Coast Aluminum’s growth reflects that of the expanding industrial sector in the state. Baja California is growing very fast and the state now lacks available real estate for new companies or for enlarging existing businesses. We are trying to expand our plant but it is impossible as there is no room. Industrial real estate is scooped up as soon as it is built and most industrial parks are already full. It is extremely hard to find real estate. To solve this, we are restructuring our offices in Baja California to maximize inventory in the available space, while also taking advantage of its facilities north of the border. We have the advantage of having a 200,000ft2 plant in Los Angeles, which allows us to quickly supply to Baja California and to avoid excess inventory. We are fully aware of what local clients need so we can keep an efficient inventory and still supply them in 24 hours.
NAFTA allowed maquilas in Mexico to supply to each other and to be supplied to by Mexican companies, generating a synergy in the manufacturing sector and convenient conditions for the introduction of more foreign manufacturers. In my opinion, it is impossible for companies operating in Mexico to move their manufacturing back to the US due to prohibitive costs. I asked some of our main lessees whether they would move their operations back to the US in the case of a negative outcome for NAFTA and everyone answered “no,” even if border adjustment taxes were implemented. While NAFTA is not a minor problem, it will not impact the sector as badly as some fear because the US government wants to increase its exports. A shaky relationship with the US, on the other hand, did impact the generation of new deals but even that impact was limited
Some companies coming to Nuevo Laredo have placed approved projects on standby while the talks take place. They are waiting for the new rules to be announced, which is understandable as they are thinking about their costs and how their operations could be affected by changes in the content of the treaty. But the market’s progress continues. I think these negotiations stimulated the market instead of harming it. Many European and Asian companies continue to be interested in investing in Mexico. With or without a wall, we continue working. With or without NAFTA, international trade will remain. If the US decides to pull out of NAFTA, all the WTO agreements would enter into force and the US would be harmed the most.