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Energy
SENER: Central America Refinery Plan Still On Table
July 3, 2008
Energy Minister Georgina Kessel said that a plan to build a new oil refinery in Central America as part of a regional energy integration project is still on the table, despite delays. Kessel said Mexico still had a pledge to supply the planned refinery, which would take several years to build, with crude oil for a period of eight years. The deadline for offers to build the refinery has been repeatedly postponed as countries like Guatemala, Honduras and Panama compete over which will be home to the new plant. Companies that have shown interest in the refinery include Royal Dutch Shell, Chevron, Valero Energy and Petrobras.
Gas Natural Sells 15% Of Mexican Unit To Sinca Inbursa
June 30, 2008
Spain's Gas Natural said it had reached a deal to sell 15% of its Mexican subsidiary to Sinca Inbursa, which is controlled by billionaire Carlos Slim, for EUR 47 million. The sale will help Gas Natural to grow in Mexico, where it is already the main gas distributor and the second largest electricity generator. Sinca Inbursa is part of billionaire Carlos Slim's Grupo Financiero Inbursa. Currently, Gas Natural Mexico is 86.75% owned by Gas Natural and 13.25% owned by Iberdrola.
Weatherford Hires Four Extreme Coil Rigs For Chicontepec
July 2, 2008
Global provider of drilling and production technology and services Weatherford International has hired four rigs from Canadian driller Extreme Coil Drilling for a project in the Chicontepec basin. In May, Weatherford won two contracts from Pemex worth a combined USD 870 million. Each contract calls for 300 wells in Chicontepec. The first of the four rigs is expected to reach Mexico in mid-July, with the other three arriving before the end of 3Q. Extreme Coil said it also has a letter of intent with Weatherford to supply a fifth rig.
Pemex Seeks Bids For Seismic Research At Chicontepec
June 30, 2008
Pemex is seeking bids for three-dimensional seismic research to conduct oil exploration in the Chicontepec basin, which is expected to ramp up production to compensate for declining output at other fields. The three-year project is expected to start in early August. The winning firm will carry out the exploration research on 3,424 square kilometers in the states of Puebla and Veracruz as part of the Chicontepec project. Chicontepec holds a multitude of small pockets of oil with low pressure and low permeability, making it difficult and expensive to extract the oil.
PRD Party Calls Referendum To Kill Energy Reform
June 30, 2008
Opposition Democratic Revolutionary Party (PRD) has called for a series of referendums this summer in an effort to derail President Calderon's plan to expand private investment in the oil industry. PRD will hold referendums in Mexico City (DF) and in the states that it governs starting in late July. The polls will not have any legal impact on congressional debates; results of the referendums are expected to be overwhelmingly against the reform because they will be held in opposition strongholds where Calderon lacks support.
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Mining
Peñoles Secures USD 530 Million Syndicated Bank Loan
June 30, 2008
Mexican mining company Industrias Peñoles said it obtained a syndicated bank loan for USD 530 million with which it will pay off existing bonds. Peñoles, whose unit Fresnillo PLC is the world's largest primary silver producer, said the proceeds will be used to pay off silver payable 8.39% structured notes issued for USD 380 million in 1997, and senior notes issued in 2006 for USD 377 million in three series. The three-year, floating-rate syndicated loan, involving 15 Mexican and foreign banks, is in two tranches – USD 455 million denominated in U.S. dollars and the equivalent of USD 75 million in Mexican pesos.
Miners Stage One-Hour Strike Over Leader
July 4, 2008
The National Mining and Metal Workers Union (STMMSRM) said workers staged a one hour walkout and planned to stop work for the first hour of three shifts, but said there were no set plans for future strikes. The three stoppages were at 7 a.m., 3 in the afternoon and 11 at night. The walkouts are a symbolic show of support for the union's embattled leader, Napoleon Gomez Urrutia, whose reelection was not recognized by the government. Gomez has been living in Canada to avoid arrest on corruption charges, which he denies.
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Trade & Investment
U.S.-Mexico Trade By Truck Has Increased 191% Under NAFTA
July 6, 2008
According to official figures, nearly 70% of cargo in U.S.-Mexico trade moves by truck, and cross-border truck traffic has increased 66% since the North American Free Trade Agreement (NAFTA) went into effect. Although there are 25 ports of entry along the U.S. Mexico border, the majority of cross-border traffic is concentrated in a handful of ports in Texas and California. U.S.-Mexico cross-border traffic reflects the high degree of integration reached by the North American manufacturing industry.
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Banking, Insurance & Finance
Bank Lending To Private Sector Rises 18.5% In May
June 30, 2008
According to figures from the central bank (Banxico), bank lending to the country's private sector increased 18.5% year-on-year at the end of May on the back of strong growth in commercial loans. International banking groups with five of the country's top six banks in the hands of BBVA, HSBC, Citigroup, Banco Santander, and Bank of Nova Scotia, dominate Mexico's banking industry. The Association of Mexican Banks (ABM) expects overall bank lending to grow between 15% and 20% this year, down from 24% in 2007, as the economy expands at a slower pace.
Banorte Sells MXN 2.75 Billion In Bonds To Fund Growth
June 30, 2008
Mexican bank Grupo Financiero Banorte said that it has sold MXN 2.75 billion in debt to fund its growth. Banorte said it sold 10-year bonds in its third issuance under a MXN 15 billion program, the proceeds of which count as regulatory capital. Banorte and its peers have enjoyed a lending boom the last five years thanks to Mexico's stable economy, low interest rates, and young population.
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Business & Industry
Femsa Sees 2008 Capital Expenditures Near USD 1.4 Billion
June 30, 2008
Mexican brewer and beverages maker Fomento Economico Mexicano S.A. (Femsa) said it expects to make capital expenditures this year of close to USD 1.4 billion. Femsa said USD 470 million of the estimated amount will be invested in soft-drinks unit Coca-Cola Femsa (KOF), USD 733 million in beer division Femsa Cerveza, and USD 172 million in its Oxxo convenience store chain.
Mexico Cigarette Exports To Canada Reach 93.9%
July 2, 2008
According to figures from the General Customs Administration (AGA), 93.9% of Mexico's cigarette exports are destined to Canada, most of which are manufactured at cigarette maker British American Tobacco's plant in Monterrey, in the state of Nuevo Leon. Mexican cigarette exports have grown considerably since 2005, and amounted to USD 300 million in 2007. Last year, Mexico exported over 11 million kilos of cigarettes to Canada.
Bodycote Inaugurates USD 12 Million Plant In Guanajuato
July 6, 2008
Thermal treatment provider for automotive and aerospace industries Bodycote Thermal Processing has inaugurated a USD 12 million plant in Silao, in the state of Guanajuato. Bodycote, which has a similar plant in Monterrey, in the state of Nuevo Leon, said that the new facility will employ 50 people.
Kaltex Buys Stake In Colombian Coltejer
July 4, 2008
Mexican textile company Grupo Kaltex agreed to buy a stake in Colombia's second largest textile maker Compañia Colombiana de Tejido (Coltejer), which is struggling to avoid bankruptcy. The Medellin-based company didn't say what stake Grupo Kaltex agreed to buy in Coltejer. The strengthening Colombian peso and rising competition from Chinese textiles have recently pushed Coltejer near bankruptcy. Grupo Kaltex produces and sells textile products such as synthetic fibers, fabrics and clothing.
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Automotive
SCT, SE Work On Regulations For Imported Used Cars From The U.S., Canada
July 4, 2008
The Communications and Transport Ministry (SCT) and the Economy Ministry (SE) said they have started to work on regulations to ensure that used cars freely imported from the U.S. and Canada as part of the North American Free Trade Agreement (NAFTA) meet the appropriate safety and environmental requirements. Mexico auto associations and their members have requested the government to prevent the entry of used cars that could damage the environment and the national industry.
Volkswagen De Mexico January-June Output Up 26% To 222,451 Units
July 3, 2008
The Mexican unit of German automaker Volkswagen said that production at its auto plant in Mexico rose 26% in 1H, 2008 from the like 2007 period to 222,451 vehicles. The company aims to produce 450,000 vehicles this year at its Puebla facility, in the state of the same name, up 9.5% from 2007 and above its previous record of 425,703 in 2000. Volkswagen de Mexico's exports from January to June reached 187,276 units, 30% higher in than 1H, 2007.
Toyota's Mexico Sales Rose 12.3% During 1H 2008
July 3, 2008
Japanese automaker Toyota Motor said its sales in Mexico rose 12.3% to 32,166 vehicles during 1H 2008, compared with the same 2007 period. The most sold models were the subcompact Yaris, the Corolla sedan, and the RAV4 sport-utility vehicle. Toyota, which set up its Mexican sales operations in 2002, has seen growth that contrasts starkly with the stagnating local auto market as a whole, as well as with its own operations in the U.S., where sales fell 21.4% in June.
Tata Group To Arrive In Mexico With Autofin
July 6, 2008
Indian conglomerate Tata Group said its automobile company Tata Motors plans to build a factory in Mexico along with local financing firm Autofin to produce at least 50,000 automobiles per year, which will require a minimum investment of USD 150 million. Tata plans to export a part of the production to countries where it already has a presence, such as Venezuela, Brazil, Chile and Argentina. Autofin is considering the states of Hidalgo and Queretaro as possible locations for the factory, which could start operations in the summer or autumn of 2009 to offer 2010 models.
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Housing & Mortgaging
Homex Enters USD 200 Million Credit Facility With Inbursa
July 3, 2008
Mexican homebuilder Desarrolladora Homex has entered into a USD 200 million credit facility with billionaire Carlos Slim's Banco Inbursa. The five-year credit facility, with a single principal payment due at maturity, has an annual interest rate of TIIE plus 1.35% payable quarterly. Homex intends to use the facility for land acquisitions, improving its tax strategy and investment in recently launched vertical or multistory construction and tourism developments.
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Construction & Infrastructure
ICA Wins MXN 1.48 Billion Highway Contract
July 2, 2008
Mexican construction and engineering firm Empresas ICA said it won a MXN 1.48 billion contract to work on a highway that will connect the states of Puebla and Veracruz. ICA said it has a 60% stake in the Avila Camacho-Tihuatlan project, with the other 40% held by Spanish partner Fomento de Construccion y Contratas (FCC). The contract, awarded by the Communications and Transportation Ministry (SCT) through an international tender offer, calls for the construction of a 48.1 kilometer road in the said states. ICA said it expects to complete the project by December 2009.
Cemex To Raise Mexico Cement Prices By 5%
July 4, 2008
Mexican cement maker Cemex plans to increase its local cement prices by an average of 5%. Cemex said that the increase is due to higher world energy costs and the big impact on the company's costs. Building material distributors have said the price of a 110-pound (50-kg) bag of cement will rise to about MXN 105 pesos from the current MXN 100 average price. Cemex last increased Mexican cement prices in December 2007 with an average 10% hike.
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Transportation
TMM To Spend USD 341 Million In Tanker Fleet Expansion
June 30, 2008
Mexican logistics and transportation firm Grupo TMM said it will spend USD 341 million to expand its tanker fleet. TMM said it will finance the expansion with the issuance of its third tranche of 20-year trust certificates on the local market for USD 423 million. TMM currently has 36 vessels, including offshore service vessels, product tankers, parcel tankers and tug boats.
Railway Companies Review SCT Resolution On Passage Rights Issue
July 2, 2008
Railway companies Kansas City Southern Mexico (KCSM) and Ferromex are reviewing the Communications and Transport Ministry's (SCT's) resolutions on the procedures to charge for passage rights, in order to determine the ways in which it will affect the firms' operations. The president of the Lower House's Transportation Commission and head of the Railway Transportation Under-Commission has explained that the new measure seeks to improve Mexico's logistics and competitiveness by making more efficient the handling of merchandise without affecting the said companies' economic interests.
Mexico To Seek Bids For New Pacific Port Terminal
July 6, 2008
The Communications and Transport Ministry (SCT) said that the port authority of Lazaro Cardenas, in the state of Michoacan, will seek bids in August to build a new terminal capable of handling 700,000 cars a year. SCT said that the port authority canceled a previous bidding round for the terminal, in order to increase the scope of the project and assign a more adequate space for it. The terminal will be the largest in the country designed to handle cars and other vehicles.
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Telecommunications & Technology
Number Portability To Intensify Telephone Competition
July 6, 2008
Number portability, which entered into force July 5, allows clients to switch telephone operators without having to change their phone number, a measure that will intensify competition in an industry dominated by billionaire tycoon Carlos Slim's Telcel. Smaller rivals of Telcel and fixed-line giant Telmex have long yearned for number portability and are expected to take clients away from the market leaders. The new measure, which already applies in much of Europe, will apply to both fixed-line and mobile phones.
Cofetel Sees Wireless License Sales In 2H 2008
July 4, 2008
The Federal Telecommunications Commission (Cofetel) still hopes to sell wireless licenses this year after the government's original goal to finish the first auction in 2Q was caught up in red tape. The Communications and Transport Ministry (SCT) gave Cofetel the green light to start its auction program in March, with a view to completing the sale of 1900 MHz wireless licenses during 2Q, and three other frequency bands by the end of September. SCT said the government expects to raise over USD 1 billion from the auctions.
Satmex To Review Strategic Options, Possible Sale
July 3, 2008
Mexican satellite operator Satelites Mexicanos (Satmex) said that its board of directors has decided to look at strategic options for the company, including a possible sale. Satmex said it has hired Perella Weinberg Partners as a financial advisor to evaluate different alternatives, which include the execution of its business plan and the launch of a new satellite, a sale, or a merger with a third party. Satmex put itself up for sale in 2007, but called off the process in June of that year after bids came in below the USD 500 million minimum sale price.
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Media & Entertainment
South Korean Entertainment Providers Eye Mexican Market
June 30, 2008
South Korean entertainment industrials and businessmen announced during the Korean Popular Culture Expo 2008, organized by the Korean Embassy in Mexico, that they intend to broaden their presence in the country by bringing TV series, soap operas, video games, movies and documentaries, among others. According to Kotra, the Embassy's promotion agency, Korea has currently delivered only a soap opera and a video game called Pump to Mexico's entertainment industry.
Canaju: Mexican Gaming Industry Attracts Foreign Investors
July 3, 2008
According to the National Gaming Industry Chamber (Canaju), Mexico's gaming, gambling and raffles industry has the potential to grow 20% per year, as it is increasingly creating interest among foreign investors from the sector who wish to enter the Mexican market, valued at some USD 800 million. Canaju said that players in the Mexican gaming sector amount to some 230, including operators, equipment providers and authorities awarding permits.
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Farming & Agriculture
Mexico Says No Signs Of Salmonella In Any Of Its Produce
July 6, 2008
Mexico said there was no evidence that a salmonella outbreak in the U.S. came from Mexican produce, amid reports U.S. officials will probe jalapeño peppers grown south of the border. Tomatoes continue to be the primary focus of the probe but officials have expanded the investigation to include produce commonly eaten with tomatoes, like cilantro, jalapeño peppers, serrano peppers, scallions and bulb onions. Mexico has not detected salmonella in any of these products.
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Economy
SHCP: January-May Fiscal Surplus MXN 112.6 Billion
June 30, 2008
The Finance and Public Credit Ministry (SHCP) said that Mexico registered a MXN 112.6 billion budget surplus in the first five months of this year, amid increases in spending, oil revenue and non-oil tax revenue. SHCP said total government revenue was up 7.7% from the like 2007 period to MXN 1.128 trillion, including an 11% rise in non-oil tax revenue and an 11.2% rise in oil revenue. Non-oil, non-tax revenue fell 32% on a decrease in nonrecurring income. The surplus was smaller than the MXN 151.9 billion surplus registered in the first five months of 2007.
June Consumer Confidence Down To Lowest Level Since 2002
July 3, 2008
Consumer confidence in Mexico fell in June to its second-lowest level since the index was introduced, as Mexicans surveyed felt significantly less able to purchase expensive items amid rising inflation. The National Statistics Institute (INEGI) said its consumer confidence index fell to 90.7 last month from 94.2 in May and 105.2 in June 2007. It was the third consecutive monthly decline and the lowest reading for the index since January 2002.
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Border & Migration
McCain: Border Security First
July 5, 2008
Presumptive republican U.S. presidential nominee John McCain told Mexican leaders, as he ended a visit to Colombia and Mexico, that security at the border is a precondition of immigration reform. McCain said that U.S. citizens want a secure border and that in order to achieve that goal, walls will need to be built, as well as virtual fences. McCain was one of the authors of an immigration reform bill that failed to get any traction in the U.S. Congress, and caused him to lose support among illegal immigration hard-liners. Since then, he has toughened his stance on the issue.
Authorities Intercept 248 Undocumented Immigrants
July 2, 2008
Authorities said that a group of 248 undocumented immigrants who were traveling on two buses were taken into custody in the state of Chiapas. The municipal authorities of Tecpatan said that the migrants, all of whom were from neighboring Guatemala, had not eaten in two days and were showing symptoms of severe dehydration. The migrants received medical attention, water and food while they waited to be transferred to the National Immigration Institute's (INM's) facility in Tuxtla Gutierrez, the state capital.
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Politics
John McCain Visits Mexico, Meets President Calderon
July 3, 2008
U.S. Senator and republican presidential candidate John McCain arrived in Mexico City (DF) for a visit and met with President Calderon to discuss issues of bilateral interest, such as trade, immigration, border security and drug trafficking. In addition, McCain visited the Basilica de Guadalupe, the cathedral dedicated to the Virgin of Guadalupe, Mexico's patron saint. The Basilica de Guadalupe is Mexico's holiest site for Roman Catholics, and Catholic and Hispanic voters are expected to be key swing voters in the November election.
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Justice, Safety & Crime
U.S. Warns On Drug War, Mexico Wants Cooperation Against Arms Trafficking
June 30, 2008
David Johnson, the top counter-narcotics official at the U.S. Department of State (DOS), has warned that Mexico's democratic development is at stake in the country's battle against drug cartels. The U.S. approved a long-awaited USD 400 million aid package for Mexico's antidrug drive which is expected to help Mexico fight drug cartels more efficiently. In addition, a top Mexican official said the government will press U.S. presidential candidates for cooperation against weapons trafficking.
President Calderon Says He Will Enhance Police With U.S. Antidrug Aid
July 4, 2008
President Calderon says he plans to use the recently approved package of U.S. antidrug aid to improve the country's police force. President Calderon praised the USD 400 million aid package in a telephone call with U.S. President George W. Bush. Calderon told Bush "one of his main aims is to improve the technology and capacity of the federal police, in order to continue dismantling the financial and operational networks of organized crime." However, the Bush administration said it would take months and possibly longer to deliver the assistance to help Mexico, as officials outlined various bureaucratic impediments.
McCain Vows To Implement Aid Package For Mexican Police
July 3, 2008
Appearing before the Federal Police, U.S. Senator John McCain promised that as president he would quickly implement a U.S. aid package to give Mexican officers more helicopters, technology and training. McCain, visiting the federal force's new command center as he concluded a three-day trip to Colombia and Mexico, paid his condolences to the hundreds of officers who have died in the drug fight since President Felipe Calderon took office 19 months ago. McCain expressed support for the Merida Initiative, the USD 1.4 billion anticrime aid package recently signed into law.
City Of Leon Suspends Police Torture Techniques' Training
July 3, 2008
The central city of Leon, in the state of Guanajuato, agreed to suspend a controversial police training program in which officers were taught to withstand torture techniques. The program in Leon sparked criticism from Mexican and international rights groups, given the history of Mexican police using torture techniques on suspects. Authorities in Leon have said the training was to instruct officers from an elite tactical squad on how to stand up under adverse conditions and not to promote the use of torture.
Murder Toll Grows In Mexico: Police Chief, Civilians Are Murdered
July 2, 2008
A deputy police chief in the central state of Aguascalientes and a dozen civilians in the northern border city of Ciudad Juarez, in the state of Chihuahua, were assassinated recently. Assailants armed with AR-15 assault rifles gunned down Jorge Pasillas Gutierrez, second-in-command of the municipal police force in Rincon de Romos, Aguascalientes. Separately, the state Attorney General in Chihuahua said that a total of 12 people perished over the weekend in Juarez. In addition, four decapitated bodies were found on a street in the city of Culiacan, in the state of Sinaloa, blocks away from their severed heads. A note with threatening messages for one of the country's powerful drug lords was found as well.
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Health & Science
Medical Tourism To Mexico Could Increase Two, Threefold In 2008-2009
July 3, 2008
According to experts from the health industry and U.S. health services provider Medical Tourism Corporation, Mexico could become the main destination for U.S. citizens who travel abroad in search of medical attention due to its geographical proximity and costs 50% below those in the U.S. Certain estimates show that in 2006, about 150,000 U.S. citizens traveled abroad for medical treatment, a figure that could increase twofold, or even threefold between 2008 and 2009. Some hospitals that are currently attended by U.S. citizens include Hospital Angeles de Tijuana and CHRISTUS Muguerza International in Monterrey.
HTH Worldwide Signs Agreement With Star Medica
July 3, 2008
Global health and safety services provider HTH Worldwide announced that it has signed an agreement with Star Medica Hospitals to provide HTH clients access to its facilities in Mexico. Star Medica, an integrated system of hospitals in Mexico, operates medical centers in Mexico City (DF), Ciudad Juarez, San Luis Potosi, Aguascalientes, Morelia, and Merida.
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Sports
Mexican Ambassador Wishes Chinese Team Great Success In Beijing Olympics
July 3, 2008
Mexican ambassador to China Jorge Guajardo said it was his hope the host country would be the top winner of gold medals at the upcoming Beijing Olympics. Chinese athletes have achieved good results in recent Olympics and many media around the world believe China may finally make a breakthrough during the August Games and top the gold medal tally. More than 30 Chinese coaches have helped to develop many Mexican stars over the years in sports such as diving, ping-pong, weight lifting and badminton.
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Arts & Culture
Researchers Open Secret Cave Under Teotihuacan Pyramid
July 3, 2008
Archeologists are opening a cave sealed for more than 30 years deep beneath a pyramid in the archaeological site of Teotihuacan to look for clues about the mysterious collapse of one of ancient civilization's largest cities. Archeologists are now revisiting a cave system that is buried 20 feet beneath the towering Pyramid of the Sun and extends into a tunnel stretching for some 295 feet with a height of 8 feet. They say new excavations begun this month could be the key to unlocking information about the sacred rituals of the people who inhabited the city, later dubbed "The Place Where Men Become Gods" by the Aztecs who believed it was a divine site.
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Other
Mexico City Has Dramatic Drop In Illegal Logging In Monarch Butterfly Reserve
July 2, 2008
Mexico says illegal logging has declined by 80% in the winter resting grounds used by Monarch butterflies during their annual migration. The reserve in the mountains west of Mexico City has been battered in recent years by the felling of fir and pine forests in which the butterflies gather. The Environment Minister said that logging had dropped by four fifths since April 2007, when authorities implemented a "zero tolerance" plan to report and detain loggers.
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