From Puebla to Yucatán, Campeche to Chiapas, Mexico’s southeastern states are starting to be noticed by foreign investors. Of course, some of the world’s most important manufacturers already knew about the region. Companies such as Volkswagen, Nestle, Motorola, Johnson Controls and others have been here for decades.

            Southeast Mexico offers companies access to the majority of Mexico’s consumer market as well as markets in Central America. U.S. markets can be easily reached by land or sea.

Puebla

            Puebla, located just two hours from Mexico City, is one of the most economically vibrant states in Mexico. The abundance of industrial operations and proximity to more than 30 percent of Mexico’s population makes Puebla an attractive alternative base of operations for U.S. exporters to Mexico.

            When thinking about exporting to Mexico, most U.S. firms think of the U.S./Mexico border region first and perhaps Mexico City second. The state of Puebla, with a capital city of the same name, has many advantages as a target region. Puebla is situated in Mexico’s central heartland and just two hours away from Mexico City. More than 30 percent of Mexico’s population resides within easy reach of the state. Moreover, it is the home of many key industries including mining, automotive, textile, garment, food and beverage, furniture, and machinery. This, coupled with a developed infrastructure, makes for an effective distribution base for a myriad of U.S. products.

            Puebla has an airport of growing importance to international commerce called Aeropuerto Hermanos Serdán, or widely known simply as Puebla International. In recognition of Puebla’s expanding trade role, the Mexican customs service has announced the opening of a new, full-service customs processing unit at the airport. This puts Puebla International’s import processing capabilities on par with that of Mexico City’s. In addition, Puebla has more than 12,000 kilometers of highway and more than 700 kilometers of railroad to move goods throughout Mexico. The nearest containerized ocean freight port is in Veracruz — about two hours from Puebla. Freight by truck from the United States can be in Puebla in two days.

            Puebla has 217 municipalities and is one of the top seven states in terms of its share of Mexico’s GDP. Puebla’s largest municipalities are Huachinango, Tehuacán, and Puebla. The state has 80,000 firms and 40 percent are located in the capital city of the state.

            The state has a diverse economy. Some of the important industrial sectors are sugar, paper, petrochemicals, textiles, automobiles, and auto parts. Volkswagen has a large automobile assembly plant in the city of Puebla, and many primary and secondary suppliers to this plant also have located in the area. In June 2002, the state of Puebla was authorized by the federal government to modernize its present cargo airport and it is expected that in a few years, Puebla will have one of the most modern cargo airports in the country.

Chiapas and Oaxaca

            The southeastern state of Chiapas is a mountainous state along the southeastern Pacific coast with a population of 3.9 million. It is among the poorest states in Mexico. Out of the 31 states and 1 federal district in Mexico, Chiapas is ranked as the 31st poorest state. The low level of welfare has been exacerbated by periodic civil uprisings and political scandals, including the 1994 Zapatista uprising. The Fox government has tried to improve the situation by promoting an indigenous rights bill.                       On a positive note, Chiapas is one of the six states with the least unemployment and is fifth in new job creation.

            The primary economic sectors in Chiapas continue to be agricultural (coffee, banana, sugarcane), cattle, and forestry. The governor of Chiapas recently announced a new fund for agro-industrial development. Of secondary importance are the construction and fishing sectors. Some 88 percent of the construction is in the public sector. Other key sectors are commerce, financial services, and tourism. Chiapas has great biodiversity and rich indigenous cultures which attract eco, adventure, and cultural tourists.

            The main sectors for foreign investment in Chiapas are textiles, auto parts, electrical, agricultural and tourism. The textile industry in Chiapas has great opportunity for development because of the state’s young workforce for labor intensive tasks, the availability of industrial supplies (water and electric power) and the artistic skills used in making garments.

            Oaxaca is another poor mountainous Pacific coast state in the southeast. It has a population of 3.3 million spread among 570 municipalities. Oaxaca’s population includes 16 ethno-linguistic groups. The United Nations ranks Oaxaca second to last (just ahead of Chiapas) in terms of quality of life.

            In order to improve the state’s economic development, the government actively promotes and supports investment in the state through its online Oaxaca Link program. The main industries in Oaxaca are: agriculture (tropical fruits, citrus, melons), fishing (tilapia, shrimp), agroindustrial products, forestry, and mining (gold, silver, antimony, titanium, quartz graphite, plaster, marble, mica, onyx, salt).

Yucatán Peninsula

            The Yucatán Peninsula was traditionally an agricultural economy until the mid 1980s. Since then, the installation of in-bond companies has provided the state with a new economic profile, as has increasing archaeological and cultural tourism. The business community in Mérida, the capital and commercial/industrial center of Yucatán, is strongly oriented toward doing business with the United States with a particular preference for Florida based firms due to proximity and language.  The state development program identified six industrial sectors that it is seeking to develop. These include textiles, furniture, medical services and equipment, information technology, aerospace, and agribusiness.

            The port of Progreso has been a fundamental platform for economic growth in this region, contributing to the development of key sectors such as cattle, the manufacturing industry and trade exchange, especially with the United States, Central America and the Caribbean. Progreso also plays an important part in the supply of fuel to the region.

            In 2001, the Port of Progreso started an expansion program, including building a cruise terminal. This terminal started operations in 2002 and has become an economic boost in the region.

            A new international airport was built in November 2000 to the south of Chichen Itza (an archaeological site popular with tourists) between Mérida and Cancún to serve the growing tourism industry within the state. The airport accommodates B-727, B-737 and DC9 charters, connecting Yucatán with Canada and Italy. Amerijet, Aeoromexpress, Fedex, and UPS provide cargo and express delivery services.

            Yucatán is the center of medical facilities in southeastern Mexico. Public and private healthcare facilities offer the most advanced technology, a variety of clinical laboratories and highly specialized personnel. Many private hospitals have agreements with clinics in Houston and Miami.

            The economy of Quintana Roo, located on the east coast of the Yucatán peninsula, is dominated by the tourism industry. The well-known resort areas include Cancún, Cozumel, and Playa del Carmen. However, the state is seeking to expand investment in other areas such as agriculture, cattle, forestry, fishing, construction and manufacturing.

            Among the three states of the peninsula, the western coastal state of Campeche has been first in terms of job creation. Its primary productive sectors are fishing, agriculture (corn, rice, sorghum), cattle, timber, oil and gas. The secondary productive sector includes manufacturing (textiles, leather, non-metallic and metallic minerals), construction, electricity, and water. In the last few years the archaeological and ecotourism industry has been increasing in importance. Six new hotels have been completed and two more are under construction. This construction has been in concert with efforts to improve road infrastructure.

Tabasco

            Tabasco’s strategic position as the service center for southern Mexico is based on its competitive communications infrastructure that includes railroads, highways, an international airport and a vast water network.

            From its international airport there are 16 daily flights to Mexico City and direct flights to 17 main cities in Mexico and other cities as Houston, Texas.

            The total length of the state’s highways exceeds 3,500 miles and connect to several of the most important cities in Mexico, such as Mexico City, Campeche, Mérida, Cancún, Puebla, Veracruz and Chetumal.

            Three seaports link the state with international markets. These ports are: the port of Coatzacoalcos, the port of Frontera and the port of Dos Bocas.

            Coatzacoalcos specializes in handling petrochemicals, agriculture products, minerals and general cargo.  Its commerce is oriented to the east coast of the United States, Canada, Central America, South America and the west coast of Europe; whereas its domestic commerce serves the economies of the Gulf of Mexico, the South Pacific, Tabasco, Veracruz, Oaxaca, Chiapas, Campeche, Yucatán, Mexico City and Puebla .

            Dos Bocas Port is in Paraíso and is used to transport oil related products. It has warehouses, custom services, health and migration facilities, courtyards, ship consignees, among other services. The Port of Frontera is a commercial port linked to the nation’s most important waterways.

Energy resources

            Tabasco’s GDP growth rate has become one of Mexico’s highest, due to the impact of the oil industry, the observed growth of the services sector of the economy and the agribusiness production.

            Tabasco contains 30 percent of Mexico’s water resources. The states of Tabasco and Chiapas generate one fourth of Mexico’s electric energy; and both states contain 21 percent of Mexico’s oil reserves.

            Tabasco is called the Energy State because of its importance in the oil industry, its derivatives and its electric power generating capacity. The oil industry’s related activities have a wide range of investment opportunities because of the presence in Tabasco of three of the most important branches of PEMEX (Mexico’s state owned oil company).

            Tabasco:

            •Is responsible for 16.3 percent of Mexico’s crude oil production.

            •Generates 42 percent of Mexico’s natural gas production.

            •Generates 28 percent of Mexico’s natural gas production.

Campeche

            In recent years, Campeche has attracted 49 domestic and foreign investment packages for areas such as aquaculture, fishing, agriculture and manufacturing. The state has also attracted Chinese investment for the cultivation of corn and rice. Its main areas of industrial activity include fishing, aquaculture, petrochemicals, manufacturing and mining.

            The state’s geographical location with regard to the United States is advantageous. Florida can be reached in just 30 minutes by plane and 48 hours by boat.

Tax breaks

            Two major tax breaks are available for qualified companies to encourage investment in the region. The Marcha Hacia del Sur is a Mexican program that provides tax relief based on the number of new jobs created. The program is available in the states of: Campeche, Chiapas, Guerrero, Oaxaca, Quintana Roo, Tabasco, Veracruz and Yucatán and certain cities in the states of Aguasca-lientes, Coahuila, Chihuahua, Durango, Guanajuato, Hidalgo, Jalisco, State of Mexico, Michoacán, Morelos, Nayarit, Nuevo León, Puebla, Querétaro, San Luis Potosí, Sinaloa, Sonora, Tamaulipas, Tlaxcala, Zacatecas.

            The second major project is the Plan Puebla-Panama, covering nine Mexican and the Central American countries Guatemala, Belize, Nicaragua, Honduras, El Salvador, Costa Rica and Panama. The Mexican states are Puebla, Veracruz, Guerrero, Tabasco, Oaxaca, Campeche, Chiapas, Mérida and Quintana Roo.

  The Plan Puebla-Panama calls for government assistance in the construction of infrastructure projects targeting roads, power plants, wastewater treatment plants, sanitary landfills, power plants, ports, railroads, hospitals, schools, housing, and airports.