Interview : Elías Massri Sasson
What makes Hidalgo attractive to investors?
ELÍAS MASSRI: It is often forgotten that Hidalgo has a long-standing industrial heritage, stretching from mining to heavy manufacturing. This makes it an attractive place due to its established and well-developed supply chains. Beyond that, compared to other states, its abundance of essential utilities such as water and electricity are of great value to a variety of manufacturing firms looking for a base in Mexico. Most importantly, its strategic geographic location, in conjunction with its excellent road and rail infrastructure, is ideal for reaching the Gulf of Mexico, the Pacific Ocean, Mexico City, the Bajío region and the US. In order to better position itself as a key investment centre, the state should bolster its services and social and cultural infrastructure to attract foreign executives from multinational firms. Apart from Pachuca, it is difficult to find globally competitive health clinics, international schools or upmarket restaurants, which are needed to put the state on the map in terms of quality of life. While it is progressing, there is a long way to go outside of core urban centres.
How would you rate the state’s human capital?
MASSRI: Hidalgo performs extremely well in terms of its human capital readiness. In particular, its workforce has been well trained to meet specific demands from the different strands of industry that operate in the state. However, moving to a more automated world, companies will increasingly put more value on knowledge and soft skills. Above all, bilingualism is an absolute must in a globalised industrial workforce, especially when there are many investors coming from China who do not speak Spanish. Links between the private sector and universities are also essential, and in Hidalgo these are strong. There is a willingness among students and academics to strengthen the state’s readiness for industrial innovation. For instance, a number of existing programmes bring students into manufacturing plants to assist in the development of patents, a clear example of how industry and academia can collaborate on one of the state’s economic objectives.
How prepared is Mexico for electric vehicles (EVs)?
MASSRI: The only way to bring EVs into the mainstream is to make them a financially and practically viable option to replace petrol vehicles. They cannot just serve as a gimmick to supplement existing vehicles.
On the logistics front, Giant Motors has spent several years working with food giant Bimbo and the Monterrey Institute of Technology and Higher Education to design and build small delivery vans to boost operational efficiency in Bimbo’s distribution network. Although around 600 are in use, we have yet to see if they are financially viable for smaller operators with 30-40 vehicles.
Another urgent requirement in Mexico is the need to renew the capital’s ageing 40,000-strong taxi fleet. We have three prototypes ready to be produced, but the high mileage of Mexico City’s taxis make them more demanding on battery power, which make the vehicles more expensive for taxi drivers. As with the sale of any vehicle, availability of financing is the main barrier, and we are waiting for a more accessible scheme to be provided to taxi drivers to allow them to finance the purchase of EVs, and therefore allow us to start production. There are currently no incentives from any level of government for the purchase or operation of EVs, in marked contrast to many other countries.
Arguably the most important long-term incentive is supporting infrastructure. We need a coordinated effort from the Federal Electricity Commission to make charging vehicles cheaper than operating electricity in homes, and we need comprehensive public infrastructure in key urban areas. Strategically speaking, setting up comprehensive charging infrastructure in smaller cities is more viable for governments to implement. Using a city such as Pachuca, Tepeji or Tula as a prototype would be entirely viable as a stepping point to a more integrated nationwide infrastructure.
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