NW Mexico
On the Move
By Mike Patten

Savvy foreign investors have known about Mexico’s western frontier for years. From Guadalajara to Tijuana, some of the biggest, most sophisticated companies in the world have found success.

Despite the beginning of a slowdown brought on by the weakening U.S. economy, the states of Aguascalientes, Jalisco, Sonora, Baja California, Zacatecas, Sinaloa and Baja California Sur continue to show promise kfor the maquila industry.

Baja California

Baja California is one of Mexico’s most urban states, with four major cities that have undergone spectacular growth: Mexicali (the state capital), Tijuana, Tecate and Ensenada.

Tijuana is the fourth-largest city in Mexico and the most populous city in Baja California. It is considered the most visited city in the world. Because of its location, Tijuana is an attractive destination for migration from the interior, guaranteeing a steady supply of available labor for companies looking to establish operations or expand in the region. The city’s population increases at a rate of about 3 percent a year.

Tijuana has an international airport with daily flights to cities in Mexico, the United States and Japan. There currently are 34 industrial parks either in operation or on the drawing board.

Tijuana’s economy is based on the assembly industry, tourism and trade with the United States. Tourism and retirement homes are Ensenada’s main activity. Tijuana, in contrast, has specialized in short-term recreational tourism. Irrigation agriculture, fishing, aquaculture and wine and beer production are now promising ingredients in Baja California’s diverse economy. To promote development, about 50 industrial parks have been opened in Baja California’s major cities, and numerous organizations support the state’s industrial development.

Tijuana is a hardworking industrial community with more than 38 years of experience in international production sharing activities. It has more maquiladora plants than any other city in Mexico, with more than 700 plants, and more than 145,000 workers. Electronics accounts for 30 percent (direct or indirect) of the maquiladoras in Tijuana.

Companies with maquiladora plants in Tijuana are mainly from U.S. corporations, but also include firms from Southeast Asia and Europe. Among them are Sony, Samsung, Sanyo, ADI, Tatung, Mattel, Sharp and others. Tijuana provides an environment that favors manufacturing and maquila operations. Its experienced, mature industrial work force, low labor cost and easy access to the United States together with the services and facilities available in San Diego make it an ideal manufacturing location.

Over the years Tijuana’s maquila industry has evolved from garments to electronics. Today, more than 10 million television sets a year are assembled in Tijuana – the biggest concentration of television assembly in the world. More picture tubes are produced here than anywhere else in North America.

As a result of that evolution, hundreds of plants have been opened here to provide the materials and supplies needed in the major maquilas.

Being part of the Pacific Rim and NAFTA, the Tijuana / San Diego Region makes Tijuana one of the best areas to manufacture and produce products. It calls itself "The Pacific Rim’s gateway to NAFTA" with access to the American, Asian and Mexican markets.

Because of its commitment and interest in satisfying its industrial market demand, Tijuana has all necessary infrastructure that a business requires. From suppliers to contract manufacturers, to supporting industries, you’ll find it all for your general and specific processes and needs. You will also find basic and complete services like water, electricity, communications, telephone, etc. Tijuana also has a highly qualified work force and workers are known to be excellent learners, hard workers and loyal.

Tijuana also benefits from its proximity to San Diego, Calif. and the quality of life that city affords.

Gateway of the Americas Project

This public-private project of LandGrant Development and the San Diego Redevelopment Agency will feature a modern, open-air shopping complex, office tower, hotel and an international pedestrian bridge connecting Avenida Revolución in Tijuana with the heart of the project across the border in San Diego.

The first phase of the project includes a 630,000-square-foot, open-air shopping center that includes mostly retail outlet stores and several restaurants located in a food court. The project also features courtyards, fountains, esplanades, and plazas. Leases have been signed by more than 30 retailers including Banana Republic, Liz Claiborne, Tommy Hilfiger, Nike, Nautica, Old Navy, The Gap and many other well-known stores.

The second phase includes a landmark pedestrian bridge over the Tijuana River still subject to federal and local government approval, a transportation terminal to facilitate buses, taxis and private vehicle traffic, duty-free retail shopping, an office tower and a hotel and conference center. This phase may also include a cultural center to provide artistic and educational exhibits, displays and live performances. Phase II would cover 10 acres and include 540,000 square feet of development.

With financial backing coming from JE Robert Companies, the International Gateway will be a $205 million, 1.4 million-square-foot project, with the international pedestrian bridge designed to serve as the landmark for this significant redevelopment project.

"The Bridge of the Americas will represent the strengthening relationship between our two nations, and will offer a cleaner, safer crossing option for the San Diego/Tijuana region, helping to ease congestion at the current San Ysidro port of entry," says C. Samuel Marasco, president of LandGrant Development. "With the traffic issues and the millions of people who come to this region every year, we’ve known that San Diego has needed this bridge and marketplace for a long time, and the public voice confirmed our beliefs. It is clear that residents and public officials from both sides of the border are pleased to see the project come to fruition.

In addition to providing an economic boost for the entire region, the project will turn an underdeveloped area into a well-planned, aesthetically pleasing and prosperous district. The first 630,000 square feet of retail space is scheduled to open in November.

LandGrant Development has built several award-winning projects throughout California, Arizona and Nevada. The San Diego Redevelopment Agency oversees 15 project areas encompassing more than 8,000 acres. The city’s community and economic development department administers nine of the project areas, including San Ysidro, and assumes responsibility for overall agency administration.

Mexicali

The state capital of Baja California is in Mexicali, a city striking for its heat and flat terrain. In recent years the city has also gained prominence for its rapidly developing maquila industry.

Mexicali is located in the northeastern section of the Baja California peninsula, about 100 miles east of Tijuana, 30 miles west of San Luis Río Colorado, Sonora, and across the international border from Calexico, Calif. in the Imperial Valley, one of the most important agricultural regions in the world. Produce is grown on both sides of the international border, and the Colorado River provides a continuous source of water for the region.

In recent years Mexicali has become a popular destination for maquilas looking to be close to the electronics cluster in Tijuana, but in a more stable labor climate. The result is an emerging cluster in the assembly of computer and television monitors. An estimated seven million computer and television monitors are assembled here each year.

Examples of major global corporations that have found success here include Acer, Thomson and Mitsubishi.

Mexicali lies in an alluvial plain and is remarkably flat. This feature makes it attractive to companies because land preparation costs are minimal. Mexicali County covers 5,400 square miles, or 20 percent of the state’s land surface. It was founded in 1903.

The city’s climate is desert. The sun shines more often here than anywhere else in the United State or Mexico. Average annual rainfall is only 3 inches.

One of Mexicali’s major advantages is its access to transportation corridors in the United States and Mexico. U.S. Interstate highways 10 and 8 are both just miles north of Mexicali, and major ports in Ensenada, B.C. and Long Beach, Calif. are readily available. Mexicali’s international airport is about 10 miles east of the city and offers daily flights to major cities in Mexico. In addition, the Imperial Valley Airport is just 15 miles north across the border from Mexicali.

Mexicali is home to Cerro Prieto, one of the largest geothermal electricity generating plants in the world. Natural gas is also readily available. Natural gas is clean, because it prevents emissions of sulfur dioxide and nitrous oxide thereby contributing to a better quality of environment. It’s safe because it’s lighter than air and consequently it dissipates into the air without dangerous accumulations of gas.

Jalisco

Separated from the country’s colonial heartland by the Sierra Madre, the semitropical state of Jalisco is a complex landscape - now lofty plain, now rugged sierra. This state stretches all the way to the coast, with resorts and beaches that vary from the sophistication of Puerto Vallarta to the simplicity of Barra de Navidad.

There’s a wealth of local products, from avocados to tequila, and glassware to guitars. Guadalajara - Mexico’s third largest city - is the area’s best-known destination, packed with elegant buildings and surrounded by scenic country. Further afield the land spreads green and mountainous.

Guadalajara growth 

Corporate Properties of the Americas, a leading design-build firm serving clients throughout Mexico, recently announced the inauguration / first stone ceremony of Guadalajara Technology Park (GTP), a master-planned, mixed-use business community located in the heart of Mexico’s Silicon Valley. GTP has been designed to meet the facility needs of multinationals that design, manufacture and distribute goods and services to the world economy, with particular emphasis on high-tech businesses.

Guadalajara is home to eight of the top 10 contract electronic manufacturers worldwide including Solectron, Flextronics and SCI Systems, and original equipment manufacturers including IBM, ON Semiconductor, Hewlett-Packard and Kodak. These companies, along with dozens of key suppliers, were attracted to Guadalajara because of its qualified labor force at all levels, a commitment by state and local government to continually improve infrastructure, education and other services for industry, and a high quality of life, including one of the world’s most favorable climates.

GTP was designed in cooperation with local landowners, municipal planning authorities and other state and federal officials. Careful attention was given to ensure compliance with issues including environmental impact, land use and traffic safety. GTP will include the most advanced infrastructure design and construction currently available. All of these details are intended to optimize the efficiency and effectiveness for businesses in the park, and to make GTP the premiere location in Mexico for leading multinationals.

"Guadalajara Technology Park was designed as a world-class business community - clean, attractive and bristling with the advances of technology," says James D. Brinkerhoff, chief executive officer of corporate properties. "We will offer a full range of services to industrial users including selling fully improved parcels, leasing inventory space, and building to suit. Complementing these users will be corporate office and research and development operations located in Town Square, a carefully planned office park within Guadalajara Technology Park. As the park grows, commercial services will be necessary and we have allocated prime land sites to accommodate hotel, restaurant and retail tenants. We chose the most attractive location in Guadalajara to develop the most advanced business community in Mexico."

GTP is located in the municipality of Zapopan, adjacent to Guadalajara. The park will offer more than 400 acres of developed land that can accommodate over 6 million square feet of business facilities. These facilities will employ thousands of people from Guadalajara and surrounding areas and generate millions of dollars of economic growth for the region.

Corporate Properties of the Americas, with headquarters in Guadalajara, and Monterrey, Nuevo León, pursues the acquisition, development, ownership and operation of business properties in Mexico. The current portfolio consists of properties in Monterrey, San Luis Potosí and Guadalajara. Two companies joined in May, 2000 to create Corporate Properties of the Americas: Development Company of the Americas is a privately-held affiliate of Denver-based Black Creek Capital, LLC.

Sonora

Sonora, one of Mexico’s largest states, borders Arizona. Thanks to modern irrigation systems, extensive highly productive agricultural areas have been developed in the state. Consequently, the state produces considerable amounts of wheat, soybeans, safflower, cotton, sesame seed, grapes, citrus fruit and vegetables. Cattle raising is another important activity, and Sonora is renowned for its top-quality beef. The fishing industry is the leading activity all along the coastline, especially in Guaymas, the home port of Mexico’s largest fishing fleet. Copper, graphite, silver, tin, lead, gold and tungsten have been established along the United States border, and Sonora now holds fourth place among Mexico’s states in this activity. The state has other manufacturing plants such as the Ford assembly plant in Hermosillo, and Portland cement plants, which export to the United States.

Aguascalientes

Located in Mexico’s geographical center, Aguascalientes is one of the country’s smallest, but most promising states for economic development. Its excellent location and good highway and rail communications network, which links the state with the country’s major cities, have been important factors in its recent development.

Aguascalientes has a long tradition in agriculture and industry, especially in textiles, wine, brandy and food processing. In recent years, companies such as Nissan, Xerox, Texas Instruments and Sealed Power of Mexico have established manufacturing facilities that produce automobiles, metal, mechanical products, and electronics. The capital city, Aguascalientes, boosted by heavy public and private investment, is a medium-sized city in the forefront of Mexico’s drive to modernization.

Despite its small size, Aguascalientes offers advantageous conditions for investors, which translate into competitive advantages for their business. This has been a major factor in attracting domestic and foreign investment, giving the state one of the five highest living standards in Mexico.

Zacatecas

The main activities in this central state are agriculture, livestock and mining. Agriculture, especially fruit production, plays a key role in the state’s economy, and its main products include guavas, grapes, peaches and apples. Livestock raising, which includes both cattle and sheep, is carried out in more than half the state’s territory. Silver, tin, lead ,copper and gold mining are also important activities. Zacatecas is Mexico’s main silver producer, second in lead and tin production, and fourth in gold production. The state has industrial parks with plants mainly engaged in processing agricultural and livestock products and minerals. Several foreign investment companies are located in these parks, including Oro Control, Delphi Packard Electric and Shelby Williams. Tourism has played an important role in Zacateca’s development. Its magnificent colonial architecture is an important attraction and provides a fitting background for the beautiful museums that are now the pride of Mexico. The city of Zacatecas and neighboring Guadalupe have become hosts to a substantial flow of cultural tourism; this has resulted in the building of new hotels and related services. The state has changed from its traditional economy based on agriculture and mining to a more balanced one, and is playing an important role in Mexico’s development.

Baja California Sur

As the state with the longest seacoast in Mexico and a large variety of marine species, Baja California Sur has an outstanding potential for the development of fishing and seafood industries. It also boasts a number of small seaports and industrial fishing parks in Pichilingue and in the capital city, La Paz. Tourism has been the prime factor in the state’s development. The resorts of Cabo San Lucas, San José del Cabo and Loreto have been promoted by means of big government investment, which has served to develop an expanding tourist industry. The enormous potential of the state’s natural resources and scenic beauty has favored foreign investment.

Sinaloa

Sinaloa is located on the eastern shore of the Sea of Cortés. With its three international airports, the highway network that connects it to the United States border, and the two major seaports, Sinaloa is well communicated with the rest of the country and the world. Agriculture is the backbone of the state’s economy with a large portion of its cropped areas under irrigation. The extensive irrigation network has potential for future expansion. The state is a leader in rice and vegetable production and Mexico’s second wheat and bean producer. The bulk of the state’s agriculture is located in the municipalities of Culiacán, Navolato, Angostura, El Fuerte and Ahome. Fishing is Sinaloa’s second most important activity. The state holds first place at a national level in terms of production value, and third place in terms of volumes of fish and seafood. There is a large potential to develop aquaculture, especially shrimp production. There is industry throughout the state; industrial parks can be found in several industrial areas, corridors and real estate developments. Sinaloa’s industrial activity is linked to agricultural production and the fishing industry, and consists primarily of canning, packing and frozen food packing plants.

Sinaloa is a strategic point linking the west, center and southeast of the United States with Asian countries. This gives it a huge economic advantage, making it one of the potentially most attractive centers for rapid expansion in northwestern Mexico.

There are investment opportunities in the opening and penetration of new markets, through joint ventures and strategic, technological and commercial alliances with the agricultural business sector.

The Sinaloa state government is trying to promote its integrated economic development, through planning with the government and the society, in the difficult mission of attracting investment. It has created a new economic promotion scheme through the Council for Economic Development in Sinaloa (CODESIN). The mission of this technical and consulting institute is to promote the permanent participation of every public and private institute in charge of promoting investment, and whose real interest is Sinaloa’s economic development.