Category Archives: Infrastructure

Mexico’s port investment is crucial to the country’s long-term future

Mexico’s growing industrialization and the rising level of disposable income are key factors spurring the growth of Mexico’s ports.
Mexico’s growing industrialization and the rising level of disposable income are key factors spurring the growth of Mexico’s ports.

By Alan M. Field / JOC

As Mexico’s manufacturing output has increased steadily over the last decade, so has the throughput of its major ports along the Gulf of Mexico and Pacific Ocean.

In 2014, Mexico handled more than 5.7 million 20-foot-equivalent container units a year, behind only Brazil and Panama in Latin America, and 10 times more than it handled in the first full year of the North American Free Trade Agreement in 1995.

It’s no mystery why container volumes have been growing at such a spectacular rate: Mexico has made expansion of its automotive sector a cornerstone of its ambitious plans to transform its country into a global industrial powerhouse.

Over the past few years, Toyota, Daimler and other automakers have invested, or promised to invest, a combined $22.6 billion in plants for assembling vehicles, containerized automotive parts and electronics products.

To keep pace with that growth, Mexico’s federal government in April announced it is investing $5 billion in its network of 117 ports, including the construction of four new terminals in Veracruz, where container throughput is expected to approach 900,000 TEUs this year, up from just 540,000 TEUs in 2001.

The new investments reflect Mexico’s “conviction that a system of total distribution, with each logistical chain of a high level, both within the country and beyond our borders, is the best way of functioning,” said Guillermo Ruiz de Teresa, coordinator of Mexico’s agency for ports and merchant marine.

http://www.joc.com/port-news/international-ports/mexicos-port-investment-crucial-countrys-long-term-future_20150706.html

Carmakers’ $23 billion Mexico ventures might face snarls at ports

Mexico is boosting operating capacity at ports by 50 percent through 2018 and doesn’t foresee any bottlenecks.
Mexico is boosting operating capacity at ports by 50 percent through 2018 and doesn’t foresee any bottlenecks.

By Nacha Cattan and Benjamin Bain / Bloomberg

Carmakers from Nissan Motor Co. to Mazda Motor Corp. are churning out record numbers of vehicles in Mexico destined for consumers abroad. Yet some executives are worried that the factory hum will slow in coming years as exports get bogged down by congestion at the nation’s ports.

The government has targeted 70 billion pesos ($4.6 billion) for port infrastructure through 2018, including building four new terminals in Veracruz. Some automakers are skeptical that the goal will be met or will be enough to handle the more than 5 million vehicles Mexico expects to produce annually by 2020, a 56 percent increase from the country’s 2014 output.

In the past two-and-a-half years, car manufacturers including Toyota Motor Corp. and Daimler AG, have invested or promised $22.6 billion for auto and parts plants, according to the government. That success story, which made the sector the largest source of foreign cash in the country, may be imperiled if the government doesn’t speed up plans for infrastructure improvements.

“Up until now, Mexico has succeeded in attracting more investments,” said Carlos Serrano, chief economist for BBVA Bancomer, Mexico’s biggest bank by loans outstanding. “But there’s going to come a point, when if infrastructure doesn’t get better, it’s going to put Mexico’s continued advance at risk.”

http://www.bloomberg.com/news/articles/2015-05-26/carmakers-23-billion-mexico-venture-may-face-snarls-at-ports