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Mexico Industrial Park Occupancy Hits Record on Nearshoring Boom – Bloomberg

An aerial view of a Foxconn factory in San Jeronimo, Chihuahua state, Mexico, as seen from Santa Teresa, New Mexico on Tuesday, August 9, 2022.
An aerial view of a Foxconn factory in San Jeronimo, Chihuahua state, Mexico, as seen from Santa Teresa, New Mexico on Tuesday, August 9, 2022. (Paul Ratje/Bloomberg)

Carolina Gonzalez, Bloomberg News

EnergiesNet.com 02 17 2023

Mexico’s industrial park occupancy hit a record high last year as international companies increasingly relocate their supply chains to Latin America’s second-largest economy. 

The sector grew 30% compared to 2021 and registered an average occupancy rate of more than 97%, Sergio Arguelles, president of the Mexican Association of Private Industrial Parks, said in a podcast with a Grupo Financiero Banorte analyst released Wednesday. The expansion was driven in part by the automotive sector, including the manufacturing of parts and electric cars.

Mexico is luring companies due to benefits including its relatively low costs and proximity to the US. Arguelles predicts the expansion will continue over the next three or four years, as the association has identified 47 new industrial parks that are either planned or under construction. Demand has come from companies in countries including China, Italy, Germany and South Korea. 

One of the main challenges facing local nearshoring, which refers to the movement of companies to Mexico to be closer to the North American market, is electricity supply, according to Arguelles. 

He said the problem is not so much generation but rather the lack of connectivity and distribution, and that the association has been working with state-controlled utility Comision Federal de Electricidad to address those woes. 

“The energy issue is something that does concern us,” he said. “Guaranteeing the electricity supply and the availability of clean energy sources, especially to achieve the de-carbonization goals demanded by new companies or global companies, is extremely important.”

“We are forecasting an additional requirement or demand in medium and high voltage of 2.3 gigas for the projects that we see in the future for the next two years,” he said.

Other concerns include security and infrastructure, as well as the water scarcity seen in the northern city of Monterrey.

Even though 70% of the roughly 100 new companies settled in the north, Arguelles said new investment poles are emerging in the south in place such as Merida. The Isthmus corridor has a lot of potential as well, he added. 

bloomberg.com 02 15 2023

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