CLEBURNE — What began as a ribbon-cutting for a new investment by a Mexican company in Texas evolved into a lovefest for NAFTA on Tuesday when speaker after speaker extolled the basic principles behind the embattled program.
In remarks by everyone from Texas Gov. Greg Abbott to Mexico’s secretary of foreign affairs, the focus was on how the decades-old pact, which is being renegotiated, has benefited the United States and especially Texas.
The official occasion was the opening of a 150,000-square-foot state of the art production, manufacturing, and distribution facility built by Mexico’s largest pasta manufacturer, La Moderna.
Abbott said he sees the opening of the company’s first U.S. production plant as emblematic of the “multi-century relationship that has existed between Texas and Mexico” and the robust trade that has developed “to the benefit of Mexico, Texas and the United States.”
“We want to ensure that that trading relationship continues,” he said.
As a mariachi band provided the soundtrack for the celebration, Abbott joined Luis Videgaray Caso, Mexico’s secretary of foreign affairs, and executives with La Moderna, based in Toluca, Mexico.
The $50 million facility is part of a Mexico-to-U.S. investment pipeline that stood at $34.4 billion in 2016, up nearly 40 percent since 2010.
First conceptualized five years ago, the Cleburne plant offers the growing pasta maker better access to U.S. markets and a hedge in case lumbering discussions about the fate of the North American Free Trade Agreement head south.
“We’re very enthusiastic about this project,” said Luis Miguel Monroy, chairman and chief executive of La Moderna who was in Cleburne for the celebration. “Most of our raw materials will come from Mexico. We needed a place close to the border. Baltimore and places farther east will not work as well as Dallas.”
Videgaray spoke of the strong trading relationship between Texas and Mexico, adding “we should not lose sight of what is at stake here.”
“I don’t know what is going to happen with NAFTA,” he said. “We’re very close to make-or-break time. Hopefully, we’ll get there.”
Location, demographics along with tax incentives from Johnson County, were among the early motivators that drew La Moderna to the Lone Star State. Since the 2016 presidential election, the project looks to pay additional dividends.
“We are better positioned now with a plant here in case NAFTA is not renewed,” said Monroy, 55, who joked that he plans to spend more time in North Texas and raise longhorn cattle.
La Moderna’s plant, located on 16.5 acres near a sprawling Walmart distribution center, will be able to make 8,818 pounds of product an hour and 7.4 million pounds in a month. While well-known for its pasta, the company, a third-generation food maker, also makes cookies, flour and semolina, a wheat product used in pasta.
In five years, Monroy hopes to double his output levels by swelling into space that’s been built but is not yet being used.
“We have enough room to expand for many years to come,” he said in advance of the official ribbon cutting, marking a major expansion of the company his father purchased from the founders in 1959.
A growing trend
La Moderna is not the only Mexican food maker drawn to Texas. Late last year, Gruma opened a plant in Dallas able to produce 30 million tortillas daily.
And while Bimbo Bakeries USA has moved its headquarters to the East Coast from its longtime home in Fort Worth, it still has seven bakeries and 133 sales centers in Texas, where it employs 1,772 workers.
That message — that Mexican firms are bringing jobs to the U.S. — gets lost in the negative portrayal of NAFTA, Monroy said.
“Some people mention that the jobs … flow one way,” said Monroy, who will employ 100 workers in Cleburne, most of them Texans. “That is false.”
Experts in foreign investment say it’s not surprising to see Mexican firms expanding north.
“Companies tend to want to get close to their customers,” said Aaron Brickman
Senior Vice President, strategy and development with the D.C.-based Organization for International Investment.
“It cuts down on … transit time.”
When companies “ see a substantial portion of their production being exported to a single market, they will start looking at whether there can be efficiencies gained by producing in that market rather than just exporting to that market,” he added “ It can help the bottom line.”
These days, some companies looking at cross-border commerce are anxious.
While talks to amend NAFTA continue, President Donald Trump has made it clear he’s not a fan.
Noting that his dad was once a bullfighter, Monroy said he’s not afraid.
“We have always been welcomed in Texas,” he said. “We’ve always had the doors open for our investment.”
And he is optimistic that the strong track record of NAFTA will speak for itself.
“We think at the end of the day the economics will prevail. Politicians might say many things but the economics will prevail.”