Go Mexico

Mexico offers great opportunities for the international process industry. The Mexican market has no restrictions and is open to competition. Exploit your chances at chemAmerica 2005.
After years of systematic economic liberalization Mexico is today an integral part of the global economy. The political stability, which was last demonstrated in 2000 by the peaceful change in power from the practically state-run party PRI which had ruled for 71 years to the opposition party PAN under President Vicente Fox, highlights the special role that Mexico plays among the major Latin American countries.
The government is aware that healthy economic conditions are the most important factors for stability and growth. A continuous, stringent budget policy, control of foreign debt (at present: US$ 143 billion total debt, the state and the private sector each accounting for half of this figure) as well as an independent central bank which safeguards monetary stability are important elements of Mexican economic policy.
Finally, the currency reserves will reach an historic record level of some US$ 60 billion by the end of 2004. This stability is reflected in the great attraction for foreign investors: As a recipient of direct foreign investments, Mexico holds third position, after China and Brazil, among the newly industrializing countries and in 2004 it expects net investments of more than US$ 15 billion.

Mexico is the tenth largest economic nation in the world and the largest exporting country in Latin America: In 2004 the country will export goods worth US$ 175 billion, more than all the rest of Latin America together. Imports will amount to US$ 182 billion, a considerable proportion of them being capital goods.
Traditionally, Mexico’s economy is heavily geared to the US market. After three years of stagnation as a result of the development in the USA, the Mexican economy has gained ground again in 2004. Growth of 4% appears realistic and a comparable growth rate is expected in 2005.
Need for modernization in many sectors
The positive development will be reflected in a rise in the Mexican industry’s willingness to invest; there is a need for modernization in many sectors. A substantial improvement in industry’s desire to invest has already been observed in recent months. The need in the petrochemical and oil-producing industries is particularly great. For example, the ambitious “Fenix” project of the state-owned oil company Pemex, which involves the construction of new petrochemical plants, is worth US$ 2 billion. And then there is the purchase of 45 oil platforms, the development of the Burgos gas field and the modernization of several refineries. “Our plants must become more competitive: The refineries in the USA are two-and-a-half times as profitable as ours, the oldest of which dates from the year 1905,” complains Pemex manager Juan Bueno Torio.
A decision is expected in the near future on the construction of a cracker. The latest oil strikes in the Gulf of Mexico at depths of 2,000 to 10,000 meters also make investments in material for deep-sea production necessary. Previously Pemex only had experience in production at depths of several hundred meters. The strikes reported by Pemex are estimated to amount to 54 billion barrels and would put Mexico in the first division of oil countries. Pemex has also announced that it wants to double its production capacity in the medium term. At present, 3.4 million barrels/day are produced, of which 1.9 million are exported.
Rising demand for medication
As far as the pharmaceutical industry is concerned, almost 200 production companies with 45,000 employees are registered. These include almost exclusively all the big names in this industry; and there are also some major Mexican producers. The domestic market in Mexico for pharmaceuticals grew to US$ 7.4 billion in 2002 (1.9% of the world market). Every year the demand of the population for medication rises by some 3%. And as regards the chemical industry, the most important global players operate in Mexico. Investments at a high level are continuously being made here.
Finally, biotechnology is still in its infancy in Mexico. At the same time, it is expected to have a major growth potential. Mexico’s government is making every effort abroad to attract companies in this branch.