Ups International Symposim June 21 2011


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Ups International Symposim June 21 2011

  1. 1. NAFTA and the Mexican Economy May 25th, 2011
  2. 2. What is ProMexico? <ul><li>ProMexico is the Mexican Government institution in charge of strengthening Mexico’s participation in the international economy. With this objective in mind, the institution supports the export activity of companies established in the country and coordinates actions to attract foreign direct investment to national territory. </li></ul>PROMOTION TRADE INVESTMENT
  3. 3. Where is ProMexico? <ul><li>27 Offices of ProMéxico in 19 countries to promote Mexico’s business in the world </li></ul><ul><li>We team up with Mexico's Embassies and Consulates abroad to have greater presence in international markets. </li></ul>Asia: Shanghai Seul Tokio Taipei Singapur Beijing Mumbai North America: New York Chicago Miami Houston/Dallas Los Angeles Vancouver Toronto Montreal       Latin America: Sao Paulo Santiago Bogota Guatemala Europe: Londres Madrid Paris Milán Bruselas Estocolmo Frankfurt Middle East: Dubai  
  4. 4. Effects of NAFTA <ul><li>In 2010, annual trade among NAFTA partners now total $946 billion, more than triple </li></ul><ul><li>US - Mexico trade represents 44% </li></ul><ul><li>US exports to Mexico have risen 293% </li></ul><ul><li>Mexican exports to the US have grown 364% </li></ul><ul><li>Mexico 2nd US export destination 13% </li></ul><ul><li>Brazil, Russia, India and China – the BRIC countries ($152 billion) </li></ul><ul><li>US$1 China = US$4 Mexico </li></ul><ul><li>Hong Kong, Singapore, South Korea and Taiwan ($120 billion) </li></ul><ul><li>Germany, France, Great Britain and Italy ($137 billion) </li></ul><ul><li>Latin America combined </li></ul>
  5. 5. Vietnam ? ? ? &quot;Off-shore&quot; &quot;Near shore&quot; China &quot; Near-shore &quot; &quot;Off-shore&quot; &quot;On-shore&quot; vs. vs. 1 st Wave: Manufacture as close as possible 2 nd Wave: China positions itself as a low cost manufacturing location 3 rd Wave: Search different locations from China China U.S. Manufacturing Tendencies & Opportunities Mexico USA USA Mexico USA
  6. 6. Why Mexico? <ul><li>Operation ease </li></ul><ul><li>The time and procedures to open or close a business, as well as to get construction permits are critical factors for international business success. </li></ul><ul><li>Number of procedures for opening a business, In Mexico, an investor needs only 6 procedures in order to open a company. This number is significantly lower than in India, China or Brazil. </li></ul>
  7. 7. <ul><li>Workforce costs </li></ul><ul><li>Mexico offers significant savings in labor force costs compared to other potential investment locations in America, Europe or Asia. Transferring operations from US to Mexico may generate savings for almost 90% in labor force costs. </li></ul>Additionally, since 2008 Mexico and China have similar labor force costs. This makes Mexico an excellent export platform for North American and European markets. Why Mexico?
  8. 8. Corporate Tax Rate In fiscal matters, Mexico has significant savings compared with Brazil, India and the Unites States. Companies with productive activities in the US could benefit with a 11.5% tax rate reduction by transferring operations to Mexico. Open economy / Free Trade Agreements A fundamental issue for choosing off-shore locations is the ease in which a country does business abroad. Mexico has advantageous Free Trade Agreements and very few export-import procedures. Mexico’s network of 11 agreements covers 43 countries on three continents. This is a unique opportunity for international commerce and investment because it gives strategic access to a potential market of over one billion consumers which represents close to 60% of the world’s GDP. Why Mexico?
  9. 9. Population and human capital / A country of young people Mexico had a registered population of almost 107.5 million inhabitants in 2009, 55% of whom were under 30 years of age. In 2009 the country’s registered Economically Active Population (EAP) was made up 46.2 million people , which exceeded the number of registered people in 2008 by 800 thousand people. The ratio of economically dependent population will reach an estimated 46.1% historical low in 2025. It is estimated that in the next three decades, the number of individuals in working age in Mexico will reach 101 million, and that the economically active population will reach 62 millions. <ul><li>A country with qualified labor </li></ul><ul><li>There are over 750,000 engineering and technology students. </li></ul><ul><li>Close to 90,000 new engineering and technical students graduate each year from Mexican universities. </li></ul><ul><li>The Mexican Higher Education System is made up of 2,539 institutions which offer educational services and, of course, international exchange opportunities. </li></ul><ul><li>Higher education in Mexico reaches a total enrollment (school and non-school) of almost 3 million students. </li></ul>Why Mexico?
  10. 10. <ul><li>Industrial Strengths </li></ul><ul><li>A country with experience. </li></ul><ul><li>Mexico has become a leading destination for global aerospace, automotive, medical device and electronics firms, which use it as a manufacturing platform for the global market due to strengths such as: </li></ul><ul><li>Transfer of quality methodologies </li></ul><ul><li>Supplier development programs </li></ul><ul><li>Manufacturing standards </li></ul><ul><li>Certification </li></ul><ul><li>Human capital </li></ul><ul><li>A country with qualified labor. </li></ul><ul><li>A country with low operation costs. </li></ul>According to the “2009 Manufacturing Costs Index” study carried out by the consulting firm AlixPartners, Mexico is the country with the lowest manufacturing costs for industrial components among the main emerging economies (Brazil, China and India). Strategic Industries
  11. 11. The Aerospace Industry in Mexico In the last five years, the Mexican aerospace industry has experienced a two-digit growth rate, enabling it to become a key supplier in the global market. The number of aerospace companies established in Mexico has tripled in the same period and exports have more than doubled. Strategic Industries
  12. 12. The Automotive Industry in Mexico Mexico is among the world’s top 10 leading manufacturers of automobiles, trucks, auto parts and components. In 2008, over two million light and heavy vehicles were manufactured in the nation, 4% more compared to 2007. Furthermore, Mexican automobile exports for 2008 were 3% higher than the previous year. Strategic Industries
  13. 13. Electrical-Electronic industry in Mexico The electrical-electronics industry is the country’s main exporting productive activity, since it accounted for more than 30 percent of total exports in 2008. The industry contributed around 8 percent of manufacturing GDP in 2008. Mexico is an attractive investment destination in the electrical-electronics sector. Between 2000 and 2007, foreign investment in this industry totaled US $ 3.52 billion, which were mainly directed toward production of high technology television sets, television decoders and cellular telephones. Strategic Industries
  14. 14. The Life Sciences Industry in Mexico In this industry, Mexico is distinguished by its specialized human resources, competitive costs, quality and large domestic market. According to Business Monitor, the value of the health sector in Mexico 2008 reached US$13.48 billion, placing it as the second most important market in Latin America. The Life sciences industry is made up of the pharmaceutical, medical devices and biotechnology sectors. Strategic Industries
  15. 15. <ul><li>The Renewable Energy Industry in Mexico </li></ul><ul><li>Currently, Mexico has an installed capacity to generate 1,924.8 MW (megawatts) of electricity from renewable energy sources. Besides offering great potential for the generating clean energy, Mexico has the ability to become a key global provider of renewable energy equipment, mainly for the NAFTA area. The United States, Mexico’s main export markets, is expected to invest 150 billion dollars in renewable energy over the next ten years. </li></ul><ul><li>Wind Power . Mexico’s potential exceeds 40,000 MW. Today, Mexico is home for at least 28 projects, such as Eurus, Latin America’s largest wind project, with an installed capacity of 250 MW. </li></ul><ul><li>Solar Power . Half of Mexico’s territory has an average daily sun exposure of 5 KWh/m2, which is enough to cover the needs of the average Mexican household. It is estimated that in 2012 Mexico will have an installed capacity of 10 MW produced using thermosolar energy. </li></ul><ul><li>Hydropower . It is estimated that the potential for plants with capacities below 10 MW is approximately 3,250 MW. Mexico has 34 plants within this range with a total capacity of 109 MW. </li></ul><ul><li>Geothermal Power. Mexico’s installed capacity to generate power from geothermal energy is currently close to 1,000 MW, the third largest in the world, after Philippines and the United States. </li></ul><ul><li>Biomass Power Bioenergy represents 8 percent of the country’s primary power consumption. Mexico’s biopower potential is estimated between 83,500 and 119,000 MW a year. </li></ul>Strategic Industries
  16. 16. Mexico’s Investment Map MIM • With this tool, developed specially for site selection professionals, you will find, in a quick and simple manner, the main drivers that make Mexico an excellent location to start-up a business or relocate production capacities to Mexico. • Information concerning Mexico’s infrastructure and production base, In a wide variety of economic sectors, will also be at reach. Our database contains detailed information at the state and regional level, which is greatly relevant for companies that are evaluating the best location alternative within Mexico.
  17. 17. <ul><li>Cesar Bueno </li></ul><ul><li>Trade & Investment Commissioner </li></ul><ul><li>ProMexico - Miami </li></ul><ul><li>Tel. (305) 415-9360 </li></ul><ul><li>444 Brickell Ave., Suite 450 </li></ul><ul><li>Miami, Florida 33131 </li></ul><ul><li>[email_address] </li></ul><ul><li> </li></ul><ul><li>promexicomiami </li></ul><ul><li>@ProMexicoMiami </li></ul>