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Energy
CFE Announces Connection With Central America
December 22, 2006
The CFE will begin construction of the first transmission line from Mexico to Central America in January 2007. The line is part of a USD 320 million investment program to link the power grids of Mexico and countries to the south. The program plans to meet the region's electricity demand, which is expected to grow about 5% annually during the next 14 years. The program calls for an initial transfer capacity of 200MW from Mexico to Guatemala.
CFE Releases 101MW La Venta III Draft Rules
December 20, 2006
The CFE has released draft bidding rules for a contract to build the 101MW La Venta III wind power project in Oaxaca State. The CFE plans to launch bidding January 18, with offers due April 26. Construction would begin in December 2007 and wrap up in March 2009. Under the independent power producer contract, the winner would supply power to CFE for 20 years.
Ministry Issues Permits For Sonora LNG Project
December 19, 2006
The Environment Ministry has granted U.S. power company El Paso three permits for an LNG project at Puerto Libertad in Sonora State. The project would include an LNG receipt, storage and re-gasification facility and a natural gas pipeline system that would provide natural gas to Sonora and the southwest U.S. El Paso is working with UBS Securities to identify potential suppliers.
Pemex To Unveil Projects Portfolio End-January
December 27, 2006
Pemex expects to publish at end-January a portfolio of projects to be carried out during 2007 and possible planned works for the rest of President Calderon's term. One priority project includes the construction of a new refinery that would process 310,000b/d of crude and cost USD 4.8 billion-5.5 billion. Further, Pemex is planning a cogeneration project for its Nuevo Pemex gas-processing center in Tabasco.
Pemex To Invest MXN 13 Billion In Tabasco Oil Field
December 22, 2006
Pemex said it plans to invest MXN 13 billion in the Jujo-Tecominoacan oil field in Tabasco State during the 2007-2021 period. The project includes completing 11 development wells and repairing 34 wells and building 6km of oil-gas pipelines, 25km of oil pipelines, and 15km of gas pipelines. The Jujo-Tecominoacan field is the second-largest hydrocarbon reservoir in Southern Mexico.
McDermott Begins Construction Of Deepwater Platform Yard
December 19, 2006
U.S. company J. Ray McDermott has begun construction on the USD 20 million first phase of a USD 220 million construction yard in Tamaulipas State to build deepwater oil platforms. The company expects to be in conditions to start building platforms in July 2007. McDermott is building the yard on land at Altamira port. The government awarded the company the yard space in a 30-year concession.
Pemex Names New Head Of Refining Division
December 21, 2006
Pemex said that Jose Antonio Ceballos was named as head of the company's refining division, replacing Miguel Tame Dominguez. The state oil company also said Carlos Morales Gil will remain in charge of Pemex's exploration and production division, with Roberto Ramirez being ratified as the head of its gas division, and Rafael Beverido staying in charge of the petrochemicals division.
Gasoline Output In 2015 To Reach 796,500b/d
December 29, 2006
Mexico aims to increase gasoline production to 796,500b/d in 2015, according to a report by the Energy Ministry. The output will satisfy 81% of the country's gasoline demand and reduce imports 17.5% with respect to 2005, when domestic production stood at 439,500b/d, according to the report. Regarding diesel, the country aims to become self-sufficient in 2012.
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Mining
Arcelor Mittal Buys Sicartsa For USD 1.4 Billion
December 20, 2006
Arcelor Mittal, the world's largest steelmaker, announced its purchase of Mexican integrated steel producer Sicartsa from Grupo Villacero for USD 1.44 billion. In addition, Arcelor Mittal agreed to start a 50-50 JV with Villacero for distribution and trade of its long steel products in Mexico and the U.S. Sicartsa has an annual production capacity of some 2.7 million tons and estimated iron ore reserves of 160 million tons.
Villacero To Invest Sicartsa Sale Earnings In Business Units
December 26, 2006
Grupo Villacero, with the sale of Sicartsa, said it plans to focus on distribution and trade of the plant's products and further downstream operations. Villacero aims to invest the USD 901 million net the company earned from the sale of Sicartsa after subtracting its USD 539 million in debt in its different business units. About 33% will go to new transformation facilities, 33% to its commercial units and the remainder to financial group Afirme.
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Banking & Finance
Ministry Grants UBS Banking License
December 27, 2006
The Finance Ministry has granted a banking license to UBS Bank Mexico, a unit of Switzerland's UBS. UBS Bank Mexico forms part of financial group UBS Grupo Financiero with stockbrokerage UBS Casa de Bolsa. The new bank will start operations with an initial capital of USD 29.0 million. Banking regulator CNBV has to give final permission to UBS to open its doors for business.
Use Of Credit And Debit Cards Up 50%
December 23, 2006
The use of credit and debit cards grew 49.8% between September 2005 and September 2006, according to the Bank of Mexico. The central bank said credit card transactions reached 71.8 million, while debit card transactions totaled 64.9 million. An aggressive campaign by the banking industry to encourage card usage and the growing number of businesses having credit/debit card terminals helped boost card usage during the said period.
Stock Exchange Rises For Fourth Straight Year
December 31, 2006
The Stock Exchange rose for a fourth straight year, the longest streak of gains since 1993, on expectations that President Calderon will have support to simplify taxes and boost investment to spur the economy. The IPC benchmark stock index gained 153.11 points in the last trading day of 2006, or 0.6%, to a record 26,448.32. That put the gain for 2006 at 49%, the most in a year since 1999.
Tax Agency Appeals Court Ruling Favoring Banamex
December 18, 2006
Mexico's tax agency (SAT) said it has filed an appeal with the Supreme Court against a recent tax ruling in favor of banking group Banamex. The bank has been in a five-year dispute over taxes that the government says it owes from the 1996 fiscal year totaling MXN 1.62 billion. A court ruled last month that the 16-month tax review completed in 2001 was unconstitutional because of the length of the process.
Ixe Grupo Financiero Nine-Month Earnings Jump 79%
December 20, 2006
Mexican financial group Ixe Grupo Financiero reported a 79% jump in net profits for the first nine months this year to MXN 147 million compared to the same period last year. ROE for the third quarter stood at 23.8% compared to 27.5% in 2Q06. Profits at its main subsidiary, niche bank Banco Ixe, dropped 47% to MXN 38 million due to higher investment spending and credit card business growth.
Insurance Industry Nine-Month Earnings Fall 16%
December 19, 2006
The insurance industry reported a drop in nominal terms of 16% in net profits for the first nine months this year compared to the same period in 2005. Net income declined to MXN 6.68 billion from the MXN 7.96 billion earned in the first three quarters of last year. Direct written premiums, which represented 98.5% of total written premiums, increased 13.4% in real terms to MXN 118 billion.
Pension Assets Rise 22% In 12 Months To November
December 22, 2006
Pension fund managers (Afores) saw assets under management reach MXN 707 billion at end-November, up 22.2% compared to the same time in 2005, according to watchdog Consar. Mexico's three largest Afores in terms of assets under management finished November with the following market share: Afore Banamex (18%), Afore Bancomer (17%), and Afore Inbursa (12%).
Regulator Authorizes Two New Reinsurance Brokers
December 21, 2006
Insurance regulator CNSF has authorized the registration of two foreign reinsurance brokers. The new brokers are Hong Kong's China International Reinsurance Company and Bermuda's Gard Marine & Energy. CNSF said the authorizations were granted due to the brokers' good ratings from international ratings agencies. The brokers had ratings of A- and A from S&P, respectively.
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Business & Industry
Coca-Cola Femsa, Coca-Cola Agree To Buy Jugos De Valle
December 19, 2006
Mexican soft-drink bottler Coca-Cola Femsa and the Coca-Cola Company have agreed to buy Mexican juice maker Jugos del Valle for USD 380 million, plus about USD 90 million in debt. The deal aims to increase Coca-Cola's presence in the noncarbonated beverage segment in Latin America. Jugos del Valle is the second-largest producer of packaged juices and fruit-flavored beverages in Mexico and the largest producer in Brazil.
Sharp Plans A New LCD TV Assembly Plant In Mexico
December 26, 2006
Japanese electronics maker Sharp plans to spend about JPY 5 billion to build a new plant in Mexico to assemble LCD TVs for the North American market, the Nihon Keizai daily said. The new factory would have an initial monthly output of about 100,000 units by next autumn, tripling the company's local production. Sharp has yet to make a final decision on a new plant, a company spokesperson said.
Flextronics Completes First Phase Of Chihuahua Facility
December 21, 2006
Singapore-based electronics manufacturer Flextronics has expanded its presence in Mexico through the first phase completion of its planned 1.9-million-square-foot facility in Ciudad Juarez, Chihuahua. The company said its expansion in Juarez strengthens its ability to quickly deliver customer products to the North American market at lower costs. The company also has operations in Guadalajara and Aguascalientes.
PASA Wins Bid For USD 25 Million Waste Concession
December 20, 2006
The municipality of Guaymas in Sonora State has awarded a USD 24.9 million collection and storage contract to waste management and disposal company PASA. The company estimates that the 15-year contract will enable it to collect some 100t/d of trash and store some 130t/d at the municipal landfill it will operate. It plans for such operations to provide some MXN 18 million/year in sales from the city.
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Automotive
Freightliner To Build USD 300 Million Factory In Coahuila
December 20, 2006
Freightliner, a truck-making unit of DaimlerChrysler, said it plans to build a USD 300 million plant in Saltillo, Coahuila State. The truck maker said it is building the plant in anticipation of a rise in demand in 2009, when a new round of U.S. emissions regulations aimed at trucks will take effect. The new plant could produce up to 30,000 trucks a year. Production is expected to start in 2009.
Honda To Invest USD 80 Million In Jalisco Plant
December 19, 2006
Japanese automaker Honda said it will start producing its CR-V crossover SUV at its El Salto plant in the state of Jalisco in fall 2007. The company will invest USD 80 million in the plant to increase annual capacity from 30,000 to 50,000 units. Honda said production is mainly meant for the local market and for export to the Americas.
Ford Agrees To Sell Chihuahua Auto Parts Plant
December 18, 2006
Ford Motor Co. agreed to sell its El Jarudo auto parts plant to U.S. automotive supplier Cooper-Standard. The automotive fuel rail factory located in Ciudad Juarez, Chihuahua, has about 500 workers. Financial terms weren't disclosed. The plant was part of Automotive Components Holdings (ACH), a temporary business formed by Ford with the intent of closing or selling some auto parts plants.
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Construction, Housing and Mortgaging
Calderon Aims For 6 Million Home Loans 2007-2012
December 18, 2006
President Calderon said he wants 6 million home loans awarded in the country during his six-year administration, nearly triple the amount granted during the previous government. Calderon said his first priority is to help lower-income families buy a house. The country's biggest home lender Infonavit plans to increase lending to more than 500,000 credits in 2007, with a goal of 1 million loans in 2010.
Banorte Places First MBS
December 19, 2006
Mexico's fifth-largest bank Banorte has placed MXN 2.05 billion in mortgage-backed securities (MBS) on the Stock Exchange in the first operation of its kind by a commercial bank in Mexico. The bank said it sold MXN 1.99 billion in senior MBS at 8.27%, and MXN 62 million in subordinated MBS at 9.45%. The issuance is part of a MXN 10 billion, five-year MBS program.
IDB Provides Metrofinanciera With USD 52.5 Million In Credit Guarantees
December 26, 2006
The IDB has provided special-purpose mortgage provider Metrofinanciera with partial credit guarantees for USD 52.5 million. The IDB partial credit guarantee covers USD 175 million equivalent in notes issued by Metrofinanciera and subscribed to by Deutsche Bank. The mortgage warehouse facility could support the issuance of USD 800 million in mortgage-backed securities.
ICA Awarded Construction Contracts For MXN 541 Million
December 19, 2006
Mexican engineering and construction company Empresas ICA said it signed three construction contracts for MXN 541 million. Two contracts for a combined MXN 294 million are to carry out repair work on two sections of the Mexico City Metro system, and the third is a MXN 247 million contract for the construction of a court building in the Sinaloa state capital Culiacan.
State Of Mexico Earmarks MXN 36 Billion For Highway Spending In 2007
December 27, 2006
The State of Mexico said it expects to spend MXN 36.0 billion in 2007 on the construction of nine new highways for the state. For each of these projects the state is looking at private capital and assistance from the federal government. Of the nine highways, four are currently under construction. The goal is to have these four highways completed and operational by end-2007.
Ministry Selects Coconal For Saltillo-Monterrey Highway Concession
December 19, 2006
The Communications and Transport Ministry has awarded the Saltillo-Monterrey highway concession to local construction firm Coconal, along with Spanish companies Isolux Corsan and Elsamex. The three companies will carry out MXN 4 billion works on the toll highway running from Saltillo in Coahuila State and into Monterrey in Nuevo Leon State. Works are slated for completion in August 2008.
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Retail
Retail Association Says November Sales Up 14%
December 18, 2006
Retail association Antad said that sales at its member establishments grew 14.3% in November on the year, with same-store sales up 5.1% from the year-ago month. The 5.1% rise in same-store sales was the highest since June, and the rise in total sales was the highest since August. Antad represents most of the country's self-service chains except Wal-Mart de Mexico. back to top
Transportation
Delta Air Lines To Increase Mexican Destinations By 16
December 28, 2006
Delta Air Lines announced it would be increasing its operations by almost four times in Mexico within the first trimester of 2007. The U.S. carrier, which currently flies to six destinations in Mexico, plans to increase that figure to 22 cities by next year. Mexico is the principal market the airline wants to target outside of its domestic market in the future, according to a company executive.
After Volaris, Slim Looks To Invest In Other Carriers
December 22, 2006
Mexican billionaire Carlos Slim will begin financing other airline companies through the investment house Inbursa that he also owns, according to Inbursa CEO Jose Heredia. Slim, who is a partner in the budget airline Volaris, has so far spent more than USD 70 million on the carrier. "We don't have any exclusivity with Volaris but we'll be very careful on how to proceed," said Heredia.
Grupo Senda Seeks Alliances With Low-Cost Airlines
December 26, 2006
Mexican bus company Grupo Senda is seeking alliances with low-cost airline carriers to offer passengers package services, according to a company official. He acknowledged that low-cost airlines had hurt business in longer bus routes at higher price points. Earlier in the week Grupo Senda said it will open new routes to Texas in 2007. The firm has bought 100 new buses from U.S. manufacturer MCI.
GMD Awarded USD 50 Million Terminal Concession At Lazaro Cardenas
December 21, 2006
Mexican construction and engineering firm GMD has received a USD 50 million, 25-year contract from the Lazaro Cardenas Port Administration (API) to build and operate a new terminal there. The terminal will contain two docks with a combined capacity to handle 5Mt/y of mineral bulk and steel derivatives. Construction is slated to begin in May next year and wrap up in the same month 2008.
KCSM To Introduce Passenger Trains
December 18, 2006
Mexican rail company Kansas City Southern de Mexico said it will launch passenger service in the near term. The service will be launched in Mexico City and use existing lines, according to a company official. He also said that while some rail projects in Mexico had been slow in recent years, 2007 under a new presidential administration was looking very dynamic.
Bancomext To Sell Two Chilean Highways In 2007
December 26, 2006
Mexican development bank Bancomext is planning on selling its stake in two Chilean highways in the near term, according to a person familiar with the situation. Bancomext did not sell its controlling stake in the highways last year because the concessions "were still operating in the red," the person said. Bancomext has valued its stakes in the Aconcagua and Itata highways at USD 400 million.
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Telecommunications & Technology
3Q Telecom Activity Up 17% On Year
December 20, 2006
Telecom regulator Cofetel said that activity in the sector grew 16.7% in the third quarter from the year-ago period. Cofetel said that the number of wireless-phone users grew 19.9% to 53 million. Wireless traffic was up 26% from the year-ago quarter. The biggest increase was in trunking services, which grew 31.8%. Other major increase was seen in satellite TV, which grew 15.9%.
Alestra, Maxcom Agree To Join Calling Party Pays Pact
December 18, 2006
Fixed-line operators Alestra and Maxcom have agreed to implement a national and international calling party pays system. The agreement they reached with mobile operators Telcel, Unefon and Iusacell as well as fixed-line giant Telmex included a decrease in interconnection rates over the next four years. Axtel, Marcatel, Protel and Telefonica are reviewing the agreement to determine whether to join it.
Telecom Regulator Issues Number Portability Rules
December 19, 2006
Telecom regulator Cofetel released rules for telephone users wishing to keep the same phone number if they switch their service provider, and the rules are expected to go into effect in 2007. Number portability was one of the pending issues as the country moves to implement triple play. The rules – which also apply to mobile phone numbers – have to be reviewed by regulatory overseer Cofemer.
Telecom Regulator – No Justification To Charge Telmex Fee For Triple Play
December 18, 2006
Telecom regulator Cofetel has found no legal justification to charge Telmex a fee to offer video services. The company's concession contract does not permit it to offer such services, and critics have argued that it would be damaging to industry competition to allow Telmex into the TV market. The Finance Ministry will now handle Cofetel's recommendations and make a final decision.
Televisa Forms Ventures With Cable Companies
January 1, 2007
Grupo Televisa has formed a venture for triple-play services with three cable companies, according to Proceso magazine. Proceso said that Televisa's strategy was to form ventures with cable companies, including Cablemas, Megacable and Multimedios de Monterrey in order to provide high-speed Internet services and seize market share from businesses related to Carlos Slim.
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Fishing, Farming & Agriculture
Sugar Imports Up 195% In January-October
December 23, 2006
The Agriculture Ministry announced that during the first 10 months of the year, sugar imports increased by 195% compared to the same period in 2005. From January to October 2005, Mexico imported USD 49 million worth of sugar, while in 2006 it purchased USD 144.9 million. The increase is because the Economy Ministry authorized importing sugar to break the price speculation that was evident in the market between last July and September.
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Economy
Congress Approves Balanced 2007 Budget
December 23, 2006
Congress approved the 2007 budget, the second balanced fiscal plan in two years. Lawmakers passed Calderon's first budget with minor tweaks to edge up funding for highways, education and rural areas. The budget foresees total outlays of about USD 205 billion and includes a pension plan for the elderly championed by Lopez Obrador. Legislators raised the tax on tobacco, but blocked a tax on soda pop on the grounds that it would hurt the poor.
Government Registers MXN 159 Billion Budget Surplus January-November
December 29, 2006
The government registered a MXN 1.7 billion budget surplus in November, bringing the year-to-date surplus to MXN 158.5 billion. Budget revenue in the first 11 months of the year rose 12.6% to MXN 2.036 trillion. The government planned a balanced budget for 2006, although it is expected to end the year with a small surplus, given extraordinary income from higher-than-expected oil prices and other sources.
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Border & Migration
Arrests Of Illegal Migrants Along U.S.-Mexican Border Drop
December 27, 2006
Arrests of illegal migrants along the U.S.-Mexican border have dropped by more than a third since U.S. National Guard troops started helping with border security, suggesting that fewer people may be trying to cross. U.S. Border Patrol agents arrested 149,238 fewer people from the start of July through November, down 34% from the same period last year.
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Politics
Electoral Institute Posts Tally Sheets From Disputed Elections On Internet
December 21, 2006
The Federal Electoral Institute (IFE) posted tally sheets from the disputed July 2 elections on the Internet. The IFE said in a news release that it made public the more than 500,000 tally sheets of the presidential and congressional races for the first time since the agency was formed in 1990 to advance the path of transparency.
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Justice, Safety & Crime
Michoacan Military Operation Enters Phase Two
December 22, 2006
Eleven days into a campaign aimed at crushing organized drug traffickers in the state of Michoacan, Army officials announced that the military operation is entering a new phase, with state law enforcement agencies playing a larger role. A key shift in phase two will be more focus on urban operations. The first 11 days of the operation netted 60 arrests and seized or destroyed marijuana that could cost the drug cartels as much as USD 626 million.
Government Plans New 30,000-Strong Nationwide Police Force
December 20, 2006
The government will set up a new 30,000-strong police force –the Federal Police Corp– to strengthen anticrime efforts. The new force will redesign crime-fighting strategies and try to help improve the efficiency of other federal police agencies. Last week the government decided to bring together the Federal Investigation Agency (AFI) and the Federal Preventative Police (PFP), to make anticrime coordination more effective.
U.S. Envoy Praises Mexico For Extraditing More Fugitives
December 28, 2006
U.S. Ambassador Tony Garza praised Mexico for extraditing what he called a record number of fugitives to the U.S. in 2006, noting that Mexico sent 63 suspects north to face justice. Extraditing fugitives to the U.S. remains a sensitive issue. Mexico only recently began extraditing people facing possible life sentences and refuses to extradite those facing possible death sentences.
U.S. Deports Alleged Tijuana Drug Cartel Member To Mexico
December 22, 2006
The U.S. has deported a suspected Tijuana drug cartel member who was arrested earlier this year along with alleged kingpin Francisco Javier Arellano Felix. Cesar Niebla was deported to the border city of Nogales in Sonora State after U.S. authorities did not find enough evidence to charge him. The attorney general's office alleges that Niebla belongs to the Tijuana cartel.
Report Sheds Light On Former President Echeverria Case
December 19, 2006
The judge who ordered the recent arrest of former President Luis Echeverria had determined that there was probable cause to believe he was directly linked to the 1968 deaths of student protesters, according to a federal court report. The report said Echeverria, then Interior Minister, apparently gave the order to repress the student movement without any justification or a threat against national security.
Mexico Second Most Dangerous Country For Journalists In 2006
January 2, 2007
Mexico was the second most dangerous country in the world for journalists in 2006, topped only by Iraq, according to a report published by the watchdog group Reporters Without Borders. Nine journalists were killed in Mexico last year while investigating drug trafficking or reporting on violent social unrest. Overall, 16 of the 81 journalists killed around the world in 2007 were in the Americas.
Hybrid Marijuana Plant Found In Michoacan
December 20, 2006
Soldiers trying to seize control of one of Mexico's top drug-producing regions found the countryside teeming with a new hybrid marijuana plant that can be cultivated year-round and cannot be killed with herbicides. The hybrid first appeared in Mexico two years ago but has become the plant of choice for drug traffickers in Michoacan. The new plants are known as "Colombians."
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Other
Gene Mutation Found That Makes Mexicans Likelier To Get Diabetes
December 18, 2006
Researchers at the National Autonomous University of Mexico have discovered a gene mutation that may explain the high rate of diabetes among Mexicans. In Mexico the mutation is found in 15% to 20% of mestizos who are diagnosed with diabetes before the age of 35, as well as in 13% and 6% of Teenek and Mazahuas Indians, respectively. According to the Health Ministry, some 9% of Mexico's adult population is diabetic.
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