Letters of Intent for Interoceanic Corridor Reach US$4.5 Billion

A few months before the tentative inauguration date of the Interoceanic Corridor of the Isthmus of Tehuantepec (CIIT), 52 projects have already been proposed by Mexican and foreign companies. These projects represent an investment of over US$4.5 billion in the construction of industrial space.

CIIT, which is expected to be completed by September 2023, has received 52 letters of investment intent. According to Carlos Sedano, Head of Investment Promotion and Commercial Development, CIIT, out of the 52 interested companies, 10 are interested in becoming developers, while the remaining 42 are interested in starting operations at CIIT's industrial parks.

Sedano highlighted that projected investments range between US$10 million and US$500 million. "We practically have letters of intent totaling US$4.5 billion to establish [plants] at CIIT," he stated. 

CIIT aims to host important companies in the electric, electronic, semiconductor, auto parts, pharmaceutical, medical devices, agroindustry, IT, heavy equipment, metallic and petrochemical industries. One of the main goals of CIIT is to foster economic development in Mexico’s Southeast by taking advantage of the nearshoring phenomenon. The corridor is expected to compete with the Panama Canal, an important logistics hub in the Americas. Attracted by the government’s goal, a delegation of Taiwanese directors from chips, semiconductors and electronics companies came to visit the corridor's facilities to explore potential investment opportunities. Among the companies interested in investing are Chunghwa Telecom, Machan International, A-Lumen Machine, Vivotek, Teco Corporation, Hon Hai Foxconn, Master Transportation Bus Manufacturing, Delta Electronics, Wonderful Hi-Tech, Inventec, Photic Electronics, Jebsee, Merry Electronics, TopCo Technologies, T-Global Technology, Bellwether International Group (TEEMA), Wieson Technologies, Pegatron and Unimicron.

To make the offer even more attractive, the federal government prepared a tax incentive package for companies established in the corridor, including a gradually decreasing discount on the ISR and the Value Added Tax (IVA), as reported by MBN. 

Despite these efforts, some experts believe that CIIT will take 10 years to fully ramp up operations. In an interview with BNAmericas, Gene Towle, Executive Partner, Softec, said that the executive project makes sense to develop for Mexico. However, he doubts Mexico could reap the benefits if the project is not fully developed. “It is a process that takes time. It is not something one announces and then, the next day, you are already developing industrial infrastructure. To build an industrial park, the first issue one must tackle is ensuring water, light and access infrastructure,” he said.