/
Insight

A Pro Aerospace Initiative

Thu, 12/01/2016 - 15:01

The aerospace sector is becoming a catalyst for the Mexican economy, boosted by the Pro-Aéreo 2012-2020 program. According to ProMéxico data, more than 300 companies employing over 45,000 people, provide services or manufacture products for the aerospace industry here.

Through ProMéxico, the federal government has established its main objective: “To develop of a high added value, national aerospace ecosystem that can be competitively integrated into international aerospace and defense industries.” Pro-Aéreo has four objectives. The first and most notable is to place Mexico within the top 10 countries that sell products for the aerospace industry. The program’s second objective is more precise, to export US$12 billion dollars of aerospace products, almost US$6 billion dollars more than in 2015. By 2020, employment provided by the aerospace industry is expected to more than double to 110,000 direct jobs in the industry. Pro-Aéreo expects that at least 30 percent of the total number of jobs will be in engineeringareas,ratherthanmanufacturing.Thefourth objective is for components in aerospace manufacturing to be at least 50 percent Mexican.

According to the Clean Water Consultancy, there are still opportunities that Mexican companies could seize to increase the country’s participation in the industry and contribute to attaining Pro-Aéreo’s goals. OEMs’ growing need for lighter, cost-efficient and eco-friendly materials will increase demand for composites such as carbon or glass fiber. Global demand for composite materials is expected to increase 7 percent annually until 2019. Manufacturing of open rotor and geared Turbofan engines also offers business openings. Open rotor engines will reduce fuel consumption by almost 26 percent compared to traditional engines. Geared turbofan engines reduce noise pollution by almost 50 percent compared to other engines, also improving fuel efficiency and reducing emissions.

The third niche discerned by Clean Water is a long-term opportunity rather than a target for the 2020 program: the development of alternative fuels to reduce oil dependency. Even though the use of biofuels will be widespread at some point, investment and R&D are needed to reach popular use.

Should Pro-Aéreo meet its expectations, by 2021 aerospace exports would register 14 percent annual growth, increasing the sector’s contribution to GDP by 0.68 percent. In the worst-case scenario, exports would only increase 9 percent and contribution to the country’s GDP would increase 0.18 percent.