MEXICO BUILDING ITS PATH TO SUCCESS i...Management consultancy A.T. Kearney released its annual...
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INDUSTRIAL PARKS Giving Mexico a Competitive Advantage II-III- 2011 MEXICO BUILDING ITS PATH TO SUCCESS i
Transcript of MEXICO BUILDING ITS PATH TO SUCCESS i...Management consultancy A.T. Kearney released its annual...
INDUSTRIAL PARKS Giving Mexico a Competitive AdvantageII-
III- 20
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II-III - 2011 •
MEXICO BUILDING ITS PATH
TO SUCCESSi
forros_300311.indd 1 3/31/11 10:45 AM
Great investment opportunitiesin the best place to live
Economic Development Secretariat+52 (777) 313 [email protected]
MorelosM E X I C O
• Located only 50 miles south of Mexico City, by far the largest market in Latin America
• Straight in the middle of the inter-oceanic highway; 260 miles from the Seaport of Veracruz on the Gulf of Mexico
L d l 50 il h f M i Ci
Strategic location for global business.
• Highly skilled workforce• Steady supply of engineering and science graduates
Hi hl kill d kf
Highly qualified human capital
• Host to 39 research centers ready to support innovative projects like no other region in Mexico
• More than 1,500 scientists, many of whom are involved in highly relevant topics such as biotechnology, applied physics, energy & fuels, materials, science, water technology and others
An outstanding innovation environment
• Famous worldwide for its ideal climate and natural beauty• Known as the “city of eternal spring,” Cuernavaca — the state Capital —
and its surroundings have become a cosmopolitan metropolis• A wide array of high quality entertainment, cultural and educational options
F
Exceptional life quality
21 cm27 cm
2 Negocios
Contents
41IndustrIal ParksGiving Mexico a competitive advantage
From the CEO 6
Briefs 8
Guest Opinion Canada’s biggest projeCts by Todd laTham 16
Business Tips infrastruCture for the 21st Century 18
Special Report peMeX’s neW integrated ep ContraCts 22
Report Mining industry 46
26Cover feature
Mexico Building its Path to success
Investment in infrastructure projects
From Mex: 01(800)025-5580 From USA: 1(877)542-9793sales@@orido.com
www..orido.com
A Master Planned Community
4 Negocios
67 Destinationquerétaro, MexICan ColonIalJewel
68 GastronomyPrICkly-Pear CaCtusa deCeIvIngly unIversal CroP froM MexICo
70 The Lifestyle Report eCo-tourIsM, a CountrywaItIng to be exPlored
52 InterviewJéroMe seIgnon:
ChaMPagne In the veIns
56 The Lifestyle Feature:foreIgners lIvIng
In MexICo
61 ArtfundaCIón JuMex:
the JuICe of ConteMPorary art
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The lifestyle Contents
ProMéxICo
Carlos guzmán bofillCeo
ilse oehler grediagaimage and Communications director
sebastián escalanteManaging [email protected]
Miguel Ángel samayoa advertising and [email protected]
natalia herreroCopy editing
q-10 CoMunICaCIón
emma Lucila López Valtierra publisher
sergio anaya editor in Chief
nicolás pradillagabriela Castañedadesign
this is an editorial project for proMéxico by q-10 Comunicación.
download the PdF version of Negocios ProMéxico at: negocios.promexico.gob.mx
Negocios ProMéxico es una publi-cación mensual en inglés editada por proMéxico, Camino a santa teresa no. 1679, Col. jardines del pedregal, delegación Álvaro obre-gón, C.p. 01900, México, d.f. tel.
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2011 aRte caReYesFilm & Arts in Paradise
50
62deMetRia: a house, a living RooM, an aRt collection… a liFestYleInterview with Mexican architect Iván Cordero
54477000 www.promexico.gob.mx; [email protected] editor responsa-ble: gabriel sebastián escalante bañuelos. reservas de derechos al uso exclusivo no. 04-2009-012714564800-102. Licitud de títu-lo: 14459; Licitud de contenido: 12032, am-bos otorgados por la Comisión Calificadora de publicaciones y revistas ilustradas de la secretaría de gobernación. issn: en trámite. impresa por Cía. impresora el universal, s.a. de C.V.
Negocios ProMéxico año 4, número 2-3, fe-brero-marzo 2011, se terminó de imprimir el 25 de marzo de 2011, con un tiraje de 13,000 ejemplares. Las opiniones expresadas por los autores no necesariamente reflejan la postura del editor de la publicación. Queda estrictamente prohibida la reproducción to-tal o parcial de los contenidos e imágenes de la publicación sin previa autorización de proMéxico.
proMéxico is not responsible for inaccurate information or omissions that might exist in the information provided by the participant companies nor of their economic solvency. the institution might or might not agree with an author’s statements; therefore the res-ponsibility of each text falls on the writers, not on the institution, except when it states otherwise. although this magazine verifies all the information printed on its pages, it will not accept responsibility derived from any omissions, inaccuracies or mistakes. fe-bruary - March 2011.
In this increasingly competitive world, where distances are shortening and the dynamics of international equity make companies leverage their competitive advantages, Mexico is consolidating itself as an stra-tegic ally to companies from all over the world. Mexico is an attractive destination for productive, value added investment.
One of the main reasons why Mexico has been able to gain this privileged position for developing international business is derived from its geographic location. As a gateway to the largest market in the world, through 11 trade agreements with 43 countries, Mexico is the ideal exports platform reaching almost 1 billion people or 66 per cent of the world´s Gross Domestic Product (GDP).
Mexico has been and still is tapping all the potential of its strategic geo-graphic location. In recent years, Mexico has emerged as an important play-er in the global economic arena by investing in and developing cutting-edge projects in strategic sectors, such as infrastructure.
The Mexican Government introduced an ambitious infrastructure devel-opment program which has promoted projects and investments that have in-creased from 3 to 5 percent of the GDP. The National Infrastructure Program for 2007-2012 has had unprecedented investments and innovative public and private participation schemes, creating new business opportunities for com-panies in the construction and logistics sectors.
Mexico is positioning itself as a world-class logistics platform. ProMéxico will continue to work as a key promoter of Mexico as one of the most attrac-tive, productive and convenient places in the world to do business in.
Welcome to our magazine Negocios!
Carlos GuzmánCEOProMéxico
From the CEO.
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ACCESS8_21X13.5_ENG.pdf 1 10/6/10 6:02 PM
[email protected]+ 52 (55) 5447 70 70
www.promexico.gob.mx
>> Log in to Mexico
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8 Negocios Photos archive8 Negocios
according to a report by the united
nations Conference on trade and de-
velopment (unCtad), Mexico attracted
19.1 billion usd of foreign direct invest-
ment (fdi) in 2010, a 52.9% annualized
increase, which placed the country in
second position in Latin america. Mexico
was exceeded only by brazil and was
slightly above Chile. in 2009, Mexico was
place third with 12.5 billion usd, and was
surpassed by brazil and Chile.
according to the study, fdi in Latin
america and the Caribbean grew by
21.1% in 2010, going from 116 billion usd in
2009 to 141 billion usd in 2010.
www.unctad.org
Foreign direct investment
InvestorsChoice
it industry
Among the Best Management consultancy A.T. Kearney released its annual Global Services Location Index naming Mexico the sixth most attractive lo-cation in the world for offshore outsourcing services.
The index ranks 50 countries based on financial attractiveness, people skills and availability, and business environment. Because cost cutting is usually the primary driver for offshoring, financial fac-tors constitute 40 percent of the total weight of A.T. Kearney’s coun-try rankings, with people skills and availability and business environ-ment constituting just 30 percent each.
In 2011’s edition, Mexico climbed five spots from its eleventh-place ranking in 2010, while India, China and Malaysia were ranked first, second and third, respectively, as they have been since A.T. Kearney began producing the index in 2003.
Mexico is the highest-ranked Latin American country and is becoming a more prominent BPO location, as it supports the US with both Spanish and English. According to A.T. Kearney, the country boasts one of the highest numbers of Capability Maturity Model Integration (CMMI) certified centers worldwide. Addition-ally, as its management schools improve in quality, Mexico could carve out an important space in the service sector.
1. India (1)2. China (2)3. Malaysia (3)4. Egypt (6 )5. Indonesia (5)6. Mexico (11)7. Thailand (4)8. Vietnam (10)9. Philippines (7)10. Chile (8)11. Estonia (18)12. Brazil (12)13. Latvia (22)
a.t. kearney Index of Most attraCtIve CountrIes
for offshore outsourCIng 2011
(2010’s rankings are shown in parentheses)
14. Lithuania (21)15. United Arab Emirates (29)16. United Kingdom (31)17. Bulgaria (13)18. United States (14)19. Costa Rica (23)20. Russia (33)21. Sri Lanka (16)22. Jordan (9)23. Tunisia (17)24. Poland (38)25. Romania (19)
Source: A.T. Kearney’s 2011 Global Services Location Index.
www.atkearney.com
energy
EnergeticAlliance
offICes abroad
North AmericaVancouver Regional [email protected]
Offices in: Chicago, Dallas, Houston, Los Angeles, Miami, Montreal, New York, Toronto and Vancouver
Latin Americaand South America Offices in: Bogotá, Guatemala, Santiago de Chile and Sao Paulo
Bogotá[email protected]
Santiago de [email protected]
Europe and Middle EastOffices in: Brussels, Dubai, Frankfurt, London, Madrid, Milan, Paris and Stockholm
Brussels [email protected]
Asia - PacificOffices in: Beijing, Mumbai, Seoul, Shanghai, Singapore, Taipei and Tokyo
Beijing [email protected]
Singapore / New [email protected]
ProMéxico Headquarters
+ 52 (55) 544 [email protected]
www.promexico.gob.mx
10 Negocios10 Negocios Photo courtesy of fresnillo plc
sustainability
general Motors is investing
540 million usd in its mo-
tor plant in toluca, to build
more fuel-efficient engines
for the recovering north
american automobile mar-
ket.
the move by gM, flush
with cash after its 2009
restructuring in bankruptcy,
The Giant Awakens
follows other investments in
recent years by american,
european and asian auto-
makers seeking to produce
more fuel-efficient models in
Mexico. gM will build 1.6-liter
and 1.8-liter 4-cylinder en-
gines at its toluca plant.
www.gm.com
automotive
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Towards a GreenEconomy
sustainability
GreenTek Ventures has launched a 100 million usd fund to invest in climate change miti-gation businesses in Mexico. The GreenTek Mexico Fund will look to deliver long-term capital appreciation; build highly competitive “green” businesses in the country; provide com-mercially viable solutions to mitigate the pressing challenges of climate change and the as-sociated shortages of energy and water; foster the transfor-mation of the Mexican market to a low-carbon economy and match-make global “green” technologies and services with opportunities in Mexico.The Fund will invest in oppor-tunities that promote market-driven solutions: thanks to its dedicated “on the ground” local team with an extensive pipe-line portfolio.
www.greentekventures.com
Mexican precious metals min-ing company Fresnillo plc, the world’s largest primary silver producer, plans to invest around 800 million usd in proj-ects in 2011, as it prioritizes or-ganic growth over mergers and acquisitions.
Fresnillo aims to expand or open at least one mine per year until 2014, putting the company on track to meet its goal of producing 65 million
ounces of silver a year and over 400,000 ounces of gold per year by 2018.
Fresnillo has four producing mines, all in Mexico, and two de-velopment projects at Saucito and Noche Buena, also in Mexico. It also has four advanced explora-tion prospects as well as a num-ber of other long-term explora-tion prospects.
The company plans to boost its silver output 5% to 44 million ounc-
es in 2011 and its gold output 8% to 400,000 ounces after increasing its silver and attributable gold output 2% and 33.4%, respectively, to 42.1 million ounces and 368,995 ounces.
Fresnillo also managed to in-crease its attributable silver and gold resource base by around 15% and 45% respectively to 1.5 billion ounces of silver and 20.1 million ounces of gold.
www.fresnilloplc.com
mining industry
Internal Growth
briefs.
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Strong Bet on Mexico
automotive
Volkswagen (VW) has begun the construction work on its new engine plant in Silao, Guanajuato. In 2013, the new factory in Silao will supply latest-generation engines to VW’s vehicle plants in Puebla, Mexico, and Chattanooga, US. The Silao fa-cility is designed for an annual capacity of 330,000 engines. Investment in developing the new engine as well as building the new plant runs at 550 million usd.
Currently, the VW Jetta, Golf Estate and New Beetle are produced in Puebla, Mexico.
www.volkswagen.com
The Mexican subsidiary of US rail company Kansas City Southern plans to carry out investments totaling some 125.7 million usd during 2011. Kansas City South-ern de México (KCSM) will carry out various maintenance projects and build new infrastructure, as well as acquiring new equipment and technology.
logistics
New Horizons in MexicoThe firm is considering car-
rying out five other projects, in-cluding a train terminal on Isla de la Palma, near the Lázaro Cárdenas port in Michoacán, as well as rail modernization in Nuevo Laredo and an inter-national rail bridge in Matam-oros, both in Tamaulipas. Ad-ditionally, it is considering the
completion of the rail beltway of Celaya, Guanajuato, with the participation of the Ministry of Communication and Transpor-tation (SCT, for its acronym in Spanish), the Guanajuato state government and competitors like Ferromex.
The Isla de la Palma project, in which the company will in-vest over 80 million usd during 2011, will not only have transfer yards, but will also serve as a train assembly that will result
in a greater capacity for cargo movement.
In this way, KCSM has a 3 billion usd investment in Mexico. The railroad company mainly handles 40% of the total rail freight in Mexico, it controls ap-proximately 25% of the track sections in the country and is the only company that has right of way to the US since its trains have flags from both nations.
www.kcsouthern.com
12 Negocios Photo courtesy of ge
A New Step in Mexicoautomotive
The auto parts maker Delphi will invest 12 million usd to build its second manufacturing plant in Mexico. The new facility will be located in Ciudad Victoria, Tamaulipas, and will be dedi-cated to manufacturing harnesses to supply the needs of the company’s customers in Canada, Mexico and the US.
www.delphi.com
US based multinational conglomerate General Electric (GE) in-augurated a 20 million usd advanced engineering research center in the central Mexican state of Querétaro.
The 8,000-square-meter (86,000-square-foot) facility will be dedicated to the research and design of airplane turbines and power generation systems.
The center is part of a complex where GE currently designs components such as the GEnx turbine –used in Boeing 787 air-craft and capable of reducing fuel consumption by up to 20%– and makes parts for the Airbus 380, the world’s largest commer-cial airliner.
GE’s new engineering research center is the only center of its type in Latin America. The company expects that the current center’s staff of 1,300 highly specialized engineers will rise in 2012 to more than 1,500.
GE began operating in Mexico in 1896 and currently employs more than 10,600 people at 18 plants nationwide.
www.ge.com
aerospace
SmartInnovation
Industrias Peñoles will invest 200 million usd to build the Velar-deña mine in the state of Durango, Mexico, as it aims to take advan-tage of growing demand from the domestic continuous galvanizing industry and high prices. The Velardeña mine will produce zinc, lead, copper and silver. Con-struction will begin in mid-2011 and its operation in October 2013. It will have an estimated milling capacity of 6,000 tons per day.
www.penoles.com.mx
Peñoles Keeps Growing
mining industry
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nissan started the production of its new worldwide com-
pact vehicle –the nissan March hatchback– at its aguascali-
entes plant.
With the start of production of this vehicle in aguascali-
entes, Mexico joins thailand, india and China as the main
manufacturing sites for this model around the world. nissan
is considering the production of 60,000 vehicles of this
model (also known as Micra) per year in aguascalientes, at
a pace of one vehicle per minute. 30% of them will be com-
mercialized in the domestic market, while the remaining
70% will be meant for the exports market in Latin america
(brazil, among other countries).
Mexican production of nissan’s March, constitutes an
investment of 1.05 billion usd along with suppliers for 2013,
including improvements and refurbishing of nissan’s manu-
facturing plant. for the production of this vehicle, a deep
localization of 80% has been considered, with the involve-
ment of 25 additional suppliers, some of them newcomers
in the country.
www.nissan-global.com
automotive
Ready, Get Set, Go!
Photo courtesy of nissan
The Mexican unit of US retail giant Wal-Mart Stores, Walmex, plans to invest 1.16 billion usd this year in Mexico, creating more than 20,000 direct jobs and more than 40,000 indirect jobs.
Walmex currently operates in six countries –Mexico, Costa Rica, El Salvador, Guatemala,
Honduras and Nicaragua– and has 2,294 commercial units in different formats, including su-permarkets, hypermarkets and restaurants.
The firm’s total investment in Mexico and Central America will amount 1.6 billion usd to ex-pand its sales floor by 12.2% in Mexico and by a combined 8.8%
in the five Central American countries where it operates.
With this year’s investment, the company will have invested a combined total of 4.7 billion usd in Mexico between late 2006 and 2011 and created 69,000 di-rect and permanent jobs. 95% of the products that Walmex sells at its stores in Mexico and Cen-
tral America are purchased from more than 20,000 Mexican suppliers, 60% of which are small and medi-um-sized businesses. Wal-mex’s purchases in Mexico totaled 21.48 billion usd in 2010.
www.walmartmexico.com.mx
retail sales
HoldingLeadership
14 Negocios Photos courtesy of organización soriana
Organización Soriana, the second largest retailer in Mexico, plans to invest 313 million usd in the country this year. The company’s investment is 23% higher than that perfomed in 2010. Most of the investments in 2011 will go to the opening of 50 stores.
Soriana expects to achieve an 8% increase in total revenues, which will be supported by a 4% increase in same-store sales (those with more than one year of operation) and the start of op-
In the Race of Growth
retail sales
erations of new units during this year. In 2010, these same indicators showed growth of 5.7% and 2.5%, respectively.
The store openings will enable the group to expand business in 5% of its sales area from a year earlier, when growth in the same area was of 3.3%.
www.soriana.com
New House in Mexico
personal care industry
SCA celebrated the formal inauguration of its new tissue plant in Ciudad Sahagún, in the state of Hidalgo.
The plant, located near key markets in and around Mexico City, will enable SCA to enhance its product qual-ity and expand its offering to consumers. On what used to be a Greenfield site, the 210 million usd investment houses a 60,000 ton capacity paper machine and tissue converting hall, as well as a recycled fiber plant and distribution center.
With the latest technology and machinery, SCA’s new plant will meet the highest standards in terms of environmental concerns. It has been de-signed with extensive energy conservation practices throughout the facility and it will use recycled paper as its key raw material.
www.sca.com
SRG Global Inc., one of the world’s leading providers of coatings on plastics for the au-tomotive industry, has broken ground on its newest facility in Irapuato, Guanajuato. The plant, which is expected to be complet-ed in the first quarter of 2012, will serve a variety of OEM automotive and non-automotive customers in North America.It is estimated that the initial phase of the project will cost from 25 million to 35 million usd.
www.srgglobal.com
TargetingNew Markets
automotive
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Expanding With Energy
energy
The Mexican Federal Electricity Comission (CFE, for its acronym in Spanish) awarded the Span-ish Iberdrola Ingeniería y Cons-trucción, in consortium with its Mexican subsidiary, a turnkey contract for the construction and commissioning of a 430 megawatt (MW) cogeneration plant in Salamanca, Guanajuato, worth 320 million usd.
The contract includes the design, engineering, procure-ment, construction, installation and commissioning of Combined Cycle Cogeneración Salamanca Fase I. The facility, located about 190 miles northwest of Mexico City, will house three natural gas-fired combustion turbine gen-
erator sets with dual-pressure heat recovery steam generators attached plus a 230-kilovolt gas insulated substation and eight transmission lines.
The cogeneration plant will supply electricity to Mexico’s national grid along with steam to power a nearby Petróleos Mexicanos (PEMEX, for its acro-nym in Spanish) refinery.
Construction should start during the second quarter of 2011 with commissioning planned for April 2013.
This is the fourth major con-tract signed by Iberdrola in Mexi-co. In July 2010, the company was awarded a contract worth 70.1 million usd to commission two
transmission lines over 220-kilo-meters-long and two substations in Jalisco. This contract followed another awarded in the same year, for the construction of electricity transmission grids and substations at the La Yesca hydroelectric dam, located 105 kilometres north-west of Guadalajara, between the states of Jalisco and Nayarit. Also in 2010, Iberdrola scooped the project to build the Piedra Larga wind farm in the Mexican state of Oaxaca, which will be one of the largest wind farms in Mexico, with an in-stalled capacity of 228 MW. The contract will be worth around 99 million usd.
www.iberdrola.es
Manufacturing and retail firms dominate the 25 for-eign companies that invest-ed the most in Mexico in 2010, according to a study by Expansión magazine.
The top investors were Canadian mining firm Goldcorp, US automaker Ford and the giant US retailer Walmart.
According to the study, which does not include comparisons with previous years, the total invested by the 25 companies amount-ed to 12.6 billion usd out of 17 billion usd estimated in foreign direct investments last year. The 25 corpora-tions generated more than 60,000 jobs in Mexico.
While manufacturing and retail firms dominated the top investors, the list showed the increasing in-terest of foreign aerospace and energy enterprises in Mexico.
Among manufacturing companies, led by Ford, were numerous automak-ers and auto parts mak-ers that are focusing on Mexico as a production base for a new generation of low-energy small cars. Automobiles and auto parts account for around one-fifth of Mexico’s total manufactured exports.
www.expansion.com.mx
Foreign direct investment
MajorPlayers
16 Negocios
According to the 2011 report of the largest infrastructure projects in Canada, published by ReNew Can-ada magazine, 96 billion Canadian
dollars (cdn) is being invested in just 100 proj-ects. That’s how you stimulate an economy and rebuild infrastructure. Yet this figure is just the tip of the iceberg for infrastructure investment in the country. There are tens of thousands of smaller projects in roads, bridges, schools and sports complexes that are all helping bridge the gap in long term public works spending that has caused much of Canadian, and North Ameri-can infrastructure assets to fall into disrepair.
Projects listed in this annual report are ranked by dollar value—not the cost of individual contracts, but the cost of everything, from design to wooden door frames to massive gas generators or wind turbines. In some cases, it includes the cost attached to a long-term, fixed-price contract to not only build an asset but to maintain or operate it. As an indicator
of the growing energy demands in Canada, the top ten are dominated by hydroelectric projects. Of the 38 billion cdn in investments represented by this year’s top 10, 20 billion cdn is going into hydro facilities. Provinces like Ontario, Alberta, and British Columbia have higher populations—and thus a bigger need for water and wastewater treatment, electricity, new roads and transit, and so on—so they tend to make more of a mark on the national list.
Certain projects may just be too small to make the list. The average cost of a Top 100 project (based on this year’s list) is 960 cdn million; the cost of the new sewage plant built in Halifax was 54 million cdn. The report lists individual projects, which means some programs, such as Ontario’s Feed-in-Tariff (FIT) program to encourage renewable energy projects, don’t result in big enough projects to make a dent in this list.
However, the trend that spurred initiatives like this program is reflected in the report.
The Top 100 Report shows where the biggest initiatives are taking Canada—are we going toward nuclear or hydro? LRT or highway? P3 or public financing? It will also tell you who the power players are in this industry –a who’s who of almost 400 key players are listed beside their projects. In addition to all of this activity, the federal government of Canada, and provinces were busy with massive stimulus programs aimed at getting “shovels in the ground” to encourage jobs and economic growth.
According to the World Economic Forum, Mexico ranked 64th out of 125 countries on the Infrastructure Competitiveness Index. Canada ranked 13th, while Germany nabbed first place. Mexico’s goal for 2030 is to be ranked in the top 25 of the index –so what is the goal for 2011?
Mexico, like the rest of the world, is trying to spend its way out of the 2008-2009 recession with its own infrastructure
CANADA’SBIGGESTPROJECTS AND WHAT MEXICOCAN LEARN FOR ITS OWN INFRASTRUCTURERENEWALby todd LathaM *
stimulus. In April 2009, over 50.4 billion usd in funding for Latin American infrastructure projects was announced, including Mexican developments such as the Federal Electricity Commission’s Salamanca Plant cogeneration project and the Multimodal Corridor extension from Mazatlán to Matamoros.
Unlike some other Latin American countries, Mexico is being proactive. A recent energy amendment approved by the Mexican Congress contemplates the development of investment and infrastructure for renewable projects with the provision of incentives. Norm Anderson of CG/LA –who is hosting a Latin American infrastructure leadership Forum in Brazil this May, says, “With the Latin American stimulus the public and private sectors throughout the region are making a serious decision to double the level of infrastructure investment, and build their way out of the financial crisis.”
Canada is helping: In December, 2010 Agri-Food Central Ltd. and CentrePort Canada announced the consolidation and expansion of Agri-Food’s Canadian operations at the Bison Transport warehouse near Winnipeg, Manitoba’s –Canada’s inland port. Their operations include the launching of a new “foods division” to promote, develop and distribute foods and beverages along the NASCO corridor to and from Mexico.
In January 2011, ReNew Canada magazine released the 2011 list of Canada’s Top100 Infrastructure Projects in Canada. In November 2010 in cooperation with Export Development Canada, we released a report that profiled 50 international projects where Canadians are taking a leadership role –and Mexico was on the list with the small Belenes Tank rehabilitation project in Guadalajara, Jalisco. There must be many positive stories and big infrastructure projects in Mexico
guest oPInIon Canada’s biggest projeCts
that could be told –especially to its big trade partners: the US & Canada.
According to NASCO, Canada’s economy has now recovered everything lost in the US-led, worldwide recession and Mexico is in the best financial condition of its history, with Mexico’s Gross Domestic Product (GDP) growing on a 5% annualized glide path and on track to create a minimum net 880,000 new jobs by year-end 2010. Both countries are doing well by investing in infrastructure projects that encourage trade between them. n
*Todd Latham is the founder of Actual Media, a
Canadian custom research and business communi-
cations firm with specialty in Environment, Infra-
structure and Water industries.
18 Negocios Photo archive
The Inter-American Development Bank (IDB) defines infrastructure as the group of engineering structures and facilities –generally with a long operating life– that constitute the base on which services that are deemed necessary for the development of production, political, social and personal activities are provided. Infrastructure, therefore, is society’s main material foundation and enables the achievement of various national objectives. In general, when speaking about infrastructure, the following areas are included: ports, roads, airports, electric power generation –including renewable sources of energy– public transport, waste water treatment, railroads and digital infrastructure. oil and gas, mining and tourism are also included.
Infrastructure makes a country competitive, creates jobs and contributes to bettering the quality of life of its inhabitants. It is considered the best target for investment given that, whether in feast or famine, as now, it boosts employment and helps to develop economic cycles. During the Great Depression –from 1929 and throughout the 1930s– it was
infrastructure for the 21st Century
discovered that a great way to stimulate the economy was to create jobs and infrastructure. Something similar has happened in Latin America. Recently, as the impact of the global economic crisis reached the region, Latin American governments turned to infrastructure projects as a means to slow down the drop in economic activity and minimize the social impact of the crisis. In addition to injecting resources and generating a demand for goods and services, infrastructure works are a source of employment for less qualified workers who, by the way, are the most vulnerable during a crisis. Furthermore, these investments allow countries to improve their position compared to other countries in terms of foreign investment.
Of course, infrastructure has a useful life and, therefore, continuous investment must be developed to guarantee competitiveness in an increasingly dynamic world. In the US, for example, according to various specialists, the country’s infrastructure is due for renewal in several areas. Gas pipelines built in the late 60s and early 70s are mentioned as well as pipelines that transport hazardous
liquids, such as gasoline, diesel and aircraft fuel. The country’s electrical network needs an immediate overhaul to be able to meet today’s needs. The US made a massive investment in infrastructure 50 years ago that has not been equaled since, a fact that could have a negative impact on its competitiveness. It is no coincidence that, in September 2010, President Barack Obama announced a program aimed at revitalizing the country’s infrastructure, including 50 billion usd to build 240 thousand kilometers of roads, 6,400 kilometers of railways and 240 kilometers of landing strips, in addition to billions of dollars committed to other works with the purpose of at bringing the American economy up to speed in the face of globalization.
As a comparison, it is worth noting that in Asia, infrastructure works are the most substantial on a global scale in terms of Gross Domestic Product (GDP). The People’s Republic of China leads the way with its huge works which include dams, airports, shipyards, high-speed trains, highly sophisticated telecommunications networks, intense aerospace development,
MeXiCo is aWare that infrastruCture is iMperatiVe to aChieVe CoMpetitiVeness. in addition, it has a uniQue geographiC LoCation, a young popuLation and a rapidLy eXpanding Market. these attributes are fundaMentaL and, When CoMpLeMented With neW infrastruCtureprojeCts, they WiLL aLLoW the Country to beCoMe an iMportant pLayer in the gLobaL eConoMy of the 21st Century.
by MarÍa Cristina rosas *
busIness tIPs infrastruCture for the 21st Century
20 Negocios
housing, hotels, etc. China consumes 40% of the world’s cement production and the construction of various buildings changes the country’s urban landscape from one month to the next, much the same as New York City at the beginning of the 20th century. It is not surprising then that Beijing is so attractive among foreign investors, since infrastructure is important not only for the construction of large projects but, above all, because it represents an operations base for investors that allows them to reduce operating costs and increase their competitiveness. It is worth noting that the People’s Republic of China allocates 10% of its GDP to infrastructure. India, another country with a dynamic economy, invests 6% of its GDP in infrastructure.
Latin America, however, falls below these averages, investing only 2% of its GDP in infrastructure. Knowing that more resources need to be channeled into improving infrastructure and increasing competitiveness, it is estimated that Latin
American countries will allocate 450 billion usd in the 2011-2015 period. It is clear that for a country such as Brazil, which will host a World Cup and the Olympic Games, investments must be abundant. But that is also true for the rest of the countries in the area because their infrastructure investment needs have changed. It is no longer just a matter of building capacity to transport raw materials; practically every country in the area is undergoing at least one process of regional integration, which demands infrastructure that supports the creation of scale economies. That is the case, for example, with the ambitious South American Regional Integration Initiative (Iniciativa de Integración Regional Sudamericana or IIRSA), the Meso America Project and, of course, the North American Free Trade Agreement (NAFTA). These last two place a particularly high demand for infrastructure on Mexico, in the first case to improve commercial links with Central America, and, in the second, with the US.
Even though the Latin American countries’ levels of investment in infrastructure are lower
than those in Asia, there is an awareness of its relevance and it is clear that the region’s governments are convinced that changes must be made.
In the case of Mexico, President Felipe Calderón assumed office in December 2006 with promises to ensure that the infrastructure sector would invest 40 billion usd every year until the end of 2013 –the end of his mandate– and the idea quickly became what is now known as the National Infrastructure Plan (Plan Nacional de Infraestructura or PNI), which was launched with a 270 billion dollar budget for the 2007-2012 period. Alongside this initiative, the National Infrastructure Fund was created.
The main goals of the PNI are to increase the coverage, quality and competitiveness of infrastructure; to turn Mexico into one of the leading logistics platforms in the world by leveraging its geographical position and its network of international trade agreements; to increase the population’s access to public services, especially in less favored areas; to promote a balanced regional
illustRation oldemar
development, paying special attention to the central, southern and southeastern areas of the country; to increase the creation of permanent jobs; to promote sustainable development and to develop the infrastructure needed to boost tourism.
The National Infrastructure Fund’s goals are to place Mexico among the 30 leaders in infrastructure; to make the country one of the world’s leading logistics platforms; to promote a balanced regional development; to increase the creation of permanent jobs and to promote sustainable development.
The above mentioned fund will finance infrastructure projects which include roads, ports, airports, railroads, environment, tourism and water. Through the National Infrastructure Fund, the federal government seeks to become the PNI’s financial basis; to maximize and facilitate the movement of private equity; to take the risk that the market is not willing to take; to increase the profitability of socially viable projects which generally have low economic profitability; to achieve long-term financing under
competitive conditions and to compete globally on a level playing field.
According to the Organization for Economic Co-operation and Development (OECD), getting the resources needed to build new basic infrastructure and update/renew the existing one, would require investments of between 2.5 and 3.5% of the world’s GDP in the coming years. It is worth noting that from 2001 to 2006 infrastructure investments by Mexican authorities were, on average, 3.2% of the GDP –above the world’s average– which predicted the achievement of PNI’s objectives for the current six-year period.
An excellent example is the federation’s expense budget for 2009, in which Mexican legislators approved 45.3 billion usd for infrastructure works, an amount equal to 4.9% of the GDP. So, among the developmental priorities for President Felipe Calderón’s administration are roads, non-hydrocarbon infrastructure, electric power, ports, airports, railroads and water.
In addition, it is expected that during the five-year period between 2011 and 2015 the
country will receive some 70 billion usd, meaning that investment in infrastructure will be growing at an annual rate of 8%. That being so, the international demands added to trade agreements signed by Mexico with countries on three continents forecast not only substantial investments in infrastructure but also better trade and business conditions in general. It is expected that new infrastructure works that will be developed –added to works that are currently underway– will be the most important in the country’s history, which means numerous opportunities for investors. Along those lines, expenditure on infrastructure in Mexico will be increasing in areas such as the construction of a refinery and important road, housing, water, tourism and public transportation projects among the main spheres. n
*Professor and researcher in the Political and Social
Sciences Faculty, National Autonomous University
of Mexico (UNAM).
busIness tIPs infrastruCture for the 21st Century
22 Negocios22 Negocios Photo archive
the Integrated eP ContraCt: an oPPoRtunitY FoR investMent in Mexico’s eneRgY sectoRIn 2008, several legal reforms to Mexico’s energy sector were approved. One of the innovations of this new legal framework was the incorporation of integrated contract models for hydrocarbon exploration and production.
by edgaR Rangel-geRMÁn and FeRnando RuiZ nasta*
the new contract modelsThe new contract models seek to increase Pe-mex’s execution capacity by means of a profit-able and competitive scheme that introduces innovative aspects to the Pemex-contractor re-lationship. This new model proposes payments based on a volumetric fee and on the percentage of recoverable expenses.
This contract scheme underwent a strict legal analysis by the National Supreme Court (SCJN, per its initials in Spanish), which in December 2010 declared the constitutionality of the regu-lations of the Petróleos Mexicanos Law. In par-ticular, Article 62 establishes that compensations considered in contracts can be fixed based on the degree of fulfillment of goals or based on indica-tors that are commonly used in the hydrocarbon industry, such as productivity, capacity, reserves incorporated, hydrocarbon recovery, execution times, expenses, savings, and others that contrib-ute to improving project performance.
The new contract models approved by Pe-mex’s Board offer the opportunity to pay for ser-vices based on performance, including produc-tion above that determined by decline curves, cost reduction, accident prevention or added value.
Thus, the new Mexican contract model is a sort of hybrid between contracts that share production and pure service contracts, also in-corporating commonly used practices in the oil and gas industry. Many aspects of this contract model are notably similar to the predominance of international practices, taking into consider-ation the constitutional and legal restrictions in the Mexican oil sector.
The volumes illustrated above are not insignificant –their total original oil in place is close to 2 billion barrels and to date only about 400 million barrels have been pro-duced, leaving a remaining volume of more than 1.6 billion barrels yet to be produced. Given that current recovery factors in these fields are very low, Improved Oil Recovery (IOR) and Enhanced Oil Recovery (EOR) methods would be ideal means to increase profitability since recovery efficiencies can reach up to 50 or 60%, depending on the EOR method selected and used, for instance.
a look into pemex’s initial portfolio proposalBased on the contract execution strategy re-cently defined by Pemex, the first contract model will begin in three areas of the South-ern Region: Magallanes, Carrizo and Santua-rio, which are made up of six brown fields. These fields are small, have been previously produced, and their hydrocarbons reserves and current production are as follows:
sPeCIal rePort peMeX’s neW integrated ep ContraCts
3p reserves (proven, probable and possible)
magallanes
carrizo
santuario
92.748.839.6
Source: PEMEX * Million barrels ** Billion Cubic feet + Barrels per day or daily barrels ++ Million cubic feet per day
area
93.4 6,8335.825.5 6,777
oil*
current production
oil+gas** gas++
13.59
3.67
currently closed
Therefore, the fields open for bidding by Pemex represent a valuable opportunity for those oil companies that have both experience in brown fields and access to EOR technolo-gies. For companies with such a profile, the ma-teriality of these fields might represent a profit similar to that of the total project portfolio that many of them manage.
the Future of investment in mexicoMany countries are quickly moving towards the use of EOR, and it is estimated that this will be a very important component of the world’s oil production in the future. Mexico must also consider these recovery methods. EOR is an attractive alternative to increase Mexican oil production, if we consider that al-most all of Mexico’s oil fields are mature and are already showing declining production.
Brown fields in Mexico represent a sig-nificant investment opportunity, whose re-vitalization and production will require both experience and IOR/EOR technologies. The new contract models are an important new means to stimulate their development. n
*Edgar Rangel-German is a Commissioner of the Na-
tional Hydrocarbon Commission (Comisión Nacional
de Hidrocarburos); Fernando Ruiz Nasta is an advi-
sor in the same institution. The opinions expressed
herein do not necessarily represent the position of the
institution in which the authors serve.
24 Negocios24 Negocios Photos and illustRation archive
A VALUE CREATION MECHANISM
Mexico’s state-owned oil company Petróleos Mexicanos (Pemex) launched its new incentive-based contracts in a bid to di-versify its projects and increase crude oil
production levels. Through the Integrated EP Contracts, Pemex expects
to leverage the expertise and technology from other companies to recover fields that are in decline, but still have potential. The new contracts, permitted under a 2008 reform law, allow a per-barrel production bonus above crude output targets.
The Model Contract is designed to apply to long-term oil and gas development projects in Mexico. Each con-tract will cover services for the evaluation, development, and production of hydrocarbons within a contractual area. The contract term will be divided into an explora-tion phase (Periodo de Evaluación) and a development and production phase (Periodo de Desarrollo), and the contract imposes a minimum work obligation on the contractor during the exploration phase.
Depending on the results of the exploration phase, the contractor may decide to terminate the contract without moving forward to the development phase. If the contract moves forward, the contractor will be ob-ligated to perform a minimum work program during each year of that phase. The length of each phase and the minimum work requirements will vary with each contract.
The incentive-based contracts are designed to give outside companies greater flexibility than Pemex’s stan-dard services contracts.
The most notable difference between the new con-tract and its predecessors is the modification of the compensation system, from a fixed unitary price-based formula to a production-based system.
The new legal framework for oil and gas develop-ment projects in Mexico (composed of the Pemex
Pemex´sinTegraTedeP ConTraCTs:
sPeCIal rePort peMeX’s neW integrated ep ContraCts
Key Contract Components
ownershIP. reserves and production are owned by mexico.
sCoPe. exploration/appraisal, development and production of hydrocarbons in a given block.
reMuneratIon. Fee per barrel (adjustable to market conditions) plus cost recovery, subject to the available cash flow from the block.
terM. 20-35 years depending on the project.
Law and the corresponding implementing regulations passed by the Mexican Congress and the Pemex Board of Directors during the past two years) allows the cur-rent administration to implement an economic model in service contracts that includes production-based incentives and additional incentives for project efficien-cies, both of which are intended to increase the potential compensation for the contractor.
Under this scheme, the contractor will receive pay-ment in the form of a fee for each produced barrel (of-fered by each bidder during the public bid process) plus a yet to be defined percentage of recoverable costs, sub-ject to the project’s available income. Another impor-tant difference is the fee adjustment mechanism. Under previous service contracts, the fixed unitary prices were adjusted annually in accordance with a Producer Price Index (PPI) for finished goods. The Model Contract es-tablishes that the fee will be adjusted every six months in accordance with a weighted PPI that accurately re-flects changes in the international oil and gas services industry.
production goalsPemex’s oil production peaked at about 3.4 million bar-rels a day in 2004 on the output of the Cantarell super-giant fields offshore, which began a rapid decline after producing for more than 20 years. PEMEX averaged about 2.58 million barrels a day in 2010 and expects about the same this year.
Carlos Morales, Director of Pemex Exploration and Production, said that the company is planning three tenders in 2011 under the new contracts: two for mature fields, the first in Tabasco and the second in the north; and one for the onshore Chicontepec basin, where ser-vice companies are already drilling with limited success.
Three areas comprised by six mature fields in Tabasco will be the first to be part of Pemex’s Integrated
Contracts. Pemex’s new era will begin in Tabasco with projects in the areas known as Carrizo, Santuario and Magallanes, which have a total area of 312 square kilo-meters (Magallanes 169, Sanctuary and Carrizo 13) with a current production of 14,000 barrels a day and a re-serve of 207 million barrels of oil equivalent. n
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If the highway and railroad infrastruc-ture is like a country’s circulatory system, which takes vital raw materi-als to each part of its geography, then
Mexico’s main arteries are its freeways and its veins are its railroads.
According to figures from the Ministry of Communication and Transportation (SCT, for its acronym in Spanish), in 2009 Mexican free-ways transported 450.9 million tons of prod-ucts while railroads shipped 90.3 million tons. The highway network transported nearly 60% of merchandise that circulated through the country, while 12% was sent by rail.
The constant modernization of these routes, thanks to the public and private sec-
mexico’s VeinsIn 2011, the Mexican government plans to spend more than 4.3 billion usd to improve and expand the highway network, part of an important investment program to better the nation’s transportation system.
tors, has helped make Mexico highly com-petitive in establishing companies whose market is the US.
According to a study by the Mexican Institute for Competitiveness (IMCO), transporting a 40-feet container with an average value of 100,000 usd will take four days from the time it leaves a factory in Mexico City until it arrives at its destina-tion port in the US and will cost 2,789 usd.
In comparison, the same container origi-nating from Paris, France, will take 18 more days to arrive at its US destination and will cost 3,503 usd, 26% more. From Sao Paulo, Brazil, the cost is 5,021 usd, an 80% increase, and from Beijing, China, the cost rises to 6,259 usd, a 124% increase.
asphalt networkThe Mexican road system measures 366,341 kilometers, of which more than 13,000 cor-respond to highways of four lanes or more.
The highway construction boom began in the 1970s with a federal program called “Mano de Obra” (Work Force), which focused mainly on the creation of roads. As a result, the road network grew from 71,000 kilometers in 1970 to 200,000 kilometers by 1980.
A new road construction effort began in 1990 and it has continued to this day. In 1980, the country had 1,000 kilometers of highways. A decade later, this number had grown to 5,500 kilometers and by 2000 it had reached 10,000 kilometers.
26 Negocios Photo archive
Cover feature MeXiCo buiLding its path to suCCess
Currently, the highway network by which most merchandise is transported in Mexico is administered by the Federal Roads and Bridges Commission (Capufe, for its acronym in Span-ish), an organization decentralized from the fed-eral government.
In 2011, the Mexican government plans to spend more than 4.3 billion usd to improve and expand the highway network, part of an impor-tant investment program to better the nation’s transportation system.
SCT’s goal is tendering seven road proj-ects, amounting to 1.45 billion usd during 2011. These projects include highway span-ning in the states of Morelos, Guanajuato, Querétaro, Estado de México, Puebla, Oa-
xaca, Sonora, Chihuahua and Campeche. To-gether they cover 430 kilometers.
the iron Horse Mexico’s railroad system, which began operat-ing in 1850 on a 13 kilometer stretch in the state of Veracruz, had its biggest expansion during the era of President Porfirio Díaz, who led the country for most of the period from 1877 to 1911. By the end of this time, the railroad system had grown to 26,677 kilometers, 90 percent of which had been done during Díaz’s era.
In 1938, President Lázaro Cardenas na-tionalized the country’s railroad system, cre-ating the state owned company the National Railroad of Mexico.
Nearly 60 years later, in 1996, President Er-nesto Zedillo decided to decentralize the com-pany and turn over a majority of the railroad network to private interests. Since that time, the amount of merchandise carried by this mode of transportation made an important jump, going from 50 million tons in 1995 to nearly 100 mil-lion tons by 2007.
Currently, the majority of the railroad net-work is managed by two companies. The largest is Ferromex, part of the mining consortium Grupo México. It controls more than 8,500 kilometers of railroads which link five of the country’s most important cities, five cities along the US-Mexico border and four ports along the Pacific Ocean and one on the Gulf of Mexico. Ferromex also
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28 Negocios Photos aRchive
owns part of Ferrovalle, a company that operates railroads and terminals in the Mexico City area.
The other company is Kansas City South-ern of Mexico (KCSM), which administers the railroad network that connects the Lázaro Cárdenas Port in Michoacán to the US.
While the highway network continues to be the country’s main method of transport-ing merchandise, the railroad system is grow-ing in importance due to the investment that companies in that sector are making to im-prove the network and its service.
From mexico to the usKansas City Southern of Mexico (KCSM) cur-rently manages 4,251 kilometers of railroads that cross 15 states in the industrial heart of Mexico: Michoacán, Estado de México, Dis-trito Federal, Hidalgo, Tlaxcala, Puebla, Vera-cruz, Querétaro, Guanajuato, San Luis Potosí, Aguascalientes, Zacatecas, Coahuila, Nuevo León and Tamaulipas.
The company has shaped the Internation-al Railroad Corridor, which begins in Lázaro Cárdenas Port in the southern state of Mi-choacán and runs to Kansas City, Missouri in the Central US.
“Our network makes up 20% of the coun-try’s railroads; without a doubt, nearly 40% of railroad cargo is carried on our lines,” says David Eaton, Director of Institutional Relations at KCSM, a division of Kansas City Southern (KCS).
In 2008, KCS reported sales of 1.8 billion usd, including operations in Mexico and the US. This represented a 6.3% increase over sales from the previous year.
The biggest increase in cargo was in the agricultural and minerals sector, which had a 12.7% jump.
Most of this investment is going into the International Railroad Corridor, now that 70% of the cargo that arrives at Lázaro Cárdenas Port is distributed by railroad to
today, feMsa is one of Many MeXiCan
MuLtinationaL CoMpanies that haVe a strong partiCipation in the
gLobaLization proCess. it reCentLy traded its beer produCtion diVision for 20% partiCipation in the
shares of heineken.
the industrial centers in Mexico and the US. This corridor offers an alternative to the highly congested US ports in Los Angeles and Long Beach.
Because of this, KCSM is projecting it will invest 80 million usd for the construction of an Intermodal Railroad Terminal on the Is-land of the Palm Trees in this port in Micho-acán and more than 200 million usd on the construction of an intermodal terminal in a central Mexican state.
In addition, the company has considered constructing a new railroad bridge in Nuevo Laredo, Tamaulipas, located in the north-eastern part of the country along the US-Mexico border.
Currently, the company has 3,500 work-ers in Mexico. “In spite of the difficult condi-tions due to the national and international economic crisis, we have made a strong effort to keep our labor force intact,” Eaton con-cludes. n
Cover feature MeXiCo buiLding its path to suCCess
baluarTebridgeamerica’s highest
When it is completed in 2012, the Baluarte River Bridge will not only be the highest bridge in North America
but the highest cable-stayed bridge in the world surpassing the Millau Viaduct in France.
It is the crown jewel of the greatest bridge and tunnel highway project ever undertaken in North America. Known as the Durango-Mazatlán highway, it will be the only crossing for more than 800 kilometers (500 miles) between the Pacific Coast and the interior of Mexico. The path of this new highway rough-ly parallels the famous “Devil’s Backbone,” a narrow road that earned its nickname from the way it follows the precarious ridge crest of the jagged peaks of the Sierra Madre Occidental mountains. The dangerous road is a seemingly endless onslaught of twisting, terrifying turns that are so tight that there are times the when road nearly spirals back into itself.
Thus, the new highway is expected to im-prove trade and increase tourism between the city of Durango and the coastal city of Mazatlán.
To achieve this connection, Mexican en-gineers were forced to design an autopista (highway) with no less than 61 tunnels –near-ly 10 times more tunnels than have ever been built on any road in North America. For big bridge fans, the highway is no less amazing with a parade of 115 towering concrete beam bridges. Including Baluarte, there will be 8 bridges exceeding 90 meters (300 feet). Only China’s West Hurong and Kunming-Guiyang and Italy’s A3 highways have a greater collec-tion of high bridges.
Once completed, the final height of 390 meters (1,280 feet) will make Baluarte Bridge the second highest roadway bridge on earth. It will also have the longest span of any cable- stayed bridge in North America at 520 me-ters (1,706 feet) exceeding the John James Audubon bridge in St. Francisville, Louisiana by 37 meters (123 feet).
In this way, the Durango-Mazatlán high-way will become a proud, prominent symbol of Mexico’s civil engineering skills for de-cades to come. So far, the investment in this ambitious infrastructure reaches more than 1.5 billion usd. n
Infrastructure in 2012MAIN AXES AND ROADS
Mex
ico-
Nu
evo
Lar
edo
bran
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to P
iedr
as N
egra
s
Veracruz-Monterreybranched to Matamoros
Mexico-Puebla-Progreso
Yucatán Peninsula
Qu
erét
aro-
Ciu
dad
Juár
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Mazatlán-Matamoros
Tra
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BC
Only Federal Government developments are considered
San
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del
Cab
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La Paz
DF
Querétaro
San Luis Potosí
Loreto
GuerreroNegro
Bahía delos Ángeles
Ensenada
TijuanaMexicali
San Luis Río Colorado
Cab
o Sa
n L
uca
s
Sonora
Hermosillo
Culiacán
Mazatlán
Tepic
Guadalajara
Manzanillo
Col
ima
Morelia
Nogales
Santa Ana
Caborca
Ciudad Juárez
El Porvenir
Acuña
Piedras Negras
Nuevo Laredo
Cd. Obregón
PuertoPeñasco
Los Mochis
Río Grande
Lázaro Cárdenas
Huatulco
Ciudad Hidalgo
Salina Cruz
Matehuala
Linares
Tuxpan
Torreón
Durango
Salt
illo
Mon
terr
ey
Tampico
Altamira
Reynosa
Matamoros
Zacatecas
Guanajuato
Aguascalientes
Puebla-Oaxaca-Cd. Hidalgo
Chihuahua
Puebla
Tlaxcala
San Cristobal de las Casas
Tapachula
AcapulcoOaxaca
Chilpancingo
Mex
ico-
Nog
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bran
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to T
ijuan
a
Pachuca
Veracruz
Coatzacoalcos
Villahermosa
Pu
erto
Pro
gres
o
Campeche
Mérida Can
cún
Champotón
ChetumalTuxtla
Arr
iaga
Acapulco-Veracruz
Manzanillo-Tampicobranched to L. Cárdenas
Trans-Isthmus Circuit
Mexico - Tuxpan
Altiplano
Symbolism
Other highways fromthe network
United Statesof America
Guaymas
Ciudad Victoria
San Diego
Tucson
El Paso
Houston
Dallas
San Antonio
Mexico City
30 Negocios inFogRaPhics oldemar
National railroad systemsAND THE CONNECTIONS TO THE US
Symbolism
BNSF
TPM
Ferromex
Ferrosur
Shortlines
SDIV
Tiju
ana
Tec
ate
Phoenix
Albuquerque
Dallas
San Diego
Calexico
Nogales
Cd. Juárez
Nuevo Laredo
Matamoros
Laredo
Piedras Negras
Eagle Pass
Presid
io
PensacolaMobile
Mem
phis
Internationalconnections
El Paso
Chihuahua
Torreón
Altamira
Durango
Guadalajara
Mazatlá
n
Salina C
ruz
Manzanill
o
Aguascalientes
Zacatecas
San Luis Potosí
Querétaro
Monterr
ey
DF
GalvestonIowa
Corpus Christi
New Orleans
Waxachachie
United Statesof America
Mérid
a
Veracru
z
Campeche
Guaymas
Topolobampo
Lázaro C
árdenas
Puebla
Pachuca
Oaxaca
Hermosillo
MexicoCity
Cover feature MeXiCo buiLding its path to suCCess
32 Negocios32 Negocios Photo archive
Arriving at a Safe Port
It’s impossible to imagine Europe without potatoes, Asia without rice, the Americas without livestock and the world without ports. Ports occupy a fundamental place
in the world’s consciousness, in the origins of the most powerful countries and in trade between regions. Mexico knows this.
What has changed throughout history is the infrastructure of these port installations, which, paradoxically, has become more efficient thanks to the marketing of innovations that occur at these maritime, air, interior or dry land facilities. It is an area in which Mexico has an endless num-ber of opportunities, due to its geographic posi-tion and its privileged location: more than 11,000
kilometers of coast, most of it along the Pacific Ocean (7,828 kilometers) but also along the Atlan-tic (3,292 kilometers).
In 2010, just through its maritime ports, Mex-ico received and sent more than 272 million tons of merchandise to the rest of the globe. Imports, through more than 26 daily arrivals of large com-mercial ships at ports, totaled almost 55 million tons in 2010, while 41.5 million tons were export-ed from Mexican maritime ports the same year.
In contrast to older ports, most of the present day ones specialize in receiving and shipping par-ticular products and setting aside extensive areas for industrial and warehouse spaces, creating un-ending sources of employment.
In Mexico, the intensity of commercial mari-time activity is not a chance occurrence. The World Economic Forum asserts that the nation’s maritime ports infrastructure quality ranks 8 in the world.
The advantage many of these ports have is a great potential for development and land reserves for their commercial and industrial expansion.
The National Infrastructure Program has put forth an investment goal of 5.1 billion usd from both the government and the private sec-tor by 2012. It will be used for the development of 12 ports: Punta Colonet, in Baja California; Cabo San Lucas, Loreto, Cortés and Pichil-inche, in Baja California Sur; Manzanillo II, in
Through history, maritime ports have played a strategic role in the origins of the most powerful economies and in trade between regions. Mexico knows this and is making a strong bet on its ports development.
Cover feature MeXiCo buiLding its path to suCCess
Colima; Lázaro Cárdenas, in Michoacán; Guay-mas, in Sonora; Topolobampo and Mazatlán, in Sinaloa; Puerto Vallarta, in Jalisco, and Zihua-tanejo, in Guerrero.
In 2011 alone, the government will invest 703 million usd in ports, according to the General Co-ordination of Ports and the Merchant Navy of the Ministry of Communication and Transportation.
The investment for 2012 proposes the expan-sion and construction of new navigation canals and the construction of marine platforms and industrial complexes. It also includes the creation of multiple use terminals for such things as tour-ism. Each year, 3,171 cruise ships with 6.4 million passengers arrive at Mexican ports.
34 Negocios34 Negocios Photos archive
In addition to maritime ports, investment is also being proposed for dry ports: large ware-houses at strategic points in the interior of the country responsible for operations and distribu-tion of products through different routes.
The Mexican government’s national develop-ment plan envisions 10 dry ports operating before 2012. These include one already working in San Luis Potosí in the northwestern area of the coun-try; the Guanajuato Interior Port in western Mex-ico; and the multimodal platform in Querétaro in the central region.
The government in the state of Puebla, also located on Mexico’s central region, has already invested 13 million usd in what will be the La Cé-lula dry port. The state of Nuevo León, located on the Mexico-US border, is looking to construct In-terpuerto Monterrey, the largest dry port in Latin America.
In June 2008, the Mexican newspaper Excél-sior reported that according to North America’s SuperCorridor Coalition (NASCO), Mexico will require nine working inland ports before 2012. In an interview, Jorge A. Acevedo, the Executive Director of the Guanajuato Interior Port, said that there are plans to develop some of these ports on thousands of hectares in the states of Jalisco, Hidalgo, Aguascalientes, Zacatecas, Puebla and Nuevo León.
Throughout centuries, ports have still re-mained focal points of the world’s development.
The Mexican Pacific Corridor in MotionAcross the Mexican territory, and through roughly 944 miles, the Corridor Pacífico Fron-tera is one of the biggest projects that have brought the Mexican federal, state and local governments and both local and foreign com-panies, together to define a strategic road that will be one of the mayor communication chan-nels in the following decades.
Part of the bigger project NASCO, which aims to become a road that transports the main bulk of goods through the three countries it encompasses, in order to become the main driver of the North American Economy.
The corridor comprises the efforts of the states of Hidalgo, San Luis Potosí, Michoacán, Nuevo León, Tamaulipas, Guanajuato and Co-lima, four federal government agencies, and countless private companies, in an effort to pro-vide a faster and better way of delivering goods that enter through the ports of Manzanillo, in the state of Colima, and Lázaro Cárdenas, in Michoacán.
This will result in the improvement of Mexican trade relationships with the US and
Canada. These two ports, already working as a couple of the main cargo ports in the Ameri-cas Pacific, are currently directing their efforts to improve the capacity and user-friendliness of their facilities to attract more ships coming from the Far East. The goal, in the end, is to become the best option for Asian import com-panies and to provide a better and safer way of transporting goods through the country.
Currently, their main competitor is the port of Los Angeles-Long Beach, which is now facing two main challenges that, if unresolved, could potentially make the Mexican ports more at-tractive for the Asian Ship Companies.
Perhaps the most difficult challenge to ad-dress is the fact that this port is already working at the top of its capacity, currently receiving 40% of all marine imports that arrive to America, and on top of that, it handles 80% of all the imports coming from Asia. Also, even though to dock in a Mexican port means a delay of over one day, most of the time the clogging in the American ports amounts to much longer waits, and with the new fuel regulations, with higher fines for noncompliant companies, it would make it more costly to touch land in American soil. On top of that, the most optimistic estimates con-cerning the imports from Asia to the US predict an increase of 320% only in the next 15 years.
Another business opportunity is open for American and Asian companies that are looking to sell their products in the Americas, since they can bring raw materials from Asia or the US into Mexico, establish assembly lines with world com-
petitive costs and then re-export their goods into Canadian, Latin American and US soil, thus ben-efiting from NAFTA and Free Trade Agreements with other Latin American countries.
Both the ports of Manzanillo and Lázaro Cárdenas have announced new improvements on their facilities, expecting to attract new com-panies that will add to the 37 that are already using Mexican facilities.
The port of Manzanillo, which currently handles 47% of all the cargo ships into the coun-try and that between 1995 and 2006 went from handling 6.4 million tons to 20 millions a year, is currently working to attract an extra six cargo ship companies, to achieve a goal of providing services to 39 companies by the year 2012. They also have plans and strategies to reduce the time
ships spend in port, from the time of their arrival until they sail away, from 24 to 16 hours in 2012. All these in order to present an alternative to the port of Lázaro Cárdenas, which is already one of the main magnets for new companies looking to do business in the Mexican Pacific.
The states that are directly involved in the development of the corridor have announced plans to build infrastructure to facilitate the operation, and they expect it will be in the best interest of Mexican business and people. All agencies and departments are working togeth-er to develop the corridor into a safe, secure, efficient transportation system.
Another key point of this Corridor will be a new bridge, propelled by Kansas City South-ern of Mexico, across the Mexico-US border between the states of Tamaulipas and Texas, in the cities of Río Bravo and El Cenizo, accord-ingly. The projects main goal is to improve the flow of rail traffic via Nuevo Laredo/Laredo in conjunction with Kansas City Southern and its other US rail, and by doing so, improve the time and conditions of goods transportation in the Mexico-US border. Also, the new project will be both for cargo trains and vehicles.
The project, that is currently looking for sup-port and funding from the Mexican government, the American government and the private sec-tor, will require an investment of 291 million usd and, after a careful evaluation of environmental and social issues, will result in a big boost for the economies of both countries, as well as for the communities that surround it. n
in addition to MaritiMe ports, inVestMent is aLso being proposed for dry ports: Large
Warehouses at strategiC points in the interior of the Country responsibLe
for operations and distribution of produCts
through different routes.
Cover feature MeXiCo buiLding its path to suCCess
36 Negocios inFogRaPhic oldemar
The Pacific Ocean ExpansionThe National Infrastructure Program has put forth an investment
goal of 6 billion USD both from the government and the privatesector by 2012. It will be used for the development of 12 ports
Zihuatanejo
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Source: Ministry of Communication and Transportation (SCT).
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The Pacific Ocean ExpansionThe National Infrastructure Program has put forth an investment
goal of 6 billion USD both from the government and the privatesector by 2012. It will be used for the development of 12 ports
Zihuatanejo
Topolobampo
Cabo San Lucas
Source: Ministry of Communication and Transportation (SCT).
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Guaymas
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Cover feature MeXiCo buiLding its path to suCCess
Photo archive38 Negocios
In July 2007, Mexico’s President Felipe Calderón launched the National Infra-structure Program (NIP), a five-year plan to increase the coverage, quality, and
competitiveness of Mexico’s infrastructure. The NIP identifies over 300 infrastructure
projects in multiple sectors representing over 141 billion usd to be financed using public-private partnerships, with significant Mexican public sector investment.
These projects represent a great deal of op-portunities for companies around the world in multiple sectors; including energy, environ-ment, transportation, telecommunications and tourism, among others.
Most of the NIP projects will be opened for international tender, but even strictly national tenders offer potential opportunities for inter-national companies as partners or suppliers to Mexican firms.
International companies interested in participating in NIP tenders should consider some basic issues about public procurement in Mexico.
The public procurement market in Mexico is divided into federal and subfederal levels. Federal level comprises government agencies and parastatal companies, such as Pemex; while subfederal level refers to state and mu-nicipal governments. NIP projects will be con-ducted under federal level rules.
Article 134 of the Mexican Constitution es-tablishes the basic ruling principle for public procurement, asserting that contracting will take place through open tendering procedures.
Specific procedures are provided in the Fed-eral Law on Procurement, Leases, and Services by the Public Sector and in the Federal Law on Public Works and Related Services. Both laws and other regulations and provisions concern-
ing public procurement can be found in their Spanish version at www.compranet.gob.mx.
Most of the nationaL infrastruCture pro-graM’s projeCts WiLL
be opened for interna-tionaL tender, but eVen striCtLy nationaL ten-ders offer potentiaL
opportunities for inter-nationaL CoMpanies as
partners or suppLiers to MeXiCan firMs.
There are two basic types of tenders:• National: suppliers must be Mexican,
and any goods must be made in Mexico and have a national content of at least 50%. For international firms to par-ticipate in a contract that is only open to Mexican companies, partnerships can be made with a Mexican counterpart, which must be the majority shareholder.
• International: Mexican and foreign suppliers may tender, and goods may be imported.
According to law, Mexican government must procure by open tender procedures with public notice. Any supplier that fulfills the re-quirements specified in the tender and sub-mits the bid documentation can participate.
Invitations to participate are advertised in the specialized section of the Diario Oficial de la Federación (Official Gazette), every Tues-day and Thursday of the year (except on holi-days). The Ministry of Public Administration divulges information about open tendering
doing businessin infrastructure
procedures trough the Electronic System for Government Procurement called Compranet.
Companies interested in participating can obtain tender documentation since the day the notice is published and up to six days previous to the deadline, either in the entity office or through Compranet.
Proposals must be submitted in Spanish to the address provided in the notice, in two sealed envelopes, one including the technical proposal and the other the economical pro-posal. If established in the invitation, propos-als must be submitted through Compranet.
The opening of bids involves two stages: • The opening of the technical proposals
takes place in a public meeting. After-ward the entity takes a period of time to analyze the proposals. Only the bids that comply with the technical require-ments will be accepted in the following stage.
• In the opening of economical proposals, if there are two or more suitable bids, the one with the lower price will be awarded. When none of the submitted bids comply with the established terms and conditions, a new tendering proce-dure will take place.
The decisions are notified during a meeting in which all bidders can participate or in writ-ing. The award decision is published in Com-pranet. The entity has an obligation to offer feedback to suppliers on their proposal rejec-tion. A notice of the awarded contracts will be published in the Official Gazette within 72 days after the tender is awarded.
Participants can appeal the decision to the Ministry of Public Administration, through the Internal Controller of the government’s enti-ties and enterprises. n
how does it work?
Mexico takes part in the oeCd anti-bribery Convention and in the inter-american Convention against Corruption of the organization of american states.
since both Conventions came into force, the Mexican government has improved its procurement systems in order to grant transparency and equal treatment for each participant in public tenders.
awarding a government contract depends on competitiveness and pricing.
to be really competitive and assure a successful participation in governmental tenders, it is recommended to:• get in early to the issuing authority so that
the technical requirements are written broadly enough to allow you to bid. Law enforces entities to make the terms and conditions of a tender public, before publishing the final tendering basis.
• have a good representative in Mexico. bear in mind that most of the procedures must be done in spanish.
• be able to integrate your products and services and provide after-sales service in Mexico.
When are tenders international?tenders in Mexico are international when:1. it is mandatory by free trade agreements (fta’s)
or other international agreements.2. there is no national supplier or when the quantity,
quality or price warrants it. 3. a national tender has been unsuccessful.4. it is required by external loan agreements.
When the procurement is subject to a fta, goods originating in partner countries are not subject to the 10% preference destined to Mexican goods under article 14 of the federal Law on procurement, Leases, and services by the public sector.
Mexican fta’s including public procurement chapters are those with the following countries:• us and Canada• bolivia• nicaragua
transitional reservations apply to:• israel• european union• european free trade association• japan• Colombia• Costa rica
Cover feature MeXiCo buiLding its path to suCCess
40 Negocios40 Negocios Photos courtesy of ampip
rePort industriaL parks
IndustrIalParks:giVing MeXiCo a CoMpetitiVe adVantage
Industrial Parks have become one of Mexico’s advantages as a destination for productive investment.
When we talk about infra-structure, besides think-ing about roads, bridges, ports and railways, we
should also think about industrial parks. According to the Mexican Institute for
Competitiveness (IMCO, for its acronym in Spanish), the competitiveness of a country is measured by its ability to attract and retain investment. But, what makes a country at-tractive to investors?
There are several factors that investors take into account when deciding the location of new operations.
Among them: the potential market of the host country, the availability of resources (human, natural and financial) and the ef-
ficiency obtained from cost savings and in-creased productivity.
As part of the North American region, Mex-ico represents a very attractive potential market for investors. Much of the foreign companies op-erating in the country are themselves exporting companies serving the US market from Mexico. Thus, the country’s geographical location is without a doubt one of its main attractions.
However, this is not Mexico’s unique com-petitive advantage. The country has a wide range of resources –such as skilled labor and natural resources like oil, minerals, fish, fresh food and cement, among others– that add to the geographical aspect and make it one of the most attractive destinations for productive investment in the world.
Large gLobaL CoMpanies and their
suppLiers throughout the suppLy Chain need
to settLe in pLaCes that ensure the aVaiLabiLity of
LogistiCs infrastruCture,
besides Warehouses With
sophistiCated QuaLity speCifiCations.
42 Negocios42 Negocios Photos courtesy of ampip
efficiency mattersSome of the items that are considered when evaluating a possible location for investment are full costs of operation, labor costs, inven-tory, transportation, finances, paperwork and permits, security and real estate. All these fac-tors result in what is known as efficiency.
In Mexico, industrial parks are an essential part in achieving high “efficiency” levels, offer-ing unparalleled advantages to investors; as a location within the main trade routes of the country; certainty in land ownership and land use; availability of basic infrastructure services such as electricity, water, drainage and in some cases, natural gas; and railroad spur and class A industrial buildings ready for occupancy.
“Industrial parks are a very important vari-able in determining a foreign investment proj-
ect for the country, since they offer investors the advantage of certainty in the land owner-ship, guarantee on the availability of basic in-frastructure, permanent maintenance of the facilities and internal security for tenants. In other words, industrial parks are the ‘ready to use’ real estate option,” explains Claudia Ávila, Director of the Mexican Association of Indus-trial Parks (AMPIP, for its acronym in Spanish).
Undoubtedly, having all those conditions in the same place, contribute to lower costs for tenants. In addition, operating within an industrial park implies a considerable risk reduction: there will always be an adminis-trator within the park that will give a perma-nent maintenance to reduce the risks that an investor operating in an isolated place will have to face alone, as much as possible.
connected to the outsideIndustrial parks in Mexico have been linked to the external sector from the start, mainly to the maquiladora industry, which rose in the mid 1960s.
The first industrial park was established in Ciudad Juárez, Chihuahua in 1965. But it was in the mid 1980s, during the country’s commercial opening and its contact with the global economy, that the sector began to take off and foreign investors started arriving. Working with national companies, these in-vestors developed this type of infrastructure to receive companies that were arriving to the country.
Since then until now, Mexican industrial parks have experienced an important devel-opment, evolving from a real estate business to a more complex business which not only includes buying and selling developed land.
“This new phase of industrial parks was characterized by the consolidation of port-folios made up industrial buildings being leased through long term contracts in dol-lars, by the reduction of profit margins and by more aggressive competition due to the arrival of new players in the market,” ex-plains Claudia Ávila.
This trend forced Mexican developers to attain standards that were as high as those of industrial parks in the US and Canada.
Currently in Mexico, the importance of logistics is growing ahead of traditional man-ufacturing schemes.
“industriaL parks WiLL Continue to be a neCessary CoMponent in a CoMpetitiVe
enVironMent noW that you Can CoMbine in one pLaCe not onLy suCh VariabLes as LoCation but aLso integration of produCtion, LogistiCs and
distribution Chains to deterMine the suCCess of any inVestMent projeCt.”
— claudia Áviladirector of the mexican
association of industrial parKs
rePort industriaL parks
WHAT IS AN INDUSTRIAL PARK?An industrial park is a delimited exten-sion of land, characterized by four main aspects:
1. It is located close to transport fa-cilities, such as highways, airports, sea ports and railways.
2. It contains essential dedicated infra-structure in one location for industrial operations, such as water (including sewer lines, drainage systems), electric-ity (including high power supply lines), telecommunications and roads.
3. It fulfills all the prerequisites to ob-tain the permission from local authori-ties to set up new operations.
4. It has a central administration that coordinates the internal safety of assets, the maintenance of public infrastruc-ture, the promotion of new operations and the affairs with local authorities.
A Business Organizationthe MexICan assoCIatIon of IndustrIal
Parks (AMPIP, for its acronym in Spanish) is the business organization representing the industrial parks in Mexico. It operates as a forum where major issues impacting the real estate industry, such as the attraction of investment, environmental protection, infrastructure, logistics, market trends and healthy coexistence with communities, are discussed.
Currently, AMPIP groups 250 industrial parks, locat-ed throughout the country, which together represent assets worth 9 billion usd. Within these industrial parks more than 2,000 domestic and foreign compa-nies operate, generating 1.7 million jobs.
www.ampip.org.mx
Photos courtesy of ampip44 Negocios
rePort industriaL parks
The costs of transportation and distribu-tion are important factors that determine the cost of a product and this is where Mexico has advantages over its competitors. The clearest one is its proximity to one of the world’s big-gest markets: North America.
It’s because of this that many of the coun-try’s industrial parks have promoted construc-tion of large distribution centers, with modern loading systems to optimize costs.
communication and securityIndustrial parks in Mexico are located close to population centers and they have access to highways, railways, airports and seaports. These allow the companies to receive raw ma-terials and transfer their products.
One of the most important characteristics of an industrial park is that it gives a company the certainty that it is established in a zone without any land ownership problems; where there are basic infrastructure services like wa-ter, electricity, paved streets, lighting and treat-ment plants; and that have maintenance and security services.
“The large global companies and their sup-pliers throughout the supply chain need to settle in places that ensure the availability of logistic infrastructure, besides warehouses with sophis-ticated quality specifications,” says Claudia Ávila.
That is what Mexican industrial parks have to offer. Due to the competition generated by parks in their efforts to attract investors, land is no lon-ger the only thing they offer. They also include industrial buildings constructed according to the needs of investors, generating the phrases “built-to-suit,” “lease-back” and “buildings in inventory.”
according to the client’s needsThe Urban Land Institute in Washington, D.C. has established six categories under
the concept of “business parks:” industrial parks, distribution parks, logistics parks, scientific parks, technology parks and corpo-rate parks.
In general, these parks grant common services to all their clients, like the ability to operate almost immediately, maintenance and security, among other things.
However, what differentiates them is the type of tenant that occupies each space.
“For example, a manufacturing company will require a major volume of water and elec-tricity in a spacious building. A distribution company will require a building more than 8 meters high and loading platforms and large
patio areas to facilitate the loading and unload-ing of merchandise. A research and develop-ment company will mainly ask for offices in smart buildings with high-tech telecommuni-cation services,” says Claudia Ávila.
In Mexico there is a voluntary standard, promoted by the federal government, which verifies the quality of available infrastruc-ture within industrial parks. It is the Indus-trial Park Mexican Standard of Industrial Parks (NMX-R-046-SCFI-2005), which aims to provide certainty to manufacturing com-panies to operate in favorable conditions within an industrial park.
This standard provides criteria for de-termining whether an industrial develop-ment can be classified as an industrial park in compliance with the conditions of quality, infrastructure, urbanization and adequate services, as well as existing legislation.
Besides, it provides a benchmark for de-termining the quality and efficiency of an industrial park, based on standardized test methods.
The Mexican Standard of Industrial Parks encourages developers of industrial parks to improve their existing facilities and also serves to ensure that new projects have the opportunity to plan and build with the highest quality standards.
For all these reasons, industrial parks should be considered as a competitive factor for Mexico.
“Industrial parks will continue to be a necessary component in a competitive envi-ronment now that you can combine in one place not only such variables as location but also integration of production, logistics and distribution chains to determine the success of any investment project,” concludes Clau-dia Ávila. n
MeXiCan industriaL parks haVe
eXperienCied an iMportant
deVeLopMent and haVe eVoLVed froM a reaL estate business to a More CoMpLeX business WhiCh not
onLy inCLudes buying and seLLing deVeLoped
Land. there is a VoLuntary standard,
proMoted by the federaL goVernMent,
WhiCh Verifies the QuaLity of aVaiLabLe
infrastruCture Within industriaL parks.
Current economic dynamics would be hard to understand without mining. Although some insist that modern economies derive a large
part of their revenue and prosperity from the service sector, primary sector activities form the economy’s real bedrock. Without exaggerating, the World Bank confirms that the most signifi-cant progress toward satisfying human needs –including food, accommodation, health, educa-tion, employment and transport– relies on the increasingly efficient use of mineral resources. Furthermore, some studies suggest that activities such as manufacturing, construction and even agriculture, could not exist without mineral pro-duction.
Mining plays a leading social-economic role in Mexico. At its various stages –from exploration to production– it generates a significant number of jobs and income for the country. In 2009 it accounted for 3.6% of Mexico’s Gross Domestic Product (mining expanded), 4% of Mexican ex-ports and around 300,000 direct jobs.
Due to the rising demand for minerals by the world’s largest and most rapidly-growing economies, mining is becoming increasingly important. China, for example, has increased its mineral consumption to support its dizzying economic growth, contributing to the growth in global prices for various minerals. African and Latin American countries are among its provid-ers. The African continent is seen as a gigantic de-posit of mineral resources –with everything from oil to coltan– and the world’s largest economies are ever more interested in that part of the world.
But when it comes to mining, Mexico has a num-ber of advantages, even over African countries.
Mining is not just a strategic sector for the Mexican economy but also for the world, which is looking ever more closely at the opportuni-ties, potential and advantages mining locations around the world have to offer. And among them, Mexico offers a solid and less risky alterna-tive for mining production.
mineral richnessInvestors are taking increasing interest in Mexi-can mines given their reserves of strategic miner-als, some of which are key to industries such as aerospace, military and electronics.
According to Xavier García de Quevedo, CEO of Minera México and COO of Southern Cop-per Corp., “the first advantage [of Mexico’s min-ing sector] is the quality of the deposits. There is enormous unexplored mining potential and current found deposits have been of high quality. Two years ago Mexico ranked as the best location for exploration in terms of the country’s invest-ment risk for mining.”
Analysis by prestigious international firms ranked Mexico in first place for exploration in Latin America and fourth in the world.
Mexico possesses significant mineral deposits that are widely sought after around the world. The country is the world’s largest producer of silver and is ranked among the top 12 countries in terms of production of other 17 types of minerals.
Mexico’s geological terrain is one of the most tectonically active and complex in the world. Orogenesis has pushed up mountain chains all
across Mexico, like the Sierra Madre Oriental, the Sierra Madre Occidental and the Sierra Madre del Sur, and these three regions have formed some of the key metallogenic areas. Gold and silver mineralization is commonly linked to the two belts of hydrothermal veins and gaps that stretch out underneath both sides of the Sierra Madre Occidental and that are located mainly in the younger volcanic sequences, according to a document prepared by the Ministry of Economy.
business environmentThe Mexican mining sector is a highly attrac-tive investment. García de Quevedo, previously Chairman of the Mexican Mining Chamber, draws attention to the competitive advantages of a country “with a very strong mining tradition. Over the years, Mexico has developed genuine expertise in mining, with great technical and growth potential.”
But there are other factors too, such as Mexico’s “total openness to foreign investment, that encourages any company from around the world to come and explore Mexico,” adds García de Quevedo. Mexican legislation encourages investments in the sector. The 1993 Mining Law (Ley Minera) opened up new areas to foreign investment pre-viously limited to Mexican financing. It also re-moved the requirement for foreign capital invest-ments to be associated with Mexican capital in a proportion of 49-51% respectively.
It is far quicker for a company to obtain an operating license in Mexico than in other countries. Referring to the “comparative ad-vantages” offered by Mexico in relation to its other commercial partners, the US company Hecla confirmed that it had taken only eight months to be granted the license concession for its project at La Choya in Sonora. In the US or Canada that process would have taken be-tween five and 10 years.
Workers’ salaries are another incentive to invest. Labor costs in the Mexico’s mining sector are between 60% and 80% lower than in coun-tries like Brazil, Turkey, South Korea, the US and Germany, for example. Mexico has a long history of mining, stretching back over more than 500 years, before the Span-ish conquest and colonization. This 500-year history is the reason for one of modern Mexico’s main competitive advantages: the skill developed by its workforce over the centuries.
The Behre Dolbear report, published in 2010, placed Mexico as the world’s fourth-best invest-ment destination for mining among a 25-country-list and in first place regarding the fiscal regime.
46 Negocios46 Negocios
golden destination for the mining industryIn the depths of Mexico’s jungles, mountain ranges or deserts, the country’s geography is a map with coordinates set for the growth of its mining industry. Its origins predate the Spanish conquest and the industry is now fully globalized, with Mexico ranked first in Latin America and fourth in the world for investments in mining. The sector accounts for 3.6% of Mexico’s Gross Domestic Product (mining expanded).
Photos courtesy of goldcorp
information is powerWith the country’s enormous geological poten-tial, the Mexican government has set about or-ganizing all this information for the benefit of in-vestors. Exploration surveys have therefore been carried out, covering 100% of the Mexican terri-tory at a scale of 1:250,000 and almost a third of the country at a scale of 1:50,000, available to the general public on the Mexican Geological Survey website (www.sgm.gob.mx); essentially based on the mining-geological cartography, geochemical and geophysical program to identify and take an inventory of mineral deposits in Mexico.
To assist investors, the Mexican Geological Survey has not only improved Internet access to its geological maps, as well as to inventories of minerals in the states and geochemical and geophysical research, but also the Ministry of Economy provides a follow up right from the promotion phase, accompaniment during the extraction or exploration phase and even after-wards, to review its performance and successful conclusion.
The government also provides all infor-mation on suppliers in the sector, on land ownership and the licenses and require-ments for handling concessions, to guaran-tee needed legal certainty.
supporting investmentThe Mexican government is particularly interested in reactivating those mining dis-tricts that are located in regions with high potential. Exploration schemes are taking place in those areas and sixteen districts are expected to be reactivated between 2009 and 2012.
This has all come together to create a boom for investors in search of Mexico’s min-eral wealth, leading to new research and min-ing exploration.
The Ministry of Economy’s Mining Pro-motion Trust (FIFOMI) is another key player. In 2009 it helped capitalize micro, small and medium-sized mining companies as well as the sector’s production chain with loans worth 510 million usd, 20% higher than in 2008, in addition to offering training and technical as-sistance to more than 8,000 companies.
This explains why Mexico remains one of the world’s top investment destinations.
Key playersThe boom in the country’s mining has translated into a growing capital investment coming from all five continents but mostly from North America, specifically Canada.
rePort Mining industry
Out of more than 738 exploration projects currently carried out by 232 companies, 70% are undertaken with investment coming from other countries: 75% from Canada, 15% from the US and the rest coming from countries such as the UK, Australia and Japan, among others. In 2009, foreign investment in the sec-tor reached 336 million usd.
“In resource extraction, we believe that invest-ment coming from Mexican companies must represent around 60% and the rest comes from foreign companies,” specifies Sergio Almazán, General Director of the Mexican Mining Cham-ber (Camimex, for its acronym in Spanish), who states that this growing injection of capital allows the mining sector to be considered strategic for the country’s economic boost.
But what is really turning Mexico into an in-vestment paradise for the mining industry? For Almazán, as well as for Camimex Chairman Manuela Luévanos, the main reason lies in the potential that the Mexican subsoil offers. “70% of the national territory is potentially suitable for storing important mineral deposits,” Luéva-nos points out. As such, “the Mexican Mining Chamber has insisted that our country’s mining calling should be acknowledged.”
For Ramón Dávila, General Director of the First Majestic Silver Corp. mining compa-ny, stemming from Canadian capital, Mexico offers many attractive features.
“What First Majestic sees in Mexico is sta-bility, politically speaking, but also when refer-ring to the great mining tradition that exists in
Value of Mining
Production in
Mexico in 2009
Production by State
Mining projectsIN MEXICO
GuerreroCampo MoradoFarallon MiningStarted operations in 2008
114 million USD
9,000 ounces of gold
54,000 tons of zinc
920,000 ounces of silver
6,800 tons of copper
Los FilosGoldcorpStarted operations in 2008
665 million USD
200,000 ounces of gold
El Arco
El Boleo
El Chanate
Mulatos
El Crestón
Los Cedros
Palmarejo
Campo Morado
Ocampo
ChihuahuaPalmarejoCoeur d’Alene MinesStarted operations in 2009
225 million USD
9 million ounces of silver
110,000 ounces of gold
Pinos AltosAgnico EagleStarted operations in 2009
200 million USD
190,000 ounces of gold
2 million ounces of silver
DoloresMinefindersStarted operations in 2008
250 million USD
130,000 ounces of gold
3 million ounces of silver
OcampoGammon GoldStarted operations in 2006
200 million USD
120,000 ounces of gold
4 million ounces of silver
ZacatecasPeñasquitoGoldcorpStarted operations in 2008
1.6 billion USD
400,000 ounces of gold
31 million ounces of silver
El CoronelGrupo FriscoStarted operations in 2008
60 million USD
Pinos Altos
El Coronel
Los Filos
Peñasquito
Dolores
Companies involved
UKVane Minerals
Arian Silver
AustralianKings Minerals
Indo Gold
738Projects
Exploration Projects2009-2012
MexicanGrupo México
Peñoles
Grupo Frisco
Autlán
Grupo Alfil
Nemisa
Minas de Bacis
Las Encinas
Materias Primas
GAN
Canadian Goldcorp
Pan American Silver
Farallon Mining
Teck Resources
Alamos Gold
Gammon Gold
Frontera Copper
First Majestic
21%Others
19%Zacatecas
15%Chihuahua
14%Coahuila
9.62billion USD
8.8billion USD
(estimated investment)
232Mining
companies
31%Sonora
USHecla Mining
Coeur d’Alene Mines
Source: Mexican Mining Chamber
48 Negocios48 Negocios inFogRaPhic oldemar
the country. [...] 100% of our personnel is Mexi-can and that makes us very proud,” explains Dávila.
“We focus on producing silver and Mexico is a great silver producer. Speaking in topographi-cal and geographical terms, we see important growth possibilities and that is what the com-pany was looking for when evaluating several countries and selecting Mexico as the only country to operate in, for the time being.”
With headquarters in Vancouver, Can-ada, First Majestic Silver Corp. operates three different mines in Mexico and plans on running a fourth one. Almazán explains the prominent Canadian participation in Mexico for two fundamental reasons: the high geo-logical mining potential enclosed in Mexican territory, which is likely to be operational, and the progress in exploration technology achieved by Canada, which allows it to evalu-ate and explore mining areas in a quick and efficient way.
“Of course we have to take into account, and this is very important, that they have de-veloped the financing formula for exploration, based on the stock market,” warns Almazán.
Another attraction point that the Mexican framework for mining operation presents, is the fact that although legislation forbids foreign companies to obtain a concession to carry out mineral exploration and extraction activities –which is, in principle, of public ownership– it is allowed for companies con-stituted as Mexican to have foreign partners that contribute up to 100% of the capital.
positive balance“In 2010 the balance was positive,” Luévanos points out. Even if the industry has had its share of stumbles due to the global financial crisis and Mexico has dropped from fourth to sixth place in raising foreign investment, it is expected for the mining-metallurgic produc-tion, which reached 9.6 billion usd in 2009, to grow 8-10% and for products to raise their production volumes.
That forecast is based on the sector’s boost in investment in “historical” proportions. “The mining industry will invest 13.8 billion usd in the country, which means that between 2007 and 2012 our industry will have invested 21.75 billion usd, a historical amount for the mining sector,” mentions Luévanos.
“These investments will go to exploration projects, new projects, extensions of mining operations, investments in labor training, equipment with leading-edge technology
and, of course, in programs that have to do with developing our communities, protecting the environment and, above all, with secure working conditions,” explains Luévanos.
The challenge for mining in the 21st cen-tury is sustainability, considers Luévanos. In that sense, the companies affiliated to Cami-mex are working hard to reach the goal of “zero accidents.” Furthermore, 68 mining op-erations have been certified as clean indus-
try, 18 are still in the process of certification and in the past six years the mining industry planted 10 million trees, which make it the sector that has planted most trees, after the Mexican Armed Forces and the lumber in-dustry.
For of all of the above, investment in Mex-ico is an excellent opportunity to grow hand in hand with the expansive cycle of mining on a global scale, concludes Luévanos. n
The lifestyleT h e C o m p l et e G u i d e of t h e M ex i c a n Way of L i fe .
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Demetria: A House, a Living Room, an
Art Collection… A Lifestyle
Op. 62
Interview
2011 Arte Careyes
Film & Artsin Paradise
p. 50
Photos courtesy of 2011 arte careyes50 Negocios i The lifestyle
Film & Arts in ParadiseCosta Careyes, a private paradise in the Mexican Pacific, celebrated its first film and contemporary art festival. A wide selection of short films directed by Latin American filmmakers was presented in an avant- garde space, together with an exhibition of emerging and established projects in Latin American contemporary art.
art 2011 arte Careyes
According to a Mayan prophecy —and that of US author Lawrence E. Joseph—, December 21, 2012 will be the end of the world, or at
least the date for a global catastrophe that very few will survive.
However, there is someone who is certain that on that day he will be in the right place and wrapped by “nature’s privilege.”
Mystic Italian businessman Gian Franco Brignone is sure that Costa Careyes, located on the celestial Mexican Pacific coast in the state of Jalisco, will be free of the apocalypse. Why? It is embedded in the Transversal Volcanic Mountain Range and on the 19.5 parallel, a spot that has been considered a holy place throughout history.
There, where Brignone has built his fortress and where dukes and princes as well as celebrities like Giorgio Armani, Francis Ford Coppola, Silvio Berlusconi, Robert de Niro and Claudia Schiffer have spent their vacations, an unprecedented art festival took place in January 2011. Supported by global brands like AMG Mercedes-Benz, Tequila Patrón, Vitamin Water and Corona, 2011 Arte Careyes offered a sample of the most
What is
Costa Careyes?
• 3 modern castles: sol occidente, sol oriente and Mi ojo, where a night can cost up to 7,000 usd.
• 5 villas: nido, La huerta, Cielo, altiplano and Candelabros. a night is about 2,000 usd.
• Casitas de las flores: small houses for about 280 usd a night.
• 2 polo fields
• 50 houses bought by world-renowned personalities such as pulitzer prize-winning author alice Walker and british singer seal and his wife, german model heidi klum.
innovative exponents of contemporary art and film in Latin America.
In the relaxed and exclusive environment that Costa Careyes is famous for, a wide selection of short films by Latin American directors and an art exhibition presenting work by various of the most renowned Latin American contemporary artists, made up the cultural agenda for the first edition of Arte Careyes.
The art pieces exhibited were auctioned in order to raise funds to support two different Mexican foundations: Fondo para la Paz (Peace Fund), a private institution which provides support to rural indigenous communities in extreme poverty, and Selva Negra (Black Forest), an organization that merges environmental conservation with conscious social development.
Arte Careyes aims to become a reference point in the international cultural scene, with the goal of creating new spaces for art. Future editions of the festival will seek to find new pairings of the film experience with other approaches such as fashion, gastronomy, architecture and other arts that might emerge. n
01 In addition to the cultural agenda, the
festival hosted several social events in which
Costa Careyes’ exotic lifestyle merged with
the Latin american cinematic and artistic
proposals, creating a unique aesthetic
experience.
02 a Polo Cup was organized by Mercedes-
benz during 2011 arte Careyes, which
offered an ideal scenario for guests to enjoy
Costa Careyes’ landscape.
03 Copa del sol is one of Careyes’
landmarks. during the festival, Vitamin
Water invited guests to experience the
mysticism of Careyes in a shamanic ritual
inside Copa del sol.
04 Mexican flavor. tequila patrón and
Corona beer supported the first edition of
arte Careyes.
01 03
02 04
Photo francisco vernis52 Negocios i The lifestyle
Jérome Seignon always intends to make the opening of a bottle of champagne a special moment. He tastes every sip as if it were his first
and he speaks of champagne as if he were talking about the great love of his life.
With that passion, his work seems sim-ple: to make Mexico’s champagne consump-tion grow.
For 10 years, since he first came to the country, Seignon has been in charge of the beverage division of Louis Vuitton Moët Hennessy Mexico and in that time he has helped increase the consumption of cham-pagne in Mexico by four to five fold.
“Our mission is not to force a sale but to explain and help people discover what champagne is, where it comes from, how and when it should it be taken and how to combine it with some Mexican dishes. Our mission is to explain that in an accessible way, not in technical terms. Champagne
has intrinsic qualities related to celebra-tion. Whenever you say, ‘let’s open a bottle of champagne,’ you can see how everyone’s imagination begins to work. It’s like magic. A sense of joy seems to be created spontane-ously. That is how we embrace consumers without forcing them. Champagne has to be spontaneous,” explains Seignon.
In his relationship with his work team, his trading partners, distributors and with almost everyone in Mexico, Seignon knows that there is always an excuse for a celebra-tion which is why there is a huge potential market for champagne.
“When I presented the idea of creating an independent structure for our Mexico office, I started my approach with the word ‘aho-rita’ and explained that the formal meaning of the word is ‘right now, in this precise mo-ment.’
“But after a few days in Mexico you real-ize that ‘ahorita’ can have several meanings,
from the immediate term to an uncertain period. And that was to say ‘We’re launch-ing on this adventure and we’ll find some surprises along the way,” he recalls.
To Seignon, each bottle of champagne –Moët & Chandon, Dom Perignon, Veuve Clic-quot or any of the other brands he handles– is the perfect balance between the perfection and the untamed nature of a brand, between the historical strength given by a 200-year-old brand and the uncertainty of having to depend on what nature offers.
“On one hand there is agriculture, land work, dependence on weather and how these elements come together to produce a grape with a specific quality.”
“On the other hand, we have a product that we know is synonymous with celebra-tion, luxury and bubbles that make imagina-tion walk at the tables of the best and most renowned restaurants in the world,” says Seignon.
JéROmE SEIGNON: CHAMpAgNEIN THE VEINSHe was born in the French city of Reims, surrounded by the aroma of champagne. The bubbly drink has always been part of his life and, 40 years on, its presence is still cause for celebration.
by franCisCo Vernis
IntervIew jéroMe seignon
Photo archive54 Negocios i The lifestyle
— Has experiencing that duality since childhood helped you?When you grow up in that region, your person-al development is entirely linked to the world of champagne. In the region of Champagne many bottles are opened on a daily basis. That is part of everyday life and it helps you to understand that world without the need for formal learn-ing. Every day you receive information from your environment and that is enough to have a deep understanding of the place. It is very likely that a Mexican feels the same way about tequila. It is a signature drink and it is part of the country’s culture.
For me it is a great privilege to have been born in the region of Champagne and to have the opportunity to represent cham-pagne brands around the world.
— did you always imagine yourself doing what you do? I used to imagine a couple of possible scenar-ios. There’s a medical tradition in my family and I used to imagine myself as a doctor.
However, when I had to make a decision, I felt the magic of champagne and thought it would be fun to travel around the world expanding champagne’s markets.
The first time I had a chance to decide on the direction of my professional life I decided it would be that.
My first professional experience was in the house of Veuve Clicquot, during the summer of 1991, as a trainee in the finance team.
However, I did nothing in relation to fi-nances, instead I spent my time at the win-eries, seeing how champagne was made.
I ended up knowing the people on the production lines and seeing how they deliv-ered the bottles.
My second experience was in Moët & Chandon, again as a trainee in the export team.
I remember arriving early every morn-ing to get orders from different markets: Russia, Australia, Mexico.
My job was to analyze those requests and redirect them in order to fulfill pro-cessing and delivery commitments.
That is how I got started in the world of champagne.
I stayed in France for a while, then I was lucky enough to be in Moët Hennessy Ven-ezuela for three years, then I returned to France and finally I came to Mexico.
— What has kept you in mexico for one decade?Mexico itself.
— What do you like most about the country?
There are several things. There is a profes-sional dimension. I sketched Moët Hennessy Mexico on paper and today it is a strong and successful company. Thus, I have a very strong sense of belonging. Although the company is part of a large group, I was lucky to experi-ence a different dimension because I became emotionally involved.
Companies are run by individuals and that’s another element. In Mexico I have had the chance to work with people with high levels of professionalism but also high levels of complicity that keeps growing over time. I consider myself privileged.
A third element is the professional qual-ity of Moët Hennessy Mexico’s team. We all feel strongly linked to Mexico. We are a Mexican company and there is little hierar-chical structure which has helped to create a less formal work atmosphere. We are more like a group of people that share the desire to make the business grow.
the best pairings
Moët IMPerIal easy to drink, very friendly, cool, good balance between acidity and fruitiness. it pairs with most food.
neCtar IMPerIal goes very well with the creamy and slightly sweet. it is the best to pair with dessert.
rose IMPerIal a pink and fruity champagne that stresses the berries’ flavors. better to combine it with seafood and pasta.
IntervIew jéroMe seignon
ChaMpagne in MeXiCo
Moët hennessy has five champagnes in the Mexican market: dom pérignon, Moët & Chandon, Veuve Clicquot, ruinart and krug.
the ChaMPagne Market in Mexico currently stands at just under 600,000 bottles per year.
the MaJor champagne consumers in the world are the uk, the us, germany, belgium, Italy, Japan, spain, australia and the netherlands.
Also, on a personal level, I have been able to build many relationships in Mexico. Life goes on quickly and these 10 years have been very hectic. Every year has been different from the one before. Each one came with its share of surprises and challenges. That makes time go by faster than you can theoretically think. Life rarely resembles what you had imagined and you must be receptive to that.
Mexico has great potential. We had great confidence in the country and that is why we decided to mount an operation itself, which does not happen in countries like Canada, for example. We have great confidence in the country, in its market and the potential of our brands.
— as a Frenchman, how hard or easy has it been to experience mexican cul-ture?It has been quite easy because Mexicans are very friendly, very warm. As soon as you get to Mexico, you feel embraced and invited to be sincere. It is very easy to make friends.
— How much has your life changed be-ing in mexico?My personal life has changed since I am living in an environment that is different from that in which I grew up in. The weather, for example, makes your life different. Here you can spend any weekend of the year at the beach without having to wear a scarf.
I enjoy outdoor activities. In France I used to practice snow skiing, there’s no snow here but you can practice water sports.
Talking about food, the country has a huge culinary richness. Mexican cuisine is much more than hot spicy food and since I first came here I have been willing to taste every-thing I have found.
Mexico might be known for tequila and spicy food but there is more than that. For example, you can find excellent wines in the Guadalupe Valley, in Baja California.
There are many Mexicos, which you can only discover when you live here for a while.
— so champagne goes well with mexican food?They go really well. Either light spicy or sweet flavors, like mole, blend well with the efferves-cence of champagne.
For example, one of the most renowned Mexican chefs, Monica Patiño, makes ‘chiles en nogada’ with a cup of Néctar Imperial from Möet & Chandon every year.
— How did you discover those combina-tions?By talking to chefs. We have a program called “7 Sensualities” in which we propose seven pair-ings for Dom Perignon. One of those pairings is with black mole from Oaxaca. Globally, when we speak of Dom Perignon we associate it with black mole from Oaxaca in the same way that we associate it with a cream of foie gras.
If you ever go to Eperney, France, most likely you’ll have black mole with Dom Peri-gnon for dinner.
—When is it best to enjoy a glass of cham-pagne?Now. Champagne is considered to be a very expensive beverage and is usually left for the great moments of celebration. That is the idea most of us have of champagne.
Certainly champagne is synonymous with celebration but it all depends on what we like to celebrate. Being here and having this inter-view can be a celebration.
The best moment for champagne is when we want to give that special touch, that “some-thing else” to any situation. And champagne is an extraordinary “something else” for any moment. n
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illustRation archive
Mexico:Somewhere to Call Home
According to the 2010 Census by the National Statistics, Geography and Informatics Institute (Inegi, for its acronym in Spanish), 112 million
people live in Mexico and 961,121 (0.86%) of them are foreigners living in the country with either a FM2 or FM3 visa. FM2 is for foreign-ers that are here on a permanent living permit, and the latter is for people with temporary work permits. According to the National Popu-lation Council, in 1990 there were less than half a million: in 20 years, the population of foreigners legally residing in the country has almost doubled. That is without counting the endless others that slip under the radar, keep a low profile and are in the country under a tourist visa but that effectively live and work here. “You just have to leave the country before your visa expires and they reseal it when you get back. It’s a good excuse to travel once a year or so”, says a girl from Spain.
Giving a glimpse into Mexico City’s everyday life may help to understand how it is for a foreigner living in the country.
Some areas of Mexico City have become hubs for foreigners, like Condesa and the more traditional neighborhoods of Polanco and Tecamachalco. Although the center of the city, the Centro Histórico, with its new renovation trend, is also becoming a magnet
for the growing wave of foreigners that come here every year.
And then, of course, there is Santa Fe. Merely 20 years ago it was a dumpster, the biggest one in the city, up in the mountains. Then, at the beginning of the 1990s, the developers figured out something that was pretty obvious: it was located in an advantageous position over the city, it was a completely empty land, a mountain on its own, close to the new toll road to Toluca.
And so, the project to build Ciudad Santa Fe began, a suburb much in the American sense, a little outside the city, completely free of the craziness of the overgrowth the city suffers in most of its limits, ready for someone with a plan. Currently, it boasts one of the biggest shopping malls in Latin America, it houses 14% of the total area of offices in the city, mostly foreign capital, employing over 70,000 people, and is also home to over 4,000 households, mostly foreigners that have been relocated to the city for their companies. “It is strange because it’s almost like you are not in the city. Everything is, as a matter of fact, pretty much like maybe the States or London”, says a young French couple living and working in Santa Fe. “But then, suddenly, you see a microbús, or hear somebody blasting Cumbias out of their BMW”.
On the other hand, downtown, or Centro Histórico, has also become the latest trend
for somebody looking to live the real Mexico City experience. “It is not as cheap as it used to be”, says James, an American journalist who has been living here for 10 years, “but it still beats Condesa or Santa Fe and definitely beats any city in the US or Europe. Everything is merely a block away and the food is excellent”.
The recent renovation plans of Centro Histórico include a “revitalization” of the area: to turn it back into what it was, the center of the cultural and social life of the city.
Carlos Slim, the richest man in the world, himself a son of immigrants, grew up here. A few years ago, when the government of the city started looking for funding to push up the area, he was the clear choice.
Asides from buying and remodeling buildings that used to be offices and storage rooms and reinstating them as apartment buildings, there is a project, already in progress, to turn the city into the biggest wireless hotspot of the world.
The first part of the project is underway and there is already a free wireless service that covers the main area around the Zócalo.
“It is amazing. This is placing the city at the level of the most technologically advanced cities in the world”, says Dan, a programmer from Italy. n
56 Negocios i The lifestyle
the lIfestyle feature foreigners LiVing in MeXiCo
Foreigners in Mexico
1930
1940
1950
1960
1970
1980
1990
1995
2000
2010 961,121
159 876
177 375
182 343
223 468
191 184
368 900
340 824
414 562
492 617
Source: Inegi, 2010 Census.
,
,
,
,
,
,
,
,
,
Country of Origin TotalPercent of Foreign Population in Mexico
US 738,103 81.5%
Spain 77,069 8.0%
Guatemala 20,078 3.0%
Italy 13,120 1.3%
South Korea 12,072 1.2%
El Salvador 11,135 1.1%
Argentina 10,187 1.0%
Colombia 10,129 1.0%
Venezuela 8,130 0.8%
Cuba 8,036 0.8%
China 7,125 0.7%
Canada 6,430 0.6%
Honduras 6,258 0.6%
France 6,186 0.6%
Germany 6,134 0.6%
Other countries 20,919 2.9%
Total 961,121 100%
Source: Inegi, 2010 Census.
Foreign Population in Mexico
illustRation archive58 Negocios i The lifestyle
the lIfestyle feature foreigners LiVing in MeXiCo
It’s happened almost without fail every time I meet someone who is vis-iting me in Mexico City for the first time. Visitors enjoy the sights and tastes of the city for a few days, and then, at one point burst out to no one in particular: “I wish I lived here.”
Can’t blame them. Every morning I wake up in my sparse but cozy apartment in a non-tourist-oriented section of Mexico City’s Centro Histórico and head one block south to have a latte made from freshly ground beans at an old neighborhood cafe. Then I head over one block to a fruit juice stand across the street from a tranquil plaza, where I order my usual, a jugo de nopal, a blend of fresh cactus, celery, parsley, orange, and the cactus’s tuna fruit.
Together, my daily breakfast routine sets me back exactly 3.30 usd. It is an amount that back home would barely get me a tall cup of cof-
fee at a typical Starbucks, nevermind the one-liter miracle that is a jugo de nopal –made, just to remind you, from fresh and organic ingredients
that are packed with vitamins and minerals, the kind often considered “high-end” and priced accordingly in the US.
And just how cozy is my new apartment? It’s an open-plan one-bedroom with hard-wood floors, and a new kitchen and bath-room, in a 1936 Art Deco jewel of a building overlooking one of the Centro’s most bus-tling intersections of commerce and street life. My monthly rent is about the amount a typical New Yorker pays for the equivalent of their closet or parking space: 350 usd.
This is life in Mexico City for a young pub-lishing freelancer. Unbelievably cheap and good eating, unbelievably cheap rents, un-believably great living. I regularly dine out, meet friends at cantinas, attend art openings and fashion shows, visit museums, and go to concerts. I buy clothes and newspapers and magazines and electronic gadgets and books. In contemporary Mexico, people like
Living a Romance with Mexico Citya faCtuaL Written in the order of their oCCurrenCe
me, young creative workers in their 20s, are finding out that it is possible to carve out a lifestyle that would be desirable in any ma-jor international city –London, Tokyo, Los Angeles– but for staggeringly less.
We are a growing community of new American exiles, an alternative image to the over-exposed stereotype of white-haired US retirees who settle in places like San Miguel Allende or on the coasts of Baja California.
Indeed, while the US State Department tells us that at least 1 million US citizens live inside Mexico, there is little data track-ing the younger generations of Americans who have chosen to live here in recent years. Anecdotal evidence suggests that number is rising. More and more, in neighborhoods such as Centro, Condesa, Roma, and Coyo-acán, the familiar ring of American English slang can be heard mixing in with the native chilango Spanish. Our curiosity about living in Mexico was piqued not by books such as On Mexican Time, about the slow and easy living in San Miguel Allende, but by rough-edged urban films such as the celebrated Amores Perros and Y Tu Mamá También. They are drawn not only by the universities or the vibrant music and art scenes, but also because living in Mexico City offers a more sensuous and unpolished kind of urban liv-ing that is becoming more difficult to find in cities like New York or Los Angeles.
Of course, that can always change. As more foreign retailers surge into the Mexico City market, they bring with them US-style products and consumer culture. Mexico
by danieL hernÁndez
illustRation archive60 Negocios i The lifestyle
City’s middle-class districts are now dotted with US-style malls and shopping centers, Wal-Mart and Home Depot, Subway and Pizza Hut. Nevertheless, the vast urban land-scape of Mexico City maintains a cohesive sense of character and culture that is all its own, allowing for a vibrant, elastic, and af-fordable way of living that has drawn many young people, like Niki Nakazawa.
“[I] decided to come after I met a group of young Mexican architects in Venice at the Biennial in 2007”, said Nakazawa, 23. “I had studied abroad in Oaxaca for a quarter and visited Mexico City before but wasn’t sure I wanted to move there until I made these friends who convinced me.”
Nakazawa moved in November 2007, not long after graduating from the University of Chicago, but not before weighing her op-tions. “I was thinking New York or Buenos Aires”, she said.
In the end she settled in Mexico City, find-ing herself a comfortable niche in less than a year. Nakazawa is an editorial coordinator at Turner, the Spanish publishing house, where she specializes in art books and catalogues. She also works on a media and culture proj-ect called Toxico Cultura and moonlights by working with an agency that books interna-tional DJs. She lives in the Condesa district with a journalist roommate and spends a lot of her free time at galleries, cantinas, and nightclubs.
“I am doing way more than I would ever have been able to do in New York”, Naka-zawa asserts.
The influx of young Americans in Mexico City raises the familiar issues of assimilation and reverse immigration, but it also poses other questions: What does it mean to be an American in Mexico?
It’s a question that I grapple with myself, having lived here for a summer directly after leaving college, and since returned for an in-definite stay in 2007. For me, coming to Mex-ico City was always a dream the origins of which I’ve never been able to properly place. I was born and raised in San Diego but be-cause my parents are native of Tijuana, our cultural center was always south of the bor-der. Even so, in June 2002, upon graduating from the University of California at Berkeley, I moved to Mexico City after securing a part-time job at an English-language newspaper called The News, a beacon for many aspiring journalists who desire to work in Mexico. It was a jolting cultural transition, even for a
Mexican-American. I had never been inside Mexico south of Ensenada or east of Mexi-cali, basically the far northwest corner of the country, and my Spanish, I would find, was noticeably Americanized. I spoke what Mex-icans referred to as “pocho Spanish”. It made me stand out in public places and while deal-ing with merchants, and resulted often in me losing a handful of pesos here or there while misunderstanding a transaction.
I took it all in as part of the growing pains of assimilating into a new place. That sum-mer I learned how to eat like a native chi-lango: on the streets, from reliable vendors of tacos and tamales.
I learned how to commute like a true chilango, gamely through the city’s complex network of subway lines, minibuses and taxis. And I learned that being an American in Mexico came with built-in advantages: an openness to new places, foods, and neigh-borhoods, a hunger to better understand Mexican culture and history, a curiosity for expanding the ties that bind Mexico and the US together.
Since I’ve returned I’ve met considerably more people like me and Niki Nakazawa, who says we are not alone.
“It seems like more people are realizing that Mexico City might be able to offer them more than a city in the States where you are spending the majority of your income on just scraping by”, she told me. “Here, I feel like my social and professional lives are more inte-grated. I don’t have to chose between having a career or having a life”. n
LiVing in MeXiCo City offers a More sensuous
and unpoLished kind of urban LiVing that is
beCoMing More diffiCuLt to find in Cities Like neW york or Los angeLes. the
Vast urban LandsCape of MeXiCo City Maintains
a CohesiVe sense of CharaCter and CuLture
that is aLL its oWn
art fundaCión/CoLeCCión juMeX
fundación Jumex:The Juice ofContemporary art
When you think of patronage of the arts, a can of fruit juice is not the first thing that comes to mind. but that is not the case in mexico as Jumex, one of the country’s best known fruit and vegetable juice companies, has made an impact in this area. Conceived in the mind of its President eugenio lopez alonso, a lover of contemporary art, the Jumex foundation/Col-lection has became one of the world’s most im-portant venues in terms of its number of pieces and its variety of artists and disciplines. The foundation, which also supports the work of up and coming artists, is one of the best organiza-tions currently supporting contemporary art.
located in the industrial outskirts of mexi-co City in Jumex’s biggest factory and distribu-tion center, the facility has more than 1,400 square meters (almost 15,000 square feet) of exhibition space, a library and a large storage area that houses more than 1,800 pieces. The
collection began with both minimal and con-ceptual pieces from the 1960s and 1970s; later, pieces from 1990s artists were included in the collection. Today, the Jumex foundation/Col-lection grows in size and quality by acquiring pieces that have been very important for the development of contemporary art and through its support of proposals from new national and international artists. The collection is always looking for new languages that express the way art is conceptualized and developed.
The Jumex foundation/Collection is an institution open to new dialogues in art and to the constant change that translates into new challenges and new perspectives to show the public. Today Jumex has a very strong identity in the world of art. it is considered one of the most important supporters of contemporary art through its patronage of artists and its col-lection of important works.. n
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Photo courtesy iván cordero62 Negocios i The lifestyle
IntervIew iVÁn Cordero
Demetria is the name of a house, a hotel, a dining room, a dinner date, an art collec-tion, a gallery... It is the name
of Mexican architect Iván Cordero’s proj-ect and in a few months it will be that of a cultural and residential corridor in one of Guadalajara’s most seductive areas.
Located in the Colonia Americana –for-merly known as Lafayette and considered one of Guadalajara’s flagship areas due to its architectural character– Demetria is one of those projects where utopia be-comes slightly real.
On La Paz Avenue, between Simón Bolívar and Unión, in an area of almost three thousand square meters, is Demetria’s heart: an architectural complex that includes a 38-room boutique hotel, ten 350-square meter apartments, 88 parking spaces, two restau-rants, a gallery, a bookstore, a spa, a business area, a design exhibit hall, a delicatessen market and popular art and antique stores.
The complex is part of what will one day be Distrito Demetria, along with other proj-ects such as the Black Swan luxury apart-ment tower –located on La Paz and Juan Ruiz de Alarcón, only two blocks west of the
hotel– and the Jalisco Portrait Museum –a collection of paintings from the 18th century open to the public during week-ends which was once the home of Jalisco architect Ignacio Díaz Morales, on Efraín González Luna street.
The idea behind Distrito Demetria is to involve guests and inhabitants in its in-frastructure and services in an innovative open-city model, expanding spacial limits through discounts in restaurants, house-keeping services, use of the business cen-ter and membership to the hotel’s facilities and amenities, among others.
demetria: a house, a living Room, an art collection… a lifestyle
An Interview with Iván Cordero, Mexican architect and author of one of the newest boutique hotels in Mexico.
Photos courtesy of iván cordero64 Negocios i The lifestyle
past and FutureDemetria consists of two residences which form part of Iván Cordero’s aesthetic ap-proach and are key to understanding 20th century architecture, both locally and glob-ally: Casa Quiñones, built in 1930 by archi-tect Pedro Castellanos for the Quiñones family and considered one of Mexico’s first modernist constructions, and Casa Franco, built by architect Luis Barragán.
The cohesive element between both resi-dences is the tower designed by Iván Corde-ro: a fifteen-story cube located in the heart of the complex, put together like a child’s toy, with smaller cubes made of glass, steel and concrete. The building coalesces with Casa Quiñones and Casa Franco through steps, terraces and crystal walls.
Just as every person is different, so is each of the boutique hotel’s 38 rooms. Different but kindred thanks to the lens of photog-rapher Efraín Alvarado, whose images are exhibited in each room to remind guests ex-actly where they are: the Lafayette neighbor-hood, a symbol of the Francofying Mexico underwent at the turn of the 19th century.
A few floors above the hotel is Demetria’s residential area, with ten highly spacious, glass-clad homes whose only furnishing is the almost all-round view above a bustling metropolis.
Back at ground level, the Demetria res-taurant, the Balzac bookstore, a multifunc-tional gallery, business halls and designer stores mingle in the central tower. Casa Franco houses a popular art store with a selection of Iván Cordero’s work, while Casa Quiñones is home to the luxury Decó restau-rant, a grocery store, a delicatessen and an antiques store.
And it is all contained in one name: De-metria, a concept in which it is possible to wake up in a setting of glass in playful juxta-position with quarry stone carved in the 18th century; to have breakfast sitting in a movie director’s chair; to travel from the Colonial period to the 21st century through a collec-tion of art and objects that beckon from ev-ery quarter; to witness how a gallery, remi-niscent of an industrial warehouse, turns into a flower shop, the flower shop into a catwalk and the catwalk into a performance. To see how Guadalajara’s architectural past and future converge naturally in every space.
Iván Cordero talked to Negocios about Demetria.
—Why demetria?I’m attracted to words that contain the “tr” sound: trigo, trineo, trama. I tried other names before, and then one day I remem-bered Demetrio Macías, the character from
the novel The Underdogs [by Mexican writ-er Mariano Azuela], and decided to name the project Demetria.
—Why in guadalajara’s lafayette neighborhood?I have always been interested in heritage rescue. When you think of Mexico’s heri-tage, you immediately think it is restricted to folklore and nothing is farther from the truth. For example, by the end of the 19th century and beginning of the 20th century, Mexico was under an important French influence and you can appreciate this in the neighborhood’s houses. This is the environ-ment that I wanted for Demetria.
—How did you come up with the idea of a residential complex?I am passionate about old buildings that have architectural value. In 2004, I found out that the house that architect Pedro Cas-tellanos built for the Quiñones family in the 1930s was being sold “as land.” This was the first modernist house in Guadalajara and some people say the first in Mexico.
When I received the keys to the prop-erty and I went to visit, I realized that I had received it exactly as it was left 18 years before by the people who lived in it: the beds were unmade, there were clothes in
IntervIew iVÁn Cordero
The pieces of Demetria’s heartit includes a building by architect iván
cordero in guadalajara’s colonia americana.
it is surrounded by two historic homes: casa
Quiñones, one of the country’s first modernist
constructions, built in 1930 by architect pedro
castellanos, and casa franco, built in 1931 by
luis Barragán.
the complex houses a 38-room boutique
hotel and ten 350-square meter apartments,
88 parking spaces, two restaurants, a gallery,
a bookstore, a spa, a business area, a design
exhibit hall, a delicatessen market and popular
art and antique stores.
Distrito Demetria
a corridor of comfort, services and culture,
comprising the complex of buildings by iván
cordero, ignacio díaz morales and luis Barragán,
the Black swan luxury apartment tower and the
jalisco portrait museum, where architect díaz
morales used to live.
the district was designed as a work of art that will
evolve by itself. it merges art, architecture, new
technologies and hospitality with the exclusive
services of a hotel that is unique in the city.
owners and guests can experience the
district’s environment and use it to expand
their own universe.
the armoires and dirty dishes in the kitchen. The house was inspiring in itself and I had already thought about building a space such as Demetria.
A couple of months after buying Casa Quiñones, I bought the Hernández family home, a construction from the 1970s with no architectural value but which was lo-cated on a lot that was ideal for projecting my building —the space for the hotel, the restaurant, the bookstore, the gallery and the residences— and two years later, in 2006, the house that architect Luis Barragán built for the Franco family in 1931 also became part of the project.
With that property, the project has an approximate surface area of 3,000 square meters.
—casa Quiñones has a unique architec-tural value. Was there anything about it that particularly surprised you?Yes. The art deco tiled fountain, which was perfectly preserved in the center of the rear courtyard. When I received the building, you could not see the fountain because it was covered with plants. During my first tour I tripped over it, so the next time I brought a cazanga [a type of knife] with me and started cleaning it up. When I finally uncovered it, I felt very fortunate.
Photo courtesy of iván cordero66 Negocios i The lifestyle
Leisure spacesDemetria restaurant
located on the ground floor of iván cordero’s building, the restaurant offers exquisite menus to
inhabitants and guests and anyone for whom food is sacrosanct in simple, elegant surroundings.
Balzac Bookstorea space that specializes in the seven fine arts, where students and art lovers can combine the
pleasure of reading with a good coffee.
Demetria Gallerya space that resembles an industrial warehouse from where you can see the entrances to casa
Quiñones and casa franco. the gallery can be converted into an art exhibit, a flower shop, a bar
area, a catwalk…
Decó restauranta unique space located in what used to be the kitchen of casa Quiñones. open only at night,
the restaurant offers an exquisite selection of wines and dishes created by chef rodrigo díaz
clouthier, who selects the produce and spices daily to create and present a limited edition of fine
cuisine.
ultramarinoa delicatessen in casa Quiñones that offers an array of products that are part of rodrigo díaz
clouthier’s cuisine.
antiques halliván cordero shares a part of his collection with the most demanding collectors.
popular art gallerythe house created by luis Barragán —one of the first contemporary collectors of popular art in
mexico— showcases and sells a selection by iván cordero, a burst of color and quality: burnished
clay from tonalá and blown glass from tlaquepaque, jalisco; tin and black clay from oaxaca; toys
from Quiroga, michoacán; boxes from olinalá, guerrero; trees of life from metepec, estado de
méxico; talavera ceramics from puebla and guanajuato…
— demetria’s buildings have a distinct architecture. is there a common idea for the project?Yes. I am certain that the hotel rooms, the apartments and public spaces become part of the form and spirit of Lafayette neighbor-hood. They give strength to it. A few decades ago the neighborhood changed from residen-tial to commercial and people left. The idea is to bring people back. Places die when they are not inhabited; human presence brings balance and sustainability.
—How does the project integrate into the neighborhood?Through architectural solutions that are related to the architecture and natural context. For example, the Franco, Cordero and Quiñones buildings connect through terraces. From the gallery in the central building, it is possible to see the naked walls of Casa Quiñones and Luis Barragán’s design for Casa Franco’s façade, which has been conserved since 1931. The Sky Bar, which is on the fifth floor of the new build-ing is at tree level, so they become a decorative element.
When I sat down to create the residential complex, my whole approach had to do with tangible and intangible heritage. I had bought a fortune in quarry stones, most from the 19th century, from a Querétaro collector. I wanted to recover Mexican ideas, ways and forms with-out them being necessarily folklore. In general, the project is a dialogue.
—a dialogue between what?A dialogue considering that things happen all the time. A dialogue in which old and new concepts converse.
For example, at the entrance to Demetria gallery — a type of warehouse made from concrete blocks and framed in glass walls — I designed a hallway that evokes residential architecture from ancient Guadalajara.
The complex’s common areas showcase works by artists such as Chucho Reyes, José Fors, Ulises González, a traveling exhibit by Juan Rodríguez Juárez, the painter of the viceroyship, author of the canvases for the Altar of the Kings in Mexico City’s Metropoli-tan Cathedral.
The gallery is intended to be part of the dialogue. At times it will be an art exhibit, a catwalk, flower shop, meeting hall...
In short, a dialogue between old and new, vernacular and academic. n
The city of Querétaro –state capital of Querétaro– is full of rich history, as evidenced by the magnificent architecture in the Centro Histórico
(Historic Center). In fact, the UNESCO declared Querétaro a World Heritage Site. Among the edifices that stand out are: Templo y Convento de la Cruz (Temple and Convent of the Cross), Templo de San Felipe Neri (The Temple of Saint Felipe Neri) and Templo de Santa Rosa de Vi-terbo (The Temple of Saint Rosa of Viterbo). These constructions are beautiful examples of baroque architecture, and their interiors house valuable altarpieces made by artists from the colonial period. The city also has large plater-esque-style houses, some of which have been converted into museums or elegant restaurants offering the best in regional cuisine.
As you walk along Querétaro’s cobblestone streets you can visit the Teatro de la República,
Where?the city of Querétaro is located in Mexico’s central region, 220 kilometers (136 miles) north of Mexico City. the climate is mild, with average temperatures ranging between 22o and 25o C (72o and 77o f). expect light winds at night.
an important building where Mexico’s constitution was signed in 1917. You’ll also find numerous art galleries, restaurants and cafes with bohemian atmospheres, that stand in sharp contrast to the modern hotels and commercial zones. In the city’s surrounding areas, you’ll see the impressive Arcos aqueduct, one of Mexico’s most important water delivery systems built during the colonial era. After having undergone several restorations, today the aqueduct is an important city symbol.
Also nearby lies the town of Bernal, where you’ll see the third largest monolith in the world. There you can also visit the Franciscan missions of Sierra Gorda, which are important architectural structures. In addition, you can explore the archaeological ruins of Ranas and Toluquilla or enjoy swimming resorts in the picturesque town of Tequisquiapan, located 74 kilometers (46 miles) east of the city. n
querétaromexican colonial jewel
destInatIon Querétaro
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68 Negocios i The lifestyle
From the Hollywood stereotype as a source of shade to the country’s seal depicted on the back of every coin, cacti are emblematic plants
of Mexico. In fact, Columbus introduced the prickly-pear cactus or nopal to the Old World during his first expedition, and since, it’s been naturalized in certain areas. For instance, nopales are easily identified on the background of movies set in Southern Italy, Spain and Northern Africa.
Now we know that many medicinal pro-perties have been attributed to nopalitos. Although most are not justified claims, cli-nical trials have confirmed that nopalitos consumption reduces blood sugar and high cholesterol levels. In addition, their high mu-cilage content is an excellent source of edible fiber that can improve digestion (and that is why there are some new supplements made out of this plant).
Readers may be surprised to discover the agronomic importance of the prickly-pear cactus’ (Opuntia ficus-indica and several related species), with a cultivated area rea-ching one million hectares (about 2.5 million acres) in 40 countries.
Forage and fodder represent its main production purpose. In fact, considering that these plants are irrigation-free, growing while storing water, and anticipating periods of drought, they are often used as food and water reservoirs. By planting thorny varie-ties, the cattle is discouraged from eating the plants until the rancher, with the use of a handy flame-thrower, removes the spines and enables the cattle to feed.
Despite their very attractive colors, sweet-tasting flesh and a long shelf life, the cactus pears, known as tunas in Mexico or figo d’india in Italy, have not become a global commodity due to its hard seeds. However, researchers in Mexico, Israel, Italy, and the US are developing varieties bearing fewer, smaller, and softer seeds that could attract the global consumer.
A restricted-to-Mexico use of the prickly-pear cactus is the preparation of young stems as greens for salads. In markets throughout the country, consumers can find rural wo-men removing young cactus stems’ spines. Chopped or sliced, nopalitos can make a fresh salad when mixed with the ingredients of pico de gallo –tomato, onion, cilantro, and
lime juice. Nopalitos are also popular at barbecues and are an increasingly frequent ingredient of the New Mexican Cuisine. It is even possible to find tortillas made of this special cactus. The difference between tra-ditional corn tortillas and nopal tortillas is that the second ones have less calories and more fiber.
But the prickly-pear cactus is not the only family member with economic importan-ce in Mexico. The fruits of many columnar cacti are also consumed. In some cases, ar-chaeological evidence suggests that their use, which currently ranges from the mere har-vesting of fruit from wild plants to the esta-blishment of highly productive commercial plantations, dates to the origin of agriculture some 10,000 years ago. For example, Ste-nocereus queretaroensis or pitayo is exten-sively cultivated in Southern Jalisco. Such plantations require minimal management and the popularity of their fruits has increa-sed within the region, mainly due to their attractive red, purple and yellow colors, and their soft and small seeds. Similar stories can be told for other columnar cacti throughout the country.
Prickly-Pear CactusA deceivingly universal crop from Mexico
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A third group experiencing a dramatic agronomic expansion is vine cacti. Known in Mexico as pitahayas –or dragon fruit in Southeast Asia, Hylocereus undatus, Seleni-cereus megalanthus and a few related spe-cies are currently under cultivation in over 20 countries worldwide, given their highly increasing demand in Europe, Japan and China. Commercial plantations are common in Yucatán, Oaxaca, and even the drier state of Puebla, where they’ve become productive in just a few years after plantation. Besides a faster return on investment, pitahayas have several advantages over other cacti fruits, spearheaded by a very attractive peel, sweet and fresh pulp, small seeds (comparable to kiwi), and a relatively long shelf-life.
Mexico has given the world several agri-cultural wonders, such as maize, tomato, and chocolate. Given their minimal management requirements and low-water consumption (a great advantage under various climate change scenarios), in addition to the prickly-pear cactus’s multiple uses and the family’s variety of fruits, Mexican cacti are a feasible candidate for becoming the next universal crop. n
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70 Negocios i The lifestyle
“The visitor will be able to appreciate, investigate or even carry out photographic safaris, or simply observe species like the gray whale and the monarch butterfly,” says the Mexican Tourism Promotion Department on its website (www.vivemexico.com)
“Traveling around the country and loo-king at its forests, jungles or deserts will be like taking an intensive geology course for the tourist. They’ll be able to see thousand-year-old fossils and be captivated by the sight of sidereal bodies and star showers, as well
Flowing downriver through the fast waters of Veracruz, rappelling hundreds of feet through a canyon in Jalisco, or discovering the Ma-
yan traces in the Yucatán Peninsula’s cenote sinkholes, are all adventures you can have in Mexico.
According to the Ministry of Tourism, the eco-tourism potential is made up of 22 biosphere reserves, 47 national parks and 9 unique flora and fauna species’ protection areas.
as reaffirming their commitment to the res-cue of flora and fauna and environmental education.”
The latest study from the Mexican government’s Tourism Studies Center, “Pro-file and Satisfaction Degree from Tourists who travel to Mexico on Eco-tourism Moti-vations,” published at the beginning of 2007, says that tourists coming to Mexico to prac-tice this sort of tourism spend an average of 7-10 nights in some of the country’s des-tinations. The report collected 8,500 inter-
a Country Waiting to be explored
Hundreds of sites for nature lovers are just waiting to be explored in Mexico. Camp-ing, mountaineering, diving or climbing feature among the most popular activities.
the lIfestyle rePort eCo-tourisM
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views from both national and international tourists.
Luis Medina Ortega, director of Jalisco-based Ecotours Guadalajara, in West Mexi-co, says that “eco-tourism can be practiced between ages 14 and 50, although there are people aged 60 who claim to have an exce-llent physical condition and sometimes beat us.”
Not everybody climbs up and down mountains, camps in the woods or the jungle, descends full-speed through a canyon down
a rope, climbs huge stones, crosses from one side of the hill to the other, or resists mosqui-toes and other bugs and animals.
According to the abovementioned report, 80% of people interviewed said they had college education. The more the education degree, the more the environmental cons-ciousness. The average annual wage of the international tourist is 80,000 usd, while the national visitor earns 43,000 usd a year.
Among the eco-tourism lovers’ favorite des-tinations in Mexico are Mexico City–although
Most of those Who Visit MeXiCo CoMe froM the us,
foLLoWed by eu, Canadian and Latin
aMeriCan tourists. the study aLso says the 25-34 year-oLd popuLation segMent enjoy this kind
of tourisM the Most.
Photos courtesy of xcaret72 Negocios i The lifestyle
it seems hard to believe, attractions can be found on the outskirts of the city, Jalisco, Yu-catán and Michoacán.
mexican eco-tourism paradise sites
There are hundreds of sites to practice eco-tourism in Mexico. You only need to Goo-gle it once to decide what you want to do: camping, mountaineering, extreme sports, diving, climbing, cave exploration, among other activities.
If you’re looking for a quiet, outdoors acti-vity, Tapalpa, Jalisco, is an option. The town is located some 130 kilometers from Guadalaja-ra. Tapalpa has places to practice tirolesa (zip-line, flying fox, zip wire, aerial runway, death slide or tyrolean crossing), which consists of sliding along a steel cable with the aid of pu-lleys. Xcaret is located at the country’s extre-me opposite, in the Yucatán Peninsula, next to the Mexican Caribbean. Only 8 kilometers away from Playa del Carmen, this park offers everything from Mayan ruins to caves, under-ground rivers and cenote sinkholes.
San Cristóbal de las Casas, Chiapas, is also located in South Mexico. The El Chorrea-dero waterfall, 60 kilometers from town, is a paradisiacal landscape for the practice of speleology and rappel.
To fly, nowhere beats Cholula, 9 kilome-ters from the colonial city of Puebla, in the country’s center. This place boasts several flying schools to paraglide through the skies.
And if you are looking for rivers, La Anti-gua, 25 kilometers from the Port of Veracruz, in the Gulf of Mexico, has 17 class 3 and 4 rapids that will make you travel at great speed. n
there are hundreds of sites to praCtiCe eCo-tourisM in MeXiCo. you
onLy need to deCide What you Want to do: CaMping, Mountaineering, eXtreMe sports, CaVe eXpLoration,
aMong other aCtiVities.
