Investment in Mexico: it’s the real thing. Coca-Cola’s announcement that it will pour $1bn into the country every year until 2020 is just the latest in a string of recent big-ticket spends in a country where manufacturing is leading the country out of an untimely economic slump.
The US beverage maker, whose operations in Mexico include eight bottling groups in Mexico, juices and dairy as well as sodas and water, said it would invest more than $8.4bn from 2014-2020, bringing the total invested in Mexico during the decade to $12.4bn. Continue reading »
As secondary legislation to enact Mexico’s historic energy reform chugs through Congress and the clock ticks towards a December 2015 deadline for state oil company, Pemex, to be transformed into a “state productive enterprise”, a new report from the Natural Resource Governance Institute (NRGI) makes for interesting reading.
The think-tank has studied a dozen national oil companies and distilled its findings into key recommendations. Pemex, a company about to discover competition as its nearly eight-decades-old monopoly on the sector is flung open, currently hands over the bulk of its revenues to the state in the form of taxes, and will face the challenge of how to invest like a private company while still propping up the state for years to come (the government says a transition to a lower tax burden will take a decade). Continue reading »
Move over multinationals – the locals are coming.
Sound unlikely? Actually not, according to a new study by the Boston Consulting Group. It has identified 50 emerging market companies giving the big boys a run for their money in their own backyards.
These “local dynamos” – like Indian e-commerce company Flipkart, Chinese mobile-phone company Xiaomi, Bank Rakyat of Indonesia, Discovery Health of South Africa or Banorte of Mexico – may not be international names, but they have successfully carved out innovative domestic niches for themselves. Continue reading »
Volkswagen Beetle at a factory in Puebla State, Mexico
Stop press: amid the ever-present rivalry between Latin America’s top two economies, Mexico has just overtaken Brazil as the region’s biggest car producer.
Mexico’s production in the first half of this year hit 1.6m – beating by a nose Brazil, where output was 1.57m.
It’s a dramatic turnaround from last year, as this graph in Mexican daily El Financiero shows. Continue reading »
In the run-up to his election victory in 2012, Enrique Peña Nieto pledged to create a new 40,000-strong paramilitary gendarmerie for Mexico to help combat security problems stemming from the country’s war on drugs.
Plans for the force were whittled back to 10,000, and seemed to be eternally delayed. But next month Mexico’s new police force is finally ready for launch, albeit with a more slimmed-down starting line-up of 5,000 new officers. Continue reading »
Mexico’s historic energy reform has understandably whetted the appetites of oil companies worldwide. But, concerns are growing that Mexico’s tax terms might turn out a little too tough – potentially scaring off, rather than attracting, investors.
How so? Let’s recap: Mexico expects to offer a range of licences and profit – or production – sharing contracts to private investors in a tender next year, the terms of which may become known in late in 2014. Continue reading »
Grupo Lala, which controls about half of Mexico’s dairy market, has been running a World Cup promotion to give consumers the chance to win tickets to Brazil. Now, it seems, it could have been eyeing Latin America’s biggest market itself.
According to Bloomberg, Lala is keen to buy BRF’s (Brazil Food) dairy business in Brazil, which the company has reportedly been hawking to potential buyers. Continue reading »
Mexico’s historic energy reform whizzed through Congress in the blink of an eye in December, when legislators rewrote parts of the Constitution to erase nearly eight decades of state control of the sector.
Passing the laws to implement the reform, by contrast, is like wading through mud. Continue reading »
A glimmer of light at the end of a (long) tunnel? Mexico’s industrial production tip-toed up 0.6 per cent in April compared with March.
Now, it wasn’t a very big increase, but it was some welcome good news to an economy where the central bank, cutting interest rates in a shock move last week, cautioned that even the disappointing new expectations of growth for this year (the bank is predicting 2.2-3.3 per cent; the government 2.7) are unlikely to be met. Continue reading »
Mexico’s Congress should this month pass legislation designed to give the country’s fixed and mobile phone users access to greater competition in a market dominated by Carlos Slim’s Telmex fixed-line company and Telcel mobile network.
Slim’s companies have 80 per cent of Mexico’s fixed-line market and 70 per cent of mobile, so the reform aims to boost consumer choice by giving rivals cheap access to his network in order to catch up – something that naturally has not gone down too well with Slim.
But is this so-called asymmetric regulation a bad thing? Will it boost competition? And will it boost investment? Continue reading »
It’s a good job discipline is an integral part of the Mexican ruling party ethos.
Lawmakers of all shades will need it next month when it comes to debating legislation to implement Mexico’s keynote reform – opening up the energy sector after nearly eight decades under state control: key debates will clash with the World Cup – something opposition lawmakers fought hard to avoid. Continue reading »
Mexico’s interest in boosting trade ties with China has long been clear, and the country’s historic energy reform is clearly a golden opportunity.
So it should perhaps come as no surprise that Pemex, the state oil company, is negotiating an investment fund to finance Pemex infrastructure projects with China, to be called the Sino-Mex Energy Fund. Continue reading »
So, Mexico, Aztec tiger, implementing far-sighted structural reforms that will ramp up economic growth, right?
Well, yes, but prepare to be patient. The central bank, Banxico, has just delivered a reality check: growth this year will be in the 2.3 to 3.3 per cent range, not the 3 to 4 per cent previously forecast. Continue reading »
Is Pemex, the Mexican state oil company, close to dumping its 9 per cent stake in Spain’s Repsol petroleum company? It certainly looks like D-day is getting closer.
Here is what Mexico’s energy minister, Pedro Joaquín Coldwell, has to say on the subject:
“Selling the Repsol stake? Well, that’s a decision that is in the hands of the management and hasn’t been put before the board yet. But I have to say that the incentives for Pemex to remain in Repsol are very low.”
Pemex, Repsol’s third-largest shareholder, with a stake valued at just over $3bn, hinted last week that news could emerge this week – which certainly sounds like a sale is brewing. So far, though, nada official. Continue reading »