Mission Statement
Manufacturing Trade Mission
Mexico City, Monterrey and Guadalajara, Mexico
June 22-28, 2003

Mission Description:

The United States Department of Commerce, International Trade Administration, U.S. Commercial Service, Office of Export Promotion Services, in cooperation with the National Association of Manufacturers (NAM), is organizing a Manufacturing Trade Mission to Mexico City, Monterrey and Guadalajara, Mexico, June 22 - 28, 2003. This Trade Mission will target major U.S. manufacturers providing inputs to manufacturing in the following sub-sectors: molds and dies, materials handling equipment, assembly line equipment, plastics machinery, machine tools, including pollution control equipment, food processing and packaging equipment, waste water treatment, process water treatment equipment, electrical power equipment, logistics services, metal-mechanic manufacturing, and automotive parts and supplies. The focus of the delegation will be to match U.S. companies with qualified agents, distributors, representatives, licensees, and joint venture partners in the Mexican market.

Commercial Setting:

Mexico's economic growth was 1.7 percent in 2002 with a projection of growth of 3 percent for 2003. Inflation is under tight control at 5.7 percent in 2002 with 2003 expected to see between 4.5 to 5 percent. The government is supporting the peso, which has remained at a ratio of approximately ten Mexican pesos to one U.S. dollar.

The North American Free Trade Agreement (NAFTA) continues to be a key factor in raising Mexico's overall level of economic activity. In 2001, the United States provided nearly 78 percent of Mexico's imports and in 2002 continued to provide 74 percent of imports.

Mexico City: Major industries include auto parts, food processing, electrical equipment, electronics, machine tools and heavy machinery. Mexico City and the 21 principal municipalities of the surrounding State of Mexico account for approximately 40 percent of Mexico's industrial base.

Monterrey: The so-called "Industrial Heart of Mexico" is home to more than 13,000 manufacturers producing 9.4 percent of Mexico's manufactured products. Manufacturing represents 20 percent of Mexico's economy. Monterrey's conglomerates are thought to control more than half of Mexico's total industrial assets (excluding the oil and telecom monopoly giants). Through private sector initiative, active promotion of international investment, a modern infrastructure, and a well-educated work force, Monterrey has created an economic boom, boasting the highest per capita income of Mexico. Monterrey's conglomerates produce 75 percent of glass, 60 percent of synthetic fibers, 60 percent of cement, 50 percent of beer, 50 percent of ceramic products, 40 percent of household appliance and 25 percent of steel in Mexico. Monterrey and Saltillo, the capital of the neighboring state of Coahuila and a 45-minute drive from Monterrey, are powerhouses in auto parts production which supply the GM and Daimler- Chrysler facilities in Saltillo. Packaged food products, chemicals, electrical materials, electronic components and telecommunications equipment are also manufactured in the area. Many representatives in Monterrey market their products throughout other manufacturing cities in Northeastern Mexico such as Saltillo, Ciudad Juarez, Chihuahua, Reynosa, and Nuevo Laredo.

Guadalajara: Considered one of Mexico's most beautiful and livable cities, Gaudaljara has experienced explosive growth, especially in electronics manufacturing. Guadalajara is the second largest distribution and retail center in Mexico. U.S. Commercial Service Guadalajara is responsible for seven states in Western Mexico including the key manufacturing and industrial states of Jalisco, Aguascalientes and Guanajuato. Major important sub sectors within the region for this mission include auto parts, electronics, metalworking and processed foods.

The top sectors for U.S. exports include the following:

• Machine Tools and Metal Forming Equipment: The 2002 Mexican market for these sub-sectors amounted to $1 billion, with $743 million and $272 million respectively. In 2003 imports are expected to increase approximately 5 percent. Best prospects for machine tools include new, used or rebuilt machining centers, for turning, milling, boring, both vertical and horizontal, with two or three axis, with automatic tool changers, both numerically controlled (CNC) or non-CNC. For metal forming best prospects include new, used or rebuilt bending, folding, straightening, flattening machines and presses; press brakes, shearing and punching machines, both CNC and non-CNC.
  
  
• Food Processing and Packaging Equipment: The total market for 2002 was worth $263 million. The projection for 2003 is $276 million for a 5 percent increase. The U.S. holds approximately 32 percent of the market. The very rapid industrial and commercial development of Mexico has triggered a tremendous increase in packaging technology during the last few years. Food distribution practices have changed over the past five years from small grocery corner store or open markets to large grocery stores and many chain-type stores such as in the U.S. To comply with the change and the increase in demand for processed and packaged foods, Mexican manufacturers are modernizing and purchasing high-tech processing and packaging equipment. After many years, plastic packages have achieved multiple uses. Food packagers that traditionally packed food products in metal cans are now using plastic containers. The Mexican Process and Packaging Association recently pointed out that food packaged in plastic in Mexico is anticipated to continue to increase at an average of 15 to 20 percent per year. Sources indicate that Mexico is five years behind the U.S. packaging industry.
  
  
• Water Resources and Equipment: The market size at the end of 2001 was slightly over $2.3 billion and was expected to reach nearly $2.4 billion by the end of 2002. Analysts expect around 6 percent growth in 2003. Best prospects in this sector include analyzers, centrifugal pumps, control valves, chemical water purifiers based on chlorine, membrane and sand filters, flow meters, helical stirring apparatuses, measuring instruments, ion-exchangers, pressure reducing valves, diaphragm valves, and reverse osmosis modules.
  
  
• Electrical Power Equipment: Mexico's total imports of electrical equipment in 2002 were approximately $3 billion, with a U.S. market share of 88 percent. The total market for electric power equipment is expected to grow between 10 and 15 percent due to growth in demand for electricity and the increase in trade due to NAFTA. Business opportunities within this sector run from turnkey projects for building electric power generating plants and installing co-generation systems, to the export of switches, transformers, control boards and motors.
  
  
• Automotive Parts and Supplies: The automotive industry represents the largest and fastest growing manufacturing sector in Mexico. The market for automotive parts in Mexico totaled $134 billion in 2001, with imports from the U.S. accounting for 28 percent. Growing 6 percent from 2001, the 2002 market was $142 billion. The growth was less than expected due to the U.S. economic slowdown which affected the auto parts industry more than other sectors. Mexican auto parts manufacturers are confident that this sector will increase over 7 percent in 2003, especially in after market auto parts. The recent announcement of the opening of the border for imports of new cars in 2004, will not negatively affect the auto parts industry in Mexico since most first and second tier suppliers produce parts for export, according to the Mexican Institute of Auto Parts (INA).

Mission Goals:

The Trade Mission's goal is to gain first-hand market information and provide access to key government officials and potential business partners for new-to-market and/or new-to-export U.S. manufacturing firms desiring to enter into the Mexican market.

Mission Scenario:

The mission will start in Mexico City, Mexico with one and one-half days of business meetings, before traveling on to Monterrey, Mexico. The participants will have one and one-half days of business meetings in Monterrey. The mission will continue on to the last stop in Guadalajara for one day of business meetings. At each stop, the U.S. Commercial Service will provide an extensive market briefing, highlighting opportunities in the manufacturing sectors and schedule one-on-one appointments with potential business partners for each participant.

Tentative Timetable:

Sunday, June 22	Arrive in Mexico City
Monday, June 23	Briefing, Business Meetings
Tuesday, June 24	Morning Meetings Afternoon travel to Monterrey
Wednesday, June 25	Briefing, Business Meetings
Thursday, June 26	Morning Meetings Afternoon travel to Guadalajara
Friday June 27	Briefing, Business Meetings Conclusion

Criteria for Participation:

• Relevance of the company's business line to mission goals
  
• Potential for business in the selected markets
  
• Timeliness of the company's completed application, participation agreement, and payment of the mission participation fee
  
• Provision of adequate information on the company's products and/or services and communication of the company's primary objectives to facilitate appropriate matching with potential business partners
  
• Certification that the company meets Departmental guidelines for participation, including certification that the company's products and/or services are manufactured or produced in the United States, or, if manufactured/produced outside of the United States, the product/service must be marketed under the name of a U.S. firm and have U.S. content representing at least 51 percent of the value of the finished good or service.

Any partisan political activities of an applicant, including political contributions, will be entirely irrelevant to the selection process.

The mission will be promoted through the following venues: the Export Assistance Centers and Teams; National Association of Manufacturer's newsletters and publication; the Federal Register; relevant trade publications; relevant trade associations; past Commerce trade mission participants; various in-house and purchased industry lists, and on the Commerce Department trade missions calendar - www.ita.doc.gov/doctm/tmcal.html - and other Internet websites.

Recruitment will begin immediately, and will close on April 30, 2003, approximately seven weeks prior to the start of the mission. The mission will target 15 companies. The participation fee for the event will be between $2,800-$3,000 per company. The participation fee does not include travel and lodging costs.

Contact Information:

Raj Dheer, Project Manager
U.S. Commercial Service
Export Promotion Services
U.S. Department of Commerce, Room 2117
Washington, D.C. 20230
Tel: (202) 482-0111
Fax: (202) 482-0178
E-mail:raj.dheer@mail.doc.gov