From Deseret News archives:
Mexico representatives tout opportunities for Utah
Nation's work force and labor wages extolled
"There's economic opportunity for you guys," Jorge Stahl, coordinator for foreign investment in the Mexican state of Nuevo Leon, said at the "Mexico's Emerging Markets" gathering.
Utah's economic ties with Mexico already are strong and growing stronger. The country was Utah's fifth-largest trading partner in 2006, when Utah companies exported $268 million in goods to Mexico, up from $128 million in 2005. And Miguel Rovira, director of Latin America and Canada for the Governor's Office of Economic Development, said the 2007 year-to-date figure is up 35 percent from a year ago.
Miguel Cavazos, property and investment solutions consultant for Citius Capital, which helps multinational companies find operations sites in Mexico, said that while it is "pretty clear" that companies put operations there to lower their business costs, other reasons also exist.
Some companies, he said, follow larger corporations that they already serve. He cited Whirlpool, Electrolux and General Motors as the types of U.S. companies that have operations in Mexico and often want vendors and suppliers nearby. Other times, companies turn to Mexico when they cannot find enough employees locally to meet their expansion plans or they simply want to do business with other U.S. companies already in Mexico, he said.
One Utah company that has benefited from putting some of its business in Mexico is Thermal Processing Inc., which followed Boeing. Thermal Processing started with a 30,000-square-foot building in Monterrey but now is expanding to 80,000 square feet.
"What I have seen in the case of this company from Utah is that the owner was following a customer, then he finally ended (up) doing more business with the other U.S. firms there are in the Mexican market than the one he was following," Cavazos said. "So it can be very interesting for you if you can just do some research on the other companies that you can do business with. It's amazing. The market is huge."
Cavazos said the various Mexican states have differing business profiles and characteristics, but many of the speakers Wednesday cited similarities.
Representatives of the states of Coahuila, Mexico and Nuevo Leon told of access to global markets, competitive production costs, industrial diversity, a productive and educated work force, high quality of life, a low cost of living, a strong economy and modern infrastructure.
Javier Fernandez, director of investment banking for Nacional Financiera, a development bank similar to the U.S. Small Business Administration, said Mexico's economy is growing at a rate of 4.5 percent annually, the Mexican stock market has grown faster than the Dow recently, and Mexico has many wealthy people. He said half of Mexico's population is poor but that only Japan, the United States and Germany have more millionaires than Mexico.
"Mexico has problems, but it also has big, big opportunities to invest," Fernandez said.
Companies can jump head-first into Mexico, but Carlos Alvarado, principal at Grupo Prodensa, which helps foreign companies set up operations in the country, said expertise from people familiar with Mexico can help immensely. Those experts can guide U.S. companies through the "unknowns" so that "you can concentrate on what you know best."
"Even though we're next door, we're not the 51st state," Alvarado said. "We're a different country."
E-mail: bwallace@desnews.com
