl, named Adela, who has created a product that has since won first prize in three regional competitions, and resulted in a meeting with state Gov. Gabino Cué.

The Mezcal Girl, as she is being called, began operating a rudimentary though artisanal distillery whose product was sold in plastic bottles bearing a simple paper label. What was missing was commercialization, and her meeting with the governor soon fixed that.

The state has anted up 825,000 pesos, or US $53,000, in funding to commercialize La Palenquerita. Economic Development and Tourism Secretary José Zorrilla said Adela’s mezcal will be included in a national catalogue of mezcal brands and sold in supermarkets.

Export opportunities will be explored as will the distillery’s inclusion on the state’s mezcal route.

Source: Milenio (sp)

 
- See more at: http://mexiconewsdaily.com/news/mezcal-girls-product-wins-state-support/#sthash.8z83sDEl.dpuf

Friday, March 6, 2015

Mexico to invest US$ 540 mln in new Agroparks

freshplaza.com



Mexico is investing 540 million dollars for the realization of new agroparks. That was said by the Dutch state secretary of Economical Affairs Sharon Dijksma in context to her visit to Mexico this week. According to Dijksma, The Netherlands can play a big role in the development of Mexico's agricultural sector. "Mexico is a world champion in regards to the production of fruit and vegetables. The country wants to become self sufficient and the Dutch technology and knowledge can play a big role in this", Dijksma said in a Dutch radio broadcast.

.
Dutch ambassador in Mexico Dolf Hogewoning, state secretary Sharon Dijksma and pepper grower Oscar Woltman of FreshMex. Picture by @LANMexico

Mexico wants to build more Agroparks that are similar to the Agropark in Queretaro. This successful greenhouse cluster was founded several years ago with the help of the Netherlands; pepper grower FreshMex was the first Dutch company to built a high tech greenhouse at the Agropark. After them many followed and nowadays the Agropark is a leading example of a cooperation between Mexico and Holland. 


Picture by @LANMexico
The Wageningen University is now developing three more business models for Agroparks in Mexico, with support from the Dutch government. "The Agropark creates opportunities for the Mexican industry to become self sufficient and to become a leading producer of greenhouse vegetables." Mexico currently is the number 1 supplier of greenhouse vegetables to the U.S. and Canada.  Holland plays a big role in this; greenhouse technology and expertise is needed.


Sharon Dijksma informed about a bumblebee hive at Koppert Mexico. Picture by @LANMexico





Sharon Dijksma and Agricultural counsellor Jean Rummenie toast the delegation during a lunch at Pena de Benal near the Agropark.  Picture by Enrico Verhoef of United Farms

Yesterday, the trade delegation with secretary Dijksma visited the pepper growers of Freshmex at the Agropark. As well as this she visited Koppert Biological Systems and the Ceickor training center in Queretaro. Furthermore the delegation paid a visit to other agricultural companies like poultry company Superpollo.

Mexico - best known for tequila - is now a berry powerhouse

tthenewstribune.com
McClatchy Foreign Staff
March 6, 2015
 

— Mexico, already the world’s third-largest exporter of blueberries, raspberries, blackberries and strawberries, is searching for ways to get U.S. consumers to throw more fresh blueberries into the pancake batter and heap more raspberries onto their fruit salads.

As long as U.S. and other foreign consumers wolf down berries, Mexican proponents of the industry say, the surge will continue. And that’s more than just an agricultural oddity in a land better-known for fields of blue-green agave and patches of cactus. The growth of the berry industry has had major consequences on regions long afflicted by high unemployment and drug-related violence.

The industry, which didn’t exist less than two decades ago, employs more than 100,000 people and reaps nearly $1 billion a year. And it’s still emerging from its adolescence.

“We’re starting some huge growth,” said Javier Trujillo Arriaga, Mexico’s senior federal plant health director. “It’s been spectacular, absolutely spectacular.”

“It’s likely the industry will employ 200,000 people in five years,” added Mario Steta Gándara, former head of the National Association of Berry Exporters, a trade association that began only five years ago.

Berry cultivation isn’t the province only of huge industrial farms. Similar to coffee farms, berry operations vary in size.

“You can have the 500-acre or 600-acre guy, but you also have people making a decent living on 5 acres,” said Steta, who’s general manager of Mexico operations for Driscoll’s Berries, a fruit giant based in Watsonville, Calif., with more than a century in the berry business.

The story of Mexico’s berry industry begins in distant lands – California and Chile – where fruit farmers encountered a number of difficulties ranging from water shortages to high shipping costs and inadequate access to migrant workers. So growers looked elsewhere.

“I worked in raspberries for 10 years in Chile,” said Sergio Vargas, a Chilean who’s a partner in Berries Paradise, an exporter with a logo that describes the concern’s products as “a piece of heaven.”

He and his Mexican partner have 1,500 acres of blueberries and raspberries under cultivation in neat rows under open-sided plastic covers. The fields are in the southern highlands of Jalisco state along the Pacific coast.

“We started at zero in 2008,” Vargas said. “It’s cost a lot to learn how to grow blueberries here. . . . We’ve had a sharp learning curve.”

They’ve settled on a variety of blueberry known as Biloxi, a name taken from the city in Mississippi, which is adapted to the warmer temperatures and milder winters of Mexico.

Unlike in the United States, the blueberry bushes don’t drop their leaves here, and the growing season is from November to May, or longer. Harvests are smaller per acre but “it’s still a good business,” Vargas said.

Most of the berry farms are 4,000 to 5,200 feet above sea level, an elevation that blunts the fierce heat that beats down along the coast. While strawberries are grown widely in Mexico, other berries are largely limited to Jalisco, Michoacan and Colima states, all of which border the Pacific, since that’s where the necessary refrigerated supply chain is centered.

The regions traditionally had been home to much different kinds of plants. When foreign growers came to the areas of Jalisco where berries now flourish, they found sugarcane. In neighboring Michoacan, berries took over from avocado plantations.

Trujillo, the government crop official, said major sugarcane growers would hire only 50 people to tend 25,000 acres. That same acreage for berries, he said, employs 2,000 people to tend the bushes and harvest the fruit by hand.

Mexico’s largest berry producer is Driscoll’s, the California concern. Its chief executive, Miles Reiter, a third-generation berry man, came to Mexico around 1995.

“A worker . . . in California invited Miles to a wedding in Jalisco in the middle of winter,” Steta said. “He came, he saw the environment . . . and he wondered if it was not the right environment for berries.”

Reiter quickly determined that bushes and vines would sprout from the soil, but he kept his plan low-key for a number of years, quietly doing trials in Mexico in the late 1990s. Then conditions in California pushed him to action. An anti-immigrant mood made it harder to get field labor there to harvest his berries.

“California’s challenges are really providing an opportunity for Mexico. Labor and immigration are really big issues. You do not have the labor to harvest these crops in California,” Steta said.

The berry industry’s growth has been so rapid that hurdles have arisen. At some times of the year, the country lacks refrigerated trucks to move berries, which have a shelf life of about 45 days. Better laws are needed to protect proprietary varieties. And capital costs are high. Rather than coming from seeds, the vines and bushes must be propagated from roots and stems, usually brought from the U.S. and elsewhere.

Two dozen companies now belong to the berry exporters’ association, and those that have mastered the supply chain note proudly how quickly their berries get plucked from the vine or bush, sent to cooling chambers, then on to refrigerated trucks.

“These trucks,” said Daniel Partida Salazar, as he stood on a shipping dock for Sunbelle, another grower, “go directly to the United States. When the doors shut here, they don’t open again until Chicago.”

When Mexico-grown berries show up on U.S. supermarket shelves, few consumers notice the provenance.

“The same brands that U.S. consumers are used to seeing on supermarket shelves – like Driscoll’s, like Naturipe, like Dole – are sourcing (their berries) in Mexico now,” said Mario Andrade Cárdenas, a grower from Michoacan state who’s the head of the berry exporters’ association.

“Today, Mexico is the principal source of berries for the United States outside of U.S. production,” he said.

But growers here seek to diversify. While 80 to 90 percent of exports head north, growers also air-ship to Europe, North Africa, the Middle East and East Asia.

“The consumption of berries just keeps growing. People are eating them for all their anti-oxidant properties, their high fiber and their beneficial effects,” said Casimiro Dávila, purchasing chief for Hortifrut, a Chilean company with major investments in Mexico.

Dávila said Mexico had cut sharply into Chile’s global berry-market share.

“Mexico just killed Chile in production of blackberries and raspberries,” he said, “because the cost of air shipment was so high.”

Mexico now produces 30 percent of the world’s blackberries.

Berry growers here have met defeat in only one area: convincing Mexicans themselves to eat more berries. Mexicans eat less than a tenth of what’s eaten in the United States, where per capita consumption of fresh berries tops five pounds a year.

Read more here: http://www.thenewstribune.com/2015/03/06/3673004_mexico-best-known-for-tequila.html?rh=1#storylink=cpy

Thursday, March 5, 2015

Diageo has plans to grow tequila brand

 
Don Julio, now owned by Diageo
       Don Julio, now owned by Diageo.drink spirits

 

Spirits maker Diageo has announced plans to invest US $400 million in Mexico over the next five years.

The company has just completed the purchase of the half of Don Julio tequila it didn’t already own, a deal it made with José Cuervo last fall. Part of the deal gave Cuervo full ownership of Bushmill’s Irish whiskey.

Diageo CEO Ivan Menezes said yesterday, in conjunction with a visit to the United Kingdom by President Peña Nieto, that its spending in Mexico will be designed to grow the Don Julio brand. The amount of the investment includes its acquisition costs (a figure that wasn’t revealed), new production facilities, water treatment, agave farming and a new heritage center in Atotonilco, Jalisco, where Don Julio is based.

Menezes said Mexico “is a country of enormous opportunity and will form an important part of Diageo’s future.” The firm has estimated its investment will create about 200 direct jobs, and about the same number of indirect jobs in the first three years.

In Mexico Diageo is best known for its blended whiskey, Johnnie Walker, of which it sells a million cases a year. Sales of Red Label soared 40% in 2014, partly as a result of a campaign called Keep Walking Mexico.

Worldwide, its most famous brands are Smirnoff vodka, Johnnie Walker, Captain Morgan rum, Baileys liqueur, J&B whiskey, Tanqueray gin and Guinness, the Irish stout.

The company’s general manager in Mexico, Erik Seiersen, said in an interview last week that it is exploring producing more of its brands here along with investing in mezcal. It also plans a big boost in tequila production, from the current 640,000 cases a year to as many as 2 million, which would mean doubling the amount exported.

Source: Press and Journal (en), El Financiero (sp)
 
- See more at: http://mexiconewsdaily.com/news/diageo-plans-grow-tequila-brand/#sthash.uVQKgzgh.dpuf

Tuesday, February 17, 2015

Mexico's reform to boost geothermal potential

bnamericas.com
By -
   

Mexico's geothermal production potential is greater than what was forecast by state utility CFE and the energy ministry (Sener), according to an executive at global energy firm Reykjavik Geothermal.
Mexico's geothermal development has been slow in the past because it is a capital intensive energy source and the CFE has not been able to allocate funds to the sector, but this will change with the energy reform, strategy and project financing director Chris McCormick said at an energy forum in Mexico City.

The high cost of geothermal development will continue to slow the sector's growth, but public-private partnerships (PPPs) will inject the much needed capital, he said.

The reform gives priority to the PPP over the independent power producer (IPP) model, even though IPPs can mean a more efficient deployment of capital, McCormick said.

Sener will launch the geothermal 'round zero' during the current quarter to determine which projects will be developed by the CFE and which ones will be tendered to the private sector.

The CFE submitted its request for geothermal projects to Sener in January, the ministry's under secretary of energy transition planning, Leonardo Beltrán, said at the same event. The information regarding projects requested is confidential, he added.

Sener will respond to the request and award CFE projects within a period of 120 days, he said.

McCormick said Mexico's post-reform electricity sector needs clearer offtake rules and green energy certificates, which would provide certainty around long-term power purchase agreements and allow investors to hedge against transmission costs.

He said long-term PPAs will come about and project financing will be cheaper as capital becomes easier to procure for the sector.

"There is a significant amount of capital ready to be deployed in the hands of large project financers around the world, who are looking for sustainable projects. That money is global money and Mexico is a wonderful market to deploy it in," he said.

Luis Carlos Gutiérrez Negrín, president of the Mexican geothermal association (AGM), said last month the sector would grow 40% by 2020 to surpass 1,400MW through US$1.6bn in investments.

Mexico currently has three geothermal power stations in operation: Los Humeros, in Puebla state; Cerro Prieto (Baja California), which is Latin America's largest, and Las Tres Vírgenes (Baja California Sur).

The 50MW Los Azufres III geothermal plant in Michoacán is slated to enter operation this year.

Wednesday, February 11, 2015

January 2015: historic month for the Automotive Industry in Mexico

theyucatantimes.com

January was a good month for the automotive industry: both exports and domestic vehicle sales set new records.

Automotive production for the month was up 6.8%, but exports shot up 15.2% to 204,907 vehicles, the first time in history that Mexico has exported more than 200,000 vehicles in the month of January. The previous record, according to Eduardo Solís of the Mexican Automotive Industry Association (AMIA), was 178,562 in 2013.
Vehicles made in Mexico represented 12.6% of those sold in the United States in January, Solís said, a market share that is growing along with that of South Korea. Trending downwards are Japan and Germany.

Looking farther north, another market is also growing for Mexican production. “Canada is a market that continues to surprise,” said Solís: exports were up 35.8% last month over the same month in 2014, for a total of 29,966 vehicles.

The other big news for the industry was the upswing in the domestic market, which has struggled for years due to a large number of used imports flooding across the northern border, and limited access to financing.


Made in Mexico Chevrolet Aveo
Made in Mexico Chevrolet Aveo


New vehicle sales soared 21.3% in January to 103,697 units, 7% more than expected, said Guillermo Rosales of the Mexican Association of Automotive Dealers (AMDA), and a record for the month.

Better financing opportunities, government incentives, lower prices and fewer used imports were responsible for the growth, said the AMDA general manager.

Those imports, vehicles that are frequently referred to as “chocolate” for the color of their exhaust fumes, were down 29% for a total of 455,372 units in 2014, the lowest number in five years. The drop came about due to tighter restrictions on allowing vehicles across the border, such as the rejection of amparos, or injunctions, that had been awarded without justification to many importers.

The result, says AMDA, was the almost unfettered movement of American vehicles that were often stolen or mechanically unsound.

AMDA has been the target of some criticism for its position on used vehicle imports, but Rosales insists that the industry has never sought protected markets or closed borders, only the even application of the law and that importers pay the taxes they are required to pay.

Leading the way in new vehicle sales last month were subcompacts, considered the market leader in Mexico for their accessible prices. Sales were up 35% in this sector, whose most popular models are General Motors’ Aveo, the Volkswagen Vento and Nissan’s Tsuru and March.

Source: http://mexiconewsdaily.com/news/exports-domestic-sales-january/

Monday, February 9, 2015

Mexico races ahead in auto industry as Canada stalls

GREG KEENAN - AUTO INDUSTRY REPORTER
The Globe and Mail
theglobeandmail.com
 
 
Auto investment soared in Mexico last year and light vehicle production topped three million for the first time, underscoring Canada’s decline to junior-partner status in NAFTA when it comes to the auto industry.
 
Sobering data on investment, trade and vehicle production add to concerns among Canadian executives, government officials and union leaders that the long-term future of the industry in Canada is in jeopardy as Mexico grows into a global powerhouse.
 
Global auto makers announced investments of $7-billion (U.S.) in Mexico last year, including $3.6-billion for three new assembly plants, compared with just $750-million in Canada, according to numbers compiled by the Center for Automotive Research (CAR), an industry think tank in Ann Arbor, Mich. Those investments will further boost production in Mexico, which grew to 19 per cent of North American vehicle output last year as new Honda Motor Co. Ltd. and Mazda Motor Corp. factories opened.
 
Industry publication Ward’s AutoWorld said Canadian production rose a fraction. But Canada’s share of North American output fell to 14 per cent, its lowest level since 1987.
 
Meanwhile, Canada’s trade deficit in vehicles and parts with all countries rose to $19-billion (Canadian). Canada’s trade deficit with Mexico surged to a record high of $10.3-billion. Canada’s ranking in automotive manufacturing among the three North American Free Trade Agreement countries has been declining since the 2008-2009 recession while Mexico’s star has been ascending.
 
“There hasn’t been a new assembly plant that has opened in Canada or the United States since 2009 and we’ve had seven in a row in Mexico,” said Sean McAlinden, CAR’s executive vice-president of research and chief economist.
 
But auto makers invested $10.5-billion (U.S.) in their existing U.S. operations last year and have added thousands of new jobs at assembly plants.
 
Mexico offers wages that are about 10 per cent of the approximately $30 an hour paid to workers with full seniority at U.S. and Canadian assembly plants. But it also benefits from its location next to the U.S. market and close to emerging markets in South America as well as ports that are open all year, permitting finished vehicles to be shipped around the world.
 
Observers “forget the advantages that Mexico has developed in terms of location and market access,” said Paul Boothe, a professor at the Ivey School of Business at the University of Western Ontario in London, Ont. “They can serve the southern U.S. market just as easily as we can service the northern U.S. market.”
 
Mexican governments also offer financial incentives that eclipse those offered by the Canadian and Ontario governments.
 
FCA Automobiles received $400-million – or more than 70 per cent – for a $550-million retooling of a plant in Toluca, Mexico. The federal and Ontario governments typically offer 20 per cent of a company’s investment.
 
“They take an entirely different approach to public policy than we do,” federal Industry Minister James Moore said in Detroit last month. “It’s hundreds of millions of dollars in straight corporate welfare and labour policies that would be wholly unacceptable within Canada.”
 
The growth of the industry coupled with stagnation in Canada has prompted an industry-union group called the Canadian Automotive Partnership Council to urge Mr. Moore and Ontario Economic Development Minister Brad Duguid to establish an automotive investment agency in Canada that would be similar to the Mexican government’s ProMexico organization.
 
A Canada-Ontario Automotive Investment and Attraction Board would provide one-stop shopping for auto makers and co-ordinate incentives offered by the governments and outline requirements and permits needed to build factories.

Wednesday, February 4, 2015

Mexico Manufacturing Surged In January











Reuters
barrons.com
By Dimitra DeFotis


The HSBC Mexico PMI index rose to 56.6 in January, the strongest measure since December 2012.


The Mexico PMI was 55.3 in December, and the survey of showed strengthening production volumes and job creation. Bill Adams, senior international economist for PNC Financial Services Group had this reaction: Adams is bullish:

“With oil prices down and the peso weaker, Mexico’s manufacturing renaissance is picking up a notch. A strengthening manufacturing sector should offset the drag on real GDP growth from lower oil prices, although oil still poses downside risk to Mexican fiscal revenues in 2015. Accelerating manufacturing growth should help the Bank of Mexico follow through on ‘strengthening the macroeconomic framework’ in 2015, the language it used in its Jan. 29 monetary decision to allude to a rate hike later this year.”

Oil revenue accounts for about a third of Mexico’s fiscal revenue, and the government is planning on lower oil prices for longer. Also on Jan. 29, Mexico Treasury Secretary Luis Videgaray announced a cut in spending of around 0.7% of GDP (124.3 billion pesos). State-owned companies Pemex and CFE will cut spending by MX62 billion and MX10 billion respectively, and the federal government will reduce the remaining MX52.3 billion, report Daniel Kerner and Carlos Peterson of Eurasia Group. Two projects cancelled or suspended: the trans-peninsular train in the state of Yucatan and the high-speed train from Mexico City to Queretaro. Kerner and Peterson write:

“The government will probably pay a political cost if growth suffers in 2015, something that is very likely, but most probably this will not alter the midterm elections or political equilibrium too much. The government seems to be betting on private investment driven by the swift implementation of the reform agenda, especially the energy reform, as well as the recovery in the U.S. economy, to eventually shift expectations and consolidate the economic recovery.”

The iShares MSCI Mexico Capped ETF (EWW) is up 1.6%, while the iShares Latin America 40 ETF (ILF) is up more than 2% and the Vanguard FTSE Emerging Markets ETF (VWO) is up 1.5%.

Shares of Mexico telecom player America Movil (AMX) and media name Grupo Televisa (TV) are each up about 0.8%. Shares of Coca-Cola Femsa (KOF) are up 2.5% today.

Friday, January 30, 2015

Mexico bourse plans new investment product for energy market

Mon, Jan 19 11:19 AM EST
reuters.com
 
 
MEXICO CITY, Jan 19 (Reuters) - The Mexican stock exchange is planning to launch a product that could allow investment in energy market infrastructure, a senior official at the bourse said on Monday.
 
Jose Manuel Allende, the stock exchange's deputy director general in charge of planning and promotion, said the product would be similar to real estate investment trusts (REITs) and local instruments known as structured equity securities (CKDs), and could allow companies to list infrastructure like pipelines.
 
Allende said at an event in Mexico City the idea was to create a basis for the product in Mexican legislation, which would need the approval of the national banking regulator and the finance ministry. He said he hoped the go-ahead could be granted later this year.
 
According to Allende, the planned product would be like a master limited partnership, a kind of publicly traded limited partnership which does not pay income tax.
 
Mexico's government, which recently abolished a 75-year-old state oil and gas monopoly, hopes that opening up the market to private investors will boost flagging crude output and spur faster growth in Latin America's second-biggest economy.
 
 (Reporting by Cyntia Barrera; Editing by James Dalgleish)