News Article

Manufacturing Muscle Fueled by National Growth

Wed, 10/02/2019 - 17:01

Carlos Bárcena Pous, Minister of Economy for the state of Zacatecas, made the case for the state as a unique destination for automotive investment during his opening presentation at Mexico Automotive Summit 2019 on Wednesday at Mexico City’s Sheraton Maria Isabel Hotel. Despite the lack of major automakers, the state connects the central region to the north, and has a unique footprint from the mining and information technology sectors that are ideal partners for the car industry, Bárcena said. “Connectivity and innovation make this the ideal place to invest in.”

Bárcena launched his case with the premier tenet of the real estate market: location. Using a map of Mexico, he highlighted the location of major automakers in an axis around the state: Guanajuato, San Luis Potosi, Queretaro and Aguascalientes to the south and east, and Cohuila and Nuevo Leon to the north. The state also has a natural corridor that is traversed by highway 45, he said, connecting the south to the north. In the middle of this corridor is the regional airport serviced with direct international flights to cities such as Chicago and Los Angeles. Through the state run some of the country’s largest gas pipelines, which can service major industrial operations. Lastly, Bárcena highlighted the availability of alternative energy sources. “Because of long sun hours and windy conditions, the state has seen significant developments in renewable energy parks by major companies such as Iberdrola and Blackrock Investment,” he said.

Along the state border with San Luis Potosi, Zacatecas’ industrial region hosts numerous companies that already work with automotive partners or have potential to enter the sector, Bárcena said, adding that businesses in the mining, food and agro-industrial sectors were natural partners for the automotive sector. “The mining industry has strong international supply chain logistics, and more importantly, within its supply chain, there are many companies that forge and manufacture metal products,” he pointed out. The food and agro industries, in turn, are “major producers of plastics and chemical products, many of which could be applied to automotive manufacturing.” These industrial operations are fed by a large workforce, which has the average age of 26 years. “Apart from manufacturing experience, the state has a range of universities and industrial parks where innovative minds are working on engineering and information technology solutions not only for automotive, but also for the aerospace and IT sectors,” Barcéna said.

Given these circumstances, the state’s administration has an ambitious strategy to increase the presence of the automotive sector. It aims to generate 40,000 jobs in five years, with a large portion of these in the automotive industry, Bárcena said. “The state has a strategic budget that has been set up to facilitate the needs of local businesses.” He added that the government is prepared to provide incentives in different forms. Among those is a two-year income tax exemption for new arrivals. The government also is reaching out to foreign companies and governments through bodies such as the Council of Zacatecas for Innovation. This has led to projects including a new industrial park to be built in partnership with the Chinese government, and a special “knowledge city” that the state has dubbed “Quantum.” It is here, Bárcena said, that the new innovations of Industry 4.0 will come to fruition.