A consortium of investors, led by Pedro Aspe’s Protego Asesores, a boutique investment bank, will build the largest building in Latin America on Mexico City’s historic Paseo de la Reforma, according to reports today at Bloomberg.com and El Universal.com.mx.
Construction is to begin at the end of 2008 and is expected to be completed by 2011. The building, which will be 244 meters high (800 feet), will be equipped with LED lighting and solar panels to reduce energy costs.
The Torre Mayor, also located on Paseo de la Reforma, is currently the tallest building in Latin America at 225 meters (783 feet).
Japanese truck maker Hino Motors, Ltd. announced today it would form a joint venture with Japanese trading company Mitsui & Co. to build a new truck manufacturing facility in Guanajuato, Mexico. Production is anticipated to begin in July 2009 with annual capacity of 1,200 units.
Hino is an affiliate of Toyota Motor Corp. Mistui & Co. is an affiliate of Mitsui Group, one of the largest conglomerates in the world.
In yet another version of the old Trojan Horse trick, Mexican drug gangs are trying to bring contraband into the United States by slipping it into U.S.- and Canada- bound export shipments of Mexican businesses, according to a Reuters report. Businesses targeted by the gangs include maquiladoras and other high volume exporters.
The report said that in May 2008, Mexican army troops searching a subsidiary of Sharp Corp. just south of Tijuana (in Rosarito) found approximately 1.5 tonnes of marijuana concealed in a Canada-bound truck behind boxes carrying television screens. Carlos Castro, head of Mexico’s national council of maquiladora plants, said in the report there had been at least two other recent cases where gangs sought to penetrate legitimate export shipments with contraband.
Businesses have responded by increasing expenditures on security cameras, guards, and other security measures. They should also carefully screen and vet personnel with reputable investigation/due diligence services and only use legitimate outsourcing companies as sources of employees.
The Mexico Foreign Policy Blog wrote a nice piece on July 29, 2008 entitled “How the Collapse of WTO Talks Affects Mexico“, stating that in the wake of the failed World Trade Organization (WTO) talks, Mexico must fall back on “its existing plethora of free trade agreements”. Mexico, the article noted, has more free trade agreements than any country in the world. Those agreements are as follows:
A more detailed listing of Mexico’s free trade agreements and copies of their texts are set forth on the Organization of American States’ Foreign Trade Information System website.
There are several ways in which importers and exporters of goods to and from Mexico can structure their international operations to benefit from Mexico’s free trade agreements, as well its various export incentive programs, such as IMMEX (formerly known as the Maquiladora and PITEX programs) and PROSEC (Programa de Promocion Sectorial). My colleague Doug Jacobson, an accomplished international trade attorney, and I have advised clients on how to establish such structures in connection with our Mexican counsel. Doug is also the author of International Trade Law News, a web-based compilation of news and information on export controls, customs, antidumping and other international trade matters.
WTO negotiations are not expected to resume until 2009.
The leaders of Mexico’s three main political parties, the PRD, the PRI, and the PAN, have agreed to discuss and approve a plan for reform of Mexico’s energy laws during the next congressional session commencing on September 1, 2008, according to a report in today’s El Financiero. The reforms will include changes the laws governing Pemex, Mexico’s state-controlled oil company.
According to an El Financiero report, Avolar Aerolineas, S.A. de C.V. obtained an order from the Court of Tijuana requiring the Secretaría de Comunicaciones y Transportes (SCT) to authorize the discount airline to temporarily continue operations following its suspension by the SCT yesterday for failure to pay airspace usage fees to the Mexican Tax Administration (SAT). However, such authorization will not be effective until the SCT notifies the Mexican Airspace Navigation Service (SENEAM) of the authorization.
How long will that take? Avolar says on its website that it will commence flights on August 8, 2008.
Avolar’s amparo proceeding against the SCT contesting the grounds for its suspension is expected to continue until final resolution in the courts.
The real estate arm of the Government of Singapore Investment Corporation (GIC) announced today that it has acquired an (undisclosed) ownership interest in Mexico Retail Properties (MRP), according to a Reuters report.
Founded in December 2001, MRP is a Mexican company affiliated with Denver-based real estate private equity firm Black Creek Group (BCG). MRP develops, builds, and manages shopping malls (centros comerciales) and other retail properties in Mexico. BCG’s website also indicates that BCG is affiliated with Corporate Properties of the Americas, an “institutionally owned industrial property company operating throughout Mexico” that “has invested over US$1 billion in Mexican industrial real estate” since its inception in 1998. The managing principals of Black Creek Group include John Blumberg, Jim Mulvihill, Tom Wattles, and Evan Zucker.
Based on a Denver Business Journal report, it appears that The Blackstone Group’s Equity International Properties Ltd., which was founded by Chicago real estate mogul Sam Zell and sold by Zell to Blackstone, made an investment of approximately $42 million in MRP in early 2004.
There is significant interest among investors in commercial retail real estate in Mexico, thanks in large part to Mexico’s emerging middle class. Oralé!
Affinia Group, Inc., a Michigan-based company, announced plans today to establish a 200,000 square-foot brake production and distribution facility in Juarez, Mexico, according to a PRNewswire report. The facility will be located in the in the America Industries-Kimco Juarez Industrial Park.
Affinia manufactures automotive filtration systems, braking systems, and chassis components. The company cited high U.S. production costs as the reason for the transfer of production to Mexico.
Cooper Tire & Rubber announced plans to invest in a $31 million tire production facility in Guadalaja, Mexico, as part of a cost reduction plan, according to a June 18, 2008 company press release. The plant will be jointly owned by Cooper IBSA (a Cooper holding company organized under Mexican law) and Cooperativa TRADOC, S. de R.L. de C.V. (a Mexican company owned by the employee-owners of the plant). Cooper IBSA will own 38% of the plant following its investment.
In October 2007, Cooper Tire also entered into a 50-50 joint venture with Mexican company Nernet International, S.A. de C.V., which markets, sells, and distributes the Cooper and Pneustone brands in Mexico.
Mexican discount airline Avolar Aerolineas, S.A. de C.V. filed an amparo proceeding today against Mexico’s Ministry of Communications and Transportation (SCT) seeking to overturn an SCT resolution issued yesterday that suspended the airline’s operations (effective this afternoon) for failure to pay airspace usage fees to the Mexican Tax Administration (SAT). The proceeding, filed in the Court of Tijuana, Baja California, appears to contest the suspension on the ground that Avolar is being treated “arbitrarily” by the SCT, which is merely following the “orders” of the SAT. Avolar said it does not expect to pay the alleged tax debt in the near term.
Yesterday the SCT also suspended the operations of another Mexican upstart airline, Polar Airlines, S.A. de C.V., which operates under the name Nova Air, for alleged failure to pay airspace usage fees. Polar has not contested its suspension.
Copyright © 2008 by John Dorsey
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