Author: OBG Admin

Éric N’guessan-Managing Partner-EY Côte d’Ivoire

Incentivised reform: A changing energy mandate spells new opportunities for hydrocarbons and electricity

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Since the release of the energy reform in December 2013, the Mexican energy sector has been on the rise. Little by little the rules have been set to turn a closed sector with two state-owned giants – Petróleos Mexicanos (Pemex) and the Federal Electricity Commission (Comisión Federal de Electricidad, CFE) – into a modern-day open market. Much Needed Pemex production has dropped by more than 24% since reaching a peak of 3.4m barrels per day in the early 2000s. Added to that, handling the amount

Chaim Zach-Managing Director and CEO-Agric International Technology and Trade; Kabiru Rabiu-Group Executive Director-BUA Group; and Aliyu Abbati Abdulhameed-Managing Director

In the pipeline: Gas production and exports look set for an upswing

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Bolstered by its substantial natural resources, Mexico’s gas production and exports are expected to rise in the longer term as a result of new investment triggered by the government’s energy liberalisation policies, and a general recovery of hydrocarbons prices from their low point in 2015. According to estimates by BP “Statistical Review of World Energy 2015”, Mexico had 12.3trn cu feet of proven natural gas reserves at the end of 2014 and one of the world’s largest shale oil endowments, particularly in the Burgos Basin in the north of the country (geologically, Burgos is a prolongation of the prolific Eagle Ford formation in the US

Philippe Eponon-President-Ivorian Group of Construction and Public WorksPhilippe Eponon-President-Ivorian Group of Construction and Public Works

Cracking open new markets: New regulations are helping craft brewers find their stride

Posted OBG AdminPosted in Uncategorized

Mexico is the world’s leading beer exporter, producing 86m hectolitres (hl) per year, worth $20bn. The country has topped the list of beer exporters for the past six years, thanks to surging international demand for brands such as Corona Extra, Modelo, Sol and Tecate, with exports growing 9% to reach around $2.4bn in 2014, according to the National Statistics Institute. Tequila exports, meanwhile, were worth $1.17bn in 2014. The market is dominated by two companies, Cuauhtemoc-Moctezuma and Modelo, both of which have undergone ownership changes in recent years. The former was acquired by the Heineken group for $7.34bn in 2010, while the latter was bought

Nhon Luc Ly-CEO-AIA Myanmar; Son Nguyen-Country President-Chubb Life Insurance Myanmar; Daw Zarchi Tin-CEO

Renewable vows: Increasing capacity through wind and solar alternatives

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With installed capacity of 2600 MW in wind and 55 MW in solar power plants, Mexico generates around 10% of its energy with non-hydro renewables, but it aims to produce 35% of its energy from clean sources by 2024. Jose Pablo Fernandez, director-general at Grupo Dragon, told OBG, “Mexico’s 2024 goal is ambitious but possible. It has 18-19% clean energy production, and the aim is to raise this by 5% by 2018.” This 5% excludes pre-existing projects and upcoming endeavours under grandfathered legislation. Irene Hernández, industry and energy partner at PwC, said that while the 5% clean energy requirement may seem conservative, it implies installing

Mohammed El Etreby-Chairman-Banque Misr

Made in Mexico: Manufacturing is becoming more focused on high-value production

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Since the early days of NAFTA, the Mexican manufacturing sector has evolved extensively. While the country once positioned itself as a destination for basic cross-border assembly operations for electronics and textiles, it is now developing a highly specialised manufacturing market. In the fourth quarter of 2014, manufacturing represented 17.5% of GDP, according to the National Institute of Statistics and Geography, indicating 3.4% growth in the first three quarters of 2014. Automotive According to Guillermo Prieto, executive chairman of the Mexican Association of Automobile Dealers, the automotive industry represents around 4% of Mexico’s GDP and 23% of the manufacturing industry. Prieto told OBG that the industry

Mario Fulgoni-CEO-Air Djibouti

Pumping up: North American automotive production shifts to Mexico, while tyre production is drawing attention

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The post-North American Free Trade Agreement ( NAFTA) manufacturing boom has been particularly attractive for the Mexican automotive industry. According to Eduardo Solis Sánchez, president of the Mexican Automotive Industry Association, Mexico will see a fifth consecutive year of increased motor vehicle output. The auto industry now brings in net earnings of some $50bn a year, more than the oil and gas or tourism sectors. Solid Foundation Solis listed five key reasons for the boom. First, Mexico is ideally located to serve the US car

Nhon Luc Ly-CEO-AIA Myanmar; Son Nguyen-Country President-Chubb Life Insurance Myanmar; Daw Zarchi Tin-CEO

Going global: Mexico’s new international airport will quadruple capacity

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A MXN169bn ($11.4bn) project to build an international airport in Mexico City is ready for take off, with the government expecting ground to be broken before the end of 2015. The airport is the most significant in a series of large-scale projects designed to tackle shortcomings in the country’s transport and logistics system, signalling the government’s commitment to continuing with major infrastructure developments, despite recent project cancellations. Bold Vision A lot of thought has gone into what could well be the defining project of the six-year presidency of Enrique Peña Nieto (2012-18). Having launched structural reforms in 2012-14, particularly in the energy, telecoms and education

George Richani-CEO-Al Ahli Bank of Kuwait

Private time: Public-private partnerships will play a key role in making up for gaps in infrastructure funding

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Since its inception in 2012, Mexico’s public-private partnership (PPP) law has opened the door to private capital assuming a larger role in the development of the country’s infrastructure. Use of this option is becoming increasingly critical, with the federal government experiencing a reduction in its budgetary capacity to invest in large-scale public works projects. This has led to a call from Mexican authorities to increase the number of PPP agreements to achieve the goals set by the National Infrastructure Programme 2014-18. While successive governments have

Sheikh Ahmad Duaij Jaber Al Sabah-Chairman-Commercial Bank of Kuwait

From lab to market: A rising number of private companies are reaping the benefits of investing in R&D activities

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As Mexico works to improve its research capabilities and infrastructure, a big contribution is coming from international investors. Industrial and technological firms have been establishing research facilities in the country, bringing fresh investment into the sector and exposing Mexican human resources to international know-how. The increase in the number of foreign research and development (R&D) departments also supports the government’s long-term goal of enhancing Mexico’s science and research infrastructure. Rising Private Spending According to the government’s Special Programme for Science Technology and Innovation, Mexico plans

Daniel Asare-Kyei-CEO-Esoko; Curtis Vanderpuije-CEO-ExpressPay; and Daniel Marfo-General Manager-Zipline Ghana

Raising the ceiling: New government plans set to improve access to quality housing

Posted OBG AdminPosted in Uncategorized

A growing population and urban development in key cities across the country has put housing development at the forefront of government policy. But the 2013 housing crisis, which saw the collapse of three of the biggest homebuilders in Mexico, has led the government to change the focus of this policy. A rethink of subsidy allocation, coupled with tax breaks and other incentives, is helping to revive Mexico’s housing sector. Home construction activity is important to reducing the country’s housing deficit, currently estimated at 15.3m homes, of which around 3m need to be rebuilt, and the remaining are in need of maintenance or extension work, according