Mexico’s moment?tlcuk.biz/images/downloads/MexicoWebinar.pdf3 • 1 of every 7 cars sold in the US is made in Mexico • Most televisions and PCs sold in the US last year were made

Mexico – Business Overview 1

Mexico’s moment? January 2013

2 Mexico – Business Overview

The Financial Times

The New York Times

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•  1 of every 7 cars sold in the US is made in Mexico

•  Most televisions and PCs sold in the US last year were made in Mexico

•  Mexico is the largest producer of smart phones worldwide, and the second exporter of televisions

•  Mexico is one of the top 5 oil producing nations in the world

•  Main global destination for aerospace manufacturing projects since 1990

•  Mexico is the largest exporter of beer in in the world

•  The richest man in the world is Mexican

Some facts about Mexico

Mexico – Business Overview

Sources: ProMexico, Forbes, Global Trade Atlas, OECD

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•  11th largest economy - 2012 GDP US$ 1,743 bn (World Bank GDP ranking, PPP based)

•  One of the world's top 7 economies by 2050

•  Largest trading nation in Latin America: Trades more than Brazil and Argentina combined - 33% of the region´s trade

•  12 Free Trade Agreements covering 44 countries

Mexico Overview


Sources: Bank of Mexico, OECD, World Bank, Goldman Sachs

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Attractive Business Environment

•  53rd in World Bank the Ease of Doing Business rankings, above most Latin American countries and all BRICs

•  Lowest cost country for the outsourcing of manufacturing operations

•  Population over 112M, median age 26

Mexico Overview


Sources: OECD, World Bank, Alix Partners 2009, AT Kearney 2010, KPMG 2010

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•  Analysts consider that Mexico’s economy will keep growing through the next years.

•  Consumption and investment likely to increase based on significant credit to the private sector

Economic Overview


2012 2013

GDP 3.8% 3.8%

Inflation 3.57% 3.7%

Exchange Rate (Pesos per £)

20.91 19.60

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Macroeconomic stability

•  Inflation under control Within Banco de Mexico’s target

•  Stable Exchange rate Massive international reserves

•  Stable Interest rates Reference rate (interbank) unchanged since July 2009

Economic Overview


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Macroeconomic stability


GDP by sectors (2012)

Sourcs: INEGI

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•  Recently appointed Mexican president Enrique Peña Nieto, has established a clear focus on economic growth and a pro-business agenda

•  Plan to review and revamp Mexico’s FTAs, incluiding the EU/FTA, with a strong push for its part in the Pacific Alliance

•  Focus on internal develompent, with a new industrial policy to boost productivity

Mexico in the coming years


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•  New National Council for Science and Technology

•  Improve competition by establishing specialised courts; increasingly proactive approach on Mexico’s monopolies already evident

•  New Foreign Minister wants to increase trade to at least $1 US billion per day in the medium to long term (currently $341 US billion a year)

Mexico in the coming years


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•  95 priority meassures for which there is cross-party support, agreed between the president and major political parties the day after taking office

•  Emphasis on the need for urgent structural reforms

•  Education and labour reforms now signed, fiscal and energy reforms discussions taking place

Pact for Mexico


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•  Educational reform: improvement of education technologies and equipment, infrastructure and opportunities on training

•  1% of the GDP to be invested in science and technology

•  Increase funds for entrepreneurial programmes

•  Energy reform: transform PEMEX into a public company, and increase the exploration of oil & gas resources

•  Increase the research & development of new renewable source energies

•  New mining law

Pact for Mexico


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•  Telecommunications: digital agenda, including access to broadband in public buildings; new tv & radio networks based on international regulations

•  Promoting openness in the telephonic and data services industry, through eliminating barriers for new operators and new competition regulations

•  New agreements to promote transparency and and new national system against corruption

Pact for Mexico


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Mexico in the world


GDP per capita (current US$)

Sourcs: IMF

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UK-Mexico bilateral trade (2011)

Mexico in the world


Mexico’s Exports to the UK (%) total UK’s Exports to Mexico (%)

total

Mobiles & Telecoms components

33.4% Medicines & Pharmaceutical 13.9%

Power generating equipment 13.4% Road Vehicles 10.7%

Miscellaneous manufactured articles

10.2% Beverages 9%

TRADE BALANCE FOR THE UK

UK Exports to Mexico £ 1,006 M

UK Imports from Mexico £ 1,087 M

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Mexico – EU Free Trade Agreement


Sourcs: European Comission

•  Entered into force in 2000 -

Commitment from both sides to update in 2013

•  Covers trade in goods and services

•  Taxes applying to a large quantity of importing goods were eliminated or reduced

•  Includes specific chapters on access to public procurement markets, competition, intellectual property rights and investment

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•  Accesorize opened its first store in Mexico City in 2011 in Plaza Satélite, then they opened two more in Santa Fe and Plaza Universidad, and they are planning to open their fourth store

•  LITTLE BRIDGE has recently sold cutting-edge education software for use in all 25,000 public secondary schools in Mexico

Success stories


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•  DavyMarkham LTD

Won its first contract to supply a production hoist to a mine in Mexico, worth £2.4 million

•  JJ Churchill (advanced engineering)

Set to open a new plant in Mexico with an initial investment of £6 million

•  Petrofac has been awarded 4 integrated services contracts by the state oil company PEMEX, since August 2011

Success stories


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•  Spirax Sarco (products for efficient use of steam and other industrial fluids) are investing US$10 million to move to a plant which is 5 times the size in 2014

•  Since its establishment in 1991, ERM in Mexico has successfully executed more than 1,600 complex and challenging environmental projects

•  Symphony Environmental Ltd (environmentally responsible plastic technologies) has the world’s largest bakery (Bimbo) as a major client

Success stories



UKTI Mexico

•  32 professional advisors -

organised in sector teams

•  Main office located in the British

Embassy in Mexico City, and 3

regional commercial offices:

Guadalajara, Monterrey and

Tijuana

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UKTI Mexico

•  Strategic relationships with government partners, key stakeholders

(British Chamber of Commerce, ProMexico, COMCE) and other

British companies already established in the market

•  Dedicated Marketing and Press team which can support with

different services: press releases and conferences, interviews,

design, article placement and event organisation

•  Ambassador’s weekly column in one of Mexico’s most read

newspapers, a weekly radio show with one of the largest audiences,

digital and social media channels

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Q & A


Justin McKenzie-Smith Director of UKTI Mexico [email protected]

Mexico’s moment?tlcuk.biz/images/downloads/MexicoWebinar.pdf3 • 1 of every 7 cars sold in the US is made in Mexico • Most televisions and PCs sold in the US last year were made

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