The country will capture half of the investment due to the relocation of companies in Latin America, predicts Guillermo Vilchis, senior director of the rating agency.

Guillermo Marcelo Vilchis Gurza, senior director of Fitch Ratings, projected that Mexico could capture 80 billion dollars in investments from companies that are taking their operations out of China to bring them to the Mexican economy, a phenomenon known as nearshoring.

“As of today, we have already captured 40 billion dollars (in foreign direct investment through nearshoring), so in the future we expect -if the required infrastructure conditions are in place- to continue with this growth, this figure could double,” said the rating agency’s representative.

The arrival of companies attracted by nearshoring is a process that will take time to consolidate, that is, it will take 1, 2 or 3 years, said the economist during the Fitch on Mexico forum.

“As infrastructure progresses, opportunities will open up for the creation of new companies in the country that take advantage of nearshoring, and obviously the amount of investment will increase,” he said.

He added that Mexico will capture half of the nearshoring investment in Latin America, and that investors have put among their requirements a better business climate, a greater generation of electric energy, more security and a better qualified labor force.

He expressed that in some states there is already a labor shortage problem due to the fact that companies are located in the north and monopolize the labor force.

“As soon as we, as Mexicans, are able to provide and grant all those facilities to investors, the number (of foreign direct investment) will grow,” said the senior director of Fitch Ratings.

“It is a matter of getting to work and that in all the states (there is investment, not only) in the north, in all the states we can create those infrastructures and those opportunities”, he highlighted.

Companies from China are looking to set up in Mexico to take advantage of its proximity to the United States, the largest market in the world in commercial terms.

“They are very important amounts of foreign direct investment that we have to take advantage of because of all the conditions that have occurred in international markets,” he said.

He stated that the trade war between China and the United States has led to “these opportunities in Mexico, and the more we take advantage of (nearshoring), the greater the number of companies that come and invest”.

The investment of automotive companies, such as Tesla, is an excellent example of the broad generation of jobs, and “it is a very strong investment and so there can be many sectors”.

He maintained that Mexico is the most attractive country in Latin America for investment due to its location: “The only thing that would prevent us from not doing so would be not offering all the conditions required for the establishment of these companies”.

Source: Forbes Mexico

San Luis Potosí, strategic location to support the industry supply chain in Mexico and the world

BorgWarner  held the groundbreaking ceremony for the construction of anew production facility focused on power electronics and electric motors in  San Luis Potosí .

The company dedicated to creating innovative and sustainable mobility solutions for the vehicle market chose this state for its strategic location to support the industry supply chain in Mexico and the world.

It should be noted that BorgWarner  has been operating for more than eight years in San Luis Potosí and this will be the company’s first plant that will integrate a clean room environment, becoming an  electromobility manufacturing hub  . It will also have a product validation test laboratory , with a focus on investors, opening the door for the development of new technologies at home, for which it will be investing more than 198 million dollars.

Agility and innovation for a sustainable future 

Stefan Demmerle, president and general manager of BorgWarner Powerdrive Systems , commented that they are proud of this project, which is committed to enabling a sustainable future.

“Our Charging Forward 2027 strategy demands agility and innovation, so we have a responsibility to drive the transition to electrification not only in manufacturing but in product development.”

The new plant will have an area of ​​64,000 square meters, will be installed in the  WTC 2 Industrial Park and is expected to start operations in the second quarter of 2024.

Currently, BorgWarner  has a manufacturing plant in San Luis Potosí, located in the Parque Industrial Tres Naciones Phase 1 , which is 100% dedicated to the assembly of integrated electric drive units (iDM) for global OEM clients, as well as components for eMotors. The current production is destined for both the national and international markets.

The ceremony was attended by the head of the Secretariat for Economic Development , Juan Carlos Valladares, and the mayor of Villa de Reyes, Daniel Lagunas. Likewise, Stefan Demmerle, president of BorgWarner Powerdrive Systems, and Ulises Pérez, manager of the San Luis Potosí plant.

Source: Mexico Industry

Bosch Rexroth inaugurated its new plant in Pedro Escobedo, Queretaro, where it invested US$251 million and plans to add 900 jobs.

In an area of 42,000 square meters, it will manufacture hydraulic pumps for mobile machinery, linear motion technology for mechanical engineering applications in manufacturing and factory automation.

The company will have greater capacity to meet the growth of the mobile hydraulic systems and factory automation markets in North America, in addition to shortening delivery routes.

The new production unit strengthens the company’s participation in North America in order to provide a more efficient service to its customers.

Reinhard Schaefer, member of the Board of Directors of Bosch Rexroth and responsible for manufacturing and quality, explained that the company’s localization strategy increases the capacity, flexibility and strength of its supply chains.

This unit, he added, will help to reduce the CO2 footprint of the inputs produced in the region, as delivery routes will be shorter.

Christoph Kleu, Vice President of Finance and Administration of Bosch Rexroth in North America, emphasized that the new location will allow Bosch Rexroth to meet its customers’ needs more promptly.

Source: Mexico Now

ASIAWAY INAUGURATION

With the arrival of Asiaway, Ricardo Gallardo Cardona reaffirmed the support for the generation of business and the ease of national and international investment.

The Governor of the State Ricardo Gallardo Cardona was present at the inauguration of the Chinese company Asiaway, this Monday; company announced it will bring an investment of 41 million, 400 thousand dollars, the equivalent to the approximate amount of 750 million pesos.

Ricardo Gallardo Cardona considered that with the arrival of the new company to San Luis Potosi, the support to business generation and the ease of national and international investment in the state was reaffirmed.

The State President shared that San Luis Potosi will exceed 3,500 million dollars in Foreign Direct Investment, which will allow the growth and economic development in the state, so he emphasized that this new company located in the WTC Industrial Park, dedicated to the production of automotive components, will increase its production to become an important leading supplier of the industry.

Ricardo Gallardo welcomed the executives and highlighted that the investment is the result of the confidence generated to foreign companies: “today there is support for education, technology and professionalization to respond to the challenges of the companies that are coming to the State”, he said.

During the inauguration event of the new plant, they announced that the plant will generate 300 new jobs and announced the investment of a second phase, which includes a total investment of 414 million dollars (more than 7 billion pesos), with 1,700 employees, for the creation of 2,000 new and better paid jobs.

Source: El Heraldo

Mitsui High Tech will invest 130 million pesos for the construction of its plant in Apaseo El Grande, Guanajuato.

The Japanese company stands out for being the main provider of frames for integrated circuits, precision tools, motor cores and surface grinders ; and will be generating 180 new jobs in the entity.

During his work tour of Japan, Diego Sinhue Rodríguez Vallejo, governor of the State of Guanajuato , affirmed the arrival of this Asian company in the region to expand its market and production in America.

At the work meeting, executives from the Japanese company Mitsui High Tec were present ; Kazuo Narita, Executive Chairman and Takafumi Kashu, General Manager; the governor, Diego Sinhue Rodríguez Vallejo; as well as the head of the Secretariat for Sustainable Economic Development , Ramón Alfaro; the Consul of Japan in León , Katsumi Itagaki; the General Coordinator of Social Communication, Alan Sahir Márquez Becerra, and state officials.

Source: Mexico Industry

With an amount of US$1.5 billion, nearshoring is opening business opportunities in the supply for the aerospace industry to North America, part of said amount could be directed to Nuevo Leon or in general to Mexico, said Erick Palacios, general director of the Aero Cluster of Nuevo Leon.

“Companies estimate that between US$300 million and US$400 million are being transferred to Mexico annually in supply chain purchases, and that this amount could grow. The areas in greatest demand are: machining, punching, harnesses, composite materials with fiberglass and carbon fiber, among others,” added the executive.

International companies are looking for suppliers throughout Mexico, so at this time it is premature to estimate how much Nuevo León could attract.

Nuevo Leon’s aerospace industry ranks fourth nationally in aerospace sales.

Nearshoring is pushing this movement and trying to strengthen supply chains and also how to reduce the risks of a possible China-Taiwan conflict, this is where the interest of foreign companies in Mexico comes from.

“With this nearshoring there is a lot of movement and viability for new players to enter the aerospace market in Mexico, this can occur in two ways: those companies that are already installed that can have access to aerospace supply with a certification and foreign companies that are looking to consolidate their operations in Mexico,” explained the executive.

In addition to the expansions of companies already operating and those that would be entering for the first time.

“There are no numbers of how many there could be, but there will be new players, at this moment they are evaluating in which state of the country they would be located,” he added.

Source: Mexico Now

Such improvement was achieved with a 24.1% growth in shipments of that basket of products in the last three years, to $21.1 billion, which allowed it to overtake Austria.

Mexico climbed from 15th position in 2019, the year before the Covid-19 pandemic, to 14th in 2022 among the world’s largest exporters of medical products, reported the World Trade Organization (WTO).

Such improvement was achieved with a 24.1% growth in exports of that basket of products over the past three years, to $21.1 billion, allowing it to overtake Austria.

In 2022, the top 10 exporters of medical products accounted for nearly three-quarters of the world total.

Germany was the top exporter in this ranking, with external sales of $202.6 billion, comprising 12.9% of global exports.

The United States, with exports of $189.6 billion (12% of world exports of medical products), and China, with exports of $137.3 billion (8.7% of world exports), ranked second and third.

While Germany was the leading exporter of medical products, the United States was the leading exporter of medical equipment, orthopedic equipment and other medical supplies. For its part, China was the top exporter of personal protective equipment.

Between 2019 and 2022, China moved from fifth to third place, mainly due to a significant increase in exports of personal protective equipment.

During the same period, Belgium moved from seventh to fourth place, becoming the second largest exporter of pharmaceuticals.

By year-on-year growth in exports of medical products from 2019 to 2022, China was the most dynamic country (74.5 percent), followed by Belgium (70.4 percent) and Ireland (42.2 percent).

Conversely, importers of medical products are not as concentrated as exporters, with the top 10 importers accounting for about two-thirds of the world’s medical products, rather than three-quarters. In 2022, the United States was the top importer, with $306 billion worth of medical products. This constitutes a significant share of the market, accounting for 19.2% of the global total.

The pandemic had an overall negative impact on global trade in goods, with one notable exception: trade in medical products.

The analysis released by the WTO and conducted by Edvinas Drevinskas, Eric Ng Shing and Thomas Verbeet also highlights that medical products, which accounted for only 6.4% of total world trade in 2018, increased to a share of 8.3% in 2020.

This increase can be attributed to a decline in overall international trade, coupled with an increase in demand for medical products at the peak of the pandemic.

Between 2019 and 2020, trade in medical products increased 13%, mostly driven by higher demand for personal protective equipment.

This positive trend continued in 2021, with further growth of 14.1% for medical products, largely due to a significant increase in pharmaceutical trade.

More recently, the share of medical products in total merchandise trade has returned to pre-pandemic levels, declining to 6.9% in 2022.

Source: El Economista