NE Mexico
Primed for industry
By Mike Patten

They are the Big Four of Mexico: Four states clustered together that comprise the biggest industrial area in the nation.

Tamaulipas, Nuevo León, Coahuila and San Luis Potosí each bring different specialties to the table. Tamaulipas is home to major electronics manufacturers in Reynosa and Matamoros and features the ports of Tampico and Altamira. Nuevo León is home to Monterrey, Mexico's most industrialized city and a financial center for the nation. Coahuila features major steel industries, world-renown denim manufacturers and auto assembly plants. San Luis Potosí has important suppliers to the automotive industry and sits in a favored spot on several trade corridors.

Monterrey-based Grupo Prodensa has been helping foreign companies establish manufacturing operations in Mexico since 1985. It has operations in each of the four states. Prodensa's Armando Charles R. says they continue to see rapid growth in the region.

"What we call the second border cities, Hermosillo, Chihuahua, Monterrey, Torreón, are going to see growth now," Charles says.

"The trend we've seen for the last 10 years is that the companies are going south, away from the border."

Prodensa has helped more than 50 companies establish operations in Mexico. It is expected to receive ISO 9001 certification in April and recently opened an office in San Luis Potosí.

Founded by Armando Charles L., Grupo Prodensa is now a team of specialized professionals committed to meet the needs of foreign companies that expect world-class quality timely services. In addition to providing shelter or contract manufacturing options, the firm recently established a construction management department. With its construction management service, it provides on site construction supervision,

project control reports, critical path scheduling and estimating purchasing, expediting and safety programs, checkout, validation and quality assurance programs.

Tamaulipas has a major multimodal transportation system that includes five airports, two deep-water ports, an extensive highway network and a railway network. It offers many productive opportunities, including in-bond, chemical and petrochemical, agriculture, fishing and tourism.

The in-bond industry has shown surprising expansion, especially in the border cities of Matamoros, Reynosa and Nuevo Laredo, where 80 percent of the state's maquilas are located. The importance of the industry is evidenced by the following statistic: 77 percent of the state's industrial workers are employed by maquilas. Thirty-one percent of all workers enrolled in the social security system are maquila employees.

The most important sectors, by the number of jobs created, are automobile parts and electric and electronic accessories. Between them, they represent 68 percent of the jobs created by the in-bond industry, followed in importance by the textile industry, with 10 percent.

Among the in-bond plants established in Tamaulipas are affiliates of General Motors, Mitsubishi, Sony, Packard Electric, Fruit of the Loom, Northern Electric, McGraw Edison, Zenith, General Electric and Caterpillar Inc.

Nuevo León is located in the northeastern of Mexico, bordering to the north with the United States and to the east, south and west with the Mexican States of Tamaulipas, San Luis Potosí, Zacatecas and Coahuila. The state is divided into 51 municipalities, and a large majority of its people are concentrated in metropolitan Monterrey, which in addition to the capital city proper, includes the municipalities of San Nicolás de los Garza, San Pedro Garza García, Guadalupe, García, Juárez, Santa Catarina, General Escobedo and Apodaca.

Greater Monterrey is the second largest industrial center in the country after Greater Mexico City, although its population of around 4 million is equivalent to only 4 percent of the country's total population. Nuevo León is a highly urbanized state. About 85 percent of the state's population lives in the metropolitan area.

For more than 100 years, industrial activity has been the most important source of income in Nuevo León.

Coahuila is one of the most attractive states in Mexico. Foreign investors have found here high profitable protection for their investments, while focusing on international market globalization.

The municipalities of Ramos Arizpe and Saltillo in Coahuila represent two examples of the most important developed cities in Mexico. Both are considered among the most important world class manufacturing centers.

The strategic location offered in this area allows immediate access to the NAFTA Highway. The state itself shares a common border with the United States of 1,050 miles, with direct access to Laredo, the most active border crossing in the world, and Eagle Pass at Piedras Negras.

An international airport in Ramos Arizpe serves both municipalities. A sufficient network of public roads and highways connect both cities to the area's principal turnpikes. In the meantime, an efficient railway system allows companies to have cheap access to national and international destinations.

Satellite and electronic hookups, malls, training and continuing education centers, professional and technical services plus a quick attention of public services provide high quality of life in the area, while its reliable and qualified workforce supports the raising economy.

Davisa Development Corporation has created premier industrial parks in these areas specially designed to provide foreign companies world-class facilities handling all necessary and first quality services in order to help them establish in Mexico.

Considered some of the most modern industrial parks in Latin America, Santa María and Santa Mónica Industrial Parks fully developed by this firm, have hosted important companies in the area.

Magna International, General Electric, Oxford Automotive, Shilo and Ferraloy Corporation among others have chosen Davisa's industrial parks, trusting high quality services, and supporting the uninterrupted growth of the area.

San Luis Potosí
San Luis Potosí has significant benefits for the companies that decide to locate here, namely:

• It is located on the NAFTA highway at the geographical and demographical center of Mexico.
• It provides logistics advantages at the major intersection of highways and railroads in México.
• Efficient access to Atlantic and Pacific ports.
• Less than eight hour drive to the U.S. border from any of the major industrial zones.
• Located in the center of the triangle created by Mexico's three largest markets- Monterrey, Guadalajara, and México City.
• Low-cost, abundant, highly-trained work force.
• 70 percent of the country's population is within 300 miles.
• Outstanding quality of life with a beautiful year-round climate, complete recreation and health-care facilities, and a safe family environment.
• Complete government support and stability with attractive incentives in a pro-business climate.

Generally the labor climate is favorable. In the larger centers you will find an abundance of highly skilled employees. In the smaller centers there is a non-competitive labor market waiting to be tapped. The people of San Luis Potosí are hard-working and eager to learn.

Low turnover is a benefit of choosing San Luis Potosí. The official unemployment rate for the state is 2.3 percent, however, the government estimates that the under employment rate, people who are working few hours or below their skill level, is about 12.7 percent.

Major industry includes domestic appliances, auto parts, production cements, iron and steel, spun and soft fabric fibers, clothing, tobacco processing, sugar refining, machinery and electrical equipment, non-ferrous metals, and milk products.

Services include scientific analysis, trade, communications, electricity, investigative, hospitals, transport, financial, and tourism.

Nuevo León
Nuevo León stretches more than 25,000 square miles and has a mean elevation of 1,912 feet above sea level. It's comprised of 51 municipalities, including, Anahuac, which borders the United States and is home to the Colombia International Bridge.

The distance between Greater Monterrey (comprised of Monterrey proper and eight neighboring counties) and the U.S. border is about 145 miles.

Nuevo León's cities provide the best examples of the modernization and industrial development that characterize the state. The best sample is Monterrey, the capital and principal urban center in the state.

Downtown is marked by the Gran Plaza (Great Square) a superb complex of 97 acres. Monterrey has buildings that were constructed following the latest architectural trends of the century. Some of the most outstanding examples of this are: El Faro del Comercio (a towering structure with a laser beacon), El Teatro de la Ciudad (City Theater), La Biblioteca Central (Central Library) and in religious architecture La Iglesia de la Purísima, a church with an impressive onyx entrance.

About 30 interesting museums and cultural centers open their doors to all kind of visitors, including: MARCO, Contemporary Art Museum, the leading contemporary art museum in Latin America; Monterrey Museum; National History Museum; Nuevo León's House of Culture; the Professional Baseball Hall of Fame; the Museum of Sport; and the Pinacoteca del Estado, an art gallery that houses the entire artistic heritage of the state.

Plays, concerts and other cultural events are staged at the City Theater, the Monterrey Theater, the Luis Elizondo Auditorium, the San Pedro Auditorium, Fundidora Arena as well as other small theaters.

Education
Nuevo León offers a complete education system for the more than 1 million enrolled students in the pre-school, basic and intermediate levels. More than 5,400 schools and more than 52,000 qualified teachers give support to the state's social development. There are more than 230 technical schools that provide professional and technical education to their students. The state has more than 50 bilingual schools.

There are thirty universities in the Metropolitan Area, some of them are:

• Universidad Autónoma de Nuevo León (U.A.N.L.) with more than 114,000 students and more than 7,200 professors.
• Instituto Tecnológico y de Estudios Superiores de Monterrey (I.T.E.S.M.) with about 14,000 students and more than 1,500 professors.
• Universidad de Monterrey (UDEM) with nearly 7,000 students and more than 800 professors.

Other universities include the Universidad Mexicana del Noreste, Centro de Estudios Universitarios, Universidad del Norte, Escuela Libre de Derecho and Universidad Regiomontana.

Advantages
The advantages of investing in Nuevo León include the following:

• Qualified labor at competitive cost.
• Proximity to the biggest market in the world, the United States.
• Infrastructure available to meet increasing demands.
• More than one hundred years of industrial experience, which results in a large huge number of suppliers that can support any industrial activity.
• Diversified markets.
• Sound financial structure, backed by the banking system, stock brokerage and currency exchange offices.
• Free-flowing communication and transportation systems.
• A renowned educational system.

Tamaulipas
During the last 20 years, Tamaulipas has changed its socioeconomic structure, transforming from a primarily rural state to a manufacturing and service-company state. Tamaulipas' industrial development is tied directly with the programs in place for the temporary importation of supplies and machinery for the maquila industry, and with PEMEX, which has a refinery in Ciudad Madero. The state has been experiencing rapid growth, with 42 of every 100 new jobs generated by the industrial sector.

Although the majority of the industrial activity in the state is concentrated in electronics and automotive, textiles play a large role as well. The state's abundant water supply, the proximity to PEMEX's chemical operations in Ciudad Madero, and the area cotton farms together make the state attractive to the textile industry.

The chemical industry is growing in the southern part of the state. The Ciudad Madero refinery, the Altamira industrial port and abundant water and energy resources attract firms that together produce more than 2.5 million tons of products such as acrylic fibers, ABS and SB synthetic rubber, styrene polymers and copolymers, thermoplastic synthetic resins, PVC and PET.

The region produces 30 percent of the country's chemicals and petrochemcials and 80 percent of its thermoplastic resins. The Port of Tampico is a service facilities complex for commercial ocean freight. It is considered the second most important port in Mexico. The Altamira Industrial Port is intended as an alternative for decentralizing heavy industry.

Ninety-four of every 100 children in the state receive primary education. Nine of every 10 finish primary school and go to secondary school. About 750,000 students are enrolled in schools. Higher education is offered by more than 30 schools throughout the state. The largest is the Autonomous State University of Tamaulipas, with campuses throughout the state. Another 63 educational centers provide technical skills for workers.

Coahuila
Coahuila is home to automakers General Motors and DaimlerChrysler, who together produce about 8 percent of the gasoline-powered automobiles used in the United States. With assembly plants in Saltillo and nearby Ramos Arizpe, the plants assemble about 530,000 units a year.

Surrounding the auto industry are major steel plants in Monclova and auto parts manufacturers from around the world. Major exports from the region include:

• Automobiles.
• Motors.
• Auto parts.
• Metal mechanical products.
• Paper.
• Ceramics.
• Electronics.
• Software.

As a result, Saltillo is one of the best cities in Mexico to do business. Companies such as General Electric, John Deere, Ericcson, Alcoa, Lear Corporation, Mannesmann Sachs, Caterpillar, Delphi, Magna and Kimberly Clark have operations near Saltillo.

Meanwhile, across the state on its western border is an area known as La Laguna, renowned for its denim production. La Laguna is located in the states of Coahuila and Durango. It includes 16 counties and many communities in both states. La Laguna is approximately 175 miles from Saltillo, 225 from Monterrey, 425 from Guadalajara and 625 from Mexico City. La Laguna is 360 miles from Laredo and Eagle Pass, and 500 miles from El Paso. In Coahuila, Torreón is the largest city in the region.

La Laguna has a population of about 1.3 million, including nearly 400,000 workers in industry and commerce. La Laguna has some of the finest schools in the country. There are nine local universities, including the world famous Monterrey Institute of Technology, which offers a wide array of undergraduate, post-graduate and extension courses. The Iberoamerican University, University of La Laguna and University of Coahuila are also located in the area

Mike Patten is managing editor of
Twin Plant News.