U.S. Imports Dim As Mexican LNG Terminals Clears
June 6, 2005
Natural Gas Week
Pieces of the complex puzzle that is Mexico’s LNG terminal landscape
are starting to fall into place, with the Federal Electricity Commission
(CFE) emerging as a key player, while export prospects to the U.S.
fall under a cloud.
A long-awaited tender for construction of a 500 MMcf/d terminal
at Manzanillo in the Southwest has again been delayed, market sources
confirm.
The CFE’s objectives in Southwest Mexico are to convert existing
power plants at Colima from fuel oil to gas and to supply nearby
Guadalajara, Mexico’s second-largest city. The CFE is hatching
plans to build a 1 Bcf/d pipeline from Manzanillo to Guadalajara.
Repsol YPF continues to pursue a rival terminal at Lazaro Cardenas
and has now obtained both environmental and construction permits
from Mexican regulators.
Another developing demand point is northern Mexico. The CFE plans
1,222 MW in new combined-cycle power plants in the states of Chihuahua,
Coahuila, and Sonora. It is expected to tender for 500 MMcf/d of
gas to Chihuahua and Durango and a similar amount to central Mexico.
“The CFE decided that the best option was to open the tender so
that imported gas from the U.S. or supplied by an LNG terminal
could compete on an equal basis,” Francisco Barnes of Mexico’s
Energy Regulatory Commission (CRE) told NGW.
Two proposed LNG terminals are poised to compete in the Chihuahua
tender: one sponsored by Houston-based DKRW Energy at Puerto Libertad
in the state of Sonora and a rival at the port of Topolobampo in
the adjacent state of Sinaloa. These terminals would probably export
to the U.S. But export rights for regasified LNG may not be automatic.
Mexico’s energy secretary told a recent conference in California
that the Mexican government is considering imposing a limit to
LNG exports to the U.S.
Luz Y Fuerza Calls For Bids On Electrical Plants
June 10, 2005
Reforma
Luz y Fuerza del Centro has issued a call for bids for
the construction of 14 electrical generation plants, 6 of which
will be installed in Mexico City and 8 in the state of Mexico,
to avoid risking a collapse in the supply in the central zone.
This is about small modular units of simple natural gas cycles,
each one with a capacity of 32 megawatts, which means that the state-owned
firm will expand its generating capacity by 448 megawatts.
Analysts indicated that this announcement is positive, since
it means a change in the Luz y Fuerza policy, from being almost
exclusively a distribution firm to now also being a company that
generates electricity.
Luz y Fuerza del Centro explained that it will deliver the necessary
natural gas for the correct functioning of the generating plants
through a pipeline that will be contracted in an independent bidding
contest.
On July 13 the technical opening of the proposals will
take place, and the economic one will be on August 10. Luz y
Fuerza del Centro said the decision regarding the winning firm
would be announced next August 19.
ICO Finances Gas Natural Investments In Mexico With EUR 75 Million
June 7, 2005
El Economista, El Financiero
The Official Credit Institute (ICO) has signed a loan with Gas
Natural México for MXN 1 billion (the equivalent of EUR 75 million),
to finance the Gas Natural Group investment plan in Mexico for
the coming years. The financing period is three years, with repayment
of the loan at maturity.
This operation enables Gas Natural México to gain access to financing in local
currency with better terms than those currently available on the local Mexican
money market, lending greater depth and competitiveness to the local financial
markets in Latin America.
Obtaining Mexican pesos is possible using a financial instrument
termed a Cross Currency Swap (C.C.S.), which consists of exchanging
foreign currency with a financial entity. By using this method,
the ICO obtains the Mexican pesos necessary to finance the operation
in exchange for its equivalent value in euros.
The Gas Natural Group,
which has operated in Mexico since 1997, is a strong investor
in this country, where it has over one million customers and saw
sales of 41,457 GWh in 2004.
Imsa To Spend USD 200 Million To Expand U.S. Steel Operations
June 10, 2005
Dow Jones Newswires
Grupo Imsa announced plans Friday to spend USD 200 million to
strengthen its position in the U.S. steel industry.
In a filing with the Mexican stock exchange, the Monterrey-based
company said the first stage of the project, scheduled to begin
in the second quarter of next year, would involve relocating its
prepainted and galvanized steel operations to Shreveport, La.,
from Richmond, Calif., to serve the U.S. market more effectively.
The move is expected to cost USD 70 million, with costs to be “significantly”
reduced by the planned sale of the Richmond plant, the company
said.
In the second stage, Imsa plans to add new mills, including cold-rolling
steel, pickling and galvanized steel operations.
Meanwhile, the company will upgrade its West Coast facilities
to boost capacity and meet growing demand in the region, it said.
The efforts are being done through Steelscape Inc., a U.S. unit
of Imsa Acero.
Mining Industry Needs Investments Of USD 1.4 Billion
June 6, 2005
El Economista
This week the mining industry will hold a debate surrounding
the strategies Mexico should follow to sustain and take advantage
of the wealth and the high potential of this activity. In an interview
the president of the Mining Chamber of Mexico (Camimex for its
initials in Spanish), Sergio Almazan, indicated that “in Mexico
there is an enormous geological potential; just in the last 18
months, more than 15 mineral deposits were registered that need
investments of USD 1.4 billion.”
During 2004, copper production grew in Mexico by 16% (tons produced),
while its prices did so by 61% in the international markets. Silver
production showed growth of 4.7% and its prices rose 36.3%. Mexican
imports of steel metals and minerals grew 31.5% and those of nonmetallic
minerals 11.4%, the trade balance in these groups would be showing
a deficit.
Almazan pointed out that the new projects are being planned not
only for the northern zone of Mexico but also for the first time
in southern states such as Chiapas, Guerrero and Oaxaca, especially
in the production of gold, silver and copper.
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Mexico Imports Steel From South Africa
June 8, 2005
Reforma
For the first time Mexico, surpassed Brazil to become the country that generated the most structured financing in 2004 in view of an evolution of the debt market toward more sophisticated instruments, according to the rating firm Standard & Poor.
According to S&P, the structured financing of firms, states and municipalities—which includes operations that go beyond a bank loans and require complex financial engineering—quadrupled last year and came to USD 9.7 million.
S&P said that Mexico realized 33 transactions of 28 different issuers. Among the operations of note are the sales of debt by Banorte, the fourth largest bank in Mexico, derived from the bank rescue after the financial crisis of 1994-5 for some USD 4.1 billion. However, S&P also underscored an increase in debt issuance with backing in assets such as mortgages, bridge loans for construction, loans for consumption, accounts receivable and federal participations.
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Pension Funds Not Investing Abroad
June 7, 2005
La Jornada
By the end of March this year, the mutual funds specializing
in retirement funds (Siefore) had placed MXN 122.9 million of the
workers’ savings for their retirement in foreign securities. This
amount represents 0.02% of the MXN 74.8 billion that this sort
of fund may invest outside the country since January, so indicated
reports of the National Commission of the Savings System for Retirement
(Consar). The legal modifications that came into force on January 17 seek to
elevate the Siefore profitability by allowing it to place up to 20% of the
funds in bonds of other governments, central banks, and “solid firms of developed
countries.”
According to the analysis, savings for the workers’ pensions
handled by Siefore, come to a total of MXN 451.9 billion. As per
an analysis made by IXE, almost one-fourth of this amount has served
to finance ten corporations, both private and state-owned, and
the rest is invested in debt instruments of the federal government.
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Femsa Completes USD 700 Million In Stock Offering
June 6, 2005
Dow Jones Newswires, Reforma
Monterrey-based Femsa said in a release Sunday that it had issued 80.5
million BD units, or the equivalent of almost 8.1 million American Depositary
Shares. The company also issued 52.8 million B units in Mexico. The
company now has 720.4 million BD units and 472.3 million B units outstanding.
Femsa plans to use the money to pay off bridge loans it took
out last year to buy back the 30% stake in its beer division Femsa
Cerveza from Belgium’s InBev, which was called Interbrew at the
time. Femsa also used cash and other loans for the USD 1.25 billion
stake purchase.
Femsa and Interbrew agreed to end their partnership last year
after Femsa had sued to halt Interbrew’s merger with Brazil’s Companhia
de Bebidas das Americas, which would have given the Brazilian company
parts of Femsa beer.
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U.S. Builders Seek Mexican Cement Imports
June 6, 2005
The Wall Street Journal
The U.S. building boom is exacerbating cement shortages, prompting
contractors to warn of layoffs and an industry group to seek relief
from restrictions on Mexican imports.
Shortages of cement, the basic ingredient in concrete, have spread
to most U.S. regions, according to the Associated General Contractors
of America. A survey last year by the Portland Cement Association
found shortages or tight supplies in 35 states. The contractors’
survey and an updated one this year by the cement group also have
documented shortages in Colorado, Idaho, Utah, Washington and Wyoming.
Friday, the Associated General Contractors asked Commerce Secretary
Carlos Gutierrez to suspend an antidumping duty on cement imports
from Mexico as a way to increase supply. The shortage reports are
“especially alarming” because they come at the beginning of the
construction season, “meaning more severe problems are almost certain
in the near future,” the association’s chief executive wrote to
Mr. Gutierrez.
The U.S. imposed the duty in 1990 after American producers complained
they were losing sales to Mexican rivals selling cement below cost.
Many domestic producers are opposed to lifting the USD 50-a-ton
duty, because they fear additional imports of cement will only
worsen a possible world-wide glut as new plants go into production
in coming years. A spokesman for the Commerce Department said the
agency is engaged in a “dialogue” with the Mexican government about
alternatives.
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Cemex In Special Cement Deal With Venezuela
June 8, 2005
AP, El Universal
Seeking to capitalise on Venezuela’s need for low-income housing, Cemex
has tailored a product to home builders with government construction contracts.
Cemex plans to sell the new cement line, called “Cemento Solidario,”
at a below-market price exclusively to construction companies working
on government housing projects.
Cemex’s product will sell for 6,990 bolivars (USD 3.25) per bag,
roughly 16.3 percent below the fixed price for cement, according
to company officials.
President Hugo Chavez has imposed price controls on a number
of products, including cement, as part of a government initiative
to control inflation. In recent weeks, Chavez expressed frustration
with the high cost of construction materials and insisted that
cement companies should further cut prices. Chavez’s government
has created a series of incentives in hopes of building as much
as 120,000 new low-income family homes this year.
Most of the cement market in Venezuela is supplied by foreign
companies, and Cemex services almost half of it. Enzo Moschella,
president for Cemex in Venezuela, said Cemex expects to sell as
much as one million bags of the new cement over the next few months
to contractors hired by the government.
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Cemex Secures USD 1.9 Billion Revolving Credit To Pay Debt
June 7, 2005
Dow Jones Newswires, Latin America Advisor
Cemex has secured USD 1.9 billion in two revolving credit facilities
that it will use in part to refinance debt associated with its
recent acquisition of RMC Group.
Barclays Capital said in a press release that Cemex secured USD
1.2 billion in a five-year revolving credit facility and USD 700
million in a restatement of an existing credit facility over four
years.
Barclays Capital and Citigroup Global Markets were joint bookrunners
on the USD 1.2 billion credit, and Barclays, Citigroup and ING
were bookrunners on the USD 700 million credit.
The bank said 23 lenders participated.
Barclays said that as a result of strong demand, Cemex decided
to increase the five-year facility to USD 1.2 billion from USD
1 billion, and reduce the four-year credit to USD 700 million from
USD 800 million.
Monterrey-based Cemex acquired RMC Group this year
for USD 5.8 billion in cash and debt, becoming the world’s leading
supplier of ready-mix concrete
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Grupo Bimbo To Buy Chocolate Maker For MXN 471 Million
June 10 , 2005
Dow Jones Newswires
Mexican baker and confectioner Grupo Bimbo said it has
agreed to a buy a local chocolate manufacturer for MXN 471 million.
In a press release Thursday, Bimbo said it expects to conclude
the acquisition of Empresas Chocolates La Corona, a unit of grocery
wholesaler Grupo Corvi, in the third quarter. Bimbo said the acquisition
includes assets and brands, and that it will pay with cash in hand.
La Corona has three production facilities in Mexico and had sales
of MXN 670 million in 2004, Bimbo said.
The Deutsche Ixe brokerage said in a research note Friday that
La Corona has about an 8% market share with 45 different chocolate
products.
“This allows Bimbo to strengthen its position in the still fragmented
confectionary market, including chocolate bars and candies,” Deutsche
Ixe said.
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Top Firms In Mexico
June 10, 2005
Reforma
The most respected firms in the country, according to
Mexican directors, are Grupo Bimbo, Yakult, Nestlé, Coca-Cola FEMSA,
Cementos Mexicanos, Danone, Pfizer, Kellogg’s, Sony and Centro
Médico ABC shows a report of ‘Empresas Líderes en México’ made
by the consulting firm Hay Group and HSM Group.
The best three by
industry sectors are: in food, tobacco and beverages, Grupo Bimbo,
Yakult and Nestlé; in construction: Cementos Mexicanos, Cementos
Cruz Azul and Apasco; in chemicals, plastics, rubber and its
products: Dupont, Bayer and Procter & Gamble.
The best three in the pharmaceutical industry are Pfizer, Roche
and Merck Sharp & Dohme;
in equipment and machinery: Schneider Electric, SKF and Caterpillar; in IT
equipment, communication, measurement systems and electrical
components: Sony, Microsoft and Dell.
In the automotive, truck and auto parts industry: BMW, VW and GM; in health
services: Centro Médico ABC, Médica Sur and Grupo Angeles; in professional,
scientific and technical services: Oracle, AC Nielsen and Boston Consulting
Group; financial services: American Express, Seguros Inbursa and Banco Inbursa.
In media: Reforma, Grupo Televisa and Canal 11 and in wholesale and retail
sales the best are Grupo P.I Mabe, Tiendas de Música Mixup and Burger King.
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Terza, Leader In Rug Market
June 6, 2005
Reforma
Despite experiencing great dynamism at the end of the 80’s and
the beginning of the 90’s, the demand for rugs underwent a pronounced
drop because they were out of fashion. In the last three years,
sales have stabilized, though.
The rug market in Mexico stands at between 12 and 15 square meters
a year, of which 80% is generated by the residential line item
and only 20% by the corporate part.
Terza, owned by Alfa, is the leader in the Mexican rug market,
both in polyester and in polypropylene. It has close to 60% of
share and a couple of factories in Monterrey. It has sales of around
MXN 100 million.
It has an alliance with Shaw and the rights to use the Mohawk
brand in Mexico.
Even though Terza has not been able to enter the U.S. market,
it has done so in other countries, among them Canada, although
its profit margins are limited.
Its rugs reach 36 countries, among them the United Kingdom, which
has been one of the most attractive markets and where it has managed
to grow up to 200%. It is also present in Australia, New Zealand
and some Latin American countries like Chile.
Last year, its sales
grew 12%, a percentage that could be repeated in 2005.
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Finnish Company Taking Business from Chihuahua
June 6, 2005
Economist Intelligence Unit
A Finnish company is taking its business from Chihuahua
to China. The Jamesbury Group, a manufacturer of industrial valves
for the petrochemical, oil, gas and paper industries, has operated
in the northern Mexican state for 13 years. One assembly line closed
in May, and the entire plant is scheduled to be shuttered by August,
resulting in the loss of 160 jobs. Jamesbury attributes the move
to lower overall sales and higher operating costs in Mexico, including higher
import taxes for supplies originating from countries other than the U.S. and
Canada.
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May Auto Production Up 5.6% To 131,295 Units
June 8, 2005
Dow Jones Newswire
The auto industry produced, sold and exported more cars in May
than in the year-ago month, although performance for the first
five months of the year remained below 2004 levels, an industry
group said Wednesday.
The Mexican Auto Industry Association, or AMIA, said production
rose 5.6% from May 2004 to 131,295 units. Exports rose 5.3% to
98,753 units, while domestic sales rose 1.8% to 83,962 units. “Total
production maintains its direct relationship with the demand for
units, both in the domestic market and for export,” AMIA said.
The auto industry in Mexico represents the biggest single manufacturing
sector. Growth in the industry has been constrained, however, by
weak export demand, particularly from the U.S. market.
While domestic sales in the first five months of this year were
3.2% higher than in the like 2004 period, exports were down 4.4%
and production was 3.2% lower, AMIA reported.
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Auto Imports Via Maritime Shipping Grow
June 7, 2005
Reforma
Auto imports via maritime shipping between January and April came to 160,124
units, a hike of 46.5%, compared to the like 2004 period. According to the
General Ports Coordination (CGP for its initials in Spanish), in some ports,
operations doubled in the beginning of this year.
This growth was due to a larger diversity of car models in the
market and the promotion of ports.
Imports in Lázaro Cárdenas grew 167%, in Mazatlán 121.7%, in
Altamira 71.6%, in Veracruz 38%, and Manzanillo saw the weakest
increase of 26%.
According to info from CGP the total auto trade
during the first 4 months in 2004 was of 181,874
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Slim To Invest In Brazil Infrastructure
June 7, 2005
Dow Jones Newswires, La Jornada
Carlos Slim plans to invest in infrastructure projects in Brazil,
most likely in roads or waterworks, according to comments he made
in an interview with Brazil business daily Valor Economico.
Slim — the world’s fourth-richest man, according to Forbes magazine
— didn’t name specific projects of interest, but he told Valor
several are being studied in Brazil. The billionaire added that
the investments would be made via his company IDEAL, or Impulsora
del Desarrollo Economico de America Latina, which holds road concessions
in Mexico among other assets.
Slim gained a huge stake in Brazil’s economy last year when Telmex
gained control of Brazil’s biggest long-distance carrier, Embratel
Participacoes. Embratel later bought a large stake in Brazil’s
biggest pay television company, Net Servicos de Comunicacao. Also,
America Movil — another Slim asset — controls one of Brazil’s top
three mobile phone operators, Claro.
Infrastructure projects in Brazil have started to draw global
attention in recent months as an export boom pushes local trasportation
to its limits. Local rail operators can’t keep up with demand from
soy growers and steelmakers trying to move their products to port.
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IFC Provides USD 115 Million In Credit, Support For GMAC Mexico
June 6, 2005
Dow Jones Newswires
The International Finance Corp. said Monday it’s agreed to put
up USD 115 million in financing and loan support for Mexican financial
company GMAC Financiera.
The IFC, an affiliate of the World Bank, said the agreement includes
a USD 65 million revolving loan to help fund or acquire mortgages,
and USD 50 million in a credit enhancement facility to support
GMAC’s mortgage-backed securities program. The IFC said that the
agreement is part of its efforts to help develop the home financing
sector in Mexico.
GMAC Financiera, a unit of General Motors Acceptance Corp., provides
funding for private mortgage companies known in Mexico by their
Spanish acronym as Sofoles, and also offers construction loans
and buys mortgages for securitization.
GMAC Hipotecaria, the concern’s local mortgage business, participated
with Sofol Hipotecaria Su Casita in launching the first ever mortgage-backed
security in Mexico in December 2003 and has since issued others.
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Geo-Prudential JV To Invest USD 180 Million
June 6, 2005
Dow Jones Newswire
Home construction company Corporacion Geo said that the second
phase of its land acquisition joint venture with the real estate
business of Prudential Financial Inc. will involve investment of
at least USD 180 million.
In a press release, Geo said the first disbursement of the second
phase will be for USD 20 million to secure four land sites — three
in central Mexico State and one in the northwestern state of Baja
California.
The first phase of the joint venture involved investment of USD
175 million, and the planned USD 180 million in the second phase
could be increased in coming months, Geo said.
The company cited its chief executive Miguel Gomez Mont as saying
it sees the joint venture as the most efficient way to acquire
land for housing development without resorting to debt.
Geo is Mexico’s biggest builder of affordable housing. The company
sold 33,228 homes in 2004, making a net profit of MXN 803 million
on sales of MXN 7.86 billion.
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GAP Will Not Meet ICAO’s Security Demands
June 8, 2005
Reforma
The 12 airports run by Grupo Aeroportuario del Pacifico (GAP
for its initials in Spanish) will not be able to set up the luggage
inspection equipment demanded by the International Civil Aviation
Organization (ICAO) for January 2006.
Pedro Sanchez Mejorada, director of Institutional Relations,
reported that it still has not been determined what type of system
is going to be used. It will take them at least a year to install
it, he said.
GAP directors stated that the Group is to invest between
MXN 300 million and MXN 400 million to install the X-Ray systems
at its 12 airports, but until that happens, the inspections will
continue manually like it has been done up to now.
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America Movil Lowers Profit Margin Forecast for Brazil
June 10, 2005
Latin America Advisor
America Movil has lowered its profit margin forecast for its
Brazilian operations this year due to higher-than-expected subscriber
growth that will raise costs for the Mexico-based company. In a
letter to analysts, America Movil’s head of investor relations,
Paulina Amieva, said the company forecasts an EBITDA (earnings
before interest, tax, depreciation, and amortization) profit margin
of zero for this year, down from a previous forecast of 10 percent.
Stronger growth of America Movil’s Brazilian subscriber base, which
totaled 14.3 million at the end of March, costs the company more
money in network expansion and handset subsidies amid a very competitive
market. The company’s ARPU, or average revenue per user, fell to
26 reais per month in the first quarter from 29 reais per month
for the same period of 2004. America Movil’s main rivals in Brazil
are Vivo—a joint venture of Portugal Telecom and Spain’s Telefonica—and
Telecom Italia Mobile.
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CFE Could Provide Broadband Access Through Electric Network
June 9, 2005
El Economista
The Federal Electricity Commission (CFE) is working on its bet
to transmit the Internet, telephony and videoconferences through
the national electric networks, the national penetration of which
is 96%, vs. 17% for the telephony network.
Alfredo Elias Ayub, the general director of the CFE, presented
the “potential of the electric networks as an instrument for the
social connectivity in Mexico”, whose objective is to provide broadband
connection to people through the electric infrastructure of the
National Electric System with PLC technology.
“No State has electric service coverage lower than 90%. The potential
of our ample electric network can be used to decrease the digital
gap,” the document presented by the official pointed out.
The development of the Internet in Mexico, according to a research
study made by the Universities of Arizona and California, stands
at level three in the Internet graduation scale of zero (non-existent)
to level four (common use).
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Televisa Eyes Sports Books, Bingo Market
June 10, 2005
Reuters, Reforma
Grupo Televisa, the biggest producer of Spanish-language TV shows in the
world, has obtained a permit from Mexico’s Interior Ministry to operate
sports books and bingo halls in Mexico.
The new business will help Televisa tap the growing gaming market
led by Caliente and CIE, which operate books to bet on live sports
events, horse tracks and lottery-styled games at locations across
the country.
In a document obtained by Reuters dated May 26, the Interior
Ministry grants Televisa’s unit Apuestas Internacionales a permit
to operate these businesses for a period of 25 years.
The permit is for 65 sports books and 65 bingo halls. It was
not clear whether they will operate jointly, or as separate establishments.
In 2004, Televisa’s executive vice president Alfonso De Angoitia
said the company was eyeing new businesses, including gambling.
“I think that sector is a huge opportunity,” he said in October.
Caliente, owned by prominent businessman and politician Jorge
Hank Rohn, owns over 70 sports books in Mexico where customers
can bet on U.S. football, soccer, baseball and hockey matches.
It also has a dog racing track. Its strongest operations are in
border cities like Tijuana and Ciudad Juarez, which attract many
U.S. gamblers.
CIE is the owner of Mexico City’s horse track and currently operates
31 sports books and bingo saloons.
While large-scale gambling is not allowed in Mexico, companies
that own horse or dog tracks are entitled to run sports books and
bingos under local laws.
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TV Azteca Gives Notice To Terminate Its American Depositary Receipts Program
June 9, 2005
Reforma
TV Azteca announced that it gave notice to the New York Stock
Exchange (NYSE) and
The Bank of New York (BONY) to terminate the American
Depositary Receipt (ADR) program that the Company has
in the United States. With the notice of termination,
the company also instructed BONY to amend the deposit
agreement to reduce to 60 days the period to exchange
ADRs for CPOs traded on the Mexican Stock Market
(BMV).
As was previously announced at an Extraordinary Shareholders’
Meeting held on June 1, shareholders approved termination
of TV Azteca’s ADR program, after an analysis and discussion
of the costs and benefits of continued listing in the
U.S. capital markets.
The trading of the ADRs in the United States shall
continue for 30 days from the date on which BONY notifies
ADR holders of the termination of the deposit agreement.
TV Azteca expects BONY to provide notice within the
next few days.
After the 30-day notice period, the NYSE will suspend
trading of the ADRs in the United States, and the ADR
holders will have 60 days to exchange their ADRs for
CPOs that are traded on the BMV. Upon the expiration
of the 60-day period, BONY will be entitled to sell
the CPOs underlying the ADRs that were not surrendered
in the Mexican Stock Exchange (BMV) and distribute
the proceeds of the sale to holders.
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Comcast and MVS’ Form Alliance
June 7, 2005
El Economista, Reforma, PRNewswire
Comcast, the country’s leading provider of cable, entertainment
and communications products and services, announced that it is
adding Canal 52MX, a leading Mexican network, to its digital cable
lineup. Beginning June 8, Canal 52MX will be available at no additional
cost to customers who subscribe to Comcast’s CableLatino, Selecto
or digital cable packages in select markets. Canal 52MX is available
only on cable, and Comcast is the first cable company to carry
this channel in the United States.
Canal 52MX offers a wide variety of Spanish-language programming,
including a growing library of original productions. Its format
combines comedy, action and drama series; music blocks and special
events; sporting programs; Mexican films; and extended news coverage.
In addition to carrying the channel, Comcast initially is making
15 hours of Canal 52MX programming available as part of its ON
DEMAND en espanol video-on-demand service.
Through an affiliation agreement with MVS Television — a Mexican
TV production, programming and advertising sales company — Canal
52MX will be available in Comcast markets with a strong Hispanic
presence, including Albuquerque, Chicago, Denver, Fresno, Miami,
northern New Jersey, Sacramento and San Francisco.
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CIE Places USD 200 Million In 10-Year Bonds
June 8, 2005
Dow Jones Newswires, Reforma
Mexican entertainment concern Corporacion Interamericana de
Entretenimiento said it placed USD 200 million in 10-year notes
at an annual interest rate of 8.875%.
In a filing with the Mexican Stock Exchange, CIE said the notes,
due June 14, 2015, were placed among more than 50 international
investors in the U.S., Europe and Latin America.
Citigroup was the sole bookrunner, while Credit Suisse First
Boston and Scotia Capital were co-managers.
The company plans to use the proceeds from the issue to pay off
short-term obligations.
CIE operates entertainment centers and amusement parks, and promotes
and organizes live events, trade fairs and exhibitions, among other
activities.
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Spanish-language Media Almost Universal Among Hispanics
June 8, 2005
El Universal
A survey on ethic media consumption made in the U.S.
by New California Media (NCM) shows that the reach of Spanish-language
media is almost universal in Hispanic America. Eighty-seven percent
of all Hispanic adults access Spanish-language television, radio
or newspapers on a regular basis. The success of the major television
networks (Univision and Telemundo) is well documented but this
study also indicates that Spanish-language radio and newspapers
are rapidly increasing their penetration in this market. For example,
more than a quarter (29 percent) of Hispanic adults report that
they now prefer Spanish-language newspapers to their English-language
counterparts. This study also reveals that Hispanics have very
low access (24 percent) to the Internet.
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U.S. Wins WTO Challenge Against Mexican Rice Duties
June 10, 2005
El Universal, Reforma
A WTO panel has sided with the United States in an agricultural
dispute involving Mexican antidumping duties on U.S. long grain
white rice. In its report, issued yesterday, the WTO panel
agreed with the United States that Mexico’s antidumping duties
on rice and various provisions of its antidumping and countervailing
duty laws are contrary to WTO rules.
Mexico is an important and growing export market for U.S. rice farmers. In 2004,
Mexico imported approximately USD 183 million of rice from the United States.
The panel sided with the United States on all of the major issues in dispute. The
panel agreed with the United States that Mexico improperly based its injury analysis
on outdated information and failed to examine half of the injury data it collected. The
panel also agreed that Mexico improperly applied its antidumping measure to two
U.S. exporters that were not dumping. In addition, the panel found that
Mexico improperly applied an adverse “facts available” margin to a U.S. exporter
that had no shipments during the period of investigation, and that Mexico improperly
applied “facts available” margins to U.S. exporters and producers that it
did not even investigate. Finally, the panel found that six provisions
of Mexico’s antidumping and countervailing duty law are inconsistent “as such”
with the WTO Antidumping Agreement and the WTO.
Fernando Canales, Mexico’s Economy Minister, said Mexico will appeal the panel
report to the WTO.
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Mexico Avocado Growers Celebrate Record U.S. Exports
June 7, 2005
El Economista
Mexican avocado exporters on Monday celebrated exporting a record
73,855, tons of avocados to the United States so far in the 2004-2005
season.
Benjamin Grayeb Ruiz, head of the Michoacan avocado producers and exporters association,
said exports this year were boosted by the expanded access from January 31 to
the U.S. market. Mexican producers, centered in Michoacan state, can now export
year-round to all states except California, Florida and Hawaii.
Grayeb noted that avocado exports from Michoacan have grown more than tenfold
from over 6,615 tons when the decades-old U.S. ban was partially lifted in the
1997-1998 season. Last year, Mexico exported about 46,300 tons of the fruit.
Grayeb said exports so far this season, which has yet to end, are worth more
than USD 140 million.
Agriculture Minister Javier Usabiaga said Mexico as a whole has 21,000 avocado
growers who produce close to 992,800 tons a year on 94,000 hectares.
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Sugarcane Harvest To Reach Record
June 6, 2005
Reforma
Three months before the 2004-2005 sugarcane harvest ends,
a sugar production record of 5.7 million tons was registered. Sugar
producers see this as a problem in the Mexican market since there
is now a 300,000 ton sugar surplus.
However, fructose producers were hesitant about the announcement
since in previous years a sugar production record was predicted
and Mexico ended up importing sugar to meet the demand.
Carlos Blackaller, President of the National Sugarcane Farmers
Union (UNC for its initials in Spanish), said this is the highest
record since the 1997-1998 season and declared he was concerned
about the sugar surplus.
Besides the surplus, he explained, there is the legal protection
against the tax on using fructose that soft drink producers asked
for. That will displace the 300,000 tons.
Despite this scenario, he does not believe the price of sugar
will fall.
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Debt Payoff Will Prevent Crisis
June 6, 2005
El Financiero
By paying off the 2005, 2006 and soon 2007 foreign debt, the
Mexican Government is preventing a financial crisis like that of
1994.
Victor Manuel Herrera, director of Standard & Poor’s, affirmed
that with the debt pre-payments, Mexico is covering itself from
an eventual denial of capital to come to the country due to uncertainty
in the markets resulting from the elections.
Other analysts indicated that the application of healthy fiscal
and monetary policies and the expansion, although moderate, of
the economy, keep Mexico as one of the most attractive emerging
countries for global investment.
The growing interest to invest in pesos, due to the attractiveness
in the interest rates and confidence in Mexico, has led to speculative
positions in favor of Mexican peso in the Chicago Futures Market
to reach record levels.
By the end of May, they rose to USD 3.7 billion, an amount that
increases the vulnerability of the Mexican currency, due to the
fact that June 13 is the maturing date of the peso futures.
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Mexico Sells EUR 750 Million In Bonds, Meets ‘05 Financing Needs
June 7, 2005
Dow Jones Newswires, El Economista
Mexico filled its total euro-denominated borrowing needs for the year
in a single EUR 750 million transaction Tuesday, attracting orders in excess
of EUR 1 billion.
The book built swiftly for the 10-year transaction, which was
announced by lead managers UBS and Barclays Capital early in the
day.
A syndicate official at one of the lead managing banks said the
deal’s audience showed that “Mexico’s investor base has migrated
from pure emerging-market players into a much broader group of
investment-grade buyers.”
The bonds carried a 4.25% coupon, and priced slightly below par
to yield 107 basis points over midmarket swaps, or 4.312%. Mexico’s
closest euro-denominated benchmarks, the 5.375% bonds due 2013,
are currently yielding 4.02% bid.
UBS told investors Tuesday the country’s low funding requirements
meant this would be its only euro-denominated deal for 2005.
Mexico’s is one of the deepest Latin American markets, with total
sovereign Eurobond debt of more than USD 50 billion. Barely a tenth
of this is euro-denominated.
The government is moving to cover borrowing
needs over the next couple years ahead of national elections
in July 2006. It wants to avoid facing possibly tougher financing
conditions later on as campaigning heats up. Last week, President
Vincente Fox said the country’s financing needs for next year
would be taken care of this month, and added that 2007’s requirements
would be covered by the end of the year.
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Mexican Peso Tipped To Stay Strong All Summer
June 6, 2005
Financial Times
The Mexican peso is being dubbed the “superpeso” once more, after it surged
last week to approach its strongest level against the dollar in 18 months.
By the close on Friday it had reached 10.83 pesos to the dollar, down 10 centavos
for the week, and down sharply from a high of 11.61 pesos set late last year.
A number of factors seem to be pushing the currency. Analysts said that Mexico’s
high interest rates, induced by an aggressive monetary policy, appeared to
be the main factor, while a reduction in political tensions over the past few
weeks and the general strength of Latin American currencies have also played
a part.
The currency appears to be having an effect on trade flows — as well as on
Mexican consumers’ behavior. Imports of consumer goods in the first quarter
were up 26 percent compared with last year, as Mexican consumers used their
greater buying power, while manufacturing exports rose by only 5.6 per cent.
A strong recovery in Mexico’s low levels of credit could also be behind increased
sales by retailers. Consumer lending by banks has increased by 46 per cent
over the past year, according to the central bank. The peso looks likely to
stay strong through the summer.
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May Consumer Prices Down 0.25%
June 9, 2005
Dow Jones Newswires, La Jornada
Consumer prices fell in May, helped by government subsidies for electricity
in the northern part of the country.
The Bank of Mexico said Thursday the Consumer Price Index decreased 0.25%
last month, more than expected. The reading was the same as the year-earlier
level, meaning that annual inflation remained at 4.60% for the second consecutive
month.
The central bank said electricity subsidies accounted for much of the decline,
while food prices varied.
Meanwhile, the more closely watched core index — which excludes the cost
of education, energy and fresh fruit and vegetables — rose 0.21%.
The annual core rate slipped to a new record low of 3.42% from 3.46% the
previous month, due to lower processed food and housing costs.
Market participants were already convinced that the central bank would be
staying put at this Friday’s monetary policy decision after two straight months
without a tightening, but the data is likely to reinforce expectations that
the tightening cycle is nearing an end.
Policy makers are expected to signal
the end of the cycle by dropping their statement that local rates should
track monetary policy in the U.S., and many economists believe the de-coupling
from the U.S. Federal Reserve could occur at the second meeting of the month
on June 24.
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Government Expects MXN 80 Billion Oil Price Windfall
June 8, 2005
Dow Jones Newswires, Reforma
Finance Minister Francisco Gil said the government will probably obtain between
MXN 80 billion and MXN 90 billion more from oil this year than it has budgeted
for.
Reforma cited Gil as saying the government believes Mexico’s export crude
oil price could average between USD 35 and USD 36 a barrel in 2005. The budget
is based on an estimate of USD 27 a barrel. “Every dollar (above the budget
estimate) represents about an additional MXN 10 billion,” Gil said.
With oil and oil-related taxes accounting for at least a third of government
revenue, the crude price estimate is a key to estimating how much money the
government will have to spend each year.
In the first four months of the year, Pemex exported an average of 1.84 million
barrels a day of crude oil at an average price of USD 35.89 a barrel. Pemex
can expect to receive 39% of the additional income to finance exploration and
productive projects, while the rest is divided among state governments for
infrastructure, an oil fund, and the federal government to pay debt.
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Hispanics Now One-Seventh Of U.S. Population
June 10, 2005
The Associated Press
One of every seven people in the United States is Hispanic, a record number
that probably will keep rising because of immigration and a birth rate outstripping
that of non-Hispanic blacks and whites.
The country’s largest minority group accounted for one-half of the overall
population growth of
2.9 million between July 2003 and July 2004, according to a Census Bureau
report being released Thursday.
The agency estimated there are 41.3 million Hispanics in the United States.
The bureau does not ask people about their legal status; that number is intended
to include both legal and other residents.
The population growth for Asians ran a close second. Increases in both groups
are due largely to immigration, but also higher birth rates, said Lewis W.
Goodman, an American University expert on U.S.-Latin American relations.
“If we didn’t have those elements, we would be moving into a situation like
Japan and Europe ... where the populations are graying in a way that is very
alarming and endangering their productivity and endangering even their social
security systems,” he said.
Most immigrants to the United States tend to arrive in their 20s, when many
people have children. A far greater percentage of whites than Hispanics is
65 or older; the opposite is true of those under 18.
The Census Bureau counts “Hispanic” or “Latino” as an ethnicity rather than
a race, so Hispanics can be of any race.
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Ex-UN Ambassador From Mexico Dies In Car Crash
June 6, 2005
Reforma, El Universal, The Chicago Tribune
Adolfo Aguilar Zinser, Mexico’s former ambassador to the United Nations
who was forced out of his job after saying the United States treats Mexico
like a “back yard,” died Sunday in a car crash, police said. He was 55.
Known for his independent streak, Aguilar Zinser was a vocal critic of the
United States’ unilateral actions in Iraq during his tenure as UN ambassador.
He left the position after a diplomatic flap that was touched off by his comments
in November 2003 to university students in Mexico City.
Aguilar Zinser, who had been Mexico’s national security adviser prior to
his UN post, later became a critic of Mexican President Vicente Fox and the
president’s conservative National Action Party.
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Raul Salinas speaks out from jail
June 4, 2005
Financial Times
Raul Salinas de Gortari, the playboy older brother of Carlos Salinas, Mexico’s
former president, has admitted for the first time that he acted unethically
by exploiting his political connections to raise a fortune that ended up in
Swiss banks.
In his first face-to-face interview since his arrest 10 years ago, he denies
breaking any laws in raising more than USD 100 million, which is still frozen
in Switzerland.
But he said he used his brother’s position as Mexico’s president from 1988
to 1994 and as a possible World Trade Organisation head to make money.
Speaking to the Financial Times in Santiaguito prison, Mr Salinas said:
“It never crossed the line into becoming illegal but I took advantage of something
that many other Mexicans didn’t have . . . and that’s not ethical. Whoever
thinks that is right.” He said most of the money came from Mexican businessmen
to set up an investment fund, and should be returned to them.
He said: “With the relations with businessmen that I had, if I wanted a
flight to take me to Europe, I would go in a private jet ...and if I wanted
a yacht in the Mediterranean, Emilio Azcarraga (owner of the former monopoly
broadcaster Televisa) would lend it to me.”
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Raul Salinas cleared of murder charges
June 9, 2005
Reforma, San Diego Union Tribune
Raul Salinas, the brother of former Mexican president Carlos Salinas, was
cleared Thursday night of murder charges, setting the stage for his release
after 10 years in prison.
A three-judge panel said the government had failed to present
convincing evidence that Salinas orchestrated the September 1994
murder of Jose Francisco Ruiz Massieu, the No. 2 man in Mexico’s
Institutional Revolutionary Party and Salinas’ former brother-in-law,
as he sat in his car in downtown Mexico City.
“It is over,” Salinas’ attorney, Alonso Aguilar Zinser, told
reporters after the ruling was announced. “Raul Salinas was declared
innocent of the crime of murder.”
Salinas still faces charges of illegal enrichment, but Aguilar
Zinser vowed to file an immediate request that his client be released
on bail.
Salinas repeatedly proclaimed his innocence, saying his arrest
was provoked by a political vendetta. His attorneys insisted the
criminal charges were based on questionable witnesses and hearsay,
a claim backed by many prominent Mexican lawyers.
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Ex-Tourism Secretary Sentenced To 7.5 Years
June 3, 2005
Dow Jones Newswire
A judge Friday sentenced a former Mexico City mayor and tourism secretary
to seven years, six months in prison for embezzling government funds — but
appeals could still keep him out of prison.
Oscar Espinosa Villarreal becomes one of the highest-ranking
officials in Mexican history to be convicted of criminal wrongdoing.
He served as mayor of the nation’s capital from 1994 to 1998, then
was a member of President Ernesto Zedillo’s cabinet as the government’s
top tourism official until 2000.
He eventually fled to Nicaragua and applied for asylum amid charges
he stole USD 45 million from city coffers, but was extradited back
to this country in August 2001. He took advantage of a bail bond
— and a court injunction against his arrest, however, to avoid
going to prison during his trial.
As part of his sentence, Espinosa Villareal was ordered to pay
more than MXN 285 million in reparations to parties he wronged.
His lawyers vowed to appeal the ruling and can present a string
of legal challenges that may allow Espinosa Villareal to avoid
prison.
Appointed mayor, Espinoza Villareal allegedly authorized outlays
that were never accounted for. Many believe the money went to finance
Zedillo’s 1994 presidential campaign.
Both were members of the Institutional Revolutionary Party, which
controlled Mexico’s presidency from 1929 until 2000.
Espinosa had called the charges an attempt at revenge by the
leftist Democratic Revolution Party, which won the mayorship during
the first elections for the post in 1997.
Espinosa went to Canada
and then Nicaragua shortly after President Vicente Fox defeated
the Institutional Revolutionary Party in elections in July 2000.
He spent months in jail, then under house arrest after Nicaraguan
officials denied him political asylum.
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Mexican Police Chief Gunned Down 9 Hours After Taking Job
June 9, 2005
The New York Times, Reuters
Gunmen shot and killed a Mexican police chief in Nuevo Laredo on Wednesday,
the third police commander attacked in a week and the seventh killed this year
in a brutal war with drug cartels.
Alejandro Dominguez was sprayed with about 30 bullets while he
was driving on Wednesday evening. The attack came hours after Dominguez
was appointed a local public security chief. Dominguez’s cousin
was former Deputy Attorney General Javier Coello.
On Thursday, gunmen in Nuevo Laredo killed a municipal police
commander in front of his young daughter. A day earlier another
local police chief was ambushed and wounded driving through the
city center.
At least 58 people, including seven police officers, have been
murdered in Nuevo Laredo this year as traffickers from western
Sinaloa state and a local cartel battle for control of the lucrative
cross-border trade in cocaine and marijuana.
Local rights groups say more than 40 of the killings showed signs
of being drug trade related, either carried out in an ambush or
with a trademark execution-style shot to the back of the head.
Violence along Mexico’s northern border has increased since President
Vicente Fox launched “the mother of all battles’’ on drug cartels
and organized crime in January.
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Officials Probe Possible Plot To Kill Ex-Attorney General
June 10, 2005
Milenio, Dow Jones Newswires
Mexican federal prosecutors are investigating a possible attempt to kill
the country’s previous attorney general, a spokesman for the president announced
Wednesday.
Milenio reported that a videotaped interrogation of alleged army deserters
employed by the powerful Gulf drug cartel alerted prosecutors to the possible
attempt against former Attorney General Rafael Macedo de la Concha, who resigned
in April.
“Yes there is a line of investigation in this direction, that there had been
a possible attempt against General Macedo de la Concha,” presidential spokesman
Ruben Aguilar said at a press conference.
The videotape apparently was made by unidentified rivals of the Gulf gang
as they interrogated four members of the Zetas, a group based on army deserters
that is accused of killing dozens of people for the Gulf cartel. Aguilar said
the alleged assassination attempt was not related to Macedo de la Concha’s
resignation.
The ex-attorney general was credited with orchestrating a series
of high-profile arrests among Mexico’s most prominent drug gangs — a crackdown
that fueled a bloody turf battle among the gangs. The possible plot to kill
Macedo de la Concha was inspired by the arrest of a high-ranking member of
the Gulf cartel, according to the videotaped conversations reported by Milenio.
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Son Of Drug Lord Released And Detained Again
June 9, 2005
Milenio, The Associated Press
Archivaldo Guzmán, the son of suspected drug lord Joaquín “El Chapo” Guzmán,
posted USD 55,225 in bail and was released from the La Palma penitentiary just
west of Mexico City early Thursday. But federal agents immediately bundled
him into a police vehicle that took him to the Mexico City offices of the attorney
general’s organized crime unit for questioning.
The detention of Mr. Guzmán, 21, came one week after a judge dismissed a
charge of use of illicit funds against him, citing insufficient evidence.
The federal attorney general’s office said in a news release that it had
detained Mr. Guzmán for “his probable participation” in a drug-money laundering
operation in Ciudad Juárez on the Texas border. It said he also was linked
to five people suspected of committing two killings on Feb. 13 in Texas, apparently
over a drug debt.
The news release said that prosecutors are investigating a possible tie to
the April 2004 killings of Cesar Augusto Pulido Mendoza and Canadian Kristen
Paige Deyell outside a bar in the central Mexican city of Zapopán.
Dismissal of the illicit funds charge had left just one charge pending against
Mr. Guzmán, for allegedly concealing a crime. Considered less serious, however,
that charge made him eligible for release on bail.
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Latin American Nations Water Down U.S. Proposal
June 8, 2005
The Associated Press
Latin American countries watered down a U.S. proposal to have the Organization
of American States monitor threats to weak democracies in the Western Hemisphere,
after Venezuela accused the Bush administration of trying to meddle in other
nations’ affairs.
Brazil and Chile led a group of foreign ministers at the OAS meeting who
changed the U.S. draft to add that any OAS review must respect “the principle
of nonintervention and the right to self-determination.” A key U.S.-backed
section stayed in the meeting’s final declaration, which was approved late
Tuesday. It sought input from civil society groups like human-rights organizations
on democratic progress, although the final text gives them less say in OAS
procedures.
Secretary of State Condoleezza Rice has said the U.S. is trying to prevent
countries from slipping into authoritarian rule. But the plan was seen as aimed
at Venezuelan President Hugo Chavez, who is accused by the Bush administration
of violating democratic principles.
Before the three-day meeting of the 34 OAS member nations began Sunday, the
U.S. submitted a draft calling on the OAS to develop a way to assess democratic
progress in the region, so it can anticipate “crises that might undermine democracy.”
The U.S. plan ran into opposition even before the meeting began, and not
only from Venezuela. Brazil and Chile were adamant that any moves to strengthen
democracy shouldn’t be intrusive.
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Volcano Of Fire’s Spectacular Eruptions
June 10, 2005
El Universal, Dow Jones Newswires
Straddling the border of Colima and Jalisco states, the Volcano of Fire
has unleashed six spectacular eruptions in the past three weeks. On Monday
night, it hurled glowing lava three miles into the air and showered the nearby
city of Colima with ash.
After Monday’s eruption, officials in Jalisco announced a voluntary evacuation
of three villages nearest the crater and told people in other towns to be ready
to move.
The off-limits zone extended at least 4.5 miles around the crater, and an
alert zone was in effect for 7 miles.
Before dawn Friday the Volcano of Fire spewed glowing volcanic rock and a
cloud of ash, then sent up a gray cloud of smoke 2,624 feet high shortly after
sunrise. The activity followed an explosion late Thursday inside the crater
of the 12,533-foot volcano. The eruptions rained ash on several nearby communities,
and officials asked some schools to close while they cleaned up the fine grit.
Seismologists say the increasing frequency of the eruptions and their intensity
are signs that the volcano was returning to an explosive stage like one that
started in 1903, which climaxed with a massive explosion 10 years later that
left a 1,650-foot-deep crater at the volcano’s peak and scattered ash on cities
240 miles away. The 1913 eruption killed dozens of farm animals, but records
aren’t clear on whether there were any human casualties.
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