As Mexico implements a set of historic reforms that are expected

to create millions of jobs, increase incomes and attract tens of billions of dollars in foreign investment over the next several years, its recent economic and fiscal perfor-mance continues to evidence the kind of strength and lead-ership that make it one of the world’s top destinations for investing and doing business.

Optimism for Mexico’s future is widespread among analysts and policymak-ers, who predict that it will become one of the world’s leading economies in less than a decade, helping to propel a shaky global economy toward more resilient, widespread growth while cementing its leadership role in Latin Ameri-ca. Mexico’s GDP will increase next year to about 4 per cent and remain at this level for the next five years, according to the latest estimates from the International Monetary Fund (IMF). Despite lingering weak-ness in the global economy, Mexico will further benefit from building momentum in the US economy, as its export industries are to expand in size and scope. Critical to maintaining this trajectory, its economy is experiencing

a balance of solid economic growth and low inflation. The IMF forecasts that average consumer price increases will drop from 4 per cent this year to 3 per cent in 2016 and re-main there until at least 2019. Per capita income, meanwhile, will rise by more than 14 per cent during this same time period, giving a much-needed boost to workers.

“Over the next decade, Mexico will become [Latin America’s] largest economy and one of the emerging markets’ most dynamic,” according to a report from Norman Equity Research. Goldman Sachs analysts forecast that by 2020, Mexico will be the world’s seventh largest economy and will ac-count for nearly 8 per cent of world GDP. Much of this can be attributed to the country’s strong leadership and the strategic decisions that they have made.

“Mexico’s strong fundamen-tals, sound policy framework and skillful macroeconomic management have allowed the country to deal with financial volatility and heightened risk aversion related to the exit from unprecedented mon-etary policies in major ad-vanced economies,” the World Bank noted this year. “Mexican

financial asset prices have been less affected compared to other emerging markets and financial markets have been able to cope without major liquidity pressures or the need for public intervention.”

Demonstrating this stra-tegic leadership, President Enrique Peña Nieto acted swiftly after taking office to rally the majority of legislators in parliament to pass long-overdue structural reforms in the labour market, education system, financial, telecommu-nications and energy sectors, as well as in the government’s fiscal policy. Lawmakers from competing political parties put aside partisan differences to back an effort deeply rooted in the country’s future well-being and success.

“We came together from different factions with the conviction to breathe new life into the Mexican state, to give strength to its in-stitutions, ready to change the political calculus of only thinking about ourselves and not thinking about soci-ety and our fatherland,” said Jesús Zambrano, President of the Partido de la Revolución Democrática (PRD), while Gustavo Madero Muñoz, President of Mexico’s Par-tido Acción Nacional (PAN)

WEDNESDAY, NOVEMBER 5, 2014

strong leadership reforms economy

the pact for

mexico has

enabled the

country to

successfully

modernise its

democracy and

open its economy

to the world,

resulting in

the creation

of globally

competitive

industries

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mexico’s stable economic growth, together with its package of reforms, attract investment from British companies and help stengthen the already solid relationship between the two nations

“our goal is to make mexico more open, productive and competitive, with sound public finances and skilled human resources” enrique peña nieto, president of mexico

MEXICO

called the pact a “product of intense discussion, analysis and inclusion of the most im-portant items on the national agenda in a multiparty dia-logue to overcome the lack of agreement, with ample political backing.”

If the reforms are carried out as envisioned, Mexico could achieve a 6 per cent growth rate in the years to come, and the increased competitiveness of its industries could enable it to replace China as the world’s largest exporter to the United States by 2018, according to The Economist.

The unprecedented accord among the country’s political parties is known as the Pact for Mexico, and represents the crowning achievement of a process that, over the last three decades, has seen Mexico successfully modern-ise its democracy and open its economy to the world, resulting in the creation of globally competitive indus-tries. Mexico has already become a manufacturing powerhouse. Among other major industries, Mexico is the world’s largest exporter of flat-screen TVs, is home to

a burgeoning aerospace in-dustry, and has steadily risen to become Latin America’s largest car manufacturer, and the fourth largest exporter of autos in the world. About one out of every four vehicles imported into the US comes from Mexico, with that share poised to rise, as Japan’s Nis-san, Germany’s Daimler and South Korea’s Kia all plan billion-dollar manufacturing plants in the country.

As key industries surge, Mexico has been hamstrung by a stagnating energy sector, largely due to an outdated regulatory framework that stifled investment. Aiming to

break this impasse, the 2013 Energy Reform opened up the sector to foreign invest-ment for the first time in 75 years. It is just one of a pack-age of changes and will allow the country to fully explore one of the world’s largest oil and gas reserves, estimated at 10 billion barrels of crude oil and close to 17 trillion cubic feet of natural gas, while main-taining state ownership over these resources. “Our goal is to make Mexico more open, productive and competitive, with sound public finances and skilled human resources; so we can play a more active role in the global economy and provide our people with a better quality of life,” Presi-dent Peña Nieto emphasises.

Mexico’s emergence as a major economy presents opportunities to extend business and trade ties with

partners across the globe. “Mexico is Latin America’s most open major economy already and the current batch of reforms will throw up exciting opportunities for UK firms in construction, energy and education,” says Lord Liv-ingston, UK Minister of Trade and Investment. Currently, the UK is the fifth most important investor in Mexico, and aims to expand its presence there, as both countries have set the ambitious goal of doubling bilateral trade by 2015.

“On a macro level, we would like to see an update of Mexi-co’s trade agreement with the EU. Mexico and Britain already

have a strong relationship, but we make up just 1 per cent of each other’s trade. We are both working to improve it. I believe that Mexico’s strong economic growth, and the package of reforms will help attract serious investment from British companies,” Lord Livingston adds.

Mexico’s strong record in favour of free trade and investment underpins this commitment. According to figures from the United Nations, Mexico ranks in the top 10 of countries globally in terms of the attractiveness of its invest-ment climate, and boasts treaties with 44 countries that together account for 60 per cent of the world’s GDP, making it the world record holder for signing free trade accords.

“Today, the world is be-ginning to value the optimal and favourable conditions in Mexico for investment,” says President Peña Nieto.

“Mexico now presents it-self to the world as a secure country, a country that is creating favourable condi-tions to attract productive investments,” the president adds, echoing a message that has been well understood at the highest levels of the UK government. “Mexico is the first major emerging economy to fully embrace the opportunities and rigours of free trade, and deservedly one of the first to reap its rewards” affirms Nick Clegg, British Deputy Prime Minister.

MEXICO2

energy reforms open sector for first time in 75 yearsnew groundbreaking legislation that welcomes private investment in the petroleum

and electricity sectors is expected to bring in new e&p methods and raise production

Mexicans are justly proud of their revolu-tion which a century

ago offered the hope for change to many. Another revolution, this time economic, is now under way which also offers hope of increased foreign and domestic investment, a boost in the GDP and employment and lower energy costs for the country’s 123 million people.

Recently, Mexican President Enrique Peña Nieto signed sweeping energy legislation opening the country’s petro-leum and electricity sectors to private investors, ending 75 years of the government’s full dominance in hydrocarbon exploration and production.

“Energy reform is the most important economic change in Mexico in the past 50 years,” the President said, whose deci-sion has been widely praised. During a recent university lecture in Mexico City in mid-October, former UK Prime Minister Tony Blair showed his enthusiasm for Mr Peña Nieto’s move, applauding the reform as “the most significant political event” for the country.

Regarding oil and gas, the move will grant the state pe-troleum company, Petroleos Mexicanos (Pemex), 21 per cent of possible reserves and the remaining 79 per cent will be allocated to private and for-eign companies to play a role in the sector for the first time since nationalisation more than seven decades ago.

British energy firms like BP and Royal Dutch Shell, along with other multinationals such as Exxon Mobil and Chevron from the United States and Russia’s Lukoil, are reportedly weighing up whether to bid in the contract auction next year.

Mexican officials estimate that, if all goes according to plan, investment could reach £30 billion.

“We are starting to see a change in key sectors such as oil and gas, due to recent reforms,” says British Minister for Trade and Investment Lord Livingston. “These reforms and the open economy will undoubtedly attract oil, gas and mineral investment.”

Pemex is expected to es-tablish 10 separate joint ven-tures with private firms and there are plans for drilling deep-water wells, especially in the oil-rich Gulf of Mexico where new, state-of-the-art technology would now per-mit exploration and produc-tion at depths formerly out of reach.

In world crude production, the country ranks sixth but proven reserves have retreat-ed over the past 15 years from 34 billion barrels to 14 billion and these reserves only have about another decade before they are depleted.

This shrinking output, cou-pled with the facts that Pemex is Mexico’s biggest company, the country’s largest tax payer and that it provides a third of the federal budget meant that it was time for a change.

Mexico is following success-ful examples of opening the pe-troleum industries to outside private players. Petroleo Bra-sileiro did exactly that almost 20 years ago and in Colombia, the state-run company Ecopet-rol has enjoyed almost double production after its control of the country’s oil sector was restricted in 2003.

The country needs the ex-pected boost. Mexican crude oil production has fallen from more than 3.5 million barrels per day to under 2.5 million during the past decade.

Government officials, and executives of those firms active in the energy sector, hope the reforms signed into law by the president will mean increased investment to open up fresh deposits and bring in new exploration and production methods.

One of those executives cheering on these changes is

Fernando Calvillo, the Presi-dent of Fermaca, a Mexican company with more than 50 years’ experience in the energy, construction and engineering sectors and a leader in the country’s gas pipeline industry.

“It’s clear that energy reform will bring increased income and investment to our country and they say that the petroleum be-longs to the Mexicans. But we can only say it’s ours when we see that it is really benefiting all Mexicans,” he says. “I think that the reforms will result in a more efficient and profitable domestic oil and gas industry. However, these profits have to be ploughed back into neces-sary infrastructure like schools, hospitals and safe drinking water systems, and to boost Mexico’s economic growth.”

Mr Calvillo warns that the process will not happen overnight and that it will take a long time for the reforms to

bear fruit, especially regarding offshore oil and gas production. But the private sector is ready to get involved.

“Heretofore, private com-panies could only contribute in activities like maintaining the platforms and performing other services because the industry was closed regarding production of both gas and oil and this was something that had to change,” he argues.

“Getting at the oil and gas in new fields is not going to be easy as the deposits are deep under the ocean, plus we’re talking about sites 300 or 400 kilometres from shore.”

Once the petroleum is located and even before the first barrel is pumped, the infrastructure has to be put into place, not only the drilling platforms but also the entire support network of employee housing, pipelines, compressors, gathering systems, marine infra-structure and more.

“It’s a tough job,” says Mr Calvillo and he should know. His company has engineered, built and operates some of the most advanced gas pipe-line systems and terminals in Mexico, and boasts the coun-try’s only gas control centre that uses an independent satellite network to monitor and control its pipelines.

“The possibilities here are enormous, not only for Mexi-can companies but for foreign enterprises as well,” he says.

“I’d like to tell potential British investors in the mid-stream gas industry that we need expertise here and it’s a great sector to get into now because of the prices, the need for growth and it’s the energy source of the future.”

And, as one of Mexico’s foremost innovators in the field, Fermaca would be an ideal partner for foreign firms considering a stake in the

Mexican gas industry, the com-pany president says.

“My company is the best and we’re the only Mexican gas transport firm with the infra-structure size and capacity. Just look at the figures. Our rate of growth over the past three years says it all.”

Another Mexican energy company keen to work with British partners is SEISA, which provides products, services and technological solutions in energy cogeneration, energy engineering and renewable en-ergy, says the Director General of the family-owned company, Jaime Luis Saldaña Méndez.

“We’ve had great experience with the United Kingdom and in fact our first partner in our biogas energy project back in 2000 who developed it with the Nuevo León state govern-ment was British,” he recalls.

“The British are pioneers in the use of landfill gas for electricity generation and I

especially admire the British for their ability to develop technol-ogy solutions and their access to capital for investment.”

Mr Saldaña is particularly proud of his company being the first in Mexico to participate in a public-private partnership (PPP) at the state level, which has now been operating for more than a decade.

The executive notes that the partnership has prospered through three local govern-ment changes and several mu-nicipal administration changes, and he expects it to continue as it benefits everyone involved.

“Ours is a win-win-win pro-ject. The private investors win, the government wins with the energy discounts we offer and, above all, the environment wins as we are reducing greenhouse gas emissions,” he explains.

“I think these types of pub-lic-private partnerships are the future. The government does not have enough resources to invest in many areas and that is why we need structural reforms, so private investors and government can partner in order to develop strategic sec-tors such as energy, telecom-munications and health, among others,” he argues.

Another such PPP that SEISA is involved in is a carbon credit trade project with the Danish government through the Clean Development Mechanism for emission reduction.

Concerning the policies of the government closer to home, Mr Saldaña says Mexico’s renewable energy sector needs more official support in such areas as tax breaks, differentiated tariff rates, grants and other meas-ures like in Europe.

“In Mexico we’ve taken very small steps in this direction; it doesn’t allow us to grow at a faster pace and we end up com-peting against utility prices. The only competitive advantage we have is to offer discounts below utility prices and this is what matters most,” he explains.

Mr Saldaña says the high electricity rates in Mexico have made renewable energy attractive and notes that the solar cells market has taken off in recent months which is good news for SEISA, who is well re-garded as a leader in the sector.

“We are a family group, however our reputation in the industry is solid. Our custom-ers recommend us to others, including their competitors. We’ve been doing this for 20 years and we are the ones you can trust,” highlights Mr Saldaña.

mexican officials estimate investment could reach £30 billion

of possibleoil and gas reserves will

be allocated to private and foreign companies

79%

“the possibilities here are enormous, not only for mexican companies but for foreign enterprises as well. i’d like to tell british investors in the mid-stream gas industry that we need ex-pertise here”

fernando calvillo, president of fermaca

“ours is a win-win-win project. the private investors win, the government wins with the energy discounts we offer and, above all, the environment wins, as we are reducing greenhouse gas emissions” Jaime luis saldaña méndez, director general of seisa

WEDNESDAY, NOVEMBER 5, 2014

MEXICO 3

automotive industry at full throttlemexico has become one of the most dynamic hubs of the global automotive production industry, now generating £18.6 billion in revenue

Mexico’s automotive industry is progress-ing at full throttle and

just recently overtook Brazil to become the world’s num-ber seven, before Spain and France. Considered by ana-lysts as one of the most dy-namic hubs of the global auto industry, Mexico produced 2.4 million vehicles in the first nine months of 2014, a 7.5 per cent increase over the same period last year, while exports rose 8.7 per cent to reach 1.95 million units, according to the Mexican Auto Industry Association (Asociación Mexicana de la Industria Automotriz, AMIA).

“This reflects a tendency that we have been seeing this year,” says Fausto Cuevas, General Director of AMIA, adding that the total output for this year is expected to reach 3.2 million vehicles. “The panorama is favourable in the international markets.”

In a move that illustrates the importance of this sec-tor for Mexico’s economy, President Enrique Peña Nieto himself announced in August a new major foreign investment: South Korean automaker Kia will build a £621 million plant outside Monterrey. Mr Peña

Nieto said that the automo-tive industry, including parts makers, now represents 20 per cent of Mexico’s manu-facturing production and 26 per cent of its exports. It also generates £18.6 billion in rev-enue, representing 6 per cent of foreign direct investment (FDI), and more than 550,000 direct and indirect jobs, ac-cording to AMIA.

Moreover, in the past five years, the sector has at-tracted £11.8 billion in new investment from foreign carmakers, including Nis-san, Honda, Volkswagen and Mazda, and production has doubled. Now a magnet for international carmakers and their suppliers, Mexico is poised to reach a produc-tion of 4 million units (cars and light goods vehicles) a year by 2020.

Several reasons explain this boom, the first one being obviously the proximity of Mexico to its main market, the US. The general good quality of transport infra-structure (highways and rail-ways), a strong steel industry, and a young (the average age in the automotive industry is 24) and comparatively cheap (about £25 per day) work-

force also contribute to the success of the sector.

But there is another key fac-tor, as noted by Mr Peña Nieto, and it is the fact that Mexico has free trade agreements with 44 nations. The United States, in contrast, has free trade accords with only 20 countries, and none with either the European Union or Japan. “We have a unique geographical location with privileged access not only to North and Latin American markets but also to those of Europe and Asia,” he said.

About 66 per cent of

Mexico’s auto exports cur-rently go to the US market, 8 per cent to Canada, 11-12 per cent to Latin America, 8.3 per cent to Europe and the remainder to Asia and the Middle East.

Now what is particu-larly interesting as well is that Mexico has earned a reputa-tion for the high quality of its automotive industry. “The quality and cost of Mexican automotive products have no equal in Latin America,” says Luis Lozano Soto, automotive team leader at the Mexican

branch of consulting firm PricewaterhouseCoopers.

This is one of the main reasons why foreign carmak-ers are now producing highly sophisticated vehicles here, rather than in Europe or in the US. For example, the German firm Audi decided recently to move the pro-duction of luxury SUVs from home to Mexico.

Audi will thus produce the Q5, one of its star vehicles, in Mexico, and is introduc-ing new technologies and production methods for the next generation of vehicles. Audi says it will buy 90 per cent of the parts necessary for the Q5 in North Amer-ica, and has conducted a thorough review of its entire supply network in Mexico, in particular to detect any quality flaws along the supply chain. Also, Audi is providing training to small suppliers to make sure quality has the same, very high standards throughout the supply chain.

This in turn provides new business for companies that are specialised in training workforce and manage-ment in quality certification, such as Plexus Interna-tional, which has a branch

in Mexico. Created in 1991 in the US, Plexus is “a global leader in providing training, assessment and consulting services for organisations to attain quality management systems excellence”. It oper-ates in several industrial sec-tors: aerospace, automotive, environmental management, healthcare, higher education, and laboratory management.

Having started the busi-ness by helping “thousands” of Asian industries to imple-ment the ISO9000 certifica-tion, Plexus was then ap-proached by leading Ameri-can carmakers Chrysler, Ford and General Motors. Today, they are present in Latin America (Mexico, Brazil), Europe (France, Italy, Spain), Asia (China, Japan, South Ko-rea, Taipei, India), Russia, and South Africa.

In the automotive sector, Plexus cooperates with lead-ing organisations such as the Automotive Industry Action Group (AIAG), the Interna-tional Automotive Oversight Bureau (IAOB), and the American Society for Quality (ASQ). “Our global presence has led to big projects with AIAG and the International Aerospace Quality Group

(IAQG). We are small but have great business part-ners,” says José Domínguez, Director General of Plexus International Mexico.

Asked about the specifici-ties of the Mexican market in terms of human re-sources and training, he says that “one of the advantages in the Mexican market is its bilingual training”. “In key sectors focused on exports, such as the automotive, aer-onautics or medical devices, professionals must be bilin-gual. It is one of Mexico’s professional features,” adds Mr Domínguez.

In Mexico, Plexus Inter-national offers technical development in areas such as management systems and methodologies, including training and development for auditors. “Since 2012, AIAG has established a collabora-tion agreement with Pro Mexico, in order to give pro-fessionals in the supply chain of the automotive industry (second level down), training programmes and qualifica-tion schemes with partial sponsorship. This project has been successful and we have great expectations for the coming years.”

“our global presence has led to big projects with aiag and iaQg. we are small but have great business partners”

Jose domínguez, director general of plexus international mexico

total output for this year is expected to be 3.2 million vehicles

mexican detergent producer sasil plans to increase production by 120,000 tonnes, doubling its powdered detergent output and boosting its export capacity

Supermarket shelves south of the border groan under the weight of products

that boast of being “100 per cent Mexican”, but not all of them can claim to be “100 per cent successful”. That is emphatically not the case with Detergentes y Jabones Sasil, the 100 per cent Mexi-can cleaning products and detergent maker, which is set to cap years of double-digit growth by increasing its manufacturing capacity and foreign market penetration.

With a line of household and industrial strength pow-dered, liquid and bar format soaps and detergents, plus a range of fabric softeners and multi-purpose household cleaning products, Sasil is approaching the quarter-century anniversary of its founding with a plan for doubling its share of the market, establishing brand presence in new countries and implementing further upgrades to technology.

Asked to what exactly it was that Sasil has got right, the company’s Director General, Bruno Aviña Núñez, acknowledges that, to a large extent, Sasil owes the £745 million annual turnover re-flected on its balance sheet to the fact that Mexico is at its most favourable macro-economic moment in years.

“The government has given everyone, not just Mexican business leaders

but foreign ones as well, the confidence to keep invest-ing,” says Mr Aviña, through its sweeping reforms of the energy sector and the tax code. “Those are the cut-ting edge of reforms,” he says confidently.

Another positive factor is that families’ need to clean the house and wash their clothes is a constant, a demand vector relatively unaffected by bumps in the economic road. And unlike

its multinational competi-tion, Sasil specialises in a sin-gle product category, so the revenue it generates does not get spread around the balance sheet to palliate pos-sible losses or imbalances in other areas and can be rein-vested in the core business.

In the current climate of promising fundamentals, Sasil is putting £9.3 million into a new plant for powdered de-tergent that will nearly dou-ble its current annual output of 135 million tonnes in that

format. Much of the new production will be destined for export to the markets Sasil has consoldiated in Central and South America. Foreign countries take 25-30 per cent of Sasil’s output, consolidating a base of loyal customers in countries such as Costa Rica and Peru. But not everyone realises that Sasil’s brands are also on sale in the United States.

“Latino consumers are very receptive to Sasil prod-

ucts,” says Mr Aviña. “It’s what we call the nostalgia niche, where people who have emigrated from Mexico choose our products over the competition because of where they’re coming from, because it reminds them of home. Of course, they are not about to forego consid-erations of quality and value for the money. Maybe they aren’t better than the other products available, but our fellow Mexicans oftentimes opt for ours because on an

emotional level, it reminds them of who they are.”

Getting shelf exposure in the big US discount houses for brands like Arcoiris, Paloma and Suavisol was a challenge made easier when Mexican retail chains expanded into the United States and the Sasil brands went with them, thereby gaining access to a market with an estimated 30 million Latino consumers. “Being associated with these chains

adds to our prestige at home and has served as our ticket of entry into other countries. We rely on SAP software that is fully compatible with the systems used by all the larger companies. We are ISO-certified down the line and have plenty of hands-on experience as an exporter. All of these things open doors for us,” Mr Aviña notes.

Clearly there could be no more opportune time for Sasil to undertake a major expansion programme. By

the end of the year, the new powdered detergent facil-ity in the central state of Guanajuato should be op-erational: liquid detergents and cleaners are already being produced in that state. Guanajuato was cho-sen because of its strategic proximity to Sasil’s most important markets in Cen-tral and South America, as well as serving a bridge to the increasingly significant segment it has carved for

itself in the United States and Canada.

Another plant located on the outskirts of the Mexican capital produces bar laundry soap, an important product for Mexican families that do not have access to washing machines. According to Mr Aviña, Sasil has always aimed its products at working-class/borderline middle-class con-sumers and small business concerns that have been mostly neglected by multina-tionals like Henkel, Colgate

and Procter & Gamble. “We put a lot of effort into reach-ing out to them and have been very well received. Of course, you run into a good many difficulties, but at the same time it gives you a lot of room to grow.”

Sasil’s original produc-tion facility and corporate headquaters are in the state of Nuevo León, where its precursor company, Jabones Guzmán, was founded in 1960. After the company

was taken over by the Mexi-can government and in 1990, returned to private hands – Mr Aviña’s among them – it stayed and grew, prospered and created jobs. The way he sees it, this is what is meant by “creating wealth” – jobs, not just money.

“There’s a lot going on in Nuevo León, and as far as I’m concerned it is the very model of what a state should be,” Mr Aviña says, and points to the fact that US President Barack Obama and his Chi-

nese counterpart, Xi Jinping, have toured Nuevo León, in addition to repeat visits by Mexico’s reform-minded cur-rent president, Enrique Peña Nieto. “I believe that Nuevo León will continue to be a groundbreaker state, and a model for industrial develop-ment on the national level.

Cutting-edge technology and a comprehensive programme of pro-active measures for the protection of the environment are an important component of Sasil’s short-term expansion plans. Much of the industrial infrastructure, including a state-of-the-art sulfination plant, are models of up-to-date auto-mated technology.

“All of our products are bio- degradable,” says Mr Aviña. “Every last one of them.”

“We have been adhering strictly to a series of clear-cut rules regarding protec-tion of the environment,” he adds. “All our factories have the most modern equip-ment available. We control our waste products and recycle them.”

“You know what’s really incredible? Despite being a factory that produces tonnes and tonnes of powder, we do not pollute. We were allowed to build in urban or suburban areas close by communities that go about their business with no prob-lems, because there is zero risk for them,” Sasil’s direc-tor general is proud to note.

“the government has given everyone, not just mexican business leaders but foreign ones as well, the confidence to keep investing”

Bruno aviña núñez, director general of sasil

WEDNESDAY, NOVEMBER 5, 2014

£9.3m new plant to almost double output

MEXICO4

“It’s very important for British investors to know that Mexico is an excellent alternative, and that we have the necessary technology to produce safe food with zero waste and that can be Global Gap certified”

Marco Esteban Ojeda Elías, Director General of Agroindustrias del Norte

Since President Enrique Peña Nieto took office in 2012, the country has

seen incredible transforma-tions across many sectors, and agriculture is no exception. Through the implementation of massive policy overhauls and incentive programmes, the Peña Nieto administra-tion has introduced and promoted a new strategy which has breathed new life into Mexico’s agribusiness, especially along the northern border in the state of Sinaloa, often called the “Breadbasket of Mexico”, with over three-quarters of its land dedicated to agricultural production.

Under the leadership of Enrique Martínez y Mar-tínez, Mexico’s Secretary of Agriculture, Livestock, Social Development, Fisheries and Food (SAGARPA), who has overseen much of the im-plementation of the nation’s reforms, agriculture has as-suredly been confirmed as a key national economic engine, achieving a reported record 7 per cent growth during the first half of 2014.

With rich soil and a mild climate, it’s no surprise that Mexico’s economy hinges so heavily on agriculture. After all, the nation is the world’s 13th largest food producer; yet cultivating the industry has required massive overhauls and transformative thinking, as well as the vision and dedica-tion of both Mr Martínez y Martínez and Mr Peña Nieto.

With these men behind the new “reforms of the countryside”, the govern-ment has been able to focus successfully on boosting the nation’s productivity and competitiveness, as well as advancing the welfare of rural families and crucially improving Mexico’s food security. Much of this success has been achieved through a programme called PROAGRO.

First announced by President Peña Nieto in 2013, PROAGRO cleared the way for SAGARPA to implement the policies and shift Mexican incentives from subsidies to production. Meanwhile, the changes also allowed for the implementation of differenti-ated public policies, which provided the government with much-needed flexibility to engage both subsistence farmers and those involved in commercial agriculture.

The introduction of PRO-AGRO marked the end of the government’s previous programme PROCAMPO, which had been in place for more than 20 years, and was criticised for welfarism. But with significant backing from the federal government, PRO-AGRO has quickly achieved resounding levels of success. According to Mr Martínez y Martínez, in the first seven months of 2014, PROAGRO delivered more than 11.3 bil-lion pesos (£521 million) to 2 million producers, allowing them to save time and money buying seeds, fertilisers, and other crucial supplies.

The agriculture secretary manages the highest budget

in the agency’s history which currently rests at £3.7 billion – nearly 10 per cent higher than the budget in 2012, according to SAGARPA. Mr Martínez y Martínez says that today the nation can be particularly optimistic about the future of the agricultural industry because producers, organisations, business own-ers, academicians, politicians and institutions are working together to create trans-formative synergy to give the Mexican countryside a “new face”.

And that’s a “new face” for many Mexicans. According to the president’s office, 22 per cent of Mexico’s population lives in rural areas, while 14 per cent of Mexicans work in agriculture. Part of the structural reforms in the country means modernising

technical tools, as well as infrastructure to monitor rainwater cycles such as the hurricanes that threatened much of the national agricul-tural industry in 2013. Before the Mexican Congress, Mr Martínez y Martínez recently talked about an amazing feat that was achieved, in part, to the transformations brought about by these reforms. He was quoted as saying that despite the washout in Sep-tember 2013, the reforms allowed agricultural experts

to counteract the adver-sity of the storms, and still achieve record production (up 6.5 per cent from 2012) in Mexico that season.

This type of pre-emptive planning greatly improves the overall security of Mexico’s food source: one of the most serious concerns for produc-ers and consumers monitor-ing for abnormalities. With the proper advancements in place, Mexicans are now able to facilitate a timely change of course before an imbalance is able to develop in the food supply. Mr Martínez y Martín-ez says the issue of health and safety is of the highest priority for the Peña Nieto adminis-tration, especially because of the high social, economic and national security risk. Yet through prevention, including the early detection of new

pests and diseases in the Mexican ecosystem, as well as effective control of outbreaks such as avian influenza and other problems, widespread threats can be managed and, eventually, eliminated.

Meanwhile, SAGARPA has been actively working to as-sign more public investment to the sector. Mr Martínez y Martínez recently said the only way Mexico can move forward is through primary investment, which is exactly how President Peña Nieto’s

reforms have been designed. For instance, the sweeping improvements also targeted the production and availabil-ity of fertilisers to farmers at lower prices, and facilitate the use of improved seeds, ensure food safety and increase areas under irrigation and protec-tion, as well as strengthen credit and financial services for the countryside.

As a result, a new trade model has emerged which allows each producer to be paid an appropriate price, encourages the creation of value chains by promoting national agribusiness and re-organises production through new plans for crops, produc-tion and breeds. The reforms also delivered sweeping legal changes, providing a new ad-ministrative and organisation-al foundation built to achieve

a more just, productive and profitable sector.

Many significant challenges still remain for Mexico’s agri-cultural industry, but together, the nation will continue to build new models that will only lead to higher levels of development for the rural population and ensure the na-tion’s food security.

Agroindustry meets innovationAnother group of people contributing their forward-thinking and innovative research towards the “new face” of Mexican agroindustry is Agroindustrias del Norte.

Established more than 45 years ago in the northwestern state of Sinaloa, Agroindus-trias del Norte is drastically changing the way Mexico and its farmers do business: the group offers top-flight inputs and comprehensive farming solutions, as well as special-ised services, including techni-cal assistance and financing.

“We are helping Mexico grow,” says the Director General of Agroindustrias del Norte Marco Esteban Ojeda Elías. “We are distributors of high-tech agricultural supplies

for the technical farmer who seeks safe food production through sustainable agri-culture.” Agroindustrias del Norte operates Mexico’s largest logistic sales network in the sector and features something unique: 90 per cent of its sales go directly to the customer. “No other company in Latin America does that. We go straight to the field, direct to the farmer,” Mr Ojeda Elías says.

In fact, the company has achieved much of its success by directly engaging and aiding farmers, both large and small-scale, to ensure that they are trained in the industry’s most advanced technologies and able to effectively apply the research to their crops. One way Agroindustrias del Norte achieves this so effectively is by aiding small farmers who can’t qualify for commercial loans, through one of the company’s five business units, Financiera Agrícola del Norte.

“We give input, technical training and resources to de-velop their agriculture. It is a fully integrated service, which together with our distribu-tion network makes us the most attractive solution,” Mr Ojeda Elías says.

Agroindustrias del Norte leads the industry in safety and sustainability and of-fers a complete solution for zero-waste production at the end of a harvest. “There is no one, no company that can offer the certainty of sustainability,” he says. Agroindustrias del Norte has also earned brag-ging rights as the company with the largest number of technicians in the field. Ac-cording to Mr Ojeda Elías, the enterprise is intently focused on developing a range of produce options, as well as providing access to innovative sales opportunities worldwide.

“We must find new mar-kets,” Mr Ojeda Elías says. “Ja-pan already removed restric-tions on Mexican tomatoes just two years ago. This repre-sents a new opportunity.”

Recently, Agroindustrias del Norte started sending Mexican-grown food to England, Germany and other countries, and is not over-looking opportunities for Brit-ish investors to get involved in Mexico’s produce boom. “We had discussions with some English sanitation companies, because we know there is a lot of technology for both water treatment or irrigation systems,” he explains, adding that Mexico isn’t always the first nation that comes to mind for international buyers. “I think it’s very important for British investors to know that Mexico is an excellent alternative, and that we have the necessary technology to produce safe food with zero waste and that can be Global Gap certified, which is the current requirement,” he says.

Mr Ojeda Elías believes a great challenge facing Mexico today is adding value to the produce presentations and different specialties. “There are 10 different types of cu-cumber to offer; among nor-

The new face of agriculturemal peppers, you know, there are 15 different varieties,” he points out, but adds that this expansion is just one example of the many ways Agroindustrias del Norte can lead Mexico’s farmers to the head of the global food supply network.

The £14 billion export of agricultural products in 2012 that Mexico saw was in part thanks to Agroindustrias del Norte’s work. “Mexico is a country of opportunity with honest people who want to work,” Mr Ojeda Elías says. The state of Sinaloa is one of the most important for food production in Mexico, and Agroindustrias is one of 80 socially responsible compa-nies in the region. “We want to share the good news, to tell the world and businesspeople that the true face of Mexico is that it is full of positive people, it produces results and every day finds better ways to boost economic development,” Mr Ojeda Elías asserts.

But the General Director’s vision for Agroindustrias del Norte goes beyond trans-forming Mexico alone. “We are one of the leading food producers worldwide and we compete among the best, but we must continue to work to bring more technology and apply that adaptation to our fields,” he says. It is likely, however, that the industry will face its greatest challenges in logistics in the coming years. “As we understand and find new ways to bring food quickly and inexpensively to new markets, we will be more competitive, because the pro-duce and quality are already there,” he explains.

Solutions may soon be on the way for Mexico, by way of large infrastructure projects that are under construction in many parts of the country. “They should revive the rail system, which is a big challenge,” says Mr Ojeda Elías. “At the end of the day, we have to improve and reduce the cost of do-mestic freight, which is very high and can often knock you out of the competition.”

Agroindustrias del Norte has weathered many market fluctuations including Mex-ico’s economic and agricul-tural crises over the past 45 years. “Today we continue on, consolidated and strong,” Mr Ojeda Elías says proudly. The company has already seen 2002 sales grow by more than 500 per cent, and targets £124 million in sales by 2016.

“Technology is evolving every day,” Mr Ojeda Elías says. “There is always some-thing innovative to offer and I’m sure that, as the years go by, there will be new solu-tions and alternatives that offer better results for the field, and we will be there to identify them and bring them closer to the pro-ducer. We want to continue learning and exploring,” he says with a smile, and with a mission like that, Agroin-dustrias del Norte is surely unstoppable throughout the world’s food markets.

3.6% is the

agricultural sector’s

contribution to GDP

14% of totalworkforce

employed in agriculture

7%growth

of agriculture during

first half of 2014

£3.4 billion

earned from vegetable exports in 2013

13th

largestfood producer

in the world

£521milliondelivered by PROAGRO to 2 million producers

fOOD PRODucTIOn RefORMs RenDeR AGROInDusTRy A key ecOnOMIc enGIne, AchIevInG A RecORD 7 PeR cenT GROwTh In The fIRsT hAlf Of 2014

PROAGRO has enabled the government to focus on successfully boosting the nation’s productivity and competitiveness

Agroindustrias del norte leads the industry in safety and sustainability and offers a solution for zero-waste production

Rich soil and a mild climate enable Mexico’s economy to rely so heavily on agriculture

WEDNESDAY, NOVEMBER 5, 2014

MEXICO 5

Transport firms upbeat about future plans leading TransporT companies conTinue To expand and offer qualiTy services Thanks To imporTanT invesTmenTs and naTional infrasTrucTure developmenTs

Based in Monterrey, in the northern State of Nuevo León, Grupo

Senda is one of the leading bus companies in Mexico, a country where the over-whelming majority of people travel by road and public transport rather than by other means such as plane or private cars.

Senda offers more than 250 routes and more than 1,000 destinations in 10 Mexican states, mainly in the north and centre, as well as across the southern United States, in Alabama, Texas, Mis-sissippi, Arkansas, Missouri, Illinois, Louisiana, Georgia, Tennessee and South and North Carolina.

The company has a fleet of 750 modern buses for long-distance routes, and also provides intra-city ser-vices for the transport of personnel and students to industrial and educational facilities, with a fleet of more than 1,600 buses. Senda has about 7,000 employees.

Director General of Grupo Senda, José Manuel Contre-ras, welcomes the recent announcement by President Enrique Peña Nieto of a major infrastructure investment plan. “The outlook is very positive for our group and we are very upbeat about the latest developments in Mexico,” he

says. “It’s a good moment for our country, and we attract a lot of interest from investors.”

Grupo Senda has three lines of business. “The most impor-tant is the transport of passen-gers across the country, with about 20 million passengers per year,” explains Mr Con-treras. “The second segment is the transport of personnel and students for companies, schools and universities. It represents about 25 per cent of our business. The third and smallest segment is a package delivery service.”

Mr Contreras adds that the transport segment has been hit by “the perception of insecurity shared by many people, especially in north-ern states”. “We have fewer passengers because people feel that travelling by road is not as safe as it used to be, particularly in the north. This is a problem that cannot be solved quickly because it has to do with people’s percep-tions. However, this situation has led us to concentrate our service on the most vi-able routes, and this segment is now much more profitable than in the past.”

Mr Contreras emphasises that the second line of busi-ness, the transport of person-nel, is increasing significantly. “We had five cities just a few years ago, and we are now

about to inaugurate the sev-enth one. This segment has had double-digit growth in the past three years because we have strategic partner-ships with a number of com-panies that are themselves doing very well. They are recruiting staff, which means more business for us. Some of our clients in Nuevo León, Saltillo, or San Luis Potosí are opening new plants in Aguas-calientes, Querétaro, Ciudad Juárez and Ciudad Victoria, and are asking us to extend our service there.”

Grupo Senda has made important investments in the past few years to acquire ve-hicles and improve its operat-ing system. “We have invested in strong systems in the last three years,” comments Mr Contreras. “For instance, we have invested more than £1.2 million in logistics. We have also bought a system that enables us to automatically allocate the best vehicle ac-cording to the specificities of each client.”

Mr Contreras adds that Grupo Senda has spent about

£22.3 million in 2013 in the acquisition of new vehicles, out of which 90 are for “fed-eral transport” and “about 130-140 for personnel trans-port”. Furthermore, Senda has invested an additional £1.2 million in new technologies.

“As regards the feeling of insecurity, we are studying the deployment of CCTV cameras on board,” ex-plains Mr Contreras. “We also monitor our person-nel transport vehicles with GPS systems. And for school buses, the tracking

systems alert our central command post when a bus doesn’t follow the route.”

Asked about Senda’s devel-opment plans, Mr Contreras says that extending routes to the US is one of the pri-orities. “There is a growing need for travel within the US among the Latin American community. We are con-templating extending routes from Mexico towards Chica-go and Atlanta, for example. This could be our next niche: the Latin American public in the US, for example people who want to go from Dal-las to Laredo without going through Mexico City.”

If you are planning a trip to Mexico and want to discover the country on the ground, first-hand, rather than through the inflight magazine of a domestic airline, Mr Contreras has a very simple message: “Travelling by bus has nothing to do with what you see in films. You will not board a bus full of chickens, big sombreros and without air conditioning. You will actually have a service that’s better than in any airline’s first class. Our buses have only between 21 and 24 seats, and they’re much bigger and more comfortable than in any plane. There’s internet con-nection, two bathrooms and we serve a lunch box.”

Another interesting op-tion for personnel transport, albeit on a much smaller level, is MAXIRent. Fernando Gracia, Director General of MAXIRent, explains that his company offers cars without or with a driver, which can be an interesting option for visiting businesspeople to see tourist sites without worry-ing about security.

Actually, MAXIRent is in the process of enhancing its offer for tourists, thus de-veloping a new line of busi-ness for this company that caters mainly to SMEs and large corporations with a fleet of cargo and passenger vehicles of varying sizes. “In 2006, we had a fleet of 70 vehicles, and now we have 540. In only six years, we have grown by almost 800 per cent,” says Mr Gracia.

“Even though we have not yet fully developed the tour-ist segment, we offer easy solutions. You don’t even need a credit card to rent a car,” he continues. “Our slo-gan is ‘Rent what you need, when you need it’. People chose us because of our flexibility and convenience. We offer tailor-made solu-tions. Yet we are also a large, solid company, which means all our vehicles are in perfect condition, perfectly serviced and of course insured.”

“our competitive advantage is that we adapt to the needs of each client and we have everything: lorries, minivans, 4x4s, etc.” Fernando Gracia, Director General of MAXIRent

£357bn for infrastructure development

Anyone who lives and works in Mexico can easily understand why

President Enrique Peña Ni-eto has repeatedly announced that developing infrastructure would be one of his top priorities ever since he took office, in December 2012.

Echoing views largely shared among the business communi-ty in Mexico, Francisco Ibáñez, a consultant for Pricewater-houseCoopers, says in a 2013 report that, “In many ways, this is a modern and sophisticated society. But Mexico is not yet a fully modern country when it comes to basic infrastructure. We don’t have enough water-treatment plants, good schools, airports or hospitals. We need thousands of kilometres of new roads. Traffic-clogged cities need more high-speed transport systems, which will enhance productivity and re-duce pollution. Electricity sup-ply must become more reliable and cost-efficient. And ports must be rebuilt and mod-ernised to handle an ongoing boom in international trade.”

President Peña Nieto found a country that, according to the World Economic Fo-rum’s Global Competitiveness Report 2014-2015, ranks 69 out of 148 for the quality of its overall infrastructure. This country of more than 123 mil-lion people that is the world’s

14th largest economy is less equipped in infrastructure than Thailand, Rwanda and Kazakhstan. The quality of Mexico’s roads ranked 52nd, railroad infrastructure ranked 64th, ports ranked 62nd, and electricity supply ranked 80th. As for the proportion of the population with mobile phone subscriptions, it ranked 111th.

The government is well aware that improving infra-structures is key to develop the economy and harness all the potential of this vast country, where about 45 per cent of the population still lives in poverty. In July 2013, Mr Peña Nieto announced a programme to invest 4 trillion pesos (£184 billion) in infra-structure over six years. “With better infrastructure, more in-vestment and transformational reforms, our nation will be able to grow at its full potential,” he said. Then in April this year, the President announced a second, more ambitious infrastructure plan, with public and private investment in infrastructure set to reach some £3.55 tril-lion over the next five years in an effort to raise the country’s economic growth capacity.

This 2014-2018 national infrastructure plan, one of the largest investment pro-grammes ever initiated in Latin America, includes 743 projects in areas such as energy, com-

munications and transport. The amount is a marked increase over the budget outlined by the government a year ago, with the addition of projects in housing and urban develop-

ment, health and tourism. The energy sector is ex-

pected to take the largest share of the investment, with 3.9 trillion pesos over the next five years, as the state-run oil

and electricity sectors are open to private investment and competition for the first time in decades. Invest-ment in communications and transport, including highways, railways, ports and broadband networks, is expected to ex-ceed 1.3 trillion pesos.

Finance Minister Luis Videga-ray Caso said that six of every 10 pesos of the overall invest-ment would come from federal and state budgets, and the rest from the private sector. He es-timated the infrastructure plan would add between 1.8 and 2 percentage points to Mexico’s growth rates by 2018.

“It won’t be long before international tenders are opened so as to finish build-ing the infrastructure Mexico needs,” highlights José Maiz García, Director General of Constructora Maiz Mier.

His is a company that has joined a growing consortium of firms, headed by Grupo ICA and Mexican billionaire busi-nessman Carlos Slim’s Grupo Carso, to bid for contracts at one of the most talked-about projects of recent years: the construction of a new, six-runway international airport for Mexico City. With a budget of about 122 billion pesos, the new airport, which was announced in September this year, will have four times the capacity of the capital’s exist-

ing terminal, the Benito Juárez International Airport. British architect Sir Norman Foster along with Fernando Romero, the son-in-law of Carlos Slim, were awarded the contract to design the 555,000 square metre airport, which will rank among the largest in the world.

The group was announced in September and also includes Grupo Mexicano de Desarrol-lo, Grupo Idinsa, Grupo Garza Ponce, MG, Grupo Casgo, Timosa, Cimesa, Coconal, Gia, Hermes, Marhnos, Prodemex, Teya and Tradeco. Construc-tion on the new airport could begin as soon as the middle of next year, according to Trans-port and Communications Minister Gerardo Ruiz Esparza. Last month, Mr Ruiz Esparza said Mexico is likely to pick an experienced, foreign con-struction company, working in partnership with local firms, to build the airport.

Based in Monterrey, capital of the northern State of Nuevo León, Maiz Mier was founded in 1938 by the late José Maiz Mier, father of Director Gen-eral José Maiz García. “My father, who was a visionary and an innovator, used to say that, ‘There is no project so small that we wouldn’t want to do it, and no project so big that we could not do it.’”

Mr Maiz García explains that one of the benefits of

bidding through a consor-tium is that it gives access to financing. “The best way to work on large-scale projects is through public-private partnerships,” he says.

“We are too small to gain access to financing on such a scale. Also, as a Mexican com-pany, financing is more expen-sive for us than for American or European companies. But we put forward the know-how that we acquired in certain types of construction. Our history, our commitment and the number of years we have been in this profession all add up to inspire trust.”

Maiz Mier is one of Mexico’s leading construction compa-nies, in particular in its home state of Nuevo León, where it built landmarks such as the Faro del Comercio, the base-ball stadium of Monterrey and the Lanzado bridge, the first railway bridge of Latin America. Whilst Maiz Mier’s manage-ment is passionate about sports, baseball in particular, the firm also lends its talents to other social dimensions.

“This is a socially responsible company in every sense of the word,” explains Mr Maiz García. “Not only in sports and baseball – we’re also involved in numerous social projects such as education and health. It’s something we’ve always been attracted to and enjoyed.”

presidenT peña nieTo’s naTional infrasTrucTure plan 2014-2018 includes 743 projecTs in areas such as energy, communicaTions and TransporT

Grupo Senda hopes to change perceptions of travelling by road

Maiz Mier built Monterrey’s baseball stadium in the late 1980s

WEDNESDAY, NOVEMBER 5, 2014

“There is no project so small that we wouldn’t want to do it, and no project so big that we could not do it” José Maiz Mier, the late founder of Constructora Maiz Mier

MEXICO WEDNESDAY, NOVEMBER 5, 20146

a freshcurriculum foreducation The educaTional reform aims To help schools boosT sTudenT

performance wiTh a layer of oversighT aT The naTional level

As Mexico moves into high-skill and value-added activities such

as durable goods, electronics, aerospace and biotechnology, it is demanding more sophisti-cated skills from its workforce to fuel the country’s upward mobility. Modernising the country’s education system is at the centre of President Enrique Peña Nieto’s efforts to continue this trend of eco-nomic development, with a fundamental reorganisation of its education system, whose performance has stagnated even as Mexico has climbed up the income ladder.

Currently, Mexico spends more on education, per pu-pil, than any country in the world, with the exception of New Zealand, according to Education Minister Emilio Chuayffet. And yet the quality of education that its students receive has lagged. In order for the country to compete in the global economy, its leaders argue that reforms are necessary, which is why President Enrique Peña Nieto – together with lawmakers from the major political par-ties – passed a set of critical laws governing the country’s education system.

The new framework gives the federal government the power to set national stand-ards for performance and teacher evaluation. It also prohibits the sale or inherit-ance of teaching positions and introduces mandatory exams to evaluate teachers. Crucially, the measures solidify local control over schools, allowing them more autonomy to form their own curricula and to manage their personnel, while giving the federal government more leverage for teacher certification, evaluation and salary decisions. The aim is to give schools more freedom to come up with creative ways to improve the learn-ing environment and boost student performance, while adding a layer of oversight and accountability at the national level, including a nationwide teacher-training programme to help educators learn and pass on the system’s best practices and most effective techniques. “This is the first step in a very profound reform that the national education system requires, above all, so that the state regains control over education in Mexico,” Mr Chuayffet explains.

The new laws also set up a process for the selec-tion of teachers using open competition among qualified university graduates. Once hired, a merit-based system will give high-performing teachers the opportunity to rise in rank based on their professional achievements.

“Now is the time to clear the path for the great educa-

tors of the country,” President Peña Nieto has declared.

As in the other major re-forms set into action by the Pact for Mexico, the Presi-dent counts on the support of lawmakers from the coun-try’s major political parties to help implement the new educational system.

“This is a transforma-tive initiative that, on one hand, transcribes into law the agreements included in the Alliance for Education Quality, and on the other, strengthens the technical and managerial autonomy given to the National Institute for the Evaluation of Education,” says Gustavo Madero Muñoz, President of the Partido Ac-ción Nacional (PAN).

“The initiative puts forward a professional system for teachers. They are the pro-tagonists of the process and it’s the state’s obligation to give them security in terms of their jobs, their salaries and in the value of their service,” Mr Chuayffet adds. The educa-tion reform will help ensure the full exercise of the con-stitutional right to a quality education, proponents argue. “The reforms’ substance must be quality; preparing children in a quality structure, so they can graduate with all the necessary skills and become a member of the productive sector and social life,” says Jesús Ancer Rodríguez, Rector of the Universidad Autonoma de Nuevo León (UANL).

To get an idea of what a world-class education system looks like, evaluators need go no further than Nuevo León, a state that ranks at the top of the country in the quality and the level of education it provides. Nuevo León’s suc-cess rests on strong relations and collaboration between the government, the private sector and academia, accord-ing to Mr Ancer Rodríguez. “This approach,” he says, “helps promote competitive-ness and the advancement of innovative solutions to market problems.”

“Nuevo León has three principles,” he continues. “One is coverage, which makes the state a prime loca-tion for education. Another is fairness and a level playing field for all. The third is quality. The UANL has all the inter-national accreditations for its students to have the capacity and the necessary skills to en-ter the job market.”

While the new laws address several important areas, insti-tutions like UANL must work to further the spread of high-er education in Mexico, Mr Ancer Rodríguez argues. “This educational reform deals basi-cally with quality, especially in elementary education,” he adds. “But when it comes to higher education, the reform

must deal with school enrol-ment and coverage. That is the great national challenge. After secondary education, young people must have the possibil-ity and expectation to be able to continue their studies into further and higher education.”

Using his leadership posi-tion in the state’s flagship higher education institution, Mr Ancer Rodríguez has worked to make sure that the system provides these opportunities.

“A student who completes basic education, including high school, has a guaranteed place in higher education,” he says. “Our state has ensured that the school alumni end up having a secure position, either at the university or the public subsystems, and we can ensure their education.”

UANL’s rector adds, “Our university’s enrolment has been growing over the years, and today we are the third-largest university in the country. We have more than 157,000 students: 67,000 at the high-school level, 85,000 undergraduate and 5,000 on postgraduate studies. Over the last three years as university rector, we have increased the number of students by 30,000. This gives a lot of young people the op-portunity to study.”

Working together with the government, UANL created a major recruitment plan that provides nearly 82,000 scholarships per semester. “We are the university that grants the most scholarships nationwide,” Mr Ancer Rod-ríguez affirms. “We believe that all students must have the opportunity to complete their education.”

Institutions like UANL are at the forefront of Mexico’s move into high-value manu-facturing and services – areas that require engagement with top universities and compa-nies around the world, par-ticularly in the UK. Around 20,000 Mexicans travel every year to study abroad. The USA, Canada and the UK are the most sought-after destinations, with the UK being the main location for those looking to specialise in areas of engineering and social sciences. Mexico sends more foreign students to the UK than any other Latin American country.

“We are focused on strategic areas such as auto-motive and aerospace. We have world-class research centres,” Mr Ancer Rodríguez says. “We have just signed an agreement with Chrysler, in which they committed to hir-ing only UANL-graduated en-gineers. There are over 14,000 students in the engineering faculty, UANL produces more engineers than any other Mexican university.”

education reform will help ensure the full exercise of mexicans’ constitutional right to quality education

The new framework gives the federal government the power to set national standards for performance and teacher evaluation

Over the last three years, enrolments at the UANL have increased by 30,000 students

The univer-sity of nuevo león has worked with the government to create a major recruitment plan that provides nearly 82,000 scholarships per semester

“The reforms’ substance must be quality; preparing children in a quality structure, so they can graduate with all the necessary skills”

Jesús Ancer Rodríguez, Rector of UANL

One of the surprises for the travel industry during the recent worldwide economic downturn was the resilience of the meetings, incentives, conferences and exhibitions (MICE) market, not just in re-gions where the economies were strong but in weak ones as well.

In a report released in 2013 analysing business meetings and convention statistics since it was founded 50 years ago, the International Con-gress and Convention As-sociation (ICCA) said that in the five-year period covering the height of the economic crisis, the number of meetings

it monitors actually increased by around 15,000 to 55,000.

Mexican tourism authori-ties, both in the public and private sectors, have taken note and are working to en-sure that Mexico gets its fair share of business travellers and then some, along with the millions of leisure travel-lers who come each year for the country’s culture, weather, natural and man-made wonders and cuisine.

Whereas once Mexican tourism officials were quite happy to focus on luring the leisure market, MICE tourism is attractive for destinations because the

guests spend well, appreciate a good product and good services and, in many cases, are loyal and happy to return year after year.

In the business travel sector “there is room and opportunity to grow,” says Mexican Secretary of Tour-ism Claudia Ruiz Massieu, noting that it represents 20 per cent of tourism activity in the country and accounts for 2 per cent of Mexico’s GDP.

In total, the business meet-ings industry is worth around £12.4 billion to Mexico and there are plenty of reasons to believe that figure can only grow in the future.

Mexico is already well on its way to becoming a busi-ness travel and meetings magnet. In 2013, the country ranked fifth among 38 west-ern hemisphere nations in the number of international congresses and conventions held, according to the ICCA.

The same association’s survey placed the country’s capital, Mexico City, in 15th place in the Americas, ahead of such heavy convention competition as New York City, Chicago and Miami.

Nevertheless, the capital is not resting on its laurels. Each year, municipal tourist authorities budget around

£15.5 million to promote more business travel to the capital, trumpeting Mexico City’s obvious attributes, such as luxury hotels, world-class meeting facilities and its traditional tourism offer for when the businessmen and women get out of those conference rooms.

The capital hosts three major convention centres that would do any European city proud. Each venue comes equipped with multifunc-tional spaces for meetings or exhibitions, as well as state-of-the-art technology and top-grade services for organisers and exhibitors.

At the same time, Mexico City’s many four and five-star hotels of both national and international brands provide excellent venues for the MICE sector. High-quality facilities are complemented by mul-tilingual staff and marketing professionals eager to help or-ganisers plan their next event.

Other Mexican cities are also getting in on the act. There are an estimated 70 convention centres around the country, with more in the planning stages, provid-ing event sponsors with a wide choice of options, whether the occasion calls for a beach on the Pacific

or the Caribbean, or a more urban setting in one of the country’s thriving cities like Guadalajara or Monterrey.

As part of the nationwide business travel promotion effort, the national tourism board has established 65 bu-reaux around the country to aid and assist those seeking a unique, affordable, efficient and, of course, fun destina-tion for that next business or incentive gathering.

After all, at the end of a gruelling day of meetings, PowerPoint presentations and networking, who doesn’t look forward to a frosty mar-garita on a balmy beach?

MEXICOWEDNESDAY, NOVEMBER 5, 2014 7

Mexico needs no elabo-rate introduction to its more than ample

tourism offer, as savvy world travellers are well aware of its long and fascinating history, rich and colourful culture and traditions, welcoming festivals and fiestas, and stunning beaches and jungles.

Mexico’s most important holiday, the Day of the Dead, or Día de los Muertos, transforms the streets of Mexico into col-ourful parades of people, who honour the deceased with gifts in the form of sugar skulls, mari-golds, and the favourite food and beverages of the departed. This joyous tradition has cap-tured the imaginations of many across borders and oceans, and is now becoming a “must-do” when exploring Mexico.

Then there is the food, which has become a global gastro-nomic phenomenon, from the taco trucks of Los Angeles and Tokyo to the high-end Mexican restaurants springing up around London, serving up authentic dishes like mole poblano and ensalada de nopales.

All these attractions and many more have consistently placed Mexico among the top tourism destinations in the world, year after year, and it is

the second most-visited coun-try in the western hemisphere after the US.

Judging from the growing numbers of tourists choosing the country for their holidays, whether it’s a week of scuba diving or a ramble along the route of Spanish colonial cities, this trend is likely to continue.

In the first eight months of this year, international tourist arrivals totalled 19.3 million, up by 19 per cent over the same period in 2013. And British travellers have taken note of Mexico’s myriad delights with visitors from the UK growing by 3 per cent in the first quarter of 2014 to more than 84,000.

Along with its many histori-cal, cultural and natural attrac-tions, Mexico is also famous for providing value for money, with travel journalists recom-mending the country as a great destination for those wanting more punch for their pound.

Spending by tourists is vital to the Mexican economy and income from the industry is the third largest source of foreign exchange after petro-leum and remittances from Mexicans living abroad.

In 2012, the most recent year for which data is available, tourism income amounted to

£7.8 billion and the sector accounts for 8.4 per cent of GDP. It directly employs more than 2.5 million people and double that number in indirect unemployment.

“In Mexico we know that tourism is an industry that gen-erates wellbeing and opportu-nities beyond the qualities that make our attractions unique, like our beauties of nature and vibrant culture,” says Mexican Secretary of Tourism Claudia Ruiz Massieu.

“It is an activity that can transform an isolated loca-

tion, a natural wonder or an architectural marvel into an engine of the economy, provid-ing employment for thousands of Mexicans and a destination for visitors from dozens of na-tions,” she says.

Mexico certainly has a wealth of idylls, wonders and marvels. Understandably, among the country’s prime draws for international travel-lers are its spectacular beaches and with coasts on both the Atlantic and the Pacific, Mexico is truly blessed.

The government tourist

literature boasts of 450 official beaches in the country where one can surf, swim or sip tropical cocktails in a palapa, or palm-frond beach hut, while haggling with a peddler over the price of a souvenir.

High-profile seaside resorts like Acapulco, Mazatlan, Cabo San Lucas, Cancun, Cozumel and the Riviera Maya are justly famed for their world-class luxury hotels, fine dining and adventure and leisure activities.

Nevertheless, there are thou-sands of little-known and rarely visited stretches of sugar-white sand on both coasts where one can truly escape the madding crowd for unhurried days of sunshine, cerveza and siesta.

Baja California and Baja Cali-fornia Sur, just two of Mexico’s 20 states lapped by one ocean or the other, together form a western peninsula that has a total of almost 2,000 miles of coastline, as well as 65 islands.

Meanwhile, the state of Campeche on the Caribbean side of the country has miles of virgin beaches for a perfect getaway. When one more day of blissfully soaking up the rays becomes just too much, Campeche’s interior beckons with some of the best pre-served or restored Mayan

ruins in the entire region. Calakmul, deep in the tropical rainforest, is testimony to the wealth and grandeur of this pre-Colombian civilisation dating back some 1,700 years and boasting 1,000 ancient pyramids, temples and palaces.

These Mayan monuments, along with the surrounding tropical forest, are among the nearly three dozen Un-esco World Heritage Sites found in Mexico, ranging from pre-historic caves to Spanish monasteries.

Of the 204 cities around the world that have been awarded the title of Cultural Heritage of Humanity by Unesco, Mexico holds 10. Each city – such as Guanajuato wih its enchanting examples of Baroque archi-tecture, or Oaxaca, which to the present day preserves the original layout of its historical centre – represents Mexico’s rich architectural, cultural and natural beauty.

Also not to be missed is a visit to one, a dozen or all 85 of the Pueblos Mágicos, or Magical Towns, which have been carefully selected by the govern-ment tourism authorities.

Included on the list is the small city of Taxco, famous for its fine silverwork, and Jala in

Nayarit State, where visitors can hike up to a volcano which last erupted more than 100 years ago.

Santiago de Tequila, which gave its name to the country’s most famous tipple and where visitors can tour distilleries dating back over a century that continue turning out the fiery spirit made from the agave cac-tus grown all around the town.

But perhaps Mexico’s most welcoming attraction is its people and their incredible diversity, from the sophisticated and worldly residents of Mexico City, to the Huastecans who still speak a Mayan language and turn out incredibly colourful and intricate textiles in the mountains and valleys of San Luis Potosi State.

Sitting at a tavern on the main plaza of a central Mexican town on a fiesta evening when the entire population is celebrating a local saint’s day or a bumper harvest, a visitor should not be surprised at being asked to join in with a group of friends danc-ing to a mariachi band.

It is the quintessential Mexi-can experience combining the country’s unique culture, traditions and the warmth and hospitality of its greatest asset, its people.

“Tourism is an activity that can transform an isolated location, a natural wonder or architectural marvel into an engine of the economy”

Claudia Ruiz Massieu,Secretary of Tourism

myriad cultural and natural delights keep visitors flocking

income from The Tourism indusTry accounTs for mexico’s Third mosT imporTanT source of foreign exchange

mexico to capture more mice tourism

Mexico’s many exotic textures drew 19.3 million international tourists in the first eight months of 2014, 19 per cent more than in the same period in 2013

The Aztec calendar reflects their philosophy of time as cyclical