Mexico's Energy Transformation and Agri-food Opportunities

XI
2014
Negocios
para
exportadores
The Lifestyle
Riviera Nayarit,
Mexico’s Paciﬁc Coast
Treasure
Special Feature
Mexico
Feeding the World
THE NEW
MEXICAN
ENERGY MODEL

M
exico is on the move. Our country has
concluded an important transforma-
tive cycle that includes 11 structural
reforms. With these profound changes, Mexico
is breaking the restraints that have prevented it
from reaching its full potential.
Six of these transformative reforms aim to
elevate the productivity and competitiveness
of our economy, to accelerate its growth. They
form a platform that will enable us to drive de-
velopment in the coming years.
With the Labor Reform, Mexico ad-
vances towards a more efficient and flexible
labor market that permits the incorporation
of women and young adults. Meanwhile, the
Economic Competition Reform establishes
clear rules that set competing companies on a
level footing and bring down entry barriers to
new participants across all sectors.
In the same way, the Telecommunications
and Broadcasting Reform encourages effective
competition in the sector, enabling Mexico to
close the digital gap and integrate more Mexi-
cans into the knowledge society. In addition, it
generates great opportunities for new produc-
tive investments and latest technologies.
The Tax Reform increases the State’s finan-
cial capacity and favors public investment in pri-
ority areas for economic activity, such as science,
technology, and infrastructure. In its turn, the
Financial Reform gives place to the conditions
that allow the robust Mexican bank to par-
ticipate more actively in the country’s growth,
through more credit options and at lower inter-
est rates for families and businesses.
Finally, the Energy Reform will allow the par-
ticipation of a higher number of companies, thus
modernizing the sector with more productive in-
vestment and cutting-edge technologies. This en-
sures the supply of electricity and hydrocarbons at
competitive prices for industries and homes.
The transformative reforms are already a real-
ity. Now, the Mexican Government is putting them
into action. To do so, we follow an agenda of ac-
tions in concrete terms that will allow them to be
implemented effectively. By combining the efforts
of authorities, the private sector, and citizens, we
are building a more prosperous Mexico.
.
Enrique Peña Nieto
President of the United Mexican States

Table of Contents November 2014
COVER FEATURE
THE NEW MEXICAN
ENERGY MODEL
From
ProMéxico
Special Report
Green Solutions 2014:
Opportunities for Green
Investment in Mexico
Mexico in the World
Opportunities for Cooperation
between Mexico and the Netherlands
in the Food and Agriculture Sector
16 46
10 BRIEFS12
PHOTOarchive
40
48
50
52
54
Mexico Feeding the World
La Nao Foods
Intergan
Prinsa
CAFESCA
Cool Flavors
Mieles Campos Azules
Comal Foods
Agri-food Industry Figures
Preserving Mexico’s Flavors
Special Feature: Mexican Food Industry
FIGURES
Business Tips
Mexico and Renewable
Energy Generation
22
56
58
60
62
64
Mexico’s Partner
26
28
30
32
34
36
38
Swiber Offshore México
3Tek Solar
Gamesa
Sunpower
Eosol Energy
Newen
Risen Energy México
18
24

The Lifestyle THECOMPLETEGUIDE
TOTHEMEXICANWAYOFLIFE
The
Lifestyle
Briefs
66
PHOTOcourtesyofcirquedusoleil
Fernando Romero:
Beauty, Sustainability,
and Economic
Development
68
PHOTOarchive
PHOTOcourtesyofpacificgolfcourse
Mexico,
a Series of
Contemporary
Snapshots
70
PHOTOcourtesyoffr-ee
RIVIERA NAYARIT,
Mexico’s Pacific Coast Treasure
Nestled between the Pacific and the Sierra Madre
Occidental, in the space of just a few years this
tropical paradise has become one of the country’s
most interesting tourist destinations, whether you
want to relax, take up residence, or do business.
74
PHOTOcourtesyoffernandomontielklint
Protecting
Our Water,
Land, and
Skies
78

7
| Negocios ProMéxico
November 2014
Para exportadores
De
ProMéxico
82
BREVES 84
FOTOSarchivo
Encuentro 1:1,
creatividad de sur a norte
87
La internacionalización
de servicios:
Experiencias del turismo
de reuniones
en Francia
88
Apuntes y reflexiones
para concretar negocios
en el mercado peruano
92
Retos para
la internacionalización
de las pymes Mexicanas
94
REFLEXIONES
EN TORNO
a la sustentabilidad
energética en México
90

9
November 2014
PROMÉXICO
Francisco N. González Díaz
CEO
Karla Mawcinitt Bueno
Communication and Image
General Coordinator
Sebastián Escalante Bañuelos
Director of Publications and Content
sebastian.escalante@promexico.gob.mx
Copy Editing
Felipe Gómez Antúnez
Jorge Morales Becerra Contreras
Advertising
negocios@promexico.gob.mx
Cover Photo
Archive
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CONSEJO EDITORIAL
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Enrique Jacob Rocha
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Francisco Javier Méndez Aguiñaga
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Karla I. Mawcinitt Bueno
This publication is not for sale.
Its sale and commercial distribution are forbidden.

11
FROM
PROMÉXICO.
Few countries can truly claim
such a profound transforma-
tion as Mexico. The New
York Times recently referred
to it as “radical.” Probably
one of the most relevant steps is the trans-
formation of the energy sector. It opens a
great attractive market to foreign investors,
through services, licenses, profit-sharing
and production-sharing agreements. In few
words, for the first time in over 75 years,
private companies can participate in Mex-
ico’s energy sector. A Citibank study esti-
mates that the impact of the energy reform
will attract over 40 billion usd in invest-
ment flows between 2015 and 2019.
In addition, Mexico represents a window
of opportunity for the development of renew-
able energies. Mexico is the third most impor-
tant destination in the world for investment
in solar energy projects and its wind potential
is one of the most attractive. The renewable
energy sector has recorded steady growth in
the country during the last decade. Installed
capacity for energy generation from renew-
able sources has grown substantially and
conditions are ripe for business development
in the sector, as you will discover in this issue.
In order to go deeper into business de-
velopment and opportunities in our coun-
try, this edition includes content related
to the country’s agri-food sector. Mexico
has a gastronomic tradition recognized as
Intangible Heritage by UNESCO. It offers
a vast assortment of products that have
innovated their processes and penetrated
traditional and non-traditional markets.
As a result, the country occupies a privi-
leged role as a producer and supplier of
food and beverages.
Mexico is the leading exporter of beer,
mango, mezcal, papaya, tomato and tequila,
among other products. It excels in the export
of confectionery,baked goods and meat prod-
ucts, to name just a few examples. Moreover,
it is the sector’s second most important sup-
plier to the US and the third largest producer
of processed foods in America.
ProMéxico has driven the formation
of agri-food export consortia in order
to strengthen small producers and help
them to export and internationalize. For-
eign demand for agri-food products from
Mexico has increased significantly, not
only to serve Hispanic consumers, but
also to supply Halal and Kosher markets.
Mexico definitely has many competi-
tive advantages. Energy and agri-food are
just two we want to highlight for the in-
ternational business community.
Welcome to Negocios!
CEO
ProMéxico

BRIEFS BRIEFS
Japanese auto parts maker Sumitomo
Electric Industries plans to build a new
manufacturing plant in the state of Aguas-
calientes. The projected 28 million USD fa-
cility will produce sintered parts for trans-
mission gears and key engine parts.
global-sei.com
AUTOMOTIVE
European aircraft manufacturer Airbus
will open a Center for Research and In-
novation in Aerospace Engineering un-
der the auspices of the Autonomous Uni-
versity of Nuevo León.
AEROSPACE
CUTTING EDGE TRAINING
The 15 million USD center will pro-
vide training for pilots and other airline
operations personnel.
www.airbusgroup.com
SUMITOMO TARGETS
AGUASCALIENTES
PHOTOcourtesyofairbus
AUTOMOTIVE
TOYODA GOSEI
LANDS IN GUANAJUATO
Japanese auto parts maker Toyoda Gosei
will invest 67 million usd to establish a
new manufacturing plant in Guanajuato.
The site is projected to produce radiator
grills, console boxes and other parts for
the region’s automotive OEMs.
www.toyoda-gosei.com
PHOTOarchivePHOTOarchive
PHOTOarchive
ELECTRIC
Brazilian electrical equipment manufacturer WEG will build a
new production plant in the state of Hidalgo, with an investment
of 120 million usd, to provide metallurgical and machining pro-
cesses for metal parts.
www.weg.net
WEG BUILDS NEW PLANT
PHOTOarchive
PHOTOarchive
French electricity company Schneider Elec-
tric will construct Mexico’s first 100% so-
lar-powered building in the northern state
of Nuevo León, which is expected to be up
and running by 2016.
The building, to be located in the city
of Monterrey’s technological research
and innovation park (PITT) –a hub for
local tech firms– will house Schneider’s
design center.
The building, to be constructed with
the support of the federal government and
boasting zero electricity consumption, will
occupy land adjacent to the company’s of-
fices in the IT hub.
www.schneider-electric.com
RENEWABLE ENERGY
CLEAN POWERED
INNOVATION
US-based biotechnology multinational Monsanto inaugurated
a new seed technology research center in the western state of
Jalisco. The new site is planned to centralize the company’s ef-
forts to develop new hybrid and genetically modified strains of
corn. Monsanto expects to invest 90 million usd over the next
five years in its new research center.
www.monsanto.com
BIOTECHNOLOGY
STRONG SEEDS FOR A STRONG INDUSTRY

BRIEFS BRIEFS
PHOTOarchive
Containerisation International and
Lloyd’s List issued their traditional annu-
al ranking of the list of the top 100 global
containerized ports.
According to the publication, eight
ports of Latin America are among the top
100 ports worldwide. The Mexican port of
Manzanillo is ranked 68th worldwide.
According to Lloyd’s, Manzanillo is
the main commercial port for Mexico’s
containerised cargo and one of the five
largest hubs in Latin America.
In 2013, Manzanillo began operations
at the port’s second specialised container
terminal (TEC II), that Philippines-based
International Container Terminal Services
Incorporated (ICTSI) will run under a 37
year concession through Contecon Man-
zanillo.The three stage ICTSI project will
INFRAESTRUCTURE
MANZANILLO IS AMONG
THE WORLD’S TOP 100 PORTS
PHOTOarchive
have the capacity to handle 2 million
TEU annually by 2020.
TEC II, with a first phase 400,000 TEU
capacity, occupies an area of 73 ha and
According to BBVA Bancomer’s Regional
Sector Situation analysis, thanks to the
recently implemented energetic reform in
Mexico, the states of Tabasco, Veracruz,
Chiapas, Puebla, Tamaulipas, Nuevo León,
Coahuila and San Luis Potosí will register
a higher economic dynamism by 2018
than the one they would have observed
without the reform.
According to the document, the larg-
est oil production platform imply that
Tabasco, Chiapas and San Luis Potosí
will accelerate their growth. With the re-
form, Tabasco will grow 7%; Chiapas, just
over 4% and San Luis Potosí, above 5%;
whereas without reform, the expansion of
the Gross Domestic Product (GDP) in Ta-
basco would be close to 4.5%; in Chiapas,
2.5%, and San Luis Potosí, under 4%. “To
enable greater oil production platform in
the coming years is one of the main goals of
energy secondary laws. The benefits of this
will be reflected primarily in those states
that concentrate both conventional and un-
conventional resources,” says the report.
ENERGY
A POSITIVE REFORM
PHOTOarchive
PHOTOarchive
PHOTOarchive
Canadian sports vehicle maker Bombardier
Recreational Products (BRP) plans to begin
construction on its third manufacturing
plant in Mexico in 2014. The 55 million
usd site, to be located in the northern bor-
der city of Ciudad Juárez, Chihuahua, will
manufacture all-terrain vehicles.
www.brp.com
AUTOMOTIVE
BRP’S THIRD IN MEXICO
Spanish renewable energy developer
Acciona Energía has signed a contract
worth 111 million usd with private in-
vestors Actis and Comexhidro for the
design, engineering and construction of a
49.5 MW wind farm in Mexico.
The Ingenio wind farm, located in the
Isthmus of Tehuantepec in Oaxaca, in-
cludes, through additional contracts, the
sale of the project developed by Acciona
Energía México to its new owners, plus the
operation and maintenance of the wind
power complex for 15 years.
RENEWABLE ENERGY The wind farm will be equipped with
33 turbines, each with rated power of 1.5
MW and a rotor diameter of 77 meters,
mounted on 80-meter-high (hub height)
steel towers.
Construction work on the site –near
the Eurus, Oaxaca II, Oaxaca III and
Oaxaca IV wind farms, all owned by
Acciona– is expected to conclude in the
fourth quarter of 2015.
When completed, the Ingenio wind
farm will produce enough clean energy
to power 125,000 Mexican homes, while
avoiding the emission of 206,000 metric
tons of CO2
that would have been pro-
duced by conventional power stations.
www.acciona-energia.es
WINDS OF SUCCESS
In an exercise on energy projections,
BBVA Bancomer considers that the produc-
tion of oil and natural gas will increase 20%
by 2018; however, it also estimates that the
share of hydrocarbon extraction from wa-
ters, generally attributed to Campeche,
would be 20% lower compared to 2014.
Based on the potential growth of these
state economies, BBVA Bancomer predicts
that Mexico’s GDP will grow a percentage
point more than the expected without en-
ergy reform in 2019, to reach 4%.
www.bbvaresearch.com
will have three docks in order to handle
super post-panamax vessels.
www.lloydslist.com
RENEWABLE ENERGY
Mexican solar power developer Iusasol is
building a new photovoltaic cell manufac-
turing plant in Estado de México. The 200
million usd facility is intended to serve
growing demand driven by Mexico’s re-
cently implemented energy reform.
iusasol.com
CAPTURING SUN POWER

17
Negocios ProMéxico |
16 November 2014
November 2014
The event has become a
space for dialogue that
unites the triple helix of the
public and private sectors
and academia, with the
goal of sharing new trends
and linking networks that
develop into innovation and
business opportunities for
the national economy. Thus,
the promotion of a forum
of this scope is fundamental
to motivate the domestic
market and the growth of
green business in Mexico.
undergoing and the potential for the future.
Structural reforms were proposed and ad-
opted in several sectors which are of great
importance for the environment, energy,
and education. They give us a glimpse of the
modernization and optimization of “green”
sectors, allowing sustainable development
and taking our country to a more competi-
tive level in the global economic arena.
In an effort to support the sustainable
products and services industries in Mexi-
co, Green Solutions 2014 will address the
following topics:
PHOTO archive
GREEN
SOLUTIONS
2014:
OPPORTUNITIES
FOR GREEN
INVESTMENT
IN MEXICO
The mitigation of climate change,
economic sustainability, and
care of the environment have
been key components for the
Mexican government, companies,
institutions, and other organizations.
The transition towards the use of
clean energy sources, the reduction
of energy consumption, and support
for sustainable city models will
be crucial components for Green
Solutions 2014.
Almost a quarter of the installed capacity
for energy generation in Mexico is derived
from renewable sources. Installed capac-
ity is currently at 15 gigawatts (GW), but is
expected to reach 35GW by 2027. Mexico
is convinced that the development of clean
technologies and energy generation from al-
ternative sources are elements that cannot be
put aside. For this to be consolidated, more
incentives must be put in place to attract the
green investment needed by the sector.
Green Solutions has been and is one of
the major efforts of the Mexican govern-
ment to promote sustainable business and
attract green investment. As the name sug-
gests, it is a forum to seek and find solutions
that achieve greater energy efficiency, reduce
carbon dioxide emissions, and optimize the
use of natural resources, among other goals.
The event has become a space for dia-
logue that unites the triple helix of the
public and private sectors and academia,
with the goal of sharing new trends and
linking networks that develop into innova-
tion and business opportunities for the na-
tional economy. Thus, the promotion of a
forum of this scope is fundamental to mo-
tivate the domestic market and the growth
of green business in Mexico.
This year will be the 5th edition of
this important event. Green Solutions
2014 will be held on November 5 and 6
and ProMéxico will be joined by the state
of Aguascalientes, which has decisively
pushed the fight against climate change
and care of the environment. This edition
will aim to:
1. Spread Mexico’s potential and com-
mitment to green investment.
2. Transfer public environmental policies
to the business sphere.
BY FRANCISCO N. GONZÁLEZ DÍAZ*
Special ReportSpecial Report
3. Promote business meetings.
4. Offer solutions in terms of financing,
liaison, knowledge of regulations, and
investment opportunities related to the
recent approval of reforms.
5. Communicate the investment opportu-
nities derived from the recent structural
reforms.
Some 3,500 participants are expected.
The main topic of this forum is Green invest-
ment to bring Mexico to its full potential.
The relevance of this topic is directly linked
to the transformation process the country is
-
facturing.
for SMBs.
Green Solutions has successfully held
four previous editions with an atten-
dance surpassing 15,000; 5,000 business
meetings and 115 conferences, panels,
and seminars. In 2014, new horizons are
sought.
The impetus from the Mexican gov-
ernment towards events like Green So-
lutions shows the country’s commitment
to its environmental future, but also to
attaining business opportunities aimed
at promoting the use of clean energy
sources.
Great transformations have been made
a reality thanks to a meeting of minds.
Mexico is pulling together to ensure a
more prosperous, greener Mexico. N
*CEO of ProMéxico.

19
18 November 2014
November 2014
PHOTO courtesy of pemexCover Feature Cover FeatureCover Feature Cover Feature
This comprehensive Energy Reform
aims to boost economic growth, promote
social development and take care of the
environment, enhancing the country’s
competitiveness and increasing its produc-
tion and industrial capacity. The design
of the new energy model was based on
international experience and best prac-
tices, as well as on six basic principles: 1)
hydrocarbons in the subsurface belong to
the nation, 2) free market access and di-
rect and fair competition amongst State-
owned enterprises and private companies,
3) strengthening of regulatory bodies, 4)
transparency and accountability, 5) sus-
THE NEW MEXICAN
ENERGY MODEL
On August 12, 2013 the Mexican government announced its constitutional
Energy Reform initiative to attract investment and modernize the
energy sector. After more than 14 months of open debate, the design
and institutional framework stage of the Energy Reform was concluded
last October 31 with the publication of the operational rules of the new
legislation and institutions of the energy sector.
BY THE MINISTRY OF ENERGY
A fundamental aspect of the
reform is the transformation
of both Pemex and
the Federal Electricity
Commission (CFE) into State-
owned productive enterprises,
so that now they have the
obligation to generate value
for their owners, that is, for
all Mexicans.
tainability and environmental protection,
and 6) maximizing the State’s revenue for
the Nation’s long-term development.
Mexico now has a modern energy
model. The hydrocarbons sector allows
private investment in the exploration and
exploitation of hydrocarbons, in the pro-
cessing, transport and storage of hydro-
carbons, petroleum products and petro-
chemicals, as well as in distribution and
marketing. In the power sector, private en-
terprises can now invest in the generation
and supply of electricity and, on a contract
basis, in the expansion and modernization
of the transmission and distribution grids.
The intention is to create competitive mar-
kets that enable, in the short and medium
terms, the reduction of energy costs, a se-
cure supply, and to reach all current and
potential consumers in the most efficient
and sustainable way.
These changes throughout the energy
value chain adhere to one of the central
goals of the current Administration: to
modernize the country’s institutional ar-
rangement to give the Mexican economy
heightened competitiveness. Along with
the education, financial, tax and telecom-
munications reforms, the transforma-
tion of the energy sector will further the
dynamic performance of all the country’s
production forces, bringing greater pros-
perity to the population as a whole.
Regarding institutions, greater pow-
ers are given to the Ministry of Energy
(SENER) and to the energy regulatory
bodies such as the National Hydrocarbon
Commission (CNH) or the Energy Regula-
tory Commission (CRE). National energy
control centers are also created to encour-
age competitive natural gas and electricity
markets (Cenagas and Cenace), as well as
an independent regulator called the Na-
tional Industrial Security and Environmen-
tal Protection Agency of the Hydrocarbons
Sector (ANSIPA). Finally, the Mexican Pe-
troleum Fund for Stabilization and Devel-
opment –a public trust fund managed by
Mexico’s Central Bank– was created and
will be responsible for the long-term man-
agement of oil revenues.
A fundamental aspect of the reform is
the transformation of both Pemex and the
Federal Electricity Commission (CFE) into
State-owned productive enterprises, so
that now they have the obligation to gen-
erate value for their owners, that is, for all
Mexicans. To achieve that aim, their inter-
nal structure was modernized to resemble
that of energy companies in their field, with
a professional management board and the
flexibility to partner with third parties, to
manage their budgets autonomously and
seize the business opportunities they deem
appropriate. The State is no longer a man-
ager but an owner.
As a result of Round Zero –process by
which the State granted Pemex the fields
for which it proved to have financial,
technical and execution capabilities– Pe-
mex received 20,589 million barrels of oil
equivalent (MMboe) in proven and prob-
able reserves (2P), enough to guarantee
PHOTOarchive

21
20 November 2014
November 2014
PHOTO archiveCover Feature PHOTO archiveCover Feature
Volume* 4yr estimated
investment**
Surface
(Km2)
Blocks
(Number)
Annual
estimated
investment**
109
60
141
25,903
2,597
612
14,606
3,782
1,557
19,000
15,100
16,400
4,750
3,775
4,100
*Million Barrels of Oil Equivalents / **Million  / 1
In 10 contracts
Exploration
(Prospective
resources)
Pemex
Farm-0uts
(2P Reserves)
Extraction
(2P Reserves)
Total: 183 Total: 29,112
Total: 183
Total: 50,500
Total: 12,625
15.5 years of production at the current
rate. This figure represents 100% of the
company’s requested reserves and 83%
of the nation’s 2P reserves; the remaining
17% of 2P reserves are available for future
bidding rounds.
Regarding prospective resources, Pe-
mex received 21% of the nation’s total
and 67% of what it asked for. These en-
titlements guarantee Pemex’s solid plat-
form to meet the new scheme of competi-
tion, while the State ensures a minimum
production level. Pemex will be able to
participate in later bidding rounds on an
equal ground with other bidders. Pemex
also has the possibility to request the mi-
gration of its entitlements to contracts,
and of forming partnerships. In the inter-
ests of transparency and suitability, the
selection of its partners in these farm-outs
will be the result of an international pub-
lic bid conducted by the CNH. Until now,
the company has announced its intention
to migrate 14 fields grouped into ten con-
tracts, with total estimated 2P reserves of
1,557 MMboe.
Besides Pemex’s entitlements, the State
will conduct exploration and extraction
activities through contracts with private
companies, state productive enterprises or
partnerships between the two. The design
of the contractual process provides for the
participation of different agencies in order
to maintain an institutional framework of
checks and balances.
SENER will be in charge of the selec-
tion of the areas that will be up for bid,
the design of the contracts and the bidding
guidelines. The kind of contract will be de-
cided based on the type of resources in the
bidding areas and following international
best practices.
The Ministry of Finance and Public
Credit (SHCP) will be in charge of defin-
ing the fiscal terms and awarding vari-
ables. In the interests of transparency
and in order to minimize discretional ac-
tions, the awarding variables will be emi-
nently economic, and could be payment
to the government, a work commitment
beyond the minimum or a combination
of both.
The bidding processes, including
awarding and signing of the contracts on
behalf of the State, will be performed by
the CNH, which will also supervise their
operation, approve the exploration and
development plans and authorize the sur-
face exploration and drilling of explor-
atory wells. The Ministry of Economy
(SE) will monitor compliance with local
content goals, while the ANSIPA will be
responsible for the oversight of industri-
al safety and environmental protection.
Finally, all public revenue, other than
taxes, from hydrocarbons exploration
and extraction activities will be managed
by the Mexican Petroleum Fund.
On August 13, an initial approxima-
tion of the blocks that will be offered up
for bidding as part of Round One was
announced to the public. From the geo-
logical information available, 169 blocks
with high resource potential were iden-
tified –60 of them can be classified as
development or extraction blocks while
109 of them as exploration blocks.
The first approximation to Round
One includes shallow water blocks, un-
conventional fields, and deep water. The
goal of this diversity is to attract com-
panies of different sizes and specialties.
The expected investment for this first
round, including Pemex’s farm-outs, is
estimated at more than 12.6 billion USD
per year, that is, 50.5 billion USD over the
2015 – 2018 period.
The tendering of the different types
of areas will be staggered throughout
2015. The terms and conditions for shal-
low waters will be published in the first
two weeks of November, followed by ex-
tra heavy oil in the first half of December.
In the case of Chicontepec and uncon-
ventional resources, the terms and condi-
tions are expected to be published in the
first half of January 2015, whereas those
of onshore and deep-waters will be pub-
lished in the first two weeks of February
2015 and March 2015, respectively. The
first contracts are expected to be awarded
between June and September 2015, so that
by the end of next year, the Energy Reform
will be yielding its first results in terms of
hydrocarbon production.
This reform opens up important busi-
ness opportunities for both local and for-
eign investors. Mexican companies are
called upon to take a leading role, either
as service providers, international busi-
ness partners or operators. The State is
working to build thorough public poli-
cies that will create a national energy
industry and stimulate the emergence of
production chains and high-paying jobs,
as has already happened in other indus-
tries such as automotive and aerospace.
In designing the legal framework for
the operation of the Mexican energy sec-
tor, priority was given to adhering to in-
ternational best practices. One of the ad-
vantages of being among the last coun-
tries to open up to private investment is
the opportunity to learn from previous
experiences, both positive and otherwise.
With the guidance of the State and strict
transparency rules, the participation of
private investment will inject dynamism
to an industry that had been closed off
for decades. With this new energy mod-
el, Mexico will be able to ensure energy
supply for the development and competi-
tiveness of the national economy for de-
cades to come. N
Mexico now has a modern
energy model. The hydrocarbons
sector allows private investment
in the exploration and
exploitation of hydrocarbons,
in the processing, transport
and storage of hydrocarbons,
petroleum products and
petrochemicals, as well as in
distribution and marketing.
In the power sector, private
enterprises can now invest in the
generation and supply
of electricity and, on a
contract basis, in the
expansion and modernization
of the transmission
and distribution grids.
GRAPHIColdemar
Cover Feature

23
22 November 2014
November 2014
Business TipsBusiness Tips
MEXICO AND RENEWABLE
ENERGY GENERATION
With a strong commitment to the development of renewable energies, Mexico is seeking to meet its energy needs
and at the same time display global responsibility by contributing to the reduction of emissions responsible for the
greenhouse effect.
BY MARÍA CRISTINA ROSAS *
In the early 19th century, 95% of the
primary energy consumed in the world
came from renewable sources. A century
later, that percentage had fallen to 38%
and at the beginning of this century it
stood at just 16%. That trend seems to
be reversing, as in many industrialized
countries the proportion of renewable
energy has grown considerably in the
last two decades.
Global investment in renewable en-
ergy has grown dramatically: in 2004 it
was 22 billion USD, rising to 130 billion
USD in 2008, 160 billion USD in 2009,
and 211 billion USD in 2010. About half
of the estimated 194 gigawatts (GW)
of new electricity capacity in the world
in 2010 was renewable energy. In early
2011, at least 118 countries had policies
in place to support renewable energy or
some kind of national goal or quota, well
above the 55 countries that had such
policies in 2005.
The growing interest in renewable
energies is due to several factors. First,
these energy sources contribute to reduc-
ing greenhouse gas (GHG) emissions.
They also reduce energy dependence and
contribute to job creation and techno-
logical development. The arguments in
favor of renewables have been endorsed
by numerous analyses and are supported
by major international institutions. As
environmental sustainability policies be-
come consolidated around the world, it
is necessary for countries to include envi-
ronmental impact studies in their devel-
opment plans, which inevitably leads to
increased use of renewables.
The use of renewable energy brings
with it several advantages, which in-
clude:
of energy, enabling countries to meet
their socio-economic needs.
-
sources.
The energy generated by renewable
sources worldwide grew 8.3% in 2013, rep-
resenting 22% of total energy production.
Meanwhile, jobs in the sector increased 14%
to 6.5 million. According to the Renewable
Energy Policy Network for the 21st Century
(REN21), in 2013, the world developed re-
cord power generation capacity from renew-
able sources of 1,560 GW,meaning that now
more than a fifth of world energy production
comes from renewable sources.
While developed countries have energy
policies that favor renewable sources, a
growing trend is also observed in emerging
economies to promote their development.
To date, 95 developing countries have pro-
posed promotion of clean energy genera-
tion technologies.
The list of the five leading countries in
energy generation from renewable sources is
headed by China, a country which is respon-
sible for 24% of renewable capacity world-
wide. In 2013, for the first time, the energy
derived from hydropower, photovoltaic and
wind sources exceeded that produced from
fossil fuels and nuclear energy in this coun-
try. The US is in second place, followed by
Brazil, Canada and Germany.
Throughout this decade, the falling
cost of technologies that make use of re-
newable energy sources has led to high
growth rates in manufacturing, particu-
larly in solar photovoltaic technology but
also wind power and biofuel production.
Mexico made a commitment to reduce
GHG emissions by 30% by 2020 and
50% by 2050, according to the Climate
Change Law passed in June 2012, in order
to comply with the provisions agreed at
the United Nations (UN) and in the Kyoto
Protocol, where the country voluntarily
imposed a reduction in the use of fossil
fuels for electricity generation of 65% by
2024, 60% by 2035 and 50% by 2050. In
addition, Mexico has set a goal of gener-
ating 35% of power in the country from
renewable sources by 2024. In that regard,
numerous opportunities are emerging in
the area, to which the recent energy reform
must be added.
Under the National Energy Strategy
2012-2026, the Special Program for the
Development of Renewable Energies, pro-
grams on bioenergy, the Program for the
Promotion of Solar Water Heaters in Mex-
ico (Procalsol) and the wider evolution of
the energy market in the coming years, we
can expect an expansion of the infrastruc-
ture using renewable energy to generate
electricity, heat and biofuels in the country.
Mexico can achieve the goal it has set itself by increasing
wind power alone. However, it is expected that as part of
that goal, it will also enjoy a boost to power generation
from other renewable sources.
Mexico can achieve the goal it has
set itself by increasing wind power alone.
However, it is expected that as part of that
goal, it will also enjoy a boost to power
generation from other renewable sources.
Geothermal energy, for example,
presents low relative costs. If geothermal
resources are achieved equivalent to the
quality of steam deposits found to date,
geothermal generation could amount to
2.3% of total capacity by 2026. Today,
Mexico is the fourth largest producer of
electricity from geothermal energy, behind
only the US, the Philippines and Indonesia.
There is already an initiative of public
and private bodies in place to set up three
research consortia for renewable technolo-
gies allocated through the Sustainable En-
ergy Sector Fund, aimed at identifying and
supporting the country’s capabilities for
expanding energy generation, with the em-
phasis on geothermal energy.
In that regard, the Transmexican volca-
nic axis has been identified as a priority area
crossing the country transversely from Co-
lima to the borders of Puebla and Veracruz
states with significant areas of thermal activ-
ity, whose development may help establish
Mexico’s position as one of the largest gen-
erators of geothermal energy on the planet.
Meanwhile, as reported by the Euro-
pean Photovoltaic Industry Association
(EPIA), Mexico is among the three most
attractive countries in the world to invest
in photovoltaic projects. States like So-
nora, Chihuahua, Durango and Baja Cali-
fornia have the land area and potential for
installing electricity-generating capacity
using solar concentration fields. Similarly,
the levels of solar radiation along the Pa-
cific coast and the states in the northeast-
ern region permit further expansion of so-
lar panel installations in the country.
Thus the outlook for renewables is ex-
tremely promising. According to informa-
tion from ProMéxico, from 2008 to date
it has attracted 47 multiyear green invest-
ment projects from abroad –mostly in the
wind sector– totaling more than 8.2 bil-
lion USD and more than 4,950 new jobs.
According to ProMéxico, the renewable
energy sector receives the second highest
amount of confirmed investment, exceeded
only by the automotive sector. N
*Professor and researcher in the Political and
Social Sciences Faculty, National Autonomous
University of Mexico (UNAM).
-
sumers.
production, consumption and distri-
bution.
-
sources, meaning they are friendly
to the environment and can promote
community development.
Unlike hydrocarbons, renewable ener-
gies are inexhaustible. For example, the sun
produces 2,850 times more energy than is
needed in the world today; wind energy has
the potential to meet that goal 200 times;
biomass 20 times; geothermal five times;
waves and tides trice, and hydropower once.
According to the Research Association for
Solar Power, the solar radiation that reaches
Earth in a single day holds enough energy to
meet current demand for eight years.
PHOTO ARCHIVE

25
24 November 2014
November 2014
INFOGRAPHIC oldemar FiguresFigures
0
500
1000
1500
2000
2500
That is almost
one quarter of
the country’s
installed
capacity to
generate
electricity.
It is expected that by
2024, 35% of the
electricity generated in
the country will come
from clean technologies.
By 2035 that ﬁgure will
be 40% and 50% by 2050.
The regions with the greater
potential for wind energy in
Mexico are the Isthmus of
Tehuantepec (Oaxaca), the
Gulf of Mexico, la Rumorosa
(Baja California) and the
Yucatán Peninsula.
Average daily solar
radiation during the
year in Mexico is
5.5 kilowatt-hour per
square meter (kWh/m2
),
but in some regions it
may exceed 8.5 kWh/m2
.
Mexico is part of the
"Sun belt", which
means it is among the
ﬁve most suitable
countries for the
development of
photovoltaic projects.
Mexico has the potential
to generate 6,500,000 GWh
per year from solar energy.
That is equivalent to
approximately 27.6 times
the country’s total consumption
of electricity in 2013.
Mexico has the largest
manufacturing base
of photovoltaic panels
in Latin America,
with a production
capacity of over
737 MW per year.
Mexico has an enormous
capacity to generate electricity
from renewable sources. In
2013, the country’s installed
capacity to produce energy
upon renewable sources was
14,891 megawatts (MW).
A BRIGHT FUTURE
Renewable energy in Mexico
WHERE IS RENEWABLE
ENERGY PRODUCED IN MEXICO?
Main states with installed
capacity in 2013
Stations in operation and
under construction, MW
A GROWING BUSINESS
Investment in renewable
energy projects in Mexico
(million , estimated upon investment announcements)
HOW
MUCH
RENEWABLE
ENERGY DOES
MEXICO
GENERATE?
MW, 2013
Sources: Federal Electricity Commission (CFE) / Energy Regulatory Commission (CRE) / FDI Markets.
11,694
0 12,000
6,000
3,000 9,000
1,638
0 12,000
6,000
3,000 9,000
823
0 12,000
6,000
3,000 9,000
Hydro Wind Geothermal
76
0 12,000
6,000
3,000 9,000
Solar
661
0 12,000
6,000
3,000 9,000
Biomass
0 150
75
120
0 1,000
500
976
0 200
100
169
0 4,000
2,000
3,332
0 900
450
890
MWMWMW MW MW
Installed
capacity
Capacity under
construction
*Only includes hydroelectric plants with installed capacity of 30 MW or less.
2,707 3319*
Oaxaca
1 10 136
Baja California Sur
572* 40 268
Veracruz
200 81 33
San Luis Potosí
500 13
Tamaulipas
24* 539 570 37
Baja California
37* 2 386
Sonora
324 28
Nuevo León
56* 50 8466
Jalisco
501 33 37
Coahuila
NUMBER
OF PROJECTS
‘13‘11 ‘12‘10‘09‘08‘07‘06‘o3
2,922
2,423
1,897
869
1,000
874
91
273
750
1
#
1
1
3
4
4
5
7
14

27
26 November 2014
November 2014
Mexico’s PartnerPHOTOS courtesy of swiber offshore mexicoMexico’s Partner
long and 36 inches in diame-
ter –almost the same distance
as the Panama Canal– that
we built under the sea in the
area of Campeche.”
Based on that experience,
Swiber decided to settle its
strategic offices in Mexico in
order to expand its opera-
tions to the Americas. Also
as a reaffirmation of its long-
term commitment, Swiber
flagged its five vessels with
the Mexican flag.
“A good definition of
what the company does is de-
veloping offshore fields. Once
various studies have been car-
ried out showing it is ready
to produce, a company like
Swiber comes along to build
the installations for transport-
ing the oil from the well to
land. That was what we did in
that first project and what we
continue to do in others with
Pemex,” Villegas says.
Internationally, the firm has
an operating fleet of 51 vessels
–comprising 38 offshore and
13 construction vessels– in re-
gions such as Asia-Pacific, Mid-
dle East, and Latin America.
In less than three years,
the company has invested
about 250 million USD in
Mexico. In August 2014,
Swiber executives announced
to the press the firm’s inten-
tion to invest about 700 mil-
lion USD in the country by
2017, thanks to the reform in
the energy sector implemented
by the Mexican government.
“Our attention has been
focused mainly on the Mexi-
can market but we also want
to explore in Colombia and
we are looking at other op-
portunities in the region,
including the Caribbean coun-
tries, Peru, Argentina, and
Venezuela, virtually all Latin
American countries, and we
are even thinking of the US,”
Villegas adds.
Entering Mexican waters
was no accident for Swiber
Offshore. Villegas explains
that the country has led to big
profits for the company.
“It is a country with an
excellent geographical posi-
tion but Mexico also has a
well-earned reputation in the
world, backed up by economic
policies, and has an excellent
command of its macroeco-
nomic indicators. It has signed
free-trade agreements with
several countries and has been
a pioneer in the field. For ex-
ample, it is in negotiations to
join the Trans-Pacific Partner-
ship (TPP), to which Singapore
is a party. All that means that
Mexico’s business practices
meet global standards,” says
Antonio Villegas.
Following the energy re-
form, Pemex will be one of
the main customers for Swiber
Offshore in Mexico. Villegas
reveals that the company an-
ticipates the national energy
sector will be one of the most
important markets in the me-
dium and long term.
“That will be a very im-
portant market for Swiber in
the next five years; it is a ques-
tion of combining the energy
reform with other factors.
Pemex is a very productive
business […] and the idea is to
establish capital investment of
about 700 million USD, with
larger modern fleets working
offshore. A feature of our fleet
is that it is made of vessels no
more than five years old and
that gives it a special value,”
Villegas said.
The technological and
innovation component is im-
portant for a company like
Swiber Offshore. In India, for
In less than three years, the company has
invested about 250 million USD in Mexico. In
August 2014, Swiber executives announced to
the press the firm’s intention to invest about 700
million USD in the country by 2017, thanks to
the reform in the energy sector implemented by
the Mexican government.
example, the company man-
aged to put in place a deepwa-
ter platform weighing approxi-
mately 13,000 tons. It did so
by working back-to-front:
building the infrastructure on
land and then using a special
vessel to position it at sea by a
“float over” method (the plat-
form slides over the water and
is installed). That represented
savings of up to 100 million
USD for the client.
Mexico has surpassed
Swiber Offshore’s expectations.
The future of the firm in the
country will be linked to the
oil and gas industry over the
next few years, says Villegas.
“There are great expectations
for the energy reform, especial-
ly for Mexico’s future, and we
are ready to make our contri-
bution. I am pleased with what
Mexico has achieved and the
changes in the energy industry
that are intended to create a
more prosperous and efficient
industry, as well as making it a
more competitive country,” he
concludes. N
www.swiber.com
SWIBER OFFSHORE MÉXICO,
THE TREASURE THAT LIES
IN MEXICAN WATERS
Having established itself in Mexico, Singaporean company Swiber Offshore has
decided to double its investments over the next ﬁve years. The idea is to invest up to
700 million  in the Mexican energy sector.
BY ANTONIO VÁZQUEZ
Less than three years ago,
Mexico was totally unknown
to Swiber Holdings Limited, a
Singapore company and lead-
ing global integrated construc-
tion and support services pro-
vider to the offshore oil and
gas industry. After a big proj-
ect carried out for Petróleos
Mexicanos (Pemex) the firm
was surprised at what it meant
to invest in Mexico.
With 18 years’ experi-
ence, more than 2,500 em-
ployees worldwide, and list-
ings on the Singapore Stock
Exchange, Swiber came to
Mexico in 2012 to work in
a project that consists in the
procurement, transportation,
and installation of a pipeline
in the Gulf of Mexico.
Antonio Villegas, Presi-
dent of Swiber Offshore in
Mexico, clearly describes the
company’s first project in
Mexico: “A pipeline 77 km

29
28 November 2014
November 2014
PHOTOS courtesy of 3tek solar Mexico’s PartnerMexico’s Partner
3Tek SOLAR competed with US companies to win the
bid for the huge development at Plantronics. Once it
had secured the contract, the company leveraged its 20
years of experience in design and implementation of
construction projects in the industrial and commercial
sectors operating as Tri Tektura.
At the Plantronics plant,
the 1.16 MW photovol-
taic system was installed
with 4,300 solar modules
occupying an area the size of
two soccer fields. With such
a large-capacity system, the
Plantronics installation can
generate close to 2 GW hours
of clean energy per year, which
is equivalent to an annual re-
duction in emissions of 1,360
tons of carbon dioxide (CO2
).
“Nationally, I know of no
other company that has inte-
grated a roof-top solar system
on par with our Plantronics
installation,” says the director
of 3Tek SOLAR.
FULL SERVICE
3Tek SOLAR competed with
US companies to win the bid
for the huge development
at Plantronics. Once it had
secured the contract, the com-
pany leveraged its 20 years of
experience in design and im-
plementation of construction
projects in the industrial and
commercial sectors operating
as Tri Tektura. Additionally,
3Tek SOLAR provided its ex-
pertise acquired over five years
in power-needs analysis, and
integration of alternative en-
ergy generation technologies.
“We developed a complete
EPC turnkey package: engi-
neering; materials and equip-
ment procurement; permitting;
and system construction,”
Montoya recalls.
During the prospecting
stage, it was necessary to
think about the location of
the solar power installation
from the viewpoint of the
local geographical and spatial
elements. A basic premise of
Hector Montoya is that in-
dustrial building design is all
about maximizing long-term
operations by reducing energy
costs and managing natural
resources. So, for the Plan-
tronics project it was necessary
to assess how optimal energy
would be produced, at what
times throughout the day, and
how it would interconnect
with the electricity grid. Fur-
ther consideration was given
to analyzing the best options
for monitoring the system
once it was in operation.
For the execution of the
work, approximately 100 peo-
ple were hired for the better
part of a year. According to
Montoya, “the staff was well
trained to carry out a project
of this magnitude with the
expected quality standards, on
time, and within budget.”
The technology providers
were hired in the US, while the
wiring and support systems
contracts were allocated to
local businesses. The advanced
monitoring system was com-
missioned from a US company
that provides the service over a
five-year period. This enables
the customer to obtain real-time
power generation data anytime
during the day, how much is
being produced, and what the
average amount of generation
will be for a given period.
SHIFTING THE PARADIGM
“There is a new mindset and
culture to be developed in
Mexico,” says Héctor Mon-
toya. From his point of view,
Plantronics broke away from
deep-seated beliefs in Mexico
about the reliability of alter-
native energy systems. This
highly successful giant step
forward has served to trigger
and expand new economic
opportunities and establish an
area of expertise in the solar
industry in Mexico.
3Tek SOLAR markets
itself as a company that bases
its work on high standards of
quality, safety and sustainabil-
ity –a company able to provide
and replicate effective prac-
tices. Given current economic
conditions, in which interest in
green energy and the benefits
of the transitioning to them
is quickly spreading, 3Tek
SOLAR is collaborating with
ProMéxico to plan new paths
for further expansion.
“Business leaders are going
to realize that they should not
miss out on taking advantage
of the sun and the free, clean
energy it provides. Further-
more, the openness to renew-
able energy is now clearly
defined in local and national
regulations. As part of that
openness, a tax benefit has
been established that will pro-
mote the growth of this sector
as well as the company itself,”
said Montoya.
“Broader adoption of re-
newable energy systems may
take some time, however it is a
process that we are excited to
be a part of and to take a lead-
ing role in. Together with inno-
vative industrial leaders such as
Plantronics and skilled solar in-
tegrators like 3Tek SOLAR, we
will most certainly consolidate
its success throughout Mexico,”
he concludes. N
www.3teksolar.com
IT’S TIME TO TURN AND FACE THE SUN
3Tek SOLAR, Inc. recently designed and installed the largest and most ambitious self-supply rooftop solar
project in Mexico. Such an achievement is the optimal platform from which to lead and revolutionize the
country’s adoption of green energy.
BY OMAR MAGAÑA
On September 27, 2014 the
first gigawatt was generated
by 3Tek SOLAR’s sizeable
photovoltaic installation on
the Plantronics factory that
manufactures telecommunica-
tions components in Tijuana,
Baja California –serving as a
70% self-sufficient clean en-
ergy producer.
For 3Tek SOLAR, the
company responsible for the
design and implementation of
the project –the largest of its
kind in the private sector in
Latin America– this is more
than good news. It is a testa-
ment to the effectiveness and
value of what 3Tek SOLAR
has promoted over the last
five years among Mexican
entrepreneurs: self-supply
power generation from re-
newable sources. According
to the company, this is the
ideal moment to invest in
renewable energy and see the
immediate financial and envi-
ronmental benefits of energy
self-sufficiency.
Héctor Montoya, Director
of 3Tek SOLAR, emphasizes
that the considerable cost-
savings exhibited by the moni-
toring system in the Plantron-
ics photovoltaic installation
should clear away any doubts
or myths about alternative
energy generation. The signifi-
cant results in projects such as
this one, clearly demonstrate
that investments in solar en-
ergy produce immediate and
tangible results and that com-
panies who are committed to
the idea will see marked sav-
ings in their operating costs.
When Plantronics commis-
sioned 3Tek SOLAR to devel-
op their photovoltaic energy
system, its long-term goal was
to maintain constant savings
of 70% of its current energy
consumption, remarks Mon-
toya. He recalls a phrase used
often by executives in the solar
industry in relation to cost
reductions from renewable
energy investing: “Going green
makes you green (dollars).”
“In most cases, the in-
ternal rate of return is in
excess of 14%. For financial
analysts, that is a very good
number, if not a great one,”
says Montoya.
Systems that capture solar
radiation and convert it into
electricity allow companies to
fix resource costs at current
prices over the long term.
According to 3Tek SO-
LAR, the average lifetime of
photovoltaic modules is over
30 years, based on the manu-
facturers’ own standards.
Moreover, since the systems
have no moving parts, main-
tenance costs are minimal.
Therefore, an investment in a
solar energy system generally
pays for itself eight to nine
times over the course of its
lifetime.

31
30 November 2014
November 2014
PHOTOS courtesy of gamesa Mexico’s PartnerMexico’s Partner
According to information
from the firm, Gamesa has in-
stalled more than 30,000 MW
in 45 countries and manages
the operation and maintenance
of about 19,500 MW. As a
developer and builder of wind
farms, it has installed 6,400
MW and has a portfolio of
16,300 MW at varying stages
of development.
In Mexico, the company
has installed around 1,400
MW and performs operation
and maintenance services
for a further 1,000 MW. As
a developer it has built 244
MW and has a large portfolio
under development.
For Suárez there is no
doubt about Gamesa’s leading
position in the country and
future dominance in a market
that will place greater empha-
sis on clean energy over the
next decade.
“It depends on who you
ask but overall the commitment
to renewable energy in Mexico
is strong. The goal set by the
Ministry of Energy (SENER)
in 2014 is that 35% of energy
produced in the country should
come from renewable sources.
Then there is the Special Pro-
gram for Renewable Energy,
which sets a target of 8,700
MW of installed capacity of
wind power by 2017, which
would be around 5,200 MW
more than currently installed,
according to annual estimates
of installed wind capacity es-
tablished in the program itself,”
says Suárez.
To get an idea of the im-
portance of wind energy in the
renewables mix, the same pro-
gram sets a target of 483 MW
of installed solar energy capac-
ity for 2017, while installed
capacity for geothermal power
should reach 962 MW. Only
generation from hydro power
tops wind, with a projected
installed capacity of 12,551
MW by 2017.
On that basis –leaving
aside Brazil, which has a
separate administration within
Gamesa– Mexico is recognized
as the largest market in Latin
America and as a result the
corporation has a special fo-
cus on the country and, from
there, on strategies for Central
and South America.
MAINTAINING
THE DIFFERENTIATING
FACTORS
Gamesa is a corporation that
develops solutions for the
field of renewables: it manu-
factures and markets its own
turbine models on 2-2.5 MW
and 5 MW platforms, in ad-
dition to those in the offshore
division for coastal water
applications; it promotes,
develops and sells wind farms,
including their operation and
maintenance and invests in
researching and designing
technologies that will produce
Among the recent announcements by the company in the country, in
addition to the designation of Hipólito Suárez as CEO, of note is the
partnership with Santander bank for the development of wind power
projects with a generation capacity of up to 500 MW in the state of
Oaxaca over the next three years.
energy more efficiently from
the sun, water, and wind.
“We have a presence
across the value chain: we
develop our own projects, we
supply the machines –a niche
in which we are also leaders–
and we provide maintenance.
In one way or another, our
understanding of the entire
value chain provides us with a
benefit,” says Suárez.
“In the case of Mexico, we
have additional benefits due to
our proximity to customers and
our flexibility. In addition, our
agreement with Santander for
the development of 500 MW
in the Oaxaca area puts us in a
very good position,” he adds.
What lies on the horizon
as a result of the energy reform
in Mexico? Suárez highlights
three characteristics of the
emerging scenario: 1) a large
market in terms of electricity
GAMESA
REMAINS A REFERENCE
POINT
Recent announcements by Gamesa in Mexico point to its
continued and growing involvement in a market where
it has set itself clear goals ahead of the growing need for
energy from renewable sources.
The largest manufacturer of
wind turbines in Spain, one
of the top five manufacturers
worldwide and one of the
most important firms in the
development of wind proj-
ects worldwide, Gamesa is
committed to maintaining its
leadership in Mexico, where
it is investing heavily in the
renewable energy sector and,
as a result, has become the
nerve center of operations for
Gamesa in Latin America.
Among the recent an-
nouncements by the company
in the country, in addition to
the designation of Hipólito
Suárez as CEO, of note is the
partnership with Santander
bank for the development of
wind power projects with a
generation capacity of up to
500 MW in the state of Oaxa-
ca over the next three years.
“We aim to establish a
clear position in Mexico
and to continue working in
the other economies in the
region while maintaining a
strong presence in them: this
is an aggressive but feasible
growth plan,” says Hipólito
Suárez.
Following a period outside
the corporation, which he was
part of for 15 years, Suárez
returned in 2013 as Deputy
Director for Mexico and Latin
America. Upon his return,
he acknowledges, he found a
company “with a more diversi-
fied position and greater inter-
national presence.”
BY OMAR MAGAÑA
demand; 2) regulatory stability:
“We sense it will be a market
with significant legal certainty
and that is a great foundation
on which to take forward en-
ergy projects in general,” says
Suarez, and 3) local capacity
for the generation of suppliers
that the sector requires.
In relation to that last
point, Hipólito Suárez reveals
that Gamesa is locating sup-
pliers of components for their
wind turbines in Mexico. As
regards wind farm construc-
tion projects in the country,
Gamesa is working with Mexi-
can suppliers of engineering,
civil engineering, and electrical
work. The latter, according
to Suárez, has involved the
recruitment of a thousand
people working on parallel
construction projects. N
www.gamesacorp.com

33
32 November 2014
November 2014
Mexico’s PartnerPHOTO courtesy of sunpowerMexico’s Partner
HARNESSING
THE POWER
OF THE SUN
As a global solar energy solutions company,
Sunpower designs, manufactures and
delivers high efﬁciency solar solutions for
homes, businesses and utilities.
BY PROMÉXICO
In early October 2014, the company
announced that its SunPower E-Series and
SunPower X-Series solar panels manufactured
in Mexico, were awarded the Cradle to Cradle
Certified Silver distinction by the Cradle to
Cradle Products Innovation Institute.
Founded in 1985 and headquar-
tered in San Jose, California,
Sunpower operates in Africa,
Asia, Australia, Europe, North
America, and South America.
Since 2011, SunPower has been
majority-owned by Total, the
fifth largest publicly-traded
energy company in the world.
In 2011 the company
opened a solar panel manu-
facturing operation in Mexi-
cali and in 2013 it estab-
lished offices in Mexico City.
Today, SunPower operations
in Mexico employ more than
1100 people.
In less than three years,
SunPower Mexico has become
the company’s largest mod-
ule assembly site by output.
“Our manufacturing facility is
320,000 square feet and has
quickly grown to employ more
than 1,000 employees to be-
come our largest module man-
ufacturing facility by output.
Its proximity to our North
American customers improves
our responsiveness, delivery
times and carbon footprint,”
says Ingrid Ekstrom, Corpo-
rate Communications Director
at Sunpower.
A MATTER OF QUALITY
“We manufacture the most
efficient and reliable solar
panels on the market today,
and we also design and build
solar power systems and
technology for residential,
commercial and solar power
plants,” says Ingrid Ekstrom,
Corporate Communications
Director at Sunpower.
In early October 2014, the
company announced that its
SunPower E-Series and Sun-
Power X-Series solar panels
manufactured in Mexico, were
awarded the Cradle to Cradle
Certified Silver distinction by
the Cradle to Cradle Products
Innovation Institute.
Sunpower’s are the world’s
first and only solar panels
to achieve that certification
–which is a comprehensive
product quality standard that
evaluates product design,
manufacturing, corporate
citizenship and ethics prin-
ciples–, based on the sustain-
able manufacturing processes
implemented at the company’s
facility in Mexicali.
In addition to manufac-
turing high efficiency panels
in Mexico, the company is
also working to develop solar
power plants to help reduce
the country’s dependence
on fossil fuel-based energy
sources. SunPower has more
than 1,500 megawatts of solar
power plants operating around
the world today.
MEXICO’S SOLAR MARKET
Sunpower expects that the
energy reforms in Mexico will
open the market to competition
and innovation, and solar will
be a big part of that.“We see
very interesting opportunities in
the utility-scale space, combined
with direct energy sales to in-
dustrial, commercial, and public
customers,” says Ekstrom.
Since its founding in 1985,
SunPower has always main-
tained a strong focus on re-
search and development. “We
design and manufacture the
most efficient solar technology
on the market, and we work
to continually improve our
own processes and products
to ensure that our customers
maximize return on invest-
ment.” says Ekstrom.
“In ensuring we are devel-
oping the highest performing
products, SunPower partners
with institutions such as the
US Department of Energy’s
National Renewable Energy
Laboratory (NREL), PV Evo-
lution Labs, Fraunhofer, Atlas
Material Testing Technology,
and Photon. Total is a key
partner today in our research
and development efforts, as
well as in our business devel-
opment efforts in Mexico,”
Ekstrom concludes. N
us.sunpower.com

35
34 November 2014
November 2014
PHOTOS courtesy of eosol Mexico’s PartnerMexico’s Partner
pany as a leader in Mexico’s
solar energy sector.
Its 16.8 MW park in the
Durango Industrial Logistics
Center opened in the spring
of 2014 and has 70,000 solar
panels that take up an area of
32 hectares. According to state
government and company
sources, a total of 500 million
pesos (approximately 37 mil-
lion USD) were channeled into
the first phase of the project.
“We have begun building
an electrical substation at the
same center to generate an
extra 100 MW and plan to
expand the park to 117 MW,”
says Bernal.
Installed capacity could
soon increase to 500 MW in
the same zone, given that the
government has been support-
ive of the company’s projects.
Initially, Eosol considered
setting up operations in Baja
California but after analyzing
the possibilities of connecting
to the electricity grid, and with
some convincing from the Du-
rango government, the latter
emerged as the most viable op-
tion. Now that TAI Durango
Uno is up and running, Eosol
is more convinced than ever
that Durango was the best
choice, since it has enabled
the company to distance itself
from the competition and take
the lead in certain regions.
According to Bernal, Mex-
ico has the potential to expand
in other subsectors such as
biomass, thermosolar and
wind energy, which are also
part of Eosol’s portfolio.
In its capacity as a devel-
oper, promoter and operator
of energy projects, Eosol has
been involved in the Fed-
eral Electricity Commission’s
(CFE) Agua Prieta II initiative
–Mexico’s first combined-cycle
power plant, which features
a 14 MW solar park. “Right
now we’re developing proj-
ects in Durango and two in
when it undertakes long-term
business ventures in a country,
but in the case of Mexico that
figure is 50%.
Eosol Energy was incorpo-
rated in Mexico in February
2011 and has since earned
a reputation as a pioneering
force, based on what it has
accomplished in Durango.
It now has offices in Mexico
City and Durango and has
announced a three-year in-
vestment plan through 2016,
which provides for an injec-
tion of as much as one billion
USD in Mexico.
The company has actively
promoted renewable energies
at forums and other events in
Mexico because, as Beltrán
says, the sector needs to earn
credibility: “There are still
Now that TAI Durango Uno is up and running, Eosol is more
convinced than ever that Durango was the best choice, since it has
enabled the company to distance itself from the competition and take
the lead in certain regions.
people who think renewable
energies are Utopian. I always
cite Germany as an example.
They have a plan to close all
their nuclear plants by 2030.”
Bernal predicts that the
recently passed energy reform
will remove obstacles and make
it easier for the private sector to
work alongside the CFE, which
will continue to play a prepon-
derant role in energy generation
in Mexico, in light of its experi-
ence and scope.
“It’s a huge company. We
need its support and we need
for it to build new plants of
its own, although that’s not
to say combined-cycle plants
shouldn’t continue to exist,”
concludes Bernal. N
www.eosolenergy.com
Sinaloa. We’re also looking at
options in Tamaulipas, where
we’re about to close a proj-
ect,” says Bernal.
MEXICO, A GLOBAL PARTNER
Before coming to Mexico,
Eosol had positive experiences
working in Spain, France, the
US and other countries. Its first
taste of Mexico was in 2009,
when it rendered engineering
services during the construc-
tion of Chrysler’s photovoltaic
park in Saltillo, Coahuila, via
its subsidiary, Injuber.
That was when company
executives in Spain decided
who were to become their
anchoring partners in Mexico.
Generally speaking, Eosol En-
ergy likes its local partners to
retain a stake of at least 25%
EOSOL ENERGY,
FOR A FULL TRANSITION TO CLEAN ENERGY
Countries that aim to play a
leading role in world affairs
should already be taking con-
crete steps to fully substitute
fossil fuels for renewable
sources of energy, says Eosol
Energy Managing Director in
Mexico Óscar Bernal.
According to German au-
thorities, nations that fail to
make a full transition to clean
energies in the course of the
21st century will be left behind,
says Bernal, adding that Eosol
Energy is confident Mexico will
make tangible progress in terms
of infrastructure and establish-
ing a legal framework to sup-
port the sector.
Eosol has officially been
operating in Mexico since
2011 and has developed the
TAI Durango Uno, a 16.8
megawatts (MW) photovoltaic
park –the first active facility of
its kind to be hooked up to the
Federal Electricity Commis-
sion’s grid.
The governments of countries that play an important role in the global arena should have long-term plans in place to
make a full conversion to renewable energies in the 21st century. Mexico can’t afford to be left behind.
BY OMAR MAGAÑA
“We’d like to be the stan-
dard bearer of renewable
energies in Mexico, as we have
been up until now with the
first plant connected to the
national electricity grid. If this
country doesn’t want to get el-
bowed out of the global econ-
omy, its government admin-
istrations need to stay firmly
focused on long-term strate-
gies that go beyond debate on
how much longer we’re going
to be able to exploit fossil
fuels. Mexico needs to bear
in mind that the transition to
clean energies will require the
implementation of large-scale
projects in this area every year
for decades. We should all be
praying that next year it’s not
16 but at least 1,000 MW,”
says Bernal.
A SUNNY PATH
TAI Durango Uno is just
the tip of a larger project
designed to position the com-

37
36 November 2014
November 2014
Mexico’s PartnerMexico’s Partner PHOTOS courtesy of newen
The challenge is to design a combined
consumption plan, whose ultimate goal is
to reduce costs, and determine which solar
photovoltaic systems are most suitable for the
individual customer.
THE EFFICIENCY DRIVE
As has occurred with other
technologies, the price of
equipment and systems for the
generation of clean electricity
has gradually dropped and
more and more consumers
are finding it cost effective to
implement them due to the
substantial long-term savings
they offer.
In its capacity as an inte-
gration and consulting firm,
the company identifies needs
and suggests ways of reduc-
ing electricity consumption.
“If you want to reduce con-
sumption, residential or in-
dustrial, you’re going to have
to make some improvements
as regards energy efficiency.
We [Mexicans] are right at
the bottom of the stack when
it comes to energy efficiency,”
says Pavón.
The challenge is to design
a combined consumption
plan, whose ultimate goal is
to reduce costs, and deter-
mine which solar photovol-
taic systems are most suitable
for the individual customer.
And because the systems
newen sells are modular,
customers can expand their
capacity when necessary.
Recouping your invest-
ment in systems of this kind
will depend on the capacity of
the equipment and post-instal-
lation consumption levels but,
NEWEN,
REAL CHANGE BEGINS
IN YOUR OWN BACKYARD
A champion of renewable energies, the company has
been operating in Mexicali –one of the cities with the
highest solar radiation indexes in Mexico– for 30 years
BY OMAR MAGAÑA
It’s now possible to generate
clean electricity at home to
cover a portion of our daily
needs and integration compa-
nies are springing up to assess
the requirements of individual
customers and recommend ap-
propriate technologies.
Newen (Energías Alternas),
which has been operating in
Mexicali, Baja California, since
1986, serves precisely that
market niche with modular
photovoltaic systems that have
a capacity of up to 10 KW –the
maximum permitted by the
Federal Electricity Commission
(CFE) for residential use.
Although the residential
sector is its most important
source of revenues, the firm
also offers rural electrification
solutions, a market it entered
in the mid-1980s and re-
mained focused on until 2006.
Additionally, the company
offers systems connected to
the national electricity grid
for businesses, industries and
public services, sells remote
monitoring systems and com-
ponents, has an R+D center
where it plans to produce its
own technologies and its own
alternate energies theme park.
The theme park opened
in 2007 and showcases the
various solar photovoltaic
and thermal technologies cur-
rently available, with a view to
educating the public about the
potential of renewable energies
and busting the myths sur-
rounding them.
Founder and director of
newen, the engineer Mario
Pavón is confident promotion-
al efforts will gradually give
rise to a natural market with
a clearer idea of the products
and solutions the company
offers. “Education can help
position us and expose us to
more users, not just regionally
but nationwide,” he says.
ADAPTING TO
A RENEWABLE REALITY
According to Pavón, we will
gradually make the transition
from fossil fuels to renewable
energies as a society and on all
levels the same way we made
the leap from horses to auto-
mobiles. “It’s an opportunity
to develop new businesses
and new industries, and it’s a
global one. It’s not just about
selling solar panels. There’s a
lot more potential to renew-
able energies.”
Newen currently imports its
photovoltaic modules and pe-
ripherals, mainly from the Unit-
ed States, Spain, Germany and
China, but Mexican companies
specialized in the metalwork-
ing and electrical industries
are starting to produce specific
parts for the renewable energies
sector, such as harnesses, special
connectors and structural bases
with one or two moving axes.
on average, it takes between
two and seven years. And since
photovoltaic solar modules
have an average lifespan of
25 years, you get your money
back cyclically.
“The residential sector is
where there are more oppor-
tunities to sell solar systems.
That is the type of customer
we get the most calls from
and where we close the most
sales,” says Pavón.
The company is also work-
ing on customized packages
that can be shipped to any
part of the country and in-
stalled by the final consumer
with the assistance of special-
ized technicians.
As regards the industrial
sector, companies like newen
are helping attract fresh capi-
tal but, according to Pavón,
Mexico will only be able to
hold onto its position as a
top destination for invest-
ment in the productive sector
if it can guarantee investors
that their operations in the
country will be more effi-
cient, based on better man-
agement of energy costs.
Pavón agrees with his
peers in the renewable energies
sector that this is the time to
integrate the business com-
munity and citizens in what all
the signs say will be the energy
model of the future, reason
why newen is focusing on
fostering new talent. “Globally
speaking, knowledge about
renewable energies is still
limited, but a lot of initiatives
are emerging in Mexico and
we believe that, with some
training, they can offer a final
product that can be used effi-
ciently,” he concludes. N
energiasalternas.com

39
38 November 2014
November 2014
Mexico’s PartnerMexico’s Partner PHOTOS archive
RISEN
ENERGY
MÉXICO,
WHEN THE
SUN COMES
OUT TO DO
BUSINESS
“Technically, the state of Du-
rango has good levels of solar
radiation and land is readily
available,” says Bao Ronglin,
CEO of Risen Energy México,
a Chinese company that plans
to invest 600 million USD in
a 300 MW solar energy plant
here.
Since it was founded in
2002, Risen Energy has posted
exponential growth. By 2010,
it was trading on the Chinese
stock exchange and by 2013
it had made it on to the list
of the top 20 companies in
Ningbo, a Chinese city that is
home to several large energy
companies.
Today Risen has 4,000
employees and a presence in
Europe –mainly Germany–
and Australia; a total of 38
solar plants have been estab-
lished. Its core activity is the
manufacture of solar panels
and LED lighting systems.
It was in 2012 when a
group of Risen Energy direc-
tors attending the first Chinese
Trade and Investment Expo
in Mexico realized the coun-
try’s potential. “The company
Risen Energy of China is
a leading solar energy
company that will be
investing 600 million 
in a 300 MW solar energy
plant in the state of
Durango.
formed a mission to assess
the viability of setting up a
solar energy plant in Mexico,”
recalls Ronglin. “I had the
opportunity to accompany
that mission, one of whose
members was the former Risen
CEO, and once we saw the
levels of irradiation in Du-
rango, we decided to invest in
the state. This part of Mexico
receives a lot more solar ir-
radiation than anywhere in
China or Europe, and we can
expect very good yields.”
According to Ronglin,
as soon as Mexico’s Federal
Electricity Commission (CFE)
and the Ministry of Energy
(SENER) grant the necessary
permits, Risen Energy will be-
gin construction on the plant
in Durango.
“Here we will generate
some 300 MW. We’re talking
about a very large amount of
energy in one single invest-
ment, in terms of figures for
Mexico. In terms of green or
solar energy, we can safely say
this will be the largest invest-
ment in all of Latin America.
That’s why it’s going to take
600 million USD to get it up
and running.”
A great percentage of the
population will benefit from
the clean or environmentally
friendly sources under the
goals set by the Mexican gov-
ernment for the near future.
Aside from high levels of
solar irradiation, another fac-
tor that swayed Risen Energy’s
decision to invest in Durango
was its highway infrastructure,
which provides easy access to
the port of Mazatlán, Sinaloa,
thereby facilitating trade with
China. Likewise, the state
government’s cooperation has
been crucial.
“There are several reasons
behind our decision, such as
the fact that labor isn’t ex-
pensive anymore compared to
China. Mexico’s geographical
location also helps because of
its proximity to the world’s
Aside from high levels of solar irradiation,
another factor that swayed Risen Energy’s
decision to invest in Durango was its highway
infrastructure, which provides easy access to the
port of Mazatlán, Sinaloa, thereby facilitating
trade with China. Likewise, the state government’s
cooperation has been crucial.
BY ANTONIO VÁZQUEZ
largest market, the US. Then
there are the free trade trea-
ties Mexico has entered into
and the fact that the exchange
rate is stable, which is another
plus,” says Ronglin.
As soon as Risen has the
licenses it needs, construction
on the plant in Durango will
begin. The initial phase will
take two to three years and
require some 300 workers.
After that, the plant will begin
generating solar energy and
conducting research activities.
“Our plans for Mexico
will very much depend on the
results we see and the country’s
demand for solar energy. Risen
Energy México can go any-
where in the country. In fact,
some states, like Baja Califor-
nia, Nuevo León and others up
north, have already contacted
us,” concludes Ronglin. N
www.risen-lighting.com

41
40 November 2014
November 2014
Special FeaturePHOTOS archiveSpecial Feature
The natural richness of Mexico’s geog-
raphy and culinary traditions inherited
throughout history has contributed to
the development of an industry that is
feeding the world. Nature, culture and
technology work together with the food
industry in Mexico, which is now the
third largest producer of processed foods
in America, the second largest supplier
of food to the US and the eighth largest
producer in the world.
Avocado, vanilla, cocoa, cactus, ama-
ranth, dahlias and agave –the plant from
which tequila and mezcal are distilled–
are some of the 200 varieties of crops
originating in Mexico, which for centu-
ries have formed the basis of Mexico’s
rich culinary culture; it is no wonder that
UNESCO has declared Mexican food an
Intangible World Heritage.
Food imports from other parts of the
world have been added to this base of na-
tive cultures and culinary traditions, con-
tributing to the diversification and expan-
sion of industry in Mexico.
The Ministry of Economy (SE) indi-
cates that the growth of the industry in
Mexico is due to several factors, such as
production capacity, agricultural resourc-
es, economic growth, the expansion of
the middle class and low manufacturing
costs. Although much of the population’s
diet is made up of traditional products
or dishes such as corn or wheat tortillas,
ready to eat and frozen foods have gained
popularity in Mexico as a result of peo-
ple’s changing lifestyles.
AN INDUSTRY IN CONSTANT GROWTH
In 2013, the production of processed food
in Mexico was 135.3 billion USD, a 4%
increase over 2012 representing 12% of
the manufacturing gross domestic product
(GDP) and 4% of total GDP; production
in this sector is expected to top 141 billion
MEXICO
FEEDING THE WORLD
In Mexico, the food industry is growing steadily; in a territory with geographical, cultural and commercial
advantages, the industry is ﬁnding the right conditions for consolidation, backing technology and innovation.
BY JESÚS ESTRADA CORTÉS
USD in 2014 and record an average annual
growth rate (AAGR) of 6.4% in the 2013-
2020 period, to reach 208 billion USD.
Much of that production is intended to
cater to the Mexican population’s growing
consumption. In 2013, the consumption
of processed foods in Mexico was worth
137.1 billion USD, and it is expected to
reach 142 billion USD in 2014 and 209 bil-
lion USD in 2020, with an AAGR of 6.2%.
sales to the UK grew by 140%, explained
by the shipment of products such as sug-
ar cane and molasses. Another destina-
tion for which exports increased com-
pared to 2012 was Switzerland, with an
increase of 166% thanks to products like
sugar cane, prepared sauces, extracts, es-
sences and concentrates of coffee, jams,
jellies and marmalades.
The principal products exported by
Mexico in 2013 were sugar cane –with
a remarkable growth of 58%– baked
goods, chocolate, confectionery and cof-
fee. Other products whose exports in-
creased in 2013 were malt extract, with
a growth rate of 20% over the previous
year, chilled or frozen pork (23%) and
sugars such as fructose (29%).
Much of the growth in the industry’s
volume and sales are due to international
investment in Mexico. In 2013, the food
industry in the country attracted for-
eign direct investment (FDI) amounting
to 734 million USD: the cumulative FDI
between 2003 and 2013 reached a value
of 22.2 billion USD. The countries that
made the largest investments over that
period were the Netherlands (60% of
total FDI), the US (19%), Switzerland
(17%) and Japan (1.4%).
ANOTHER WAY TO ATTACK THE MARKET
From the perspective of the National
Chamber of the Canned Food Products
Industry (CANAINCA), the feeling is that
this sector in Mexico “has experienced
growth” in the words of Juan Carlos Lo-
renzo Leboreiro, president of the organi-
zation that brings together and represents
companies engaged in the production and
packaging of processed foods in Mexico.
“This year we have calculated growth
of between 4% and 5%, which shows
greater dynamism compared to the 3.9%
increase recorded by the industry in 2013,”
says Lorenzo Leboreiro.
The good health of the processed
foods sector in Mexico “can be attributed
to the efforts made by the industry to at-
tack the market in a smarter manner. This
year sales to the National Association
of Supermarkets and Department Stores
(ANTAD) have fallen but sales in tradi-
tional channels have returned to growth.
That is a trend that can be explained
by people rationalizing their spending –
housewives are heading to their corner
stores more than to the supermarket,” ex-
plains Lorenzo Leboreiro.
“As an industry, we have top inter-
national companies in Mexico. There are
companies that have invested lots and
continue to invest in cutting-edge capital
goods, which puts us at a level comparable
to the US and Europe,” he adds.
Thus, the strengths of the processed
food industry in Mexico include the fusion
between tradition and investment in the
latest technology. CANAINCA includes
affiliates with a very long history, such as
Herdez, which is 100 years old, and La
Costeña, which is 85, which also highlights
the technological challenge.
The processed food market had a vol-
ume of 28,424,000 tons in 2013. It is ex-
pected that the volume of processed food
market in Mexico will grow at an AAGR
of 2.9% between 2013 and 2018. The cat-
egories with the largest volume of sales in
2013 in the domestic market were baked
goods, dairy products, processed dehydrat-
ed foods and fats and oils.
Another part of the Mexican produc-
tion of processed foods is intended for
the global population. In 2013, Mexican
exports in the sector recorded a value of
8.4 billion USD, and between 2006 and
2013 grew at an AAGR of 11%. The main
export destination was the US (70%), fol-
lowed by Japan (6%), Guatemala (2%)
and Venezuela (2%).
While the US prevails as the main
export destination for Mexican industry,
exports are diversifying. For example,
While the US prevails as the main export destination for Mexican
industry, exports are diversifying. For example, sales to the UK
grew by 140%, explained by the shipment of products such as
sugar cane and molasses. Another destination for which exports
increased compared to 2012 was Switzerland, with an increase of
166% thanks to products like sugar cane, prepared sauces, extracts,
essences and concentrates of coffee, jams, jellies and marmalades.
In the country there are also
plenty of opportunities for
food exports, with a wide range
of products, both fresh and
processed, that also meet the
health safety standards of the
world’s major markets.

43
42 November 2014
November 2014
Thus, the strengths of the processed food industry in Mexico include the fusion between tradition
and investment in the latest technology. CANAINCA includes affiliates with a very long history,
such as Herdez, which is 100 years old, and La Costeña, which is 85, which also highlights the
technological challenge.
The competitive advantages
of the processed foods sector
in Mexico lie in the country’s
agricultural and climatic
diversity, along with the
geographical proximity to the
world’s largest market –the
US– tariff-free goods thanks to
multiple free trade agreements,
abundant raw materials that are
available throughout the year,
skilled labor and technology.
“Although we are the national cham-
ber for canned food, we do not use pre-
servatives in our processing. Instead, our
processed foods are natural; there are
plenty of technologies to produce a natu-
ral processed food. We are here to help
housewives in the modern world, since
many work and do not have time, for
example, to cook grains and pulses,” ex-
plains Lorenzo Leboreiro.
The processed food industry is an im-
portant link in the production chain of
the food industry in Mexico. “Most of the
country’s agricultural production is con-
centrated in the central supply markets.
The processed food industry is very close
to these markets and we act as an outlet
for them. For example, when there is a sig-
nificant import of a given product, the pro-
cessed food industry contributes to ensur-
ing local prices do not fall, benefiting rural
producers and markets,” says Leboreiro.
An additional advantage of the in-
dustry in Mexico is the country’s de-
mographic dividend, which provides “a
promising future with a dynamic market
of nearly 130 million consumers, making
the country attractive per se, not just for
the food industry but to all sectors of the
economy,” says Leboreiro.
There are 50 affiliated companies
in CANAINCA, including companies
like Nestlé and Unilever, which gener-
ate about 30,000 direct jobs. “Each of
those companies has major training and
staff development programs, and aim to
be socially responsible companies. The
main asset in the industry is human re-
sources and it is something we take great
care of,” asserts Leboreiro.
Furthermore, by maintaining a dy-
namic foreign trade, companies in the
sector comply with international certifi-
cations, such as those of the US Food and
Drug Administration (FDA), an agency
with which CANAINCA maintains a
good relationship, with joint and coop-
erative programs.
Finally, as Lorenzo Leboreiro explains,
Mexican geography is also an advantage
for the food processing industry: “In farm-
ing and fishing we have excellent raw ma-
terial and we have a competitive advan-
tage since virtually all the world’s climates
are found in the country,” he says.
A DISH WITH MANY OPPORTUNITIES
According to an article by Damien Cave
in The New York Times on May 31, 2014,
Mexico is considered the most competitive
place to manufacture industrial goods for
the North American marketplace.
The competitive advantages of the pro-
cessed foods sector in Mexico lie in the
country’s agricultural and climatic diver-
sity, along with the geographical proximity
to the world’s largest market –the US– tar-
iff-free goods thanks to multiple free trade
agreements, abundant raw materials that
are available throughout the year, skilled
labor and technology.
In addition, Mexico is considered a
competitive country in manufacturing
costs for the processed food industry. Ac-
cording to the KPMG study Competitive
Alternatives 2014, Mexico offers cost sav-
ings of up to 9.1% compared to the US.
On the other hand, many companies
invest in Mexico attracted by a robust do-
mestic market, high consumption and the
possibility of generating economies of scale.
Additionally, Mexico has a strict regulatory
framework of health and safety standards.
Mexico also offers great opportunities
for the development of domestic suppli-
ers in segments such as natural sweeteners
and industrial crops; cocoa for the con-
fectionery industry and vegetables for the
pre-cut, pre-packaged and ready-to-eat
sector. The competitiveness of the food
industry can be increased through invest-
ment in post-production activities such as
the cold chain, preservation technology,
packaging, biodegradable plastics and
specialized transportation.

45
44 November 2014
November 2014
Mexico’s geography is also an ally of the
fishing and seafood industry, a dynamic
sector that caters to growing domestic
consumption and international markets.
The country is the leading exporter of
oysters in the world, fourth for fresh
bluefin tuna, second for frozen bluefin
tuna, third for frozen sardines, fifth for
chilled sardines, fifth for trout and ninth
for frozen shrimp and prawns.
The enormous potential of the fisher-
ies sector in Mexico is the result of hav-
ing 11,592 kilometers of coastline, of
which 73% belongs to the Pacific coast
and 27% comprises the Gulf of Mexico,
Caribbean Sea and islands. The conti-
nental shelf is about 394,603 square ki-
lometers (km2). The country has 12,500
km2 of coastal lagoons and estuaries,
providing 6,500 km2 of inland waters
such as lakes, ponds and rivers.
Seafood consumption is important for
Mexico’s rich cuisine, making the country
the second largest market in Latin America.
In 2013 Mexico consumed 635,000 tons of
seafood and that figure is expected to grow
at an average annual rate of 2% to reach
706,000 tons in the 2013-2018 period.
In 2012, the volume of fish production
in live weight was 1.68 million tons –rep-
resenting growth of 1.6% over 2011– of
which 84.9% was production from cap-
ture fishing and the rest from aquaculture.
That same year, production of cap-
ture fishing was valued at 871.9 million
USD, mainly species including sardine
(50.3%), tuna (6.7%), anchovy (5.4%),
shrimp (4.3%) and octopus (2.2%).
The competitiveness of the food industry can be increased through investment
in post-production activities such as the cold chain, preservation technology,
packaging, biodegradable plastics and specialized transportation.
In 2013, according to data from Pro-
México and Global Insight, the net operat-
ing profits of companies in the processed
foods sector were worth 22.4 billion USD,
higher than that reported for countries like
Japan (17.1 billion USD), Indonesia (10
billion USD), Russia (8.4 billion USD) and
Germany (6.5 billion USD).
In the country there are also plenty
of opportunities for food exports, with
a wide range of products, both fresh
and processed, that also meet the health
safety standards of the world’s major
markets.
In that sense, the SE indicates that
there are niche markets with high de-
mand that Mexico is able to meet, where
sophisticated marketing is key and it is
necessary to invest in certification and
market knowledge.
For example, a segment with high poten-
tial is Halal-certified food. The Muslim pop-
ulation –almost 2,000 million people– repre-
sents one fifth of world population. Mexico
exports numerous products that could re-
ceive Halal certification, such as milk, agave
syrup, beef, chicken, mayonnaise, ketchup,
cocoa and cocoa derivatives, guava paste,
food coloring, alcohol-free vanilla, carbon of
mineral or vegetable origin and artificial fla-
vorings. Some products that are already cer-
tified include hamburger meat, sesame seeds,
dehydrated products such as egg white, to-
matoes and organic and inorganic chemical
products that are used in small quantities for
food and fishery products, among others.
Another example is Kosher certification,
which represents a significant opportunity
due to the tariff advantages resulting from
the free trade agreement Mexico has signed
with Israel. In 2013, Mexico exported to Is-
rael 4 million USD of processed foods, main-
ly prepared fruits and preserves, extracts,
essences and unflavored instant coffee, con-
fectionery not containing cocoa, prepared or
preserved vegetables and mixed vegetables,
and fructose and fructose syrup.
In the 2003-2013 period, exports of pro-
cessed foods from Mexico to Israel grew at
an AAGR of 7.3%. In 2013, Mexico was
ranked as the fourth largest supplier of sug-
arcane to Israel, fifth for jams, jellies and
marmalades, and third for uncooked and
cooked fruits and coconut oil.
There are also opportunities to export
Mexican processed products to supermar-
ket chains in the US and Canada. In 2013,
US imports of processed foods from Mexico
were worth 5.7 billion USD –5% more than
in 2012. The main products were cane sugar
(1.1 billion USD), bakery products (682 mil-
lion USD), chocolate and prepared chocolate
products (485 million USD), confectionery
(476 million USD) and coffee (340 million
USD). The AAGR for imports from Mexico
in the 2003-2013 period was 13%.
As for the Canadian market, Mexico is
the eighth largest supplier of processed foods
and imports in 2013 were valued at 222 mil-
lion USD. The main products that Canada
bought from Mexico were chocolate, coffee,
cooked or frozen fruit,prepared or preserved
fruits and confectionery.
That recipe, which combines tradition
and modernity, nature and technology, is
increasingly attracting investors to cultivate
the fertile industrial fields of Mexico. The
outlook suggests that the food industry will
continue to grow, with the support of in-
novation, meeting the needs of the world’s
growing population. N
FISHING WEALTH
Meanwhile, aquaculture production
had a value of 574.2 million USD and the
main species produced in that activity
were shrimp, with a 39.5% share, crap-
pie (28.7%), oyster (17.2%) and carp
(7.9%).
Over 2,400 commercial fish farms
operate in Mexico together with around
800 units for auto-consumption. The de-
velopment potential for the production
of farmed shrimp is very high, as is that
of scaled fish (snapper, mackerel, cor-
vina, croaker and sea bass) and bivalve
mollusks (oysters, clams and mussels).
In the case of fish and processed sea-
food products in Mexico, the market
value in 2013 was 1.4 billion USD. It is
expected that in the 2013-2018 period
chilled and frozen products will grow at
a rate of 5.7% annually.
Besides serving the domestic market,
the fishing industry in Mexico also feeds
people around the world. Exports grew by
an annual average of 5% between 2005
and 2013. In 2013, 63.4% of Mexican
exports of fish and shellfish were sent to
the US, while the second destination was
Hong Kong, with a share of 10%, fol-
lowed by Japan, Spain and Vietnam.
The most exported products from
Mexico are crustaceans (shrimps, lob-
sters and crabs), with 43% of total for-
eign sales, followed by fresh fish (14%),
mollusks (13%), frozen fish (12%) and
crustaceans, mollusks and other prepared
aquatic invertebrates which, though they
have a share of 7%, reported an annual
growth of 72% in 2013.

Mexico's Energy Transformation and Agri-food Opportunities

Mexico's Energy Transformation and Agri-food Opportunities

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