NAFTA Works
A
MONTHLY
NEWSLETTER
ON NAFTA
AND RELATED ISSUES
May 2006
Volume 11, Issue 05
The Connectivity Zone, a new logistic platform
project in Durango, México
The northern zone in Mexico has great
resource diversity, as well as many industries.
Some examples of these various industries are:
mining (gold, silver and steel), wood, paper, construction, food processing machinery, industrial
gases, car parts, beer brewers, pipes, and furniture, among others.
In 2002, this zone produced: 8% of the
nation’s electricity, 37.4% of the cars and light
trucks of the country, and 51.5% of the automobile
motors produced in the country. In the last 4 years
the investment has been greater than US$5.253
million. 298 companies have settled, generating
over 90 thousand formal jobs. In 2002, though the
national economy grew at a rate of 0.9%, the region grew at a rate near 2.1%. The milk industry of
the zone is one of the most important of Latin
America. The region has one of the more important iron and steel companies of the country in
addition to being an important farming center.
The geographical location of this zone
gives a special advantage for commerce within the
country as well as with the outside. This zone is
one of the central axes of the country due to the
connections that is has. Also, it is one of the most
prosperous zones in the country due to the proximity to the United States and the opportunities
that NAFTA has created. It is through NAFTA that
many of the most recognized services companies have found this zone as an excellent business opportunity. In addition, this region has
most of the assembly companies’ plants as well
as their suppliers and distributors. In the last
few years, a lot of infrastructure investment has
been done in this region to achieve a better
result.
Looking to take advantage of the opportunities that this region offers, and considering that it is a strategically important point in the
distribution of merchandise in the national and
international market, several businessmen
launched a project called the Connectivity Zone
in Gomez Palacio, Durango.
The Connectivity Zone is a project
specifically focusing on the installation of non
polluting light industries and specialized warehouses for logistics and distribution merchandise products in local, nation and global markets. In addition, the zone will promote the development of clusters that take advantage of the
region’s benefits. It already is using an agreement with the harbor authority of Valencia which
gives advantages in dealing merchandise between Mexico and the Mediterranean in addition
to being able to serve as a continental platform
for the Asian products that look to enter in the
American market.
continues on page 2
M
exico Economic Update
Inside this issue:
The Connectivity Zone, a
New Logistic Platform in
Durango, Mexico
1
Mexico Economic Update
1
Diario Oficial Notices
3
Success Stories
3
Profile of San Luis Potosí
4
Profile of South Carolina
5
Selected Readings
5
Related Events
6
This project will be able to benefit from an important
network of highways, railroads, and airports as well as proximity to the main ports of the country, which facilitated the
commerce. Since 70% of American-Mexican commerce transport is via road transportation, the proximity of highways is a
definite asset of the industrial park.
Connectivity with Mexican Cities
City
Miles
Saltillo, Coahuila
172
Monterrey, Nuevo Leon
225
Chihuahua, Chihuahua
283
Guadalajara, Jalapa
487
Ciudad Juárez, Chihuahua
510
México City
626
Connectivity with US Border Cities
City
Miles
Eagle Pass, Texas
360
McAllen, Texas
365
Laredo, Texas
374
Del Rio, Texas
415
Brownsville, Texas
426
El Paso, Texas
519
The industrial park will have a surface of 34 ha. The
power will be supplied by “Comisión Federal de Electricidad
division del Norte”, and water has been authorized for
3,586,600 cubic meters per year. In addition the zone counts
on a gas capacity of 5,000,000 ft3. As it mentioned above, the
region has an important industrial zone that lodges important
companies of different sectors like the automotive, metalmechanical, textile, electronic, and food. Moreover, it houses a
customs agency, insurance agencies, and telecommunications
infrastructure, among other communications services. For instance, lodging services, internet, frame relay links, point-topoint digital links, multipoint digital links, and analogical lines
will be offered in order to make the project more efficient.
The Connectivity Zone has an investment that surpasses the $40 million for the construction of the necessary
infrastructure in order to facilitate the commercial activities.
The local government offers some supports for those companies that invest in this zone. In addition, it is anticipated that
there will be a need for universities to cover the necessities
that the zone presents, since it is estimated that this project
generates more than 12,000 direct jobs and 60,000 indirect
ones, which leads to the development of a new technological
organization in the zone.
In addition to being a project that promotes commerce and businesses, the zone of connectivity also offers
housing for executives. It is planned to construct commercial
sites, country clubs, and a cultural center with all the services
such as: a babysitting area; gas stations; restaurants; collective maintenance, lighting, and cleaning services; surveillance;
and security. This will serve as an incentive to the sector services and the development of the zone.
The industrial park is currently in the first stages of
development.
If you are interested in knowing more about this project, please
contact:
Connectivity Zone
Carretera Gómez Palacio, DGO – Chihuahua Km. 6.5
(Ejido El Vergel), Calle 5 de Mayo s/n
Connectivity with Ports
City
en Casa Grande del Vergel,
Miles
C.P. 35120
Mazatlán, Sinaloa
340
México
Altamira, Tamp.***
580
Tel: 52 (871) 714 56 10
Manzanillo, Col.***
710
Contact person: Eduardo Holguin
Houston, Texas
715
Email: [email protected]
Los Angeles, California
Volume 11, Issue 05
1,994
Page 2
D
iario Oficial Notices
• Decree approving the Agreement on Promotion and Mutual
Protection of Investments, between México an Australia
signed on 23/08/2005. (April 11)
• Decree approving the Agreement on Customs Cooperation
and Mutual Assistance, between Mexico and Korea, signed
on 9/04/2005. (April 11)
• Decree modifying, adding and revoking certain provisions of
the Federal Telecommunications Law and the Radio and TV
Law. (April 11)
• Decree approving the Treaty on Criminal Law Assistance,
between Mexico and Switzerland. (April 11)
• Project of the Mexican Official Standard PROY-NOM-044-
SEMARNAT-2006, establishing the allowed maximum limits
of hydrocarbons, carbon monoxide, nitrogen oxides from the
exhaust pipes of new engines using diesel as fuel, used in
new vehicles with a gross weight of more than 3,857 kilograms, including all new units equipped with such type of
engines. (April 26)
• Agreement modifying the existing one which identifies the
tariff lines of the import/export Tariff Law subject to the compliance of Mexican official standards when such goods are
exported or imported. (May 3)
• Decree promulgating an Agreement on Maritime Transporta-
tion between México and China, signed on 24/01/05. (May
8)
• Decree promulgating an Agreement on Cooperation and
Mutual Assistance on Customs Matters, between Mexico
and Korea, signed on 09/09/05. (May 11)
• Annexes 2, 4 and 5 of the Fiscal Resolution for 2006 pub-
lished on 28/04/06. (May 12)
Success Stories
KMG Chemicals, Inc. expands plant in Matamoros
KMG Chemicals, Inc. is a global provider of specialty
chemicals in carefully focused markets. Just this last month
(April 2006), they announced that a pentachlorophenol (penta)
plant in Matamoros is now fully functional. KMG is the only
producer of penta in North America. The expansion was an
investment of approximately one million dollars and will add a
minimum of 30 percent more penta production capacity. The
company grows by acquiring and managing stable chemical
production lines and businesses with established production
processes. Neal Butler, President and COO of KMG, stated,
“While the plant has been operating at record production levels
for several months, we are now operating at sufficiently high
levels as to reduce our backlog of penta orders and ensure our
ability to meet market demand going forward.”
Steris Corporation (STE) transfers to the State of Nuevo
Leon
The Steris Corporation (STE) has announced the selection of
the Monterrey area of Mexico as the future site for
manufacturing operations that are to be transferred from Erie,
Pennsylvania. The Avante Group, a Monterrey-based real
estate development company, located in the City of
Guadalupe, has agreed to lease a facility to STE that
comprises approximately 13 acres in the Guadalupe Industrial
Park. This site was selected because of the many advantages
it offers to the company including an excellent infrastructure,
supply base, and access to distribution points, as well as the
availability of skilled labor. The plan is to transfer the
operations in phases, which are expected to continue through
the summer of 2007. Once the phases are completed, the
facility will manufacture sterilization equipment for use in
healthcare institutions, pharmaceutical production facilities,
and research laboratories.
Toyota expands production capacity in Baja California
Created in 2004, Toyota Motor Manufacturing de Baja
California (TMMBC) produces Tacoma pick-ups for sale in the
United States and Mexico. They recently announced their
plans to expand production capacity of Tacoma pick-up trucks
by 20,000 units, for a total annual capacity of 50,000 vehicles
and 200,000 Tacoma truck beds. This increase will require an
additional investment of 37 million dollars.
TMMBC’s current operations include welding, paint and
assembly, and the plant now employs approximately 800
workers. “Thanks to a close partnership with local, state and
federal governments, our sales operations in Mexico and the
US, and our excellent asociados, each of these expansions
has been successful,” said Bob Ried, vice president of
TMMBC. Estimating an additional 200 jobs to be filled, Toyota
also approximates that by 2008 they will have the annual
capacity to build 1.83 million cars and trucks, 1.44 million
engines, and 600,000 automatic transmissions in North
America.
Volume 11, Issue 05
Page 3
San Luis Potosí
Major exports:
Electrical machines and equipment, chemical
products,apparel, textiles, iron products, plastics,
Exports:
US $1857 Millions (2004)
Imports:
US $1446 Millions (2004)
Maquiladoras:
employing 13,138 w orkers
FDI Companies:
Capital:
Main cities:
188
San Luis Potosí
SLP, Soledad de Graciano Sanchez, Valles,
Rioverde, Matehuala.
Population:
Foreign Direct Investment
(Millions of US Dollars)
286
2,410,414 (2005)
59% in the urban area
63% under 30 years old
36 persons per square kilometer
208
183
Education:
89% Literacy rate
180,199 w ith more than High School
135
9,252 Masters or Ph.D.
Households w ith:
119
89
16% Computers
65
86% TV
38.9
73% Refrigerators
61% Washing Machine
Infrastructure:
6,738 km of paved roads
14.8
1994
1.1 6.1
1996
1998
4.5
2000
2002
2004
320 km of highw ays (4 lanes)
1 International Airport
69 Universities and technological institutes
Foreign Direct Investment by Sector 94-05
(Percentage)
60 Hospitals
Com m erce, 3.0
327,845 Fixed telephone lines
30 Radio stations
Other services, 0.5
Transportation & Mining, 0.2
com m unications,
0.9
18 TV stations
Gross Domestic Product 2004
Manufacturing, 95.3
Others, 16.8
Transportation &
com m unications,
11.3
Financial
services, 13.6
Volume 11, Issue 05
Manufacturing,
24.1
Com m erce, 18.9
Other services,
15.3
1,151 Millions of US Dollars
Web-site:
http://w w w .sdeslp.gob.mx
E-mail:
[email protected] ([email protected])
Tel/Fax:
011 52 (444) 834 3600 / 011 52 (444) 825 6674
Page 4
South Carolina
Selected Readings
From 1993 to 2005, South Carolina’s exports to Mexico grew at
an average annual rate of 19%
Mexico is the third largest market for South Carolina’s goods.
http://www.imf.org/external/pubs/ft/weo/2006/01
/index.htm
Exports to Mexico
1993-2005 (Billions of US Dollars)
1.1
.9
.8
.7
.7
.8 .8
.9
.6
.3
.1
.2
World Economic Outlook : Globalization and
External Imbalances (International Monetary
Fund, April 2006)
.3
The World Economic Outlook (WEO) presents the
IMF staff's analysis and projections of economic
developments at the global level, in major country
groups (classified by region, stage of development,
etc.), and in many individual countries. It focuses
on major economic policy issues as well as on the
analysis of economic developments and prospects.
It is usually prepared twice a year, as documentation for meetings of the International Monetary and
Financial Committee, and forms the main instrument of the IMF's global surveillance activities.
World Development Indicators 2006 (World
Bank, April 2006)
1993
1995
1997
1999
2001
2003
2005
Source: US Census, WISER and SE-NAFTA Series. 2000-2005, NAICS
series.
By Sector
(NAICS)
2005
Others, 23.0
Plastics And
Rubber Prod,
27.1
Machinery,
Except Electr, 9.5
http://web.worldbank.org/WBSITE/EXTERNAL/
DATASTATISTICS/0,,contentMDK:
20899413~pagePK:64133150~piPK:64133175~
theSitePK:239419,00.html
Looking for accurate, up-to-date data on development issues? This indispensable statistical reference allows you to consult over 800 indicators for
some 150 economies and 14 country groups in
more than 80 tables. It provides a current overview
of the most recent data available as well as important regional data and income group analysis in six
thematic chapters: World View, People, Environment, Economy, States and Markets, and Global
Links. The CD-ROM editions contain 43 years of
time series data, covering 1960 to 2004, and offers
mapping, charting, and data export formats.
Little Data Book 2006 (World Bank Press, April
2006)
Chem icals, 17.8
Textiles And
Fabrics, 10.2
Computer And
Electronic , 12.4
http://publications.worldbank.org/ecommerce/
catalog/product?item_id=5367270
A pocket-sized reference on key development data
for over 200 countries that provides profiles of each
country with 54 development indicators about people, environment, economy, technology and infrastructure, trade, and finance.
Source: US Census, WISER and SE-NAFTA. SIC Series 1993-2000
NAICS series 2001-2005.
Volume 11, Issue 05
Page 5
N
AFTA Related Events
May 17 – 18
June 6 – 8
“Logística2006“
“ALIMENTARIA MÉXICO“
Juárez, Chihuahua
México, D.F.
The largest tradeshow and conference dedicated 100% to
promote Logistics Services in Cd. Juárez, Chih. Two days
packed with educational and innovative solution sessions
focused specifically on logistics and distribution operations. This conference provides the tools and techniques
the maquiladora industry needs to improve logistics and
distribution knowledge, solution development, and operating performance. Maquiladora’s representatives will heart
from expert speakers, exchange ideas with suppliers in an
open panel, and network with vendors.
This is the biggest international food and beverage event in Mexico. It attracts manufacturers, producers, distributors, import &
export companies of food, beverage, and equipment.
http://www.logistica2006.com
May 30
Phone: (52) 52 55 5578-7820
June 14 – 18
“EXPO AMPIMM“
México, D.F.
The bi-annual tradeshow for international suppliers to the furniture
and wood industries.
“PXI TAC“
Phone: (52) 52 55 5578-7820
Juárez, Chihuahua
June 27 – 30
The PXI TAC is a series of free, full-day events in 15 cities
across the United States, Canada, and Mexico featuring
in-depth informational sessions on the latest PXI platform
technologies and roadmaps, case study presentations,
hands-on technical training, and networking with industry
executives.
“INTERPHEX MEXICO“
http://www.pixtac.com
México, D.F.
Bringing together the top buyers from the leading Mexican pharmaceutical manufacturers and more than 125 technology vendors
and pertinent and timely education sessions.
Phone: (203) 840-5567
May 31
“WELDMEX“
Monterrey, Nuevo Leon
http://www.giprex.com
A monthly newsletter on
NAFTA and related issues
May 31 – June 2
“EXPOLOGISTICA“
México, D.F.
http://www.expologistica.com
June 2
1911 Pennsylvania Ave. NW
Washington, D. C. 20006
Phone: (202) 728-1700
Fax: (202) 728-1700
Email:
[email protected]
“PXI TAC“
Juárez, Chihuahua
Hosted by systems integrators, end users, and PXI Systems Alliance members, the PXI TAC offers engineers,
managers, and technicians a change to network with colleagues and industry experts in design, validation, test,
and controls.
Visit us at
www.naftamx.org
http://www.pixtac.com
Volume 11, Issue 05
Page 6