July, 2016

City of Phoenix Trade & Investment Representation

Mexico

EDGE, The Trade & Investment Review

July 1st, 2016

Phoenix-Mexico Business Community

On behalf of the City of Phoenix Trade Representation team, we are pleased to present the first edition of EDGE, The Trade & Investment Review, a tool that aims to highlight timely business opportunities that City of Phoenix stakeholders may pursue to increase trade and investment with Mexico.

We have witnessed in recent years an increasing interest among U.S. city and state governments to strengthen regional economic cooperation. With recent shifts in FDI toward North America and away from other regions of the world, professionals in economic development must share precise and timely information on new investments and how to engage directly in these opportunities.

The City of Phoenix representatives will present periodically a brief document with an overview of Mexico’s Economic Regions, presenting developments that may be of interest to Phoenix-based companies. Our objective is to stimulate continuous dialogue and brainstorming with public and private sector organizations as to how Phoenix can take the lead in bilateral trade relations with Mexico.

EDGE, The Trade & Investment Review will present information in different formats, enabling our readers to gain a deep understanding of emerging opportunities. Content may be developed and distributed in cooperation with the Phoenix office of ProMexico, Phoenix area Chambers of Commerce, and other stakeholders. The materials will vary in each edition, and may include:

Interviews with Public and Private Sector Leaders Statistics and Figures on the Mexican Economy Links to articles on U.S.-Mexico relations Trade and Investment News

Enhanced trade and economic development will be the City of Phoenix success story behind, EDGE, The Trade & Investment Review. We invite you to be a part of this important effort.

Molera Alvarez Estrategia Global

City of Phoenix Trade & Investment Representation

Mexico

Mexico Industry Map

The Mexico Industrial Map is represented by five regions or geographic concentrations of industries that closely relate due to the existence of common factors like technology, skills, supply and demand of goods and services. As we will be able to analyze and understand in the editions to follow, Mexican clusters that emerged and developed in the past 25 years have based their success on inter-industry linkages. We will carefully describe how these interactions happen and how we can take advantage of supply chain integration involving Phoenix based companies in economic industries such as automotive, aerospace, semiconductor, electronics and plastics manufacturing.

Northwest

Includes the States of Baja California Norte, Baja California Sur, Sonora and Sinaloa. The most dynamic economies of the region are located in Baja California Norte and Sonora, where the industrial activities that predominate are advanced manufacturing for electronic equipment, aerospace product and part manufacturing, medical devices, as well as mining and agro-industry.

Northcentral

Includes the States of Chihuahua, Coahuila and Durango. The most dynamic economies of the region are located in Chihuahua and Coahuila, where the industrial activities that predominate are automotive, aerospace and plastics manufacturing as well as agro-industry.

Central

Includes the States of Nayarit, Jalisco, Colima, Zacatecas, Aguascalientes, Guanajuato, Queretaro, Hidalgo, State of Mexico, Tlaxcala y Puebla. The most dynamic economies of the region are located in Jalisco, Guanajuato and Queretaro, where the industrial activities that predominate are automotive, heavy motor vehicle manufacturing, aerospace and plastic manufacturing.

Northeast

Includes the States of Nuevo Leon, Tamaulipas and San Luis Potosi. The most dynamic economies of the region are located in Nuevo Leon and San Luis Potosi, where the industrial activities that predominate are iron and steel, mining, chemical and heavy motor vehicle manufacturing.

NortheastNortheast

CentralCentral

NorthwestNorthwest

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SouthSouth

City of Phoenix Trade & Investment Representation Mexico

Grupo Gondi, a Mexican conglomerate leader in the paper and cardboard industry for packaging announces the construction of a new plant in the State of Yucatan. The new project is intended to serve the current demand of companies in the region such as Cervecería Yucateca. Using a lean manufacturing model, the new plant will feature hi-tech equipment in order to produce corrugated and folding cardboard.

During the same week, a spokesman from Grupo Gondi also announced the acquisition of Grupo Contantia Flexibles division of cardboard packaging Aluprint Pegadizos. Aluprint Pegadizos manufacturing facility in San Luis Potosí specializes in folding cardboard and micro-corrugated boxes, supplying the domestic, United States, Canada and Latin America markets.

Grupo Gondi is a leader in the Mexican market supplying cross industry corporations. Currently, its structure is integrated by six recycled paper mills and 15 manufacturing facilities.

Grupo Lala, the Mexican dairy company presented recently an investment plan to develop a new milk production plant in Ciudad Obregon, Sonora. This new facility in the northern state of Mexico will feature advanced technology in pasteurization process as well as innovative packaging.

With an estimated investment of US $18.9 million, Grupo Lala expects a production of 53,000 gallons per day.

Trade and Investment News

Grupo Bimbo, the multinational bakery announced recently plans to manufacture 2,000 electric vehicles through its sister company Moldex, an investment that is estimated at US $38 million.

Through its business strategy for sustainable development, the company has committed to reduce its carbon dioxide emissions significantly. Currently, a group of experts works together in the development of a prototype that enables the company to deploy loads of 1 ton or more.

El Tizoncito, famous for its “tacos al pastor” will soon be opening restaurants under a franchise model in the State of Texas, in order to increase presence and offer quality Mexican food in the United States.

Ricardo Ruiz, Director of Operations and Franchises at El Tizoncito announced the start of operations in south Texas, looking forward to identify other areas of opportunity in the US, mentioning the importance of the Mexican community in the states as key players for their long term success.

Trade and Investment News

The Interview

Federico de ArteagaStrategic Planning DirectorGrupo JB-Jose Cuervo

The Transformation of Tequila Jalisco

Tequila Jalisco, the heart of the Mexican blue agave produce has been for many years an icon of excellency when it comes to international trade. It’s not new to hear the impressive volumes of exports this legendary spirit sends all over the world. Just last year, the State of Jalisco’s most important markets were the United States, Spain, France, Germany and Japan. With numbers rising in all continents and a greater preference for super premium 100% agave brands, tequila makers are betting for much more than the product. Today, ambitious plans are taking them to export the complete tequila experience to the world.

Jose Andres Garcia Rosales

“Tequila Jalisco has a longstanding history dating approximately 250 years back. In Mundo Cuervo, we are looking 250 years into the future, our main objective is to preserve all of the local traditions and expertise of the tequileros”. In a very precise way, Federico De Arteaga, Strategic Planning Director at Grupo JB-Mundo Cuervo states the vision that the Beckmann Family has put into Mundo Cuervo.

“The transformation of Tequila has come more or less since 2003, when the Mexican Secretariat of Tourism designated it as one of Mexico’s Magic Towns. Previously, Tequila was an agricultural and industrial city, a place where people worked in the famous tequila distilleries. In recent years, the municipality has changed to position itself as a tourist destination, where the local population emphasizes its desire to become part of the new economy.

Today, Tequila Jalisco has successfully created a thematic city that has organically promoted the creation of small and medium size companies focused on a service based economy”.

“Tequila’s destination planning has been an effort that has involved close collaboration with local, state and federal authorities, making way for the creation of a 2040 Municipal Plan with specific goals in 10 year periods. The idea has been to make Tequila a compact and efficient city economically, socially and environmentally. For a proper management, Tequila has created a public-private partnership aimed to monitor governance in areas like municipal services, regulations and land registry”.

Since 2003, Mundo Cuervo has been an evolving concept where experiences on tequila culture, tourism and positioning of Jose Cuervo brands are linked. The concept itself is defined by four principles that make it a unique experience not only in Mexico but globally; authenticity, community, culture and sustainability.

“Mundo Cuervo is a long term project for Grupo JB. Currently, we are working intensely at the heart of downtown Tequila, we not only want to make it an intelligent city through technology but also through the correct leadership”, stated Federico. “In the near future, we intend to look out for investors to develop a retired home community, hospital, university and convention center within the limits of the 740 acre land”.

Who visits Tequila Jalisco?80% of current tourism is Mexican. Initially, visitors came mainly from Jalisco, the State of Mexico and Mexico City. Presently, tourism has diversified and visitors come from all over the Mexico. The other 20% comes from the United States, specifically from California.

What is Tequila Tourism?Tequila Tourism was launched in March of 2016 between Mundo Cuervo and The National Geographic Society. The intention is to promote Tequila Jalisco as a GeoTourism destination, activity that sustains and enhances the geographical character of a place-its environment, heritage, aesthetics, culture and the well-being of its residents.

Where do you go when you visit Tequila Jalisco?Tequila has a broad range of activities. When you come, you have to visit:

• Fábrica La Rojeña• Hacienda Centenario Lázaro Gallardo• José Cuervo Express• El Bar de Margaritas