Hidalgo
From The Report: Mexico 2019
View in Online Reader
With an economy traditionally based on mining, Hidalgo had lagged behind some of Mexico’s more prosperous and dynamic regions. However, the new administration has actively sought to foster growth in new sectors including renewable energy, sustainable transport, agro-industry, pharmaceuticals and chemicals; develop infrastructure; and create a more business-friendly regulatory framework. As a result of these efforts, it has recently recorded growth and foreign direct investment figures that exceed the national average. Hidalgo also has several advantages including close proximity to Mexico City and major road networks, a range of both new and well-established industries operating in the area, and a young and educated workforce. This chapter contains interviews with Omar Fayad Meneses, Governor of Hidalgo; José Luis Romo Cruz, Executive Secretary of Public Policy; Sergio Vargas Téllez, Secretary of Economic Development, State of Hidalgo; Camilo Serrano, General Manager for Mexico, Atlas Renewable Energy; and Cassiano De Stefano, CEO, Grupo Modelo.
Articles from this Chapter
State of transformation: Efforts to improve the business environment have attracted attention to both traditional and new sectors
Policy for prosperity: Omar Fayad Meneses, Governor of Hidalgo, on an efficient and robust business environment driven by regulatory reformOBGplus
Interview:Omar Fayad Meneses What competitive advantages have consolidated Hidalgo as one of Mexico’s fastest-growing investment destinations? OMAR FAYAD: First of all, the government has conducted a series of regulatory reforms that have fully transformed the state’s business environment. We have put into place a one-stop-shop system that allows companies direct access to information, reduces bureaucracy and speeds up paperwork. Our security framework was reinforced with over 5000 video…
Bottom up: Emphasis on investment aimed at encouraging inclusive growthOBGplus
In 2006 local conglomerate Grupo UNNE and Hong Kong-headquartered Hutchison Ports signed a strategic alliance to build the Intermodal Logistics Terminal of Hidalgo (TILH) in Tula, in the west of the state. Francisco Orozco, commercial director for Mexico at Hutchinson Ports, told OBG that the agreement envisioned “the terminal of the future”. The TILH became the only intermodal logistics terminal where both cargo rail networks – Kansas City Southern de México and Ferromex – connect with…
Unlocked potential: José Luis Romo Cruz, Executive Secretary of Public Policy, State of Hidalgo, on the state’s economic development strategyOBGplus
Interview:José Luis Romo Cruz How has economic growth in Hidalgo led to greater development and less poverty? JOSÉ LUIS ROMO: Private investment has injected significant dynamism into Hidalgo’s business environment. It has boosted small and medium-sized enterprise expansion, which subsequently contributed to an increase in socio-economic levels for the local population as well as a reduction of the state’s poverty rate. Since the current administration took office in 2016, 18,000 new…
Doing business: Sergio Vargas Téllez, Secretary of Economic Development, State of Hidalgo, on economic competitiveness, investments and strengthening the regulatory frameworkOBGplus
Interview:Sergio Vargas Téllez In what ways is the government seeking to strengthen Hidalgo’s economic competitiveness? SERGIO VARGAS: The strategy of the government is in line with the World Bank’s ease-of-doing-business metrics: facilitating the right conditions for companies to become globally competitive, and focusing on providing access to quality, value-added services such as energy and telecoms networks, financial and human capital, as well as regulatory improvement. Furthermore,…
Regulatory revamp: Efforts to improve the business climate attract investmentOBGplus
With an eye on diversification and increased value-added production and services, the state of Hidalgo has been working in recent years to revitalise its business climate to entice both domestic and international investment in a way that trickles down throughout the local economy, boosting salaries and improving livelihoods. To that end, the government has implemented what in May 2019 ratings agency Standard & Poor’s called an “ambitious plan” to make entering and operating in the state…
Virtuous circle: Federal government supports private investment to boost output and leverage position as energy exporterOBGplus
Hidalgo has long served an important role in the production and distribution of energy, being a net exporter to other regions of Mexico. The state is well served with energy infrastructure and possesses strong transport connectivity to the rest of the country. Furthermore, the local administration has established energy as one of its main strategic sectors for development, and has been proactive in attracting both domestic and international investment, notably in the renewables segment. While changes…
A bright outlook: Camilo Serrano, General Manager for Mexico, Atlas Renewable Energy, on regional solar potential to anchor a national marketOBGplus
Interview:Camilo Serrano In what sense did the reforms enacted earlier in the decade help to boost the energy sector? CAMILO SERRANO: Although far from complete, and with considerable regulatory issues remaining, the energy reform opened the door to competition and attracted the attention of international energy companies that see Mexico as a new market with great potential. As part of the reform, the energy auctions can be considered – up to a certain level – a case study and a success…
Big on investment: The state has proved attractive to pharmaceutical and chemical companies making both large and small investmentsOBGplus
Compared to three other sectors selected as strategic by Hidalgo’s state government, the chemical-pharmaceuticals sector has additional room to grow in terms of the aggregate amount of investment that has arrived during the tenure of this administration. According to figures from Hidalgo’s Secretariat of Economic Development (Secretaría de Desarrollo Económico, SEDECO), the sector has seen MXN452m ($23.4m) of investment between September 2016 and May 2019, compared to MXN5.4bn ($279.2m) in…
At the crossroads: Improved connectivity attracts logistics parks and terminalsOBGplus
With the state capital, Pachuca, just 90 km north of Mexico City, Hidalgo’s location has long been a draw for investment. Economic growth in the country’s capital has attracted even more attention to the central state as it is the only flat territory that Mexico City and its suburbs can expand to. Its strategic location has brought transport and logistics infrastructure, as well as investment. In November 2017 Grupo Modelo – the Mexican branch of the world’s largest beer maker, Anheuser-Busch…
Cultivating opportunity: Agro-industry primed for growth as market expansion and large investments come into effectOBGplus
The largest single private investment in the history of Hidalgo, Grupo Modelo’s new brewery in the southern municipality of Apan opened in March 2019 and is a key anchor investment for the state. Investment Modelo’s MXN14bn ($723.9bn) funding represented 5.3% of Hidalgo’s 2017 GDP and reflects the agro-industry’s recent progress. Of the strategic sectors prioritised by the state’s Secretariat for Economic Development (Secretaría de Desarrollo Económico, SEDECO), the agro-industry has…
Fostering productivity: Cassiano De Stefano, CEO, Grupo Modelo, on the strengths of Hidalgo’s beer industry and broader business environmentOBGplus
Interview:Cassiano De Stefano Describe the advantages of establishing or expanding a business in the state of Hidalgo. CASSIANO DE STEFANO: When a company seeks to invest a significant amount of resources in a particular location, there are several factors to consider, and having a government structure that is both diligent and efficient is a good first step. The government can help connect private companies to local communities, a relationship that is crucial for the success of large-scale…
First things first: Telecommunications infrastructure is prioritised to support further economic developmentOBGplus
Internet access is a constitutional right in Mexico, and while penetration rates are gradually increasing, the latest survey from the National Institute of Statistics and Geography suggests that Hidalgo has some work to do to improve connectivity. In 2017 the state ranked 22nd out of 32 nationally for the share of its population that used the internet (59.3%), while it ranked 24th in terms of its percentage of residents using mobile internet on a smartphone (46.8%). As of 2017 around one-third of…
Research refined: Ensuring the state becomes a place of innovation requires an approach that joins academia, industry and governmentOBGplus
In an effort to boost the state’s research and development (R&D) capabilities, in March 2019 Hidalgo announced that $25m of seed funding would be put towards developing Mexico’s first synchrotron, a type of cyclical particle accelerator. The federal government is expected to provide a further $500m for the project, which Alonso Huerta, director of the Council of Science, Technology and Innovation of Hidalgo, says will bring great benefits to the state. “This is a flagship project that can…
A helping hand: Support for local small and medium-sized enterprises (SMEs) through increased funding and certificationOBGplus
According to an OECD statement delivered in May 2019, SMEs will play a key role in the economic development of Hidalgo. The organisation suggested that the state should look to create “a more strategic vision to integrate local programmes with funding and leverage the National Entrepreneur Fund”. The fund, however, no longer exists; it was created in 2013 as an initiative of the National Institute for Entrepreneurship (Instituto Nacional del Emprendedor, INADEM) under the administration of former…
Talent retention: Promising educational offerings and programmes help to keep talented graduates in the stateOBGplus
According to the OECD, Hidalgo’s population is currently experiencing “a youth demographic premium”, meaning young people make up a large part of the population. Furthermore, 65% of its residents are between the ages of 15 and 64. There are also greater educational opportunities than in the past, and the percentage of 19- to 25-year-olds who had completed or were in higher education grew from 5% in 1995 to 33% in 2015. Investment in public education has raised Hidalgo’s level of basic education…
