Soft Landing for Companies in MonterreyFri, 09/01/2017 - 10:55
Although OEMs like Audi and Kia have shown a willingness to invest in their locations, Mauricio Garza, CEO of Interpuerto Monterrey, says automotive suppliers now look for turn-key solutions that can provide a soft landing in a new country.
Nuevo Leon is already one of Mexico’s automotive hubs along with states like Guanajuato and Queretaro and according to Garza, “Monterrey is in a privileged position right in the heart of the NAFTA market.” After Kia’s manufacturing operations arrived in the state, many new suppliers started looking for the perfect site to establish facilities. This created an opportunity for Interpuerto Monterrey. Located in the Salinas Victoria municipality and only an hour away from Monterrey’s city center, the park offered an advantageous position for companies wanting to supply both the domestic market and the NAFTA region.
A two-hour drive is the only thing separating Interpuerto Monterrey from the nearest crossing to the US. If companies choose to source or work with companies in the Bajio instead, they have direct access to the highway. Interpuerto Monterrey also offers strong rail connectivity with both Kansas City Southern and Ferromex lines passing right next to the park, which is rare given the limited rail infrastructure in the country. Garza is promoting the use of rail as a costefficient solution for imports and exports. “Mexican logistics are almost twice as costly as in other developed countries,” he says. “But rail is an attractive option for investors when comparing volume and shipment costs.”
“Interpuerto Monterrey can offer multimodal solutions to fit clients’ specific needs,” says Garza, who does not want to rely solely on its accessibility to promote Interpuerto Monterrey’s market position. The park has developed its service offering to the point of becoming a partner in realestate solutions. “We can sell lots to clients so they can build their plants with any developer of their choosing, we can build their plants according to the clients’ specifications and lease them or build the plant and sell it to companies once finished, or develop speculative buildings and lease them to tenants. In other words, we are a real-estate solution company,” he says.
The park is also combatting one of the industry’s main concerns: customs operations. Several logistics providers including Hellmann and UPS say customs is among the processes with the most opportunity to increase Mexico’s competitiveness as a logistics hub. Garza has created a development plan to address this. “Most of our clients are importers and exporters, so an internal customs agency would be a crucial advantage for us,” he says. Garza’s threestage program for Interpuerto Monterrey places a customs office at the top of the list, which must follow the Customs Technologic Integration Project (PITA) established by the federal government. This initiative seeks to automatize and expedite customs operations for products entering or leaving the country. “We finalized the details in July 2017 and we expect to deliver the facilities to the Tax Administration Service (SAT) by the end of 2017,” says Garza.
In the medium term, Garza wants to make the park a free-trade zone (FTZ). According to the latest regulations established by President Enrique Peña Nieto’s administration and SAT, parks no longer require a minimal square footage to become an FTZ, they can be built in modules. Companies cleared under FTZ’s regulations can obtain benefits such as longer authorizations for temporary import of up to 24 months for products entering the supply chain. These advantages have made FTZs an attractive solution for recurrent importers and exporters. “We are advancing with this project along with potential clients that might use this service because companies have to be certified to apply for free-trade conditions,” explains Garza.
Interpuerto Monterrey’s long-term initiative is to establish a binational customs office between Mexico and the US. This would allow cargo to come directly to Interpuerto Monterrey without stopping at the border, pre-validated by customs agents from the US. Garza expects both its customs and real-estate solutions to help Interpuerto Monterrey have a clear service offering that can satisfy its clients current and future needs. Even in its early stages, Interpuerto Monterrey already appeals to investors in the state of Nuevo Leon and Garza says both the state and the municipal governments are using the park as an investment promotion tool.