Maquila Portal - Weekly Bulletin

Mexico Manufacturing Industry Information Center.


Bulletin 788- Friday, January 6, 2017

Mazda defends its operations in Mexico

Masamichi Kogai, delegate counselor of Mazda Motors, has defended the importance of Mazda operations in Mexico, despite the protectionist policies of the U.S. Elected President, Donald Trump. "We want our plant in Mexico to be a strategic hub of extreme importance", said Kogai in an interview with the Japanese journal Mainichi. Mazda started a producing in its plant at Salamanca, Guanajuato in 2014, and moreover, to use the facilities as a key hub to export to other countries from the region. Mazda's CEO considered that the NAFTA should be maintained for the benefit of the whole automotive industry and he said he would keep "a watchful eye on the policies of the new U.S. President".

Source: El Sol de México

China recapitalizes Mexican firms

Companies from China have started a silent capitalization of 900 Mexican firms dedicated to commerce, manufacture, services, industry and services in Mexico City, the State of Mexico, Jalisco and Baja California. Sergio Ley Lopez, President of the Entrepreneurial Section for the Asia and Oceania Region of the Mexican Entrepreneurial Council for Foreign Commerce, Investment and Technology (COMSE), commented to Forbes Mexico that Chinese companies are waiting to see what happens with the impasse occurring now in the world, to start investing in sectors such as manufacturing in Mexico. He expressed that: "It is not possible for us to continue having commerce and economic relations so tied to one single country, as is the case with the U.S., which receives 85% of our exports".

Source: Plano Informativo

2017 unpacking new assemblers

The Compas factory, in collaboration with Nissan and Daimler in Aguascalientes, is ready to start producing its first Premium compact vehicles for Infiniti and Mercedes-Benz, with a US$1 billion investment, informed the Company. On the other hand, Volkswagen will start operating its second plant in Puebla, which will produce the Tiguan SUV. This plant had a US$1.1 billion investment. The production of vehicles made in Mexico has been growing at an average annual rate of 9% over the last ten years. Besides these two assemblers, Goodyear, the tire manufacturer, is set to start operations in April in San Luis Potosi.

Source: Reforma

Focus production in Sonora to create 200 jobs

The relocation of the Ford Focus production, from Michigan into the Hermosillo, Sonora plant, 200 new jobs will be created, informed Jorge Vidal, Ministry of Economy in the State. He said that the remodeling works to get the Hermosillo plant ready for production will start this year, as the vehicle will be in the market by 2018. More than 63Fusion y Lincoln MKZ vehicles are currently produced per hour in Hermosillo, to be sold in the North American market. This January 10 more details about this production might be disclosed, as Ford's CEO, Mark Fields, will have a general conference.


AMIA prospects 5.1 million vehicle production by 2020

Fausto Cuevas Mesa, General Director of the Mexican Association of the Automotive Industry (AMIA), is certain that this sector will consolidate its activity towards 2020, when the light vehicle production peaks at 5.1 million units. He states that Mexico contributes with 3.7% of the global automotive production, which is the greatest cash inflow generator nationally, with a foreign commercial surplus that was calculated at US$63.6 billion by the end of 2015, earning Mexico a position as the seventh largest light automobile manufacturer globally and the first in Latin America. He also said that Mexico has increased its production participation by 12.7% within the NAFTA region over the last 22 years, and it could even escalate an additional 6.2% if 5.1 million vehicles are assembled by 2020.


Mexico, only steel supplier to the U.S. to grow

Mexico is the only supplier to increase its exports volume, out of the 10 main foreign suppliers in the U.S. during the period from January to October 2016, informed the U.S. Department of Commerce. Steel exports from Mexico to the U.S. presented an inter-annual increase of 1% over the first 10 months of the year. In contrast, those from China dropped by 65.7%, followed by decreases in shipments from South Korea (24%), from Germany (23.1%) and Taiwan (22.3%). U.S. imports steel from over 90 countries territories. The 10 main providers, Canada, Brazil, South Korea, Turkey, Mexico, Japan, China, Russia, Germany and Taiwan, exported over 1 million tons of steel each to the U.S. during all of last year.

Source: El Economista

DAWS expands production plant in Durango

Gustavo Saucedo Esparza, General Manager of Durango Automotive Wiring Systems (DAWS) Corporation, disclosed that the plant is soon to have an expansion, with investment valued at US$4.5 million. He said that this action will make them the best equipped rural plant in the State, as it will have modern facilities and new areas, besides the creation of 500 jobs, in addition to the 4,500 existing ones, distributed at plants in the municipalities of Durango, Guadalupe Victoria, Suchil, Poanas and Vicente Guerrero. This firm, a manufacturer of electric harness, components and spare parts for vehicles, is originally from Korea and the U.S., and it is the second major private employer in the State of Durango.


Mexican government to buy more from the national industry

Purchases by the Mexican government from the national industry and commerce are far from reaching the goal established by the present administration, which is estimated at US$6 billion, as purchases from SMEs are currently worth an approximate of US$4.4 billion, according to reports from the Ministry of Economy. Manuel Herrera Vega, President of the Confederation of Industrial Chambers (CONCAMIN), presented a plan for a 2017 production shield, to boost internal economy in the light of international financial instability. This shield must include the increase to government purchases and financing exceeding 30% of total annual purchases, which currently is not even worth 20%, as most purchases are foreign. The entrepreneurial sector demands that government purchases be used as a propeller to develop SMEs while creating and promoting national policies to help create the Mexican industry of entrepreneurial capital.

Source: El Economista

Automotive sector to exceed US$50 billion

The Mexican Association of the Automotive Industry (AMIA) estimated that the automotive sector will record a commercial balance worth over US$50 billion by the end of 2016, which means that this industry is maintaining itself as an important income generator and engine for the internal economy. Eduardo Solis Sanchez, President of AMIA, said that, according to the last official figures by Banxico, there was a surplus of US$45.79 billion in the automotive commercial balance from January to September 2016. Automotive exports peaked at US$83 billion during this period, that is 33.7% of all manufacturing exports in Mexico and 30.4% of national exports. Nonetheless, the figures for October and November are yet to be added, as historical records were reached during these months.

Source: Vanguardia

6.5% more agri-food exports

Agri-food exports surpassed the US$23.66 billion record from January through October 2016, equivalent to a 6.5% annual rate increase, informed the Ministry of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA). Agro-industry exports had reached US$11.8 billion by the month of May, 12% over the record for the same period in 2015. SAGARPA details that this increase signifies extra income related to international agri-food product sales, valued at US$1.43 billion. On the other hand, foreign sales of the agro-industrial sector peaked at US$11.79 billion, that is 1.4% more that the record for January-October 2015. Besides, the agri-food exports have stayed above other types of income, such as oil sales, which reached a US$15.22 billion value over the figures for the same period, as well as remittances, with a total of US$22.26 billion.

Source: El Diario

Nidec Sankyo to invest US$15 million to build a plant in San Luis Potosi

Japanese auto part Company, Nidec Sankyo has invested US$15 million to become installed at the industrial park Colinas de San Luis, in San Luis Potosi, on a 4 hectares land, with plans for a second stage of expansion. The construction is expected to end by July this year, to start operations in August. The plant is expected to have over 300 employees by 2019. Nidec Sankyo Corporation also has offices in countries such as the U.S., China and Philippines, to name a few.

Source: El Economista

Textile Industry looking to diversify its market

The textile sector in Puebla is looking to manufacture not only T-shirts or thread, but also high technology fabrics. For example, in the medical field, there are plans to work on skin re-generation or clothing items able to monitor temperature, said Jorge Plata Castellanos, President of the National Textile Institute. He informed that 15 out of 300 companies from the region are currently working on innovation and product reconversion projects related to bio medicine, bio technology and nano technology. He explained that current markets require new products to respond to client's need, which is why factories in Puebla have possibilities to become reactivated applying these new technologies. Likewise, Mr. Plata reminded that 10% of all textile companies has entered the automotive sector with production of air bags, upholstery, covers for automotive bands and cables, as well as premium rugs.

Source: El Economista

Mexico exports 170,000 tons of guacamole per year

Mexico exports 170,000 tons of guacamole (processed avocado) per year, estimated the Agriculture Department in the U.S. Guacamole is exported from Mexico into the U.S., Europe, Middle East and Asia. The Mexican Hass avocado production is prospected to reach 1.8 million tons during the 2016-2017 commercialization cycle. Michoacan is the world leader in the avocado production and it represents 80% of the total Mexican avocado production. Grupo Kuo owns the largest guacamole production company in the world. The portfolio of MegaMex (a branch of Grupo Kuo) is purchased by over one third of homes in the U.S., thus reaching a market penetration rate over 50% in the West region. Wholly Guacamole is the leading processed avocado brand in the U.S. and it is commercialized both in supermarkets and institutionally.

Source: El Economista