Watching over the Interests of Local SuppliersThu, 09/01/2016 - 15:45
Q: How does INDEX’s structure allow it to significantly contribute to Guanajuato’s industrial development?
A: INDEX has offered its services since 1983, catering to companies with foreign business that need consulting services. This led to the creation of a national institution to support companies in the areas of economy, sustainability and human resources. We have a close relationship with the federal government and from that we were able to participate in several forums where we realized that Mexican industry was under-represented. INDEX grew as a support entity of the Foreign Trade Promotion Coordinator (COFOCE), addressing the needs of companies that already had a vocation for exports.
Q: What influence has INDEX had on policy decisions that most reflect the entity’s vision for industry?
A: When the federal government announced a series of adjustments to the regulations surrounding temporary imports, the Tax Administration Service (SAT) discovered that many companies were taking advantage of the IMMEX program to evade taxes, as certain materials were crossing the border without ever becoming exported products. The government decided that all companies that imported raw materials for later export as manufactured products would have to pay a VAT, which would be refunded once those components were exported. INDEX created a consensus among its associates on the effect that paying VAT would have on companies across the country. We concluded that the total taxes paid would be astronomical and SAT was unlikely to be able to digitally manage this temporary tax payment.
By enlightening the authorities on the risk involved for the manufacturing industry, we were able to reach an agreement. We created a certification that allowed companies to retain control of their finances while Mexico developed its local supply chain. In 2014, 3,200 companies out of the 6,200 companies that were part of the IMMEX program certified their processes, while the rest had to follow the new tax regulation starting from 2015 until they could comply with the certification.
Q: What do you hope to achieve with INDEX in the short term and what is your involvement with industries in Guanajuato?
A: We want to work closely with directors and key decision-makers who are already part of INDEX and ensure they are aware of the services we offer. We must define the needs of individual industry players to identify a series of problems that could be mutually solved or that could affect other companies in the same way.
The automotive cluster has consolidated in Guanajuato and there will be more opportunities when Toyota starts operations in 2019. But we must not lose sight of the textile industry, while also promoting the growth of the chemical and personal care sectors. We are also considering the development of aeronautical activities in the state. We are eager to use the state’s privileged position to develop other industries, without jeopardizing the ones that are already essential. Influential Japanese and German companies have invested in Guanajuato, creating an imposing presence that benefits the local industry, but there are plenty of Mexican companies that could also strengthen the local supply chain.
Q: In what ways can Mexico hone its competitive advantages to compete internationally?
A: Many sectors will benefit from the TPP agreement. Although we know many Asian countries are competitive in electronics, we are confident about the level of expertise and international production standards that exist in Chihuahua and its neighbouring states. Mexico can remain competitive by innovating and investing in new technology. We have excellent human capital for generating ideas. Unfortunately, we find ourselves developing the innovations of other countries. Mexico must move from being a manufacturing hub to a technology creator with the support of internal investors. Our most important objective should be investing in human capital and offering opportunities to young people with innovative ideas would be a good start. Increasing our design and engineering capabilities would allow the country to truly profit from the commercialization of products.