The rise of a new giant · 2014-08-11 · Like the economy, Mexico’s dynamic capital, Mexico City, is also undergoing growth and transformation. It currently accounts for 18% of

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With a privileged location that links North and South America, Mexico is the des-tination of choice for business. Reforms introduced by President Enrique Peña Ni-eto, who took office in December 2012, are improving democracy and security,

strengthening the business environment, and improving poverty. “Mexico today has a number of strengths, including a high

level of macroeconomic stability and low debt. This puts it above many countries and gives us the confidence to move forward and a mandate to use our wealth for the benefit of all Mexico,” he says. “At the same time we have a clear diagnosis, too, of what we have to change. That is the challenge for this government.”

With a market of some 114 million consumers, 50 million of whom are part of a growing workforce, Mexico has huge potential and has already impressed the financial houses. Goldman Sachs has predicted Mexico will be the fifth-largest economy in the world by 2050, while Accenture believes it will be in the top six econo-mies by 2025.

Mexico also enjoys 12 free trade agreements with 44 different countries, and is expected to continue diversifying its network mar-kets and attracting foreign investment for joint production.

A skilled and abundant workforce is available for manufacturing and tourism projects, with salaries for Mexican and Chinese factory

workers now very similar. The country’s financial institutions are in an excellent position to bankroll growth, and the infrastructure is rapidly becoming world class, thanks to a $400 billion government injection over the next five years.

Mexico’s natural resources are also in plentiful supply: it is the world’s seventh-largest oil producer, it has vast pockets of land available for agriculture or industry, and it has three different coast-lines that house some of the most beautiful tourism resorts in the world. It boasts more than 30 UNESCO World Heritage Sites and last year, received no less than 23 million tourists.

A varied climate, some of the friendliest people in the world, a stable, ambitious government, and an exciting economy: Mexico is very definitely the country to watch and invest in now.

MEXICOThe rise of a new giantCompetitive, stable, modern and forward- looking, Mexico is set to become the region’s economic powerhouse in the coming years.

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Enrique Peña Nieto, President of Mexico

Soumaya Museum, Mexico City

Mexico’s Key Investment Facts and Figures 2012

Capital: Mexico City Real GDP Growth Rate: Investment: 21.5% of GDPArea: 1,964,375 sq. km 3.9% Public Debt: 35.4% of GDP Population: 114,975,406 GDP per capita: Industries: food & beverages, In the last two years, Mexico $15,600 tobacco, chemicals, iron &steel, has risen 13 places on WEF’s GDP Composition by Sector: petroleum, mining, textiles, clothing Global Competitiveness Rep.(#53) agriculture 3.7%, industry 34.2%, motor vehicles, durables, tourism. moved up 5 places on IFC’s services 62.1% Agriculture products: corn, wheat, Doing Business Index (#48) Labor force: 50.7 million soybeans, rice, beans, cotton, coffee, Exports: $370.9 billion Budget Deficit: -2.7% of GDP fruit, tomatoes, beef, dairy, wood. Source: CIA World Factbook, WEF, IFC.

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While other countries and regions suffer austerity and recession, Mexico has implemented an independent monetary policy and has a trustworthy and well-capitalized financial system.

“The route the President took on his first day in office confirms that not only will he continue to lead the country through stability, but that he will further reinforce it,” says Minister of Finance, Luis Videgaray Caso. “As part of the reforms, we are modernizing some aspects of the financial regulation system in order to increase loan offers and reduce the cost of borrowing, particularly to benefit small and medium enterprises (SMEs). We currently have a low penetra-tion of loans, so we want to improve this, by fostering the use of the Development Bank, and also creating more competitive conditions.

“Mexico is one of the most stable economies with one of the best prospects. It has balanced all the crucial indicators of the economy, such as public finances and low public debt, and the Central Bank has a lot of credibility and autonomy. We are also open to foreign commercial opportunities. We are one of the most attractive countries in the world in terms of free trade.

“Unlike other countries in crisis, Mexico reinforces its free trade and opposes any form of protectionism. We are becoming increas-ingly competitive: these days many companies are realizing that the costs of establishing a company in China are higher than here. This is especially visible in industries such as automotive, aerospace, and electronics.”

The energy sector is also opening up at a rapid pace as new technology becomes more crucial. Although the Pact for Mexico, a 34-page document signed by the major political parties in December, states Mexico’s oil reserves and Pemex, the national oil company, will not be privatized, the President is keen for private investment in the sector to boost wider development.

Minister of Energy, Pedro Joaquín Coldwell, who has been described as being “distinguished by his bargaining, dialogue, and openness,” will be managing the process.

New life is also being breathed into the tourism sector. As Claudia Ruiz Massieu, Minister of Tourism, has explained: “We are competing against the world now and can’t just settle for sun and beach promo-tions. We are targeting specific sectors, such as devising specific tours for cultural and gastronomic routes. These were just a concept in the past, but we are leaping forward with real products for the market place.”

Latin America’s Emerging Alpha CityLike the economy, Mexico’s dynamic capital, Mexico City, is also undergoing growth and transformation. It currently accounts for 18% of the country’s $1 trillion economy, and has a GDP as large as Peru’s and almost as large as Chile’s. The vibrant and well-connected Mexican hub produces 80% of the country’s R&D activities and has a diverse workforce in knowledge-based sectors that include: health care, financial services, science, information and communications technology, and education. It has a population of 8.85 million.

City mayor Miguel Ángel Mancera explains how appealing the capital is for investors. “We have all the services and infrastructure of a sophisticated city and niche opportunities that major investors will appreciate,” he says. “There is new housing, companies, and research centers all in the same area—real estate cohabiting with production and a proximity to services.

“We are working toward the concept of becoming a Smart City. We have a powerful fiber-optic network. We started to digitalize the government offices but we lack articulation and availability to the public so we are researching an innovation facility, and keeping in touch with other major laboratories in London and Boston.”

In 2011, Mexico City attracted $13.5 billion in foreign direct investment: almost 70% of the country total. It is making significant investments in economic infrastructure, and sustainability, residents enjoy a high quality of life thanks to diverse cultural attractions, great cuisine, and a strong ex-pat community.

The political, economic, commercial, and cultural capital, where English is widely spoken, welcomes more than 12 million visitors a year. It offers scores of modern hotels, convention centers, and busi-ness services, and has a strong culture mix of art galleries, theatres, performing arts, film, dance, music, nightclubs, sport facilities, and distinct neighborhoods, all connected by a modern subway system.•

Pedro Joaquín ColdwellMinister of Energy

Luis Videgaray Caso Minister of Finance

Claudia Ruiz MassieuMinister of Tourism

Mexico’s manufacturing base has grown exponentially in the past two decades, and there are now more than 3,000 global manufacturers reaping the benefits of this golden gateway.

Add to that the huge number of local successes, from decades-old family-run firms, and tradi-tional firms that have embraced mergers and acquisitions, and it is clear why the economy is booming.

Food and drink is one part of the growth equation, with the award-winning animal-feed firm maltaCleyton making a significant contribution feeding “everything that flies, walks or swims.” Producing more than 1,500 brands, maltaCleyton is headed by CEO Antonio Pedroza who founded the company in 1997 when his employer at the time, Unilever, decided to sell its animal feed brands.

“At the time, we did not have enough money to invest in infrastructure; our only goal was to produce and sell,” Pedroza re-calls. “Our first year was almost a nightmare, but fortunately old co-workers of Uni-lever joined me and we started to make big changes. We developed a trainee program by recruiting young talent from the prestigious Mexican universities, which is a strong asset of the company today.”

As part of the search for new ways to innovate, Pedroza and his team decided to segment the market by creating a premium, standard, and economic line for every animal

species it catered to. “Our strategy cent-ers have the broadest portfolio in the animal-nutrition industry,” Pedroza says. “We used the Delta model: offer all the best products on the market, if not by ourselves, then by strategic alliance with other companies.”

The company is flanked by a team of nutritionists and powerful software that can calculate the exact food component the animals need at each stage of the

life cycle. “We have two factories in Brazil, and export to Venezuela, Nicaragua, Guatemala, and even Cuba,” Pedroza says. “In the area of animal nutrition, Mexico is secure due to several factors: a

“We are working toward the concept of becoming a Smart City.”

Miguel Ángel Mancera, Mayor of Mexico City

Marc BusainCEO, Cuauhtémoc Moctezuma



Made in MexicoHundreds of homegrown companies are making an impact in global markets.

Mexico City: the city we are building together

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growing population and incomes, and the improvement in food products. I always thought Mexico had a strong potential to suc-ceed. Mexicans have a passion for progress, for money, for growth, and great ambition.”

Meanwhile, Mexican-drinks giant Cuauhtémoc Moctezuma has an excellent reputation built on more than 120 years of products and services and has moved in a new direction since being taken over by Heineken in 2010.

For Marc Busain, CEO, the initial challenge was to build a more simple organization, to change the culture, and to focus more on the market.

“One of the most surprising things for me was knowing that in Latin America and Mexico, people are highly educated and very professional, especially those within the supply chain,” he says. “They are very easy to work with and have embraced multinational initiatives.”

The business leader, who has spent 18 years at Heineken, is proud to head this competitive, international company. “What makes us different are our brands: Tecate, Indio, and Heineken are among the most-liked in the Mexican market,” he says. “The consistency in our brands is also very important; we focus on the execution and the details. Our business is all about details and focusing on the market. We need to be inclusive for the customer.”

The Need to InnovateInnovation is also an important factor. “Innovation can range from a change in packaging to new products and a new label, which allows you to build image, but there is also product innovation,” Busain says. “In 2011, for example, we brought the Strongbow brand to the market. It is a British cider and 90% of the people who tasted it said they would buy it.

“The positive thing for us is that every year, one million new young adults reach the legal drinking age so we have positive people and positive demographics, compared to Europe.”

The company takes its social responsibility very seriously in terms of providing books and libraries for public schools, a program to attract children to sports, and a music school in partnership with Conade. It has also embraced the strong regional differences in Mexico when it comes to consumer habits, branding, and packag-ing preferences. The traditional off-premise retail segment continues to be relevant for the beer industry, but there is also accelerated growth happening in modern channels.

“The premium segment is underdeveloped compared to other countries, but we have seen excellent results with Heineken and our domestic premium brands, particularly in Mexico City, Guadalajara, and Monterrey. We are confident this segment will continue grow-

ing at a fast pace,” Busain says. “Mexico has proven to be a great investment destination. However, the one single thing that worries us the most in order to continue with our investment plans is tax or fiscal certainty. Indirect taxes for beer in Mexico are way above the international average.

“Three years ago, we invested under the legal basis that excise tax would be reduced from 26.5% in 2010, to 25% in 2014. In late 2012, the Mexican Congress approved the reduction of the excise tax for 2014.”



Miguel Ángel Mancera, Mayor of Mexico City



“We have heard the Finance Minister declare that legal certainty will be the cor-nerstone of this new government. We trust the government, and are just waiting for the confirmation of this tax reduction in 2014 to continue with our future investments.

“One of the reasons Mexico has been such an attractive market for investment has been the predictability of the fiscal and tax regime. The government has benefited from making clear statements to businesses and sticking to

them. As long as they stick to this approach, Mexico will continue to be high on international companies’ lists of markets to invest in.”

Innovation is also in the company genes at Kuspit, the first online brokerage house in Mexico. Launched by founder and CEO Rodrigo Ocejo on 29th of October last year, Kuspit had more than 4,000 users just three months after going online.

With an impressive financial background that included roles at Pemex and the Ministry of Finance, as well as senior positions in Cintra, ABN AMRO, Bear Stearns and Zagax Capital, Ocejo realized that almost nobody was working in online brokerage.

“We created a product that comes across as interesting and aligned with the vision of the regulator, the National Banking and Securities Commission (CNBV), in terms of where they see the development of the stock market in our country,” Ocejo says.

“We succeeded because it is an innovative idea: it has never been done before in Mexico and the socio-economic situation is

ripe for this kind of company. Mexico is a huge country with a lot of potential; the middle class has been growing fast for the past 25 years and it is now common for both parents to work.

“We believe our potential market lies in the 12 million people currently banking online.”

Heavy investment in technology and a great business model were the keys to getting Kuspit off the ground—what has followed has been a raising of awareness in the market.

Finding the “New” Mexico in Querétaro Despite being the 28th state in terms of size, Querétaro is, nonethe-less, Mexico’s third most-competitive state, proving that size is no hindrance to a will to succeed. The state has witnessed the largest amount of jobs development since 2009, with a 36.1% increase, and is hailed as the success story of the North American free trade agreement. In the last two years it has grown 7.7% and 6.7% respectively.

For Governor José Calzada Rovirosa, Querétaro’s success can be traced to a number of factors. First, it sits in the center of the coun-try. It has an economic model that places the family economy as a priority, and it has significantly increased local supply by making a connection between the major buyers and small providers, achieving in two years $2 billion for the domestic economy.

“It has a robust middle class, with 58 universities that gave us the opportunity to form and develop a labor force according to inter-national standards, which means the talent remains in the state,” Calzada Rovirosa says.

José Calzada RovirosaGovernor of Querétaro

“We have the capacity to attract companies like General Electric, Siemens, Bombardier, Safran and Eurocopter. We are moving from a manufacturing state to a state of innovation and high technology with high-performance industries.”

For now, the major employer is the automotive industry, which has 45,000 related jobs. It is a highly robust sector with approxi-mately 300 companies, Calzada Rovirosa says, “with approximately 52 companies and $100 billion invested, which is helping Queré-taro transform into an aerospace-industry capital.

“Aeronautics is an industry that provides prestige; we are one of only eight countries that builds aircraft and are producing the fuselage of Learjet 85 Bombardier aircraft made through composites of carbon fiber.”

Biotechnology, food and beverages, chemicals, and tourism are also being nurtured and are growing at a fast speed.

“In terms of foreign direct investment, we moved from an aver-age of $166 billion a year to $700 billion over three years. Our incentives are related to the infrastructure system provided by the state, services, and communication. We have the best quality of life in the country, proper security, and a government that is close to its citizens. We have a number of important success stories, thanks to the quality of workmanship, a stable work environment, and no strikes in a period of 12 years. This gives certainty to entrepreneurs looking to settle in the state.”

The state of Querétaro is also known for its fine quality products especially cheese and most importantly wine. Today, Tequisquia-pan is the center of the wine industry in this state, with a very

notable annual wine and cheese festival in May—the “Feria del Queso y del Vino.”

Querétaro is where wine became entwined with the history of Mexico. When the Spanish colonial government ordered Father Miguel Hidalgo’s servants to uproot his vines, it led to the first battle in the war of Mexican Independence. Wine is one of Mexico’s many hidden gems. There are around 3,600 hectares of land suitable for wine cultivation, or viniculture, and Mexicans consume around 62 million liters of wine per year. Around 18.5 million liters of this con-sumption are produced locally, but there is plenty of scope for more production, with several companies and associates of the Mexico’s National Wine Council, celebrating its 65-year anniversary this year, open to partnership options. The current market value of Mexican wine is $800 million.•



Grape harvest in Mexican vineyards

Mexican Wine—Tradition and Development

M exican wine has a long tradition dating back to the early sixteenth century, when the first vineyard in the Americas was established there. By the end of the century, the first commercial winery was set

up, and since then, the Mexican wine industry has continued to grow. Today, there are more than 100 wineries producing more than 500 wines.

During its long history, the Mexican wine industry has had to overcome nume-rous obstacles, from King Philip II banning the planting of new vineyards in 1595, through the War of Independence and the Mexican Revolution, when production practically stopped. While there were several attempts to stimulate wine production in Mexico, it is from the year 1960 onward that the industry entered its most active stage and achieved its most accelerated growth.

The competitiveness of Mexican growers and winemakers is becoming increa-singly clear. Between 1990 and 2010, wine consumption in the country more than doubled; by 2020, it is expected to triple. Based on strains brought from Spain, France, Italy and other latitudes, and the entrepreneurial talents of Mexican wine-makers, Mexican wine is becoming internationally recognized for its quality. Mexican wines have won more than 1,000 awards in international competitions.

Mexican wine has even begun to lead the way in international markets, exporting to 30 countries, with the U.S., Canada, and the European Union the most important destinations. Exports account for 7% of domestic production.

Recent studies from Mexico’s Ministry of Agriculture highlight regions that feature the basic agro-climatic conditions to plant vineyards of fine grapes. There are more than two million hectares with potential for planting, 165,000 of which will be able to produce top-quality wines—wines that are recognized in the most demanding international markets. At the present time, only 3,600 hectares of grape-

vines are cultivated for wine production. This presents an incredible opening both for winemakers that are continuously developing new production techniques, both in the field and in an industry that requires high standards of production and quality.

Mexico currently produces 18.4 million liters a year, while annual consumption is around 56.5 million liters. As Mexican incomes continue to increase, wine con-sumption will grow and the consumer will become more sophisticated, recognizing wine as a product that gives satisfaction and pleasure. These new consumption habits, coupled with the increase in important foreign direct investment, the migration of executives from countries that have strong wine-drinking traditions, and the tourist potential of Mexico, give a glimpse of an even faster development of wine consumption in the future.

Mexico already boasts free trade agreements with the world’s principal wine producers, including the U.S., Canada, Chile, and the European Union, where it has zero-import tariffs, and is currently in negotiations with the Pacific Alliance and the Trans-Pacific Strategic Economic Partnership. This ensures that the wine market in Mexico will be increasingly globalized and enjoy unrestricted trade barriers.

Since February 2009, when officials combined 60 years’ experience of the National Association of Winegrowers and the six years of the National Grape Production System to create the Mexican Wine Council (CMV), CMV has been dedica-ted to helping local producers cultivate the best-quality wines for domestic, regional, and international consumption.

The time is ripe to invest in this sector. We therefore invite you to help us build value and credibility as a domestic producer. Contact us through our website: www.uvayvino.org



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L apping the Mexican Caribbean, Quintana Roo—the location that features Cancún, Cozumel, Grand Costa Maya, the Grand Mayan Zone, Riviera Maya, Puerto Morelos, Isla Mujeres and Holbox—boasts both white-sand beaches and breathtaking landmarks from the Mayan civiliza-

tion, flanked by extraordinary flora and fauna, and hospitable, friendly people.

Having pledged to increase tourism numbers by 20% year on year—last year, the state received 14 million passengers by air, 2.3 million by cruise ship, and more than 1.3 million by road, for a to-tal of almost 18 million, which was the objective. Governor Roberto Borge Angulo is consistently improving infrastructure and connectiv-ity. He has increased airline frequencies as well as attracting more airlines—and set up plans to simplify immigration procedures for people coming from the U.S., to allow them to fly to Cancún almost as if they were flying within their country. When operational, this would make it possible to have direct flights from 20 additional cities in the U.S.

Borge Angulo and his team are also getting ready to host Mexico’s most important tourism fair or “Tianguis” in Cancún and Riviera Maya next year. “We have an incomparable tourist infra-

structure and great convention centers in Cancún and the Riviera Maya, which will be a perfect place to host the gala dinners and business meetings for any type of group.

“We will also be organizing tours for tour operators that will be coming for the first time to Isla Mujeres, Costa Maya and Holbox, Cozumel and Tulum, so they can fully appreciate the beauty, diver-sity, and uniqueness of Quintana Roo.

“Our state is the premier tourist destination in Latin America and it offers the best connectivity nationally as well as with the United States, Canada, and Europe. We are sure to be able to attract a very high number of travel buyers. That is why I think Tianguis 2014 will most likely be Mexico’s most successful Tianguis ever.

“Regarding nature and ecotourism, Mexico ranks number four in the world in terms of biodiversity, and Quintana Roo is the state with the highest biodiversity in the whole country. Indeed, it offers plenty of nature parks, ecological parks, scuba diving tourism, and so on. For instance, the Mesoamerican Reef, which runs from Cabo Catoche until the Republic of Honduras, is the second largest in the world after the Great Barrier Reef in Australia, but it is the most visited.

“We also have 27 protected natural areas which include the ma-jority of our 878 kilometers of coast. As a matter of fact, taking care


quInTana rOOParadise on EarthWell connected, beautiful, diverse, and vibrant, Quintana Roo is where some of the most well-loved tourism hotspots in the world can be found.


Roberto Borge Angulo, Governor of Quintana Roo

of our natural environment is one of my main priorities as governor of Quintana Roo.”

CancúnWhat four decades ago was vacant, beachfront jungle is today undoubtedly one of the most important resorts of Mexico. This famous international destination has become a modern, fascinat-ing, glamorous city where visitors can find world-class luxury hotels offering massages in one of the excellent spas on the Caribbean shore, or play golf on one of the nine legendary courses designed by celebrities like Jack Nicklaus. All have spectacular views and all have the required characteristics to accommodate the most demanding player.

The hotel zone of Cancún is a paradise for all kind of water-sports and an ideal starting point to visit the archaeological Mayan sites, such as El Rey, Punta Nizuc, Punta Cancún, Bahia Mujeres, Nichupte Lagoon, and, the latest addition, the Mayan Museum.

HolboxThere are few places in the world with the necessary characteristics to be shelter for the whale shark, the world’s largest living fish, but Holbox is one of them. Visitors are invited to watch closely and even swim with this peaceful animal. This magical island compromises second-to-none landscapes that are surrounded by exotic species and white-sand beaches full of Caribbean-style wooden houses.

Isla MujeresThis is a unique island in the Mexican Caribbean with its white-sand beaches, quiet atmosphere, impressive architecture of nature

carved into the cliffs, and marine park with incredible natural reefs. Isla Mujeres has a very sophisticated tourist infrastructure and nu-merous attractions, including natural reefs and diving spots like the Cruz, the Virgin, and the Cave of sleeping sharks. The best way to enjoy the island is roaming the streets in a golf cart, or by scooter, or bike.

Riviera MayaThis area, with a coastline of around 120 kilometers and abundant flora and fauna, has a superb infrastructure and extensive beaches, ecological parks, and archaeological sites. It is home to Playa del Carmen, which is full of exotic global influences and white-sand beaches; Tulum, a highly spiritual location with a wonderful ocean view from its archaeological site; Puerto Aventuras, with its legen-dary marina and a nautical museum; and Akumal, with its quiet beaches and spectacular cave diving.

TulumTulum is the most important Mayan trading port on the eastern coast of Quintana Roo. A wall with five gates surrounds the ceremo-nial center of the city, which consists of temples, palaces, shrines, and platforms where the ruling-group rooms were located. Tulum archaeological site is the most visited Mayan attraction in Mexico.

CozumelWith an internationally famous reef, the second-largest in the world, one that Jacques Cousteau nicknamed “The Paradise,” visitors to Cozumel, the island of the Mayan fertility goddess Ixchel, can practice scuba diving in the reef or any other water sport, such as



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surfing, kite surfing, snorkelling, kayaking and fishing. In addition to an archaeological site called San Gervasio, Cozumel also has magnificent beaches.

Zona Maya and Grand Costa MayaThe Mayan Zone of the Mexico Caribbean is the living legacy of Mexico’s ancestors, a corridor full of exuberant nature and a far-reaching history, one that starts in Felipe Carrillo Puerto going through the Sian Ka’an Biosphere Reserve, and ending with José María Morelos and the small towns of Kantemo, Saban, Sacalaca and Huay Max. Those travel-ling to the Grand Costa Maya find a true natural paradise and a vast history of the Mayan culture. City attractions include the Corredor Escultórico Chactemal, the Plaza las Américas, and the Museum of Mayan Culture. Visitors can enjoy the boulevard that surrounds the city—the longest in the Yucatán Peninsula—and visit the light house and beaches. Lakes, rivers, thick jungles, and the fishing village of Calderitas can also be found outside the city.

A Healthy Sector In the meantime, medical tourism is becoming a major draw for foreign citizens who want to experience high-quality, low-cost pro-cedures in comfortable hospitals offering state-of-the-art technology. Amerimed Hospital is one of the most prolific in this field. Boasting

the best doctors in the country, the organization has 60 beds and hospitalizes around 4,500 patients a year, 900 of which are foreign nationals. Although most of these have either come on holiday to Mexico or on a cruise and have taken ill, there is a growing trend for people to plan surgeries in advance and take advantage of the lower prices and the beautiful location.

As Rafael Espino de la Peña, general director, explains: “Amer-imed is the network of hospitals located in major tourism destina-

tions in Mexico and was the first organi-zation specializing in medical tourism in the country. Currently the group consists of four hospitals, in Cabo San Lucas, San José del Cabo, Puerto Vallarta, and Cancún, and is the best choice when choosing medical care in these cities.

“Our bilingual staff provides high-quality medical care based on the latest U.S. standards. We also offer foreign

clients a home away from home. We have a good knowledge of different cultures, and our experts have been certified in the field in the United States in the majority of cases. We integrate cutting-edge technology, ethics, professionalism, and the best medical care, treating patients and family members with sensitivity and empathy. Procedures cost significantly less than in the U.S., Canada, and most the European countries. We also have agreements with a wide network of domestic and international insurance companies. Last year we had a 48% occupation rate, which is very high.”•


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“Quintana Roo is Mexico’s number one tourism destination.”

Roberto Borge Angulo, Governor of Quintana Roo

Situated on the Gulf of Mexico, the thriving state of Veracruz, home to the oldest and largest port in Mexico, is also a hotbed of tourism activity.

As part of a far-reaching, five-year development plan launched in 2011, the state government is promoting interest in Veracruz through its “Veracruz

Incomparable” branding campaign. It is also working to increase hotel occupancy and the average

money a tourist spends by promoting a varied events calendar that will entice visitors to come at off-peak times.

The state’s eco-systems, waterways, forests, and coastal areas will benefit from new and sustainable routes and tours, while small and medium enterprises (SMEs)—an important aspect of the Ver-acruz economy—are also being given a boost, as they provide major socioeconomic benefits to the communities through the generation of local goods and services, including food, construction materi-als, decoration and furniture, travel agencies, and tour guides. The Ministry of Tourism takes an inventory of SMEs and offers training

programs and consultancy for the moderni-zation and improvement of its processes.

Veracruz’s many thematic attractions also lend it to be used as a setting for the local film industry, as well as international video clips. The development will also be linked to the tourism industry.

As state governor Javier Duarte de Ochoa says: “Veracruz has the wealth and diversity of elements of a unique culture, and a herit-age that has distinguished us as having one of the richest links to folk expression, gastronomy, customs and traditions of mysticism, and religious devotion, all consolidated by Hispanic, colonial, and contemporary buildings.

“Veracruz has a great personality and all the trappings of a dif-ferentiated destination.”•

Javier Duarte de OchoaGovernor of Veracruz



VeracruzVeracruz is a world-class destination offering visitors an excellent taste of Mexico’s history and diversity.

Parties and relevant events in the state of Veracruz in 2014Date Festival-Event Place31 January – 7 February “Fiestas de la Candelaria” Tlacotalpan25 February – 4 March “Carnival” VeracruzFebruary “Gulf-Pacific Race” Veracruz19 – 23 March Cumbre Tajín Papantla15 – 18 May “Salsa Festival” Boca del Río25 – 11 August Liberty Festival Veracruz and Yanga6 – 8 September International Meeting of the Sea Coatzacoalcos25 October XXVI Panamerican Race Veracruz

Meanwhile, as home to four UNESCO sites, dozens of five-star hotels, modern convention and meeting facilities, many museums, art galleries, great shopping and recreation, and unparalelled cui-sine, Mexico City is ideal for both business and leisure travelers.

The cosmopolitan city of 8.85 million boasts the highest number of U.S. citizens outside of the U.S., and, like New York, is home to one of the world’s greatest urban parks, the Bosque de Chapultepec, with its grand museums, gardens, and miles of hiking and biking trails. Every year, more than 12.3 million people come to the city, which is well connected by air and road.

As City Mayor, Miguel Ángel Mancera says: “Mexico City offers various resorts that reflect the different tourist segments. We have religious tourism: the Cathedral, for example, is surrounded by many important churches and religious festivals. The most recognized tourist attractions include the Reforma Avenue, the Historic Center, Coyoacan, Xochimilco Canal, the Day of the Dead celebrations in Mixquic, and the National Mole Fair in Milpa Alta, among others.”

Five-Star LuxuryVisitors can stay in one of more than 600 hotels of different cat-egories. Situated on Paseo de La Reforma, one of the city’s most important avenues, the Plaza Suites Mexico City offers an intimate and exclusive place for short or long stays.

As general manager Jaime Levy, explains: “Plaza Suites Mexico City is designed to give comfort and offers amenities that exceed the expectations of sophisticated travelers as it indulges them. It has 29 suites of one, two or three bedrooms.”

The Real de Minas Hotel in San Miguel de Allende, Guanajuato, is the biggest hotel in Mexico’s central region, spanning three hec-tares. Embracing an ecological concept, it has 218 completely reno-vated rooms, a spa, a tennis court, gardens with lakes, a bullring, and a heliport. There are large halls for congresses and conventions, eight executive meeting rooms, a pool, and three restaurants. “We have distinguished ourselves with the ‘Great Host,’ ‘Distinctive H,’ and ‘Modernize’ groups and are certified with the ISO 9001:2008 standard,” says proud general manager Marcelo Castro Vera.•



Plaza Suites in Mexico City www.plazasuites.com.mx

www.df.gob.mx

Mexico City: the city we are

building together

Vibrant, well connected and diverse, Mexico City is

growing smarter by the day. Great for both business and pleasure, come and see why we’re one of the most-visited

cities in the world.



As the biggest company in Mexico and the whole of Latin America, state oil company Petróleos Mexicanos (Pemex) contributes the most to Mexico’s economy. Producing around 2.5 million barrels of crude oil a day, the company is currently in the throes of an historic transformation, with

a business plan for 2012-2016 having identified growth, operative efficiency, corporate responsibility, and the modernization of manage-ment as the four most pressing lines of action.

The move has come in light of the government’s decision to open the energy sector to foreign investment.

Pemex is supported by a number of companies. Compañía Mexicana de Exploraciones, S.A. de C.V. (COMESA), a long-term subsidiary of Pemex Exploration and Production, with 44 years of experience in exploration projects, is one example. Dedicated to developing solutions for the exploration and exploitation of hydrocar-bons, such as advice on project design, geophysical and geotechni-cal seafloor acquisition, and seismic data processing and related services, and from last year, initiating activity outside of Mexico, it looks to increase its portfolio and customer base.

“We are strengthening our presence in Colombia and Bolivia and are also developing our activity in the shale gas sector in the south of Texas,” says COMESA’s president, Adán E. Oviedo Pérez. “Just six years ago, the proportion of our business was 90% exploration services and 10% of hydrocarbons. Today we have that proportion to a 70/30 split. In the countries that we’re present in, we offer expertise in seismic services. These are crucial and allow further development of hydrocarbons. Without the seismic services, there can be no discovery of new reserves, production, or petrochemical activity. In order to give our clients a value-added service, we now not only acquire the data about the ground, but can interpret it for them in our geo-science centers.”

Oviedo Pérez is excited about the energy reform. “There will ob-viously be a lot of new opportunities, not just for COMESA, but for other companies that will arrive to make the sector more dynamic. The changes will happen not only in terms of investment, but also in terms of better competence in technology.

“I believe the changes will translate into cheaper and better quality energy for the Mexican community, and will make the natu-ral resources sustainable.” (continued on page 17)

Opening DoorsMexico’s energy sector is bursting with activity and all set to become a major global provider of hydrocarbons.

“We do not only acquire the data, but interpret it.”

Adán E. Oviedo Pérez, President, COMESA

Oceanografía SA de CV Av 4 Oriente, manzana D, Lote 3, Puerto Industrial Laguna Azul, Ciudad del Carmen, Campeche CP 24140, MexicoTel: +52 938 381 2570 Ext.: [email protected] | www.oceanografia.com.mx

Leader in offshore services in the Gulf of Mexico

With more than 40 years’ experience in the petroleum industry, Oceanografía SA de CV is a Mexican company offering integrated services in engineering, exploration, installation, inspections and the maintenance of marine structures. We offer also support services in drilling, materials logistics, and personal transport, as well as integrated services for submarine cables.The forward-thinking company is also proud to offer the most versatile, modern and specialized fleet in Mexico’s petroleum industry today.



Fermaca, a second-generation family business that has been in the market for more than 50 years, is now one of the leading services and construc-tion companies in the energy sector. During its history, it has been involved in many projects, including the construction of infrastructure in the

communications, water, roads, and public services sectors. Today, Fermaca is one of the leading transporters of natural gas

in Mexico, so its main activities center on building and operating pipelines.

“We were pushed into the natural gas business because of the ‘Tequila Crisis’ of 1994. The sudden devaluation of the Mexican peso made us lose a lot of money and harmed our business. We had to reinvent ourselves and we were on the look-out for new opportunities,” Fermaca’s president and CEO Fernando Calvillo Álvarez explains. “Luckily for us, we were in the right place at the right time. The natural gas industry opened up to the private sector in 1995, so we decided to give it a try.”

The breakthrough came when Fermaca found U.S. partner Williams and Oneok. The resulting company was one of the first to obtain a permit for gas pipelines in Mexico. Later on, Texas Gas made them an offer to buy their pipeline as they had exceeded their planned budget and decided to sell. “In order to buy this project, we partnered with Occidental Petroleum and 14 months later, we had our first gas pipeline in operation,” Calvillo says.

Chihuahua CorridorMore recently, Fermaca won the bid for the 380-kilometer Chihua-hua Corridor through its subsidiary, Tarahumara Pipeline. The $500 million project is the most impor-tant in the firm’s history.

“When complete, our assets will have a value of around $600 million and mark us as a major player in the industry,” Calvillo says. “The development will enable us to transport 20% of the country’s national gas production. This project was awarded to us after a very competitive international bid. We won it against all

the odds, bidding alongside large, interna-tional companies. We succeeded because we were extremely determined and showed that we have the local know-how. To secure the project, we invested about $10 million up-front.

“We made sure we had all the necessary permits in advance, as well as a presidential permit from the U.S. government. More- over, we were able to get a good financial package from the banks. This risky formula paid off and our success surprised many in the energy industry.

“At Fermaca, we like to take calculated risks. It is the only way to achieve success in my opinion. We have replicated this formula in other projects of ours.”

The new pipeline seeks to address the current shortage of gas in the area north of Mexico, and will go some way to interconnect Mexico with the United States. Tarahumara Pipeline will provide transport services for a period of 25 years and the construction is

scheduled to finish this year. The project has been internationally acclaimed as the most important pipeline to be built in Mexico in the last 30 years.

Other company projects include Fermaca Gas & Power, a self-sufficient supply plant that will produce 75 MW of elec-

tricity and heating to sell. “We are working with a couple of U.S. companies,” Calvillo says. “The plant is very close to Mexico City. We know that there is a market for 200 MW, but we are taking it slowly. We are always creating alliances with companies that are truly committed to investing and making concessions. We seek long term partners because we are a real company.”•

“We take calculated risks. It is the only way to achieve success in my opinion.”

Fernando Calvillo Alvarez, President & CEO, Fermaca

Powering MexicoHaving won an industry-acclaimed bid to transport natural gas to the north of Mexico, Fermaca shows a determination to succeed.

www.fermaca.com.mx

FermacaTel: +52 55 51486700Email: [email protected]: www.fermaca.com.mx

Fernando Calvillo ÁlvarezPresident & CEO, Fermaca



(continued from page 15) “It will generate more investment oppor-tunities, more projects, and more opportunities to increase income for the shareholders and stakeholders. Mexico has various reserves and resources, like conventional and unconventional hydrocarbons.

“Speaking conservatively, the reserve and prospective resources associated with shale gas can give us hydrocarbons for the next 100-120 years. However, the resources will only be useful when we capitalize on them and translate them into services, health care, education, and infrastructure for the country now and for its future generations.”

Making Energetic ChangesOceanografía S.A. de C.V. specializes in subsea services and offshore infrastruc-tures, from installation to maintenance and inspection, and brings the best technology in the market. The company has an excel-lent infrastructure and has grown according to the needs of Pemex.

“We reinvested the company’s business profits year after year with the aim of expanding our asset base, working perfectly toward, and achieving, our final goals,” says director general Amado Yañez Osuna, who became general director of the family firm in 2000. “When I became CEO, I basically focused on following my father’s vision, which was a company that was created to employ Mexicans, with proper salaries—a company that could offer the same services as foreign companies in the field. The challenge was having enough

human capacity to be able to provide a full service to Pemex. We decided to be a service-integrated company, with the philosophy of channeling all our services into one single supplier and giving proper service quality to our customers.”

The company chief is excited about the changes that are hap-pening in the energy industry, as it becomes more open to invest-ment, and the effect this will have on Pemex.

“We have already made long-term investments, and we believe in the future and we believe in Pemex,” Yañez says. “We collaborated with the U.S. during the time of Hurricane Katrina, repair-ing the pipelines over a period of three years. It was a time of great learning for us; we were a 100% Mexican company working abroad with a Mexican staff. We currently have growth opportunities in Colombia, Peru, Venezuela, and the

Mexican Gulf, but as our human resource capacity is full and we do not have sufficient tools to expand, we are concentrating on giving a quality service and security to our clients.

“We’ve focused 100% on our markets. Pemex is a great institu-tion and we have formed an excellent relationship with them, which gives us peace of mind as a company. Part of our success is know-ing our surroundings and how we should operate. With the energy reform, there will be many more opportunities and we are preparing to be more competitive.”

“We have made long-term investments and we believe in the future.”Amado Yañez Osuna, Director General, Oceanografía

Grupo PERC: Fueling Mexico’s Economic Success

a recognized leader in its field, Grupo PERC is an award-winning provider of integrated, value-added energy solutions that is now appealing for local and international investment partners as it embarks on an ambitious decade-

long expansion drive. Founded 30 years ago by visionary entrepreneur César Pereda Rodriguez, Grupo

PERC has grown into the third-largest fuel distributor in central Mexico. With an expanding workforce of more than 600 people, Grupo PERC is a holder of the coveted ISO 9001 and 14001 certifications. The dynamic company’s average monthly retail and wholesale sales exceed 25 million liters of gasoline and diesel fuel and more than 3 million liters of LPG. In 2012, the group’s consolidated revenues reached approximately $240 million.

The proactive group currently comprises nearly 30 high-volume Pemex franchise petrol stations in the cities and states of Mexico, Querétaro, Veracruz, and Hidalgo, along with two national wholesale gasoline and fuel oil distribution companies. These two firms are called Distribuidora de Diesel y Diáfano PERC S.A. de C.V. and José Gomez Camacho S.A., and operate branches in Querétaro, Poza Rica, Guadalajara, and Villahermosa. Grupo PERC also runs two LPG distribution companies, Gas PERC and Gas Ecológico PERC, in the State of Mexico and a construction company dedicated to building gasoline stations and fuel distribution and refueling terminals.

The highly-successful enterprise runs a field services company serving petroleum exploration subcontractors and affiliated entities that supply biofuels (biodiesel, ethanol), biomass, and compressed natural gas (CNG) to industrial and commercial customers. With the help of international investors, Grupo PERC has now raised its sights even higher. As chairman and CEO C.P. César Pereda Rodríguez explains, the company is inviting foreign investors who share his drive, ambition, and vision for Mexico’s downstream petroleum sector to contact him.

“Grupo PERC is a Mexican company with three decades of experience in the distribution of petroleum products—gasoline, diesel, fuel oil, liquefied petroleum gas—that has achieved double-digit growth rates,” Pereda Rodríguez states. “We are

dedicated to finding solutions to the growing energy needs of Mexi-can industry. For the decade of 2013–2023, we are embarking on a very aggressive investment program in biofuels, biomass, and compressed natural gas (CNG) production and distribution.

We have 30 petrol stations, but plan to increase that number to 100 over the next decade.”

Pereda Rodríguez, who is also president of industry group Asociación Nacional de Bio Combus-

tible, asks, “Are you interested in sharing with us your know-how, experience, and success in these developing energy applications?”

C.P. César Pereda Rodríguez Chairman and CEO Grupo PERC

Grupo PERC. Tel: +52 55 5251 2245 | Email: [email protected] | www.grupoperc.com

Family businesses are an integral part of Mexico’s business structure. In the case of Grupo PERC, one of the country’s most inspiring energy companies, Ricardo and César Pereda López are playing a huge role in expanding and growing the successful firm built by their father, chairman and CEO, César Pereda Rodríguez.

Recognized as one of Mexico’s 40 best companies, Grupo PERC is using its substantial experience in petroleum distribution to expand into the biofuels sector with an application to build a giant ethanol plant in Valle Hermoso. Although ethanol is not currently authorized as an additive for petrol, the innovative group believes its proposal will go through. Headed by Ricardo and César, Grupo PERC has already started creating a plant that will produce 50 mil-lion gallons of ethanol, and requires an investment of $120 million.

There is international pressure to get such projects off the ground. Starting in 2015, aircrafts that don’t use jet biofuel will not be allowed to land in Europe. In Mexico, there are experi-ments taking place in order to meet the legislation and comply with these standards and it is precisely in this area where the Pereda family sees a great potential for growth. According to Grupo PERC, Mexico currently imports more than 60% of its petrol. If the country substitutes 10% of its petrol with ethanol, it will considerably lower Mexico’s petrol needs. Petrol prices will go down, there will be less pollution, and there will be more investment and job opportunities.

Through its trading division, Grupo PERC is also exporting ben-zine from Pemex to the U.S., and entering a new venture called Un-iontren that will help transport petrol from North Dakota to Texas. A shining beacon for other companies, this family empire is clearly going from strength to strength.

To conclude, Rodolfo Martínez Septién, managing partner of leading accounting firm RSM Bogarín, explains why Mexico’s future is bright. “Mexico has not suffered a self-generated crisis for the past 20 years due to the fact that our first set of reforms were well planned, and the government knows how to handle macroeconomics, regardless of the party in charge. We’ve learned from our mistakes and have acted accordingly.

“On the one hand, the authorities have done a great job providing the right conditions for growth, and on the other, we have world-class entrepreneurs and great companies that have propelled such growth. Companies operating in Mexico have successfully started to lose the fear of going abroad, while foreign companies seek a gateway to Latin America and Mexico.

“At RSM International (RSMI), we build bridges between Mexico and the world. We are ‘Connected for Success’ through more than 700 offices in 102 countries, especially with our Latin American partners in the south of the continent, and McGladrey, the fifth-largest accounting firm in the U.S. Within Mexico, RSM Bogarín is the firm with the highest geographical coverage: 32 offices nationwide. A few years ago, it was only Fortune 500 firms that left their country; nowadays, it is any medium to large company, and as a result they need a global service provider.

“The most important advantage that comes from being part of a network like RSMI is the uniform methodology that serves our clients with the same quality worldwide.”•



Av. Mariano Escobedo No. 366 Col. Anzures Delegación Miguel Hidalgo México D.F. C.P. 11590Tel: +52 55 52 78 2960 | Fax: +52 55 52 78 2969 | Lada: 01800 71 85 628 | www.comesa.mx

Solutions close to youfor the E&P Oil Business

Rodrigo Ocejo, Founder and CEO of Kuspit www.kuspit.com Hotel and Convention Center Real de Minas San Miguel de Allende

www.realdeminas.com

Rodolfo Martínez SeptiénChairman RSM Latin America

Documents

The rise of a new giant · 2014-08-11 · Like the economy, Mexico’s dynamic capital, Mexico City, is also undergoing growth and transformation. It currently accounts for 18% of