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Energy
SHCP: Mexico Will Not Reduce Gasoline Subsidy
June 26, 2008
The Finance and Public Credit Ministry (SHCP) said that the government does not plan to reduce subsidies for gasoline despite soaring global fuel prices. Officials said that an idea that SHCP is going to be forced to adjust the subsidies is not backed up by any macroeconomic variable. The government is expected to spend close to USD 20 billion this year to subsidize prices for gasoline, diesel, and domestic gas. President Calderon has kept the subsidies in part to contain inflation as well as to maintain popular support for his government.
PRI Party Rejects Special Session For Energy Reform
June 26, 2008
The Institutional Revolutionary Party (PRI) has rejected calls for a special congressional session to approve an energy-overhaul bill later this summer. The ruling National Action Party (PAN) needs support from the PRI to approve the bill, which would expand private investment in the oil industry and lower tax rates at oil fields with expensive production costs. PRI said that setting the energy agenda is not a priority, as the legislative process is still green; political parties still need to reach a consensus on the measure and the PRI may come up with its own version of an energy-overhaul bill.
Mexican Oil Reaches USD 122.26 P/B Record High
June 27, 2008
Mexican oil reached a record high of USD 122.26 per barrel (p/b), almost USD 1 higher than a day earlier, when it was sold at USD 121.31 p/b; USD 5 higher than a week ago. The Mexican oil price has jumped almost 150% if compared with the Lower House’s estimates, a calculation that was based on the price of USD 49 at the end of 2007. Analysts said that speculation, the U.S. presidential election and the weakness of dollar are among the factors that have driven up the price.
Pemex Worker Union Seeks 10% Salary Increase
June 28, 2008
The Oil Workers Union wants a 10% increase in salaries and 5% increase in benefits from Pemex. The union will hold a meeting shortly to ask that the new terms go into effect by August 1. The workers are currently under a two-year contract signed in July 2007, whose rules dictate that there can be no modifications except for wages and benefits.
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Mining
Mining Investment During Current Administration Estimated At USD 24 Billion
June 24, 2008
Economy Minister Eduardo Sojo said that total local and foreign investment in the mining sector during President Calderon’s administration (2006-2012) is expected to be of some USD 24 billion. The Ministry has said that the government and the private sector have estimated the current year’s investment in the mining sector at some USD 3.18 billion, a 59% increase compared to the previous year’s USD 2 billion. Mexico’s Mining Chamber (Camimex) expects its member companies alone to invest some USD 2.25 billion in 2008.
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Trade & Investment
Mexico Seeks Combined FTA With Central American States
June 27, 2008
Economy Minister Eduardo Sojo said that Mexico has started negotiations to consolidate the three free trade agreements (FTA) it has with Central American countries into a single accord. Regional integration is expected to facilitate trade by harmonizing rules and different procedures, and also to reduce operation costs. Mexico currently has a free trade agreement with Costa Rica, another with Nicaragua, and one with the Northern Triangle that encompasses El Salvador, Guatemala and Honduras.
May Trade Deficit Reaches USD 61 Million
June 23, 2008
Mexico registered a USD 61 million trade deficit in May, narrower than a year ago as record oil prices compensated for relatively slow growth in manufacturing exports. The Finance and Public Credit Ministry (SHCP) said that exports rose 9% year on year last month to USD 25.96 billion. The deficit brought the balance for the first five months of 2008 to a deficit of USD 2.8 billion.
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Banking, Insurance & Finance
Mexico Bank Lending Grows 24% In 1 Q
June 24, 2008
The National Banking and Securities Commission (CNBV) said that Mexican bank lending grew 24% in 1Q over the year-ago period while non-performing loans jumped 42%. Total bank credit stood at USD 170 billion at the end of March, and deposits were at USD 194 billion, up 17%. Net profits for Mexico's banks in the 1Q reached USD 2.15 billion, a 54.2% increase from the like 2007 period, due in large part to one-time gains.
Mexican Lender Financiera Independencia Sells MXN 784 Million In Debt
June 27, 2008
Mexican microfinance lender Financiera Independencia said that it has sold MXN 784 million in corporate notes to finance its growth plans. The company said the three-year notes were issued under an MXN 1.5 billion debt program. Financiera Independencia said it plans to use the proceeds from the sale to fund lending, finance the expansion of its office network, pay down debt, and for other corporate purposes. HSBC Mexico, a unit of U.K.-based HSBC Holdings, owns a minority stake in the lender.
Mexican Investors Eye Spain's Banco Popular
June 24, 2008
U.K.-registered entity Blueprime, acting on behalf of a group of Mexican investors, said it was in advanced talks to acquire up to 20% in Spanish bank Banco Popular. Blueprime said it had already signed a deal with one Banco Popular investor, represented by Spanish property developer Trinitario Casanova, to acquire a 3.5% stake in the bank for EUR 14.20 per share.
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Business & Industry
European Commission Fines Mexican Aluminum Makers EUR 1.6 Billion
June 25, 2008
The European Commission fined Mexican aluminum fluorure producers Industrial Quimica de Mexico and Industrias SAB EUR 1.6 billion each for alleged monopoly practices derived from their alliance with Italian, Swiss and Tunisian peers Fluorsid, Minmet Financing Company and Societe des Industries Chimiques du Fluor. Fines to all the parties involved total EUR 4.97 billion.
FEMSA Acquires Brazilian Bottler For USD 364 Million
June 27, 2008
Mexico-based Coca-Cola FEMSA (KOF) said it completed the purchase of Brazilian bottler Refrigerantes Minas Gerais (Remil) from Atlanta-based Coca-Cola Company. The operation, which is still subject to the approval of Brazilian antitrust authorities, will give KOF’s consolidated Brazilian operations a 30% share of the Coca-Cola bottling system in the South American State, with more than 41 million consumers. KOF will employ approximately 9,200 people in Brazil.
Mexichem Completes Acquisition Of Brazilian Geotextile Maker
June 24, 2008
Mexican chemical company Mexichem said it has completed the acquisition of Brazilian geotextile manufacturer Bidim from U.K. parent firm Fiberweb for an undisclosed amount. Fiberweb manufactures polyester non-woven fabrics. Geotextiles are fabrics used among other things for separation, drainage and erosion control on roads, canals and reservoirs. Bidim's main markets include Brazil, Argentina, Uruguay and Paraguay.
SABMiller Held Merger Talks With Grupo Modelo
June 24, 2008
Brewer SABMiller has held informal discussions with Mexican peer Grupo Modelo (GModelo) and Brazilian-Belgian InBev to explore options including a future merger of Modelo and SABMiller. Discussions have included the possibility of SABMiller acquiring part or all of GModelo, in the event that InBev succeeds in its proposed USD 46.3 billion takeover of Anheuser-Busch. Anheuser owns 50% of GModelo, maker of Corona beer.
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Automotive
Mexico On Track To Surpass Canada As North America's #2 Automaker
June 25, 2008
Mexico is riding a boom in small-car sales that has put the nation's vehicle production on track to pass Canada for the first time and become the second-largest vehicle manufacturer in North America this year. Mexico saw production begin to take off after the North American Free-Trade Agreement (NAFTA) came into effect in 1994. Low labor costs are allowing Mexico to maintain a competitive edge; particularly in the manufacturing of popular subcompact vehicles that are expensive to produce in Canada and the U.S. There currently is more investment in small cars under way in Mexico than in Canada.
Geely Eyes U.S. Markets Via Mexico
June 23, 2008
Chinese car manufacturer Geely Automobile Holdings said it plans to enter American markets through a USD 500 million car assembly plant in Mexico. Geely said it will build an industrial park along with a local firm, including a car plant that is expected to manufacture 300,000 vehicles a year. Although Geely has said it expected construction of the plant to start in early 2008, the industrial park has not been finalized as the firm is still in talks with the government, seeking more favorable policies.
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Housing & Mortgaging
ICA Begins Construction Of MXN 1.77 Billion Plant
June 27, 2008
Mexican construction company ICA said it has begun constructing a new MXN 1.77 billion plant in the state of Hidalgo to produce materials and components to build houses. The plant will manufacture components for the Casaflex houses. ICA and local homebuilder Controladora Garciavelez recently entered a JV to create Casaflex which builds houses with three-dimensional modules and reinforced concrete. The facility in the state of Hidalgo is expected to create 720 direct jobs and about 8,600 indirect jobs. In its first phase, the plant will have a capacity to produce 8,406 houses per year.
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Construction & Infrastructure
Pinfra Wins USD 262 Million Highway Concession
June 24, 2008
Mexican infrastructure operator Pinfra has won a 30-year concession to build, operate and maintain a USD 262 million highway north of Mexico City. The 54-kilometer, four-lane highway from the town of Atlacomulco to the town of Palmillas will communicate with existing highways to better connect Mexico City with the major industrial hubs of Toluca, in the State of Mexico (Edomex) and Queretaro, in the state of the same name.
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Transportation
Canacar Sues U.S. Department Of Transportation
June 25, 2008
Canacar, the private organization representing the majority of Mexico’s freight haulers, has sued the U.S. Department of Transportation (DOT) for damages to Mexican truckers deriving from omitted investments and for failing to comply with the North American Free Trade Agreement (NAFTA)’s articles allowing Mexican truckers to enter U.S. soil. Canacar’s President Tirso Martinez said that should they win the case, Mexican truckers could be paid a USD 6 million indemnity. Martinez also called for Mexican authorities to give U.S. truckers a similar treatment to what Mexican counterparts are given in the U.S.
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Telecommunications & Technology
Satmex Signs Accord With Space Systems/Loral For Construction Of Satmex 7
June 24, 2008
Mexican satellite company Satelites Mexicanos (Satmex) announced that it has issued an Authorization To Proceed (ATP) with the construction of Satmex 7 to Space Systems/Loral (SS/L). The new satellite will provide Fixed Satellite Services (FSS) in the Americas. Satmex 7 will be latest generation high-power C and Ku-band satellite that will augment the current Satmex fleet in providing services such as broadband, voice and data transmission, and video broadcasting, including HDTV. It is being designed to be located at 114.9 degrees West, today occupied by Solidaridad 2, and its launch is programmed for 2011.
SCJN: Government Must Replace Two Cofetel Commissioners
June 24, 2008
The Supreme Court (SCJN) ruled the government has to replace two of the commissioners at the Federal Telecommunications Commission (Cofetel) because their appointment process was unconstitutional. SCJN said serving commissioners Gerardo Francisco Gonzalez and Eduardo Ruiz must step down and be replaced by former nominees Rafael del Villar and Gonzalo Martinez. SCJN declared unconstitutional last year a clause in the telecommunications law that allowed the Senate to block proposed commissioners of the Cofetel because it violated the division of powers since Cofetel is a decentralized agency of the executive branch.
Axtel Starts Operations In Veracruz
June 26, 2008
Mexican telecommunications company Axtel has expanded coverage in the state of Veracruz to include the cities of Coatzacoalcos and Minatitlan. Over the next five years, Axtel will invest USD 13 million in Coatzacoalcos and USD 11 million in Minatitlan. Axtel provides fixed-line telephone and Internet services with Wimax wireless technology.
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Farming & Agriculture
Mexico Bans Arkansas Poultry On Bird Flu
June 25, 2008
The Agriculture, Livestock and Rural Development Ministry (SAGARPA) said that Mexico will ban all imports of poultry and poultry products from Arkansas after a small flock in that U.S. state had been exposed to a mild form of bird flu. Mexico, whose largest trading partner is the U.S., joined Japan, Russia and Taiwan who also closed their borders temporarily to chicken imports. Mexico said it would resume imports once the virus was completely contained. U.S. chicken from other states still can be shipped to Mexico. SAGARPA said that also fertilized eggs, song birds and messenger pigeons are banned indefinitely.
U.S. Wants To Open FDA Inspection Office In Latin America
June 23, 2008
U.S. Health and Human Services Secretary Michael Leavitt said the U.S. wants to open an office in Latin America to monitor food safety. His comments came as U.S. inspectors combed Mexican farms and distribution sites to determine if a salmonella outbreak that has sickened more than 500 people in the U.S. originated in Mexico or Florida. A team of inspectors from the U.S. Food and Drug Administration (FDA) arrived and are focusing their investigation on tomatoes from three states: Jalisco, Sinaloa and Coahuila. Meanwhile, the National Farming Counsel (CNA) said that tomato producers from Mexico and the U.S. have lost about USD 100 million.
Mexico Calls For Reducing Production Of Ethanol From Grain
June 26, 2008
The Agriculture, Livestock and Rural Development Ministry (SAGARPA) said that ethanol production is bankrupting cattle and poultry farmers and causing food prices to hit record highs around the world. The head of SAGARPA, Alberto Cardenas, said countries should change their policies and reduce production of grains for the alternative fuel. Cardenas said the government has earmarked more than MXN 9 billion to help 500,000 ranchers. Mexico recently froze prices on more than 150 food products to help families cope with rising prices.
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Hospitality & Tourism
Grupo Posadas To Build 5-Star Hotel In Chile
June 25, 2008
Mexican hotel company Grupo Posadas and Chilean construction firm Boetch plan to build a five-star hotel in the resort city of Viña del Mar, Chile. The hotel will be constructed on the 5,000 square meter lot currently occupied by Maritimo Hospital in the city, which is located 120 kilometers west of Santiago. The hospital's owners have agreed to sell the property to the Mexican company for USD 8 million. The 14-story hotel will cater to tourists and business travelers, offering meeting and conference rooms, recreational facilities, a gym and restaurants. The new property will be part of the chain of more than 100 hotels operated by Grupo Posadas around the world.
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Border & Migration
U.S. Court Rejects Challenge To Arizona Border Fence
June 27, 2008
The U.S. Supreme Court rejected a legal challenge by two environmental groups to the U.S. Homeland Security secretary's decision to waive 19 federal laws so a fence could be built on the Arizona-Mexico border. The high court refused to hear an appeal by Defenders of Wildlife and the Sierra Club challenging a 2005 law that Secretary Michael Chertoff invoked on the grounds that it violated the constitutional separation of powers principles. However, the first of 400,000 trees are being planted to form a "green wall" in protest of the fence. The treeline will eventually stretch for 318 miles (512 kilometers) along the border between the state of Coahuila and Texas.
Police To Escort Migrants’ Transfers, INM Officials Fired
June 27, 2008
Interior Minister Juan Camilo Mouriño said that police will now escort illegal migrant’s transfers to governmental facilities, as 33 Cubans were snatched from federal immigration authorities last month. Mouriño also ordered officials from the National Immigration Institute (INM) to be interrogated and evaluated, as well as the dismissal of officials from INM’s offices in the state of Quintana Roo, where the majority of Cuban illegal immigrants are detained. Authorities have discovered that corrupt INM officials received USD 6,000 for every Cuban immigrant they successfully helped reach the U.S. via the state of Tamaulipas. In addition, authorities recently detained 130 Central Americans in the state of Chiapas.
U.S. Authorities Arrest 160 In Raid At A Houston Plant
June 26, 2008
U.S. Federal immigration agents arrested 160 employees in a raid on a used clothing and rag exporting plant in Houston. Most of those arrested were from Mexico, El Salvador, Guatemala and Honduras, and 70% of them were women. It was the second major raid in Houston in just over two months. Federal agents arrested 20 workers at a Shipley Do-Nuts factory on April 16. About 200 immigration agents conducted the roundup at Action Rags USA, which is just north of the Houston Ship Channel.
Migrant Smugglers Disguise Illegal Immigrants As Tourists
June 25, 2008
According to the migratory affairs commission from the Institutional Revolutionary Party (PRI), migrant smugglers in yachts and luxury boats intercept at sea Cubans going to the U.S. and disguise them as tourists. The smugglers also provide the illegal immigrants with fake documents. The yachts usually set sail from Cancun, Isla Mujeres and Cozumel, in the state of Quintana Roo. Mexico’s navy has intercepted boats that were reported as stolen in Florida.
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Politics
Uruguayan President Visits Mexico, Invites Mexico To Mercosur
June 22, 2008
Uruguay President Tabare Vazquez said during an official visit that Mexico plays an important role in the integration of Latin America and the Caribbean. President Vazquez said that one the main purposes of his visit included inviting Mexico to form part of the MERCOSUR trade block. President Calderon and Vazquez assisted to the signing of several bilateral cooperation agreements, including a Memorandum of Understanding (MOU) to formalize a Bilateral Strategic Partnership Agreement that will boost relations between the two States. President Calderon said that Mexico and Uruguay are strategic partners and trusted that the Free Trade Agreement (FTA) between the two countries would benefit the consumers and producers of both Nations.
EPR, Government Hold Talks, Avoid New Attacks
June 23, 2008
The federal government and the rebel group People’s Revolutionary Army (EPR) held a secret negotiation that helped avoid new attacks in strategic facilities. The talks also helped avoid the detention of individuals linked to the guerilla. The negotiation between the government and EPR seeks to create a mediation group that would help finding missing guerilla activists that disappeared in 2007.
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Justice, Safety & Crime
U.S. Congress Approves Merida Initiative, President Bush Signs It Into Law
June 27, 2008
The U.S. Senate approved USD 465 million to help Mexico and Central American countries battle drug cartels, and President Bush signed it into law less than week after the approval. The anti-narcotics measure providing U.S. aircraft, equipment and training for Latin American countries to fight drug traffickers was attached to an unrelated bill that mostly funds the wars in Iraq and Afghanistan. Under the bill, the "Merida Initiative" would provide Mexico with USD 400 million and Central American countries USD 65 million this year. Overall, the measure provides USD 85 million less than Bush sought.
Mexico Agrees To Extradite Leader Of Tijuana-Based Drug Cartel To The U.S.
June 25, 2008
Mexico has agreed to extradite Benjamin Arellano Felix, a leader of the Tijuana-based drug cartel, to the U.S. regardless of a judge’s recommendation that Arellano Felix should not be extradited because he should not be tried twice on the same charges. The judge's opinion was not binding, although the government was required to take it into account. Arellano Felix was arrested in 2002 and has already been sentenced to 22 years in prison in Mexico on drug-trafficking and organized crime charges. Authorities say he could be extradited at any time; however, Arellano Felix can seek court protection (“amparo”) and delay his extradition one year. Officials have also announced that Mexico will extradite another 120 criminals at U.S. request.
Gunman Kills Senior Police Officer In Mexico City Restaurant
June 26, 2008
Authorities announced that a heavily armed gunman burst into a restaurant in the north of Mexico City (DF) and shot Igor Labastida, a regional director for trafficking and contraband in the federal police force, and three bodyguards. Police said Labastida and one bodyguard were killed; the two other bodyguards were seriously injured. The killings appear to be part of a recent coordinated effort by drug cartels to go after the federal police agency, which is generally thought to be less corrupt than most state and local police forces.
IFAI Protects Information Of Undercover U.S. Agents In Mexico
June 25, 2008
The Federal Institute of Access to Public Information (IFAI) denied access to statistics regarding the number of U.S. intelligence agents working on Mexican soil as it considered it would endanger national security. IFAI said that the U.S. sends agents to Mexico as the evolution of the crime wave in the country has been rising and help is needed.
Police Seize Two Tons Of Cocaine, 18 Tons Of Pirated Goods
June 25, 2008
Police in the state of Chiapas, on the border with Guatemala, seized two tons of cocaine and arrested seven suspected drug traffickers who said they were members of the Gulf drug cartel, but officials said they believe the group belongs to the rival Sinaloa drug cartel. In addition, police seized 18 tons of pirated CDs and DVDs plus 27,000 counterfeit items such as purses, shoes and clothing. The agents confiscated the merchandise in two operations, one in Mexico City and the other in the city of Merida, in the state of Yucatan.
Executions Reach New Record High
June 25, 2008
Executions in Mexico reached a new record high after 38 people linked to organized crime were murdered in one single day. Authorities said that 18 people were executed in the city of Ciudad Juarez alone, in the state of Chihuahua. According to statistics from a local daily, the drug war in Mexico has left 1,833 dead people during 2008, an average of 10 executions per day.
Authorities To Charge Police Commander In Club Stampede
June 25, 2008
Mexico City Attorney General Rodolfo Felix Cardenas said his office will charge police commander Guillermo Zayas with 12 counts of homicide, one for each person who was killed in a stampede at a nightclub last month. People died crushed or asphyxiated near the club's entrance after police raided it looking for alcohol and drug relations. Seven other police officers are being held pending possible charges in the case. The man who ran the nightclub will be charged with involuntary homicide, and survivors of the stampede said they have been receiving threatening phone calls to prevent them to speak publicly about the raid.
U.S. Agency Intervenes After Politician’s Kin Kidnapped In Mexico
June 27, 2008
U.S. Congressman Silvestre Reyes persuaded U.S. Immigration and Customs Enforcement (ICE) to help arrange ransom for a relative of his wife who was kidnapped from her place of business in Ciudad Juarez, in the state of Chihuahua. After initially demanding USD 500,000 for the safe return of Erika Posselt, the kidnappers eventually agreed with the victim's brother on a ransom of USD 32,000 in U.S. and Mexican currency. Reyes’ use of his influence to have ICE mediate in the case was questioned in the U.S.
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Health & Science
U.S., Mexican Health Secretaries Meet, Discuss Health Issues
June 27, 2008
The U.S. Health and Human Services Secretary Michael Leavitt and Mexico’s Health Minister Jose Angel Villalobos met to discuss the Puebla-Panama Plan, binational health issues and setting up a level three biosecurity laboratory. The two officials said they have been working on the U.S. salmonella outbreak and that tomatoes from 28 Mexican states have already been cleared. However, the state of Sinaloa, which exports 55% of tomatoes to the U.S., is still being investigated.
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Arts & Culture
Peasant Finds 1,000-Year-Old Artifacts At Mexican Site
June 24, 2008
A peasant in the northeastern state of Tamaulipas discovered a sculpture of the Lord of Death, belonging to the Huastec culture and dating to the early post-classical period, from A.D. 900 to A.D. 1200, along with an altar and a stele. The discoveries were made a year ago, but the National Institute of Anthropology and History (INAH) did not report them until recently. Guadalupe Rios, a peasant who lives in Celaya, was working his plot of land when he found the sculpture dedicated to the god Ajhactictamtzemlab, Lord of Death.
Mexican Publishers Offer Books For As Low As MXN 0.5
June 24, 2008
Dozens of publishing houses placed on sale at the Mexico City National Auditorium books they had been keeping stockpiled at their warehouses for prices as low as MXN 0.5. Paloma Saiz, the coordinator of the “Para leer en Libertad" (“To Read In Freedom”) program to encourage reading, said that the Mexican publishing industry has warehouses full of books that in the past had been discounted and put on sale but still had not been bought. Mexican law prevents the books from being donated or given as gifts unless high taxes are paid, and thus many publishing houses see no other alternative but to destroy them. To avoid that, however, last December the Mexico City government held the first book liquidation sale with the participation of eight publishers.
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Other
U.S., Mexican And Canadian Environmental Leaders Reaffirm Commitment
June 26, 2008
U.S., Mexican and Canadian environment Ministers and officials met at the 15th Council Session of the Commission for Environmental Cooperation (CEC), an agency the three States created to address regional environmental concerns. Attendants at the meeting pledged to continue efforts to strengthen environmental policy and collaboration in North America, and identified common priorities in developing the new CEC Strategic Plan for 2010-2015. The partnership complements the environmental provisions of the North American Free Trade Agreement (NAFTA).
Heads Of Mexico, U.S. Universities Meet To Promote Cooperation In Education
June 25, 2008
Over 100 Vice-chancellors and heads of Mexican and U.S. universities met at the first Binational Meeting organized by the National Association of Universities and Education Institutions (ANUIES) to promote university cooperation between Mexico and the U.S. The meeting was held at the Texas University in Austin and was also attended by Mexico’s Public Education Minister Josefina Vazquez Mota and Texas Senator Judith Zaffrini, among others.
Mexico Pays Compensation To Indigenous Men Forced To Have Vasectomies
June 25, 2008
Authorities have agreed to pay a USD 48,000 indemnity to 14 indigenous men coerced into having vasectomies. The Health Ministry of the state of Guerrero says the men will each be paid USD 3,400. The Ministry said that the men have accepted the compensation even though it was far less than the USD 19,000 each they had demanded. The group says state health workers threatened to exclude the men from aid programs unless they agreed to vasectomies between 1998 and 1999.
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