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From Mexico In Brief Newsletter
Switzerland-based multinational commodity trading and mining company, Glencore Plc, is joining a 15-year supply deal and investing approximately U.S.$200 million over the next two years in a Mexican joint-venture with G500 Grupo Gasolinero, a Mexican fuel-stations owner. Glencore will supply 180,000 barrels of gasoline and diesel a day and this investment will be their first significant move in the retail fuel sector.
Organizacion Techint, the Luxembourg-based manufacturer of flat and long steel products and controller of Ternium Mexico will invest approximately U.S.$260 million in the next 30 months in the construction of two plants in the Mexican State of Nuevo Leon destined to the manufacture of steel specialized in the automotive industry and home appliances.
Femsa, Mexican multinational beverage and retail company, owner of the world’s largest Coca-Cola bottler, will invest approximately U.S.$1.3 billion in all of its business divisions in 2017. The investment will be divided in U.S.$770 million that will be destined for its soft drink business, approximately U.S.$390 million for its Oxxo retail division, approximately U.S.$60 million for its pharmacies’ operation, approximately U.S.$40 million for its new gas stations business and the remaining U.S.$40 million will be focused on distribution, logistics and refrigeration.
Multinational Spain-based banking group, BBVA, is planning an investment of approximately U.S.$1.5 billion in the next five years to expand operations in Mexico, mainly targeting software, artificial intelligence and other processes to make the bank more efficient and close to its customers.
Comision Federal de Electricidad, or CFE, is investing approximately U.S.$89 million in 560 projects, including the installation of 82 distribution substations, 70 high voltage lines and 354 medium voltage networks, among other works for this year.
The Chairman of the Mexican National Agricultural Council, or CNA, announced that agricultural firms are set to invest approximately U.S.$1.5 billion in modernization and development that will boost protected farming, such as greenhouses, pressurized irrigation systems, revamping of storage facilities and logistics and certification strategies.
Under the scheme of public-private partnerships, the Mexican Ministry of Finance and Public Credit, or SHCP, announced 18 projects to be tendered in the first semester of 2017, that will require and investment of approximately U.S.$1.9 billion. Bids are expected in the infrastructure, hydraulic, security, education and transportation sectors, among others.
Wal-Mart de Mexico plans to increase its investment budget in nearly 19% in the current year, investing approximately U.S.$864 million in e-commerce and in the upgrade and opening of new stores.
Mexico placed its first U.S- Dollar-denominated bond issue in 2017, with a ten-year maturity, for approximately U.S.$2.4 billion. The transaction is part of a debt refinancing structure that did not increase government debt levels and increased the investors’ trust in the country. Another recent and relevant placement was completed by Nemak, a Mexico-based global automotive parts manufacturing company, which placed euro bonds for approximately U.S.$536 million with a seven years’ maturity; the proceeds will be used for the repayment of shorter maturity debt.
An amount between approximately U.S.$4 and U.S.$7 billion will be invested in the following years in ports infrastructure in Mexico, mainly related with the development of ports and storage tanks which are necessary to meet the needs of the energy sector derived from the Mexican Energy Reform, and specifically to the increasing demand the Mexican infrastructure needs for the import of fuels.
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