BUSINESS DEVELOPMENT

The Industrial Market in Queretaro and the Central Region


Given the relevance of the political-electoral situation that will be transcendental for the future of Mexico, in this SITE Solución Inmobiliaria article, we will concentrate on presenting the Industrial sector’s situation and the Economic-Political conditions that are being experienced in Mexico which directly affect the area of influence of the center of the country.


The whole country’s real estate activity has been seen to be strengthened with the decision of American, European and Asian companies considering our country as an attractive one in which to make manufacturing and distribution investments.

The macroeconomic variables have supported these investments considering a strong economy with a stable currency, lowering interest rates and controlled inflation, in addition to supports and incentives that are becoming more and more attractive for investment.

From this point of view we think that the political parties that have the possibility to win the July 2 elections should be very cautious to maintain the stable and favorable conditions that have been seen in the country in the last two years given the sustained rhythm of growth that has been presented in all of the real estate markets: Residential, Commercial, Tourist, Corporative and of course INDUSTRIAL which had been the most affected of all, and is now in recovery.

In the same way the central region of Mexico (El Bajío) has been shaped into an economic motor for this sector and it is currently the area’s most important source of employment; therefore we affirm that whoever wins must keep a relevant strategy facing the attractive conditions for this real estate sector.

The region has been benefited with the installation of world class companies who have come to the main states of the center like the new General Motors plant in San Luis Potosi (compact car assembly), the Toyota National Distribution Center in Celaya and probably the most relevant operation of the Aeronautical industry with Bombardier in Queretaro.

In SITE Solución Inmobiliaria we see a year of real estate consolidation and growth and, without doubt, the real estate chain in all sectors of the market will behave very actively; therefore we predict a year with excellent results even though it must be taken into account that it is a political year and that tax reform will play a preponderant role for the market in general.

QUERETARO Industrial

In the coming weeks construction will begin of the buildings where the Bombardier company will formally operate within the Queretaro International Airport, in the framework of beginning of the Programa de Entrenamiento Intensivo en Ensambles Eléctricos y Estructurales para Aviones (Intensive
Training in Electrical and Structural Assembly for Airplanes).

State authorities have announced that they are working very closely with 12 suppliers from this sector so that they come to Querertaro in the short term; it will be the Cluster Aeronáutico de México (Aeronautical Cluster of Mexico). We will have the nucleus of this industry in this country, a privilege we will share in the coming years with no more than 12 regions in the world.

The Airspace industry is one of the most technological industries at a world level. Therefore, the first generation of young people from Queretaro that will be trained in the UTEQ (Universidad Tecnológica – Technological University) will have the opportunity to begin basic training for the first jobs that Bombadier will have, but in the future more than one will be scaling this organizational structure in order to reach management positions. Those responsible for Sustainable Development announced that Queretaro maintains itself in first place in regards to growth of the GDP. It is a lot higher than the per capita GDP with $7,982 dollars per inhabitant, according to official figures and a lot higher than the national average of $6,421 dollars. The manufacturing industry, of which Bombardier will make up a part in this state, grew and made it to second place in the country with 6.2 percent at August 2005.

The experts point out that statistics place Queretaro among the first three states in regards to the growth of the GDP. It is estimated that more than 20,000 jobs will be generated in the administration of Governor Garrido. This is to the merit of everyone; it is an achievement of the businessmen, the workers, and the government as promoter and facilitator placing Queretaro as one of the best options in which to invest.

With respect to the availability of industrial buildings, the area has been favored since the speculative properties that are mainly built in industrial parks have been occupied. This has made the principal players in development begin the construction of new speculative industrial spaces again even though the market continues protecting risks mainly concentrating on custom made warehouses - turnkey. Since last year they began to start some new speculative industrial warehouse projects again which demonstrates the confidence of developers and investors for 2006 even though they will continue to be very cautious and will maintain a low risk policy at the beginning, mainly focusing on guaranteeing custom made projects with previously contracted clients.

The main industrialized cities in el Bajío, have witnessed a slow growth in recent years. However, for 2006 the consolidation and beginning of large projects is expected, given the clear confidence of this and practically all of the real estate sectors.

The manufacturing industry will surely maintain conservative strategies and will continue recovering as it has been doing in the last 2 years. El Bajío has been considered one of the most attractive regions for industry in the fields of automotive parts, aeronautics, home appliances, electronics, the food industry, those with greatest growth. Industrial parks will continue to be the most viable alternatives and will maintain their strategy of growth and expansion with better offers of space and infrastructure.

Logistics and distribution projects have been the most favored and the most required in recent years. Surely in 2006 this niche of the market will continue to grow. North of the metropolitan area has without doubt been where the majority of the projects have been located and this has provoked a large increase in Queretaro given the state’s privileged geographic location, highway and communication systems. As transportation and logistics companies have told us, saturation will create the need to go out in search of better opportunities and the center of the country, mainly Queretaro, will be one of the most benefited states in that respect.

Manufacturing Industry in Queretaro

Queretaro is characterized by the constant development of the manufacturing industry, growing 11% in 2004 taking first place nationally for the growth of said sector.

Assembly companies find an ample number of national and international capital suppliers in Queretaro. There are 47 plants in the state with Tier One category; it is one of the states with the greatest number of direct suppliers for assembly companies from the country’s automotive industry.

The State of Queretaro has been given the task of supporting and developing local suppliers through the integration of value chains, through the substitution of imports.

Queretaro is the ideal site for the establishment of highly technological processes since it has productive and qualified human capital.

Therefore, in recent years companies with highly technical processes have decided to set themselves up, which has taken us from being a maquilador State to a high-tech industrial entity.


Industrial Parks

The State of Queretaro stands out at a national level for the excellent location of its industrial parks with extensive access ways and external circuits and for the communication that its interior provides to the urban transport service. The installations allow immediate access with railway, road, telephone, satellite and electricity networks, which represents an important comparative advantage in respect to other federal entities.

There are 16 industrial parks in operation in the state. One of them is in the process of being handed over to the El Marques municipality and is still managed by Fideicomisos Industriales de Gobierno del Estado de Queretaro – FIDEQRO (Industrial Trusts of the Government of the State of Queretaro), a decentralized organism of the State Government; three are managed by local municipalities and the rest by private enterprises.

The State’s systems and means of communication

Queretaro has a modern highway network that allows it to be connected to the rest of the country. Highway 57, also called the highway of the Tratado de Libre Comercio (Free Trade Agreement), comes from Mexico City and crosses Queretaro and is considered the most used highway to the USA from the center of the country.

The state is considered to be the primary loading, unloading and goods transfer point since the main railway lines cross Queretaro. It also has a multi-modal terminal through which goods are transported to the principal national destinations and an interior customs in which exterior commerce operations are carried out.

Interior customs

Queretaro interior customs has installations and services provided by private initiative and offers warehousing, management and fiscal custody in order to facilitate international trade, with the most complete and modern integrated services in Mexico.

The Interior Customs offices are located in the City of Queretaro on an eight hectare section. Because of the adequate distribution of its installations the following services are provided: customs processing, modal exchange operations (automotive transport- railway), fiscal custody and warehousing. It has access to the Mexico-Queretaro double railway line, as well as the Mexico-Cd Juarez, Mexico – Nuevo Laredo via Viborillas and Mexico – Guadalajara - Nogales – Mexicali routes.

It has immediate access to the “FTA Route” or highway 57. It has the capacity to manage six thousand containers per month and 300 trailers per day in addition to having a warehousing capacity of 30,000 m3.

The Integral Services and Development GMG (ISD-GMG) multimodal station offers logistics and transportation services, and they are beginning with: the reception of products and bulk goods by rail in order to make direct transfers to road transport; the consolidation and deconsolidation of goods in the formation of linked single and double stowage trains in maritime containers; piggyback management (with which movements can be made by rail or by road) from and to the country’s main ports and borders; and warehousing.

The operation of this customs center in Queretaro represents a great advantage for local productive plants and those in the central region of the country, both for its proximity, quality and variety of services and for the tax benefits that can be obtained in tax matters.

We appreciate the support of the State of Queretaro’s Sustainable Development Department for the information presented for this article. We hope we have been able to help in the promotion of the state and that we continue to receive companies that generate sources of employment, sustainable growth, development and infrastructure for the area.


2006 Regional Statistics – Averages of the real estate sector

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örale, no sabía lo de Celaya, y ps espremos más inversiones en Qro.

Que bien, que buen panorama para la región. Este es justamente el México que todos deseamos, el que trabaja y avanza y no se entrampa en conflictos inútiles. Enhorabuena y ojalá todo se desarrolle favorablemente.

Pues sí, no cabe duda que Qro. tiene muchas ventajas para seguir atrayendo nuevas inversiones.

Bueno, este es un articulo de la revista Business Week publicado en EU, resalta el hecho de que en Mexico y sobre todo en nuestra region se ha elevado la calidad y remuneracion del trabajo, sobre todo con impulso de inversiones de empresas que requieren mano de obra mejor calificada.

Mexico: Pumping Out Engineers

For years the Mexican workforce has meant one thing to multinationals: cheap, reliable labor, perfect for assembling cars, refrigerators, and other goods in the maquiladoras lining the border with America. More complex engineering and design work was better done elsewhere in the global economy -- usually at company headquarters in the U.S., Europe, and Japan. But as maquila-style assembly work migrated to cheaper locales, and India and China grabbed more sophisticated design and engineering assignments, Mexican officials knew they had to do something to stay in the global race. Quietly and steadily, they have. Over the past 10 years, the country's policymakers have been building up enrollment in four-year degree programs in engineering, developing a network of technical institutes that confer two-year degrees, and expanding advanced training programs with multinationals from the U.S. and elsewhere. The result is a bumper crop of engineers. Currently, 451,000 Mexican students are enrolled in full-time undergraduate programs, vs. just over 370,000 in the U.S. The Mexican students benefit from high-tech equipment and materials donated to their schools by foreign companies, which help develop course content to fit their needs. Many of these engineers graduate knowing how to use the latest computer-assisted design (CAD) software and speaking fluent English. This expanding workforce is changing the way multinationals view the country. They can now shift more complex production to Mexico, along with higher-skilled jobs. But it goes beyond manufacturing: Companies such as General Electric (GE <javascript: void showTicker('GE')> ), General Motors (GM <javascript: void showTicker('GM')> ), Honeywell (HON <javascript: void showTicker('HON')> ), and Delphi (DPHIQ <javascript: void showTicker('DPHIQ')> ) have created large research and development centers employing hundreds of Mexican engineers to carry out sophisticated design modifications and handle the testing of everything from new car models to military and commercial jet engines. "In the past five years, Mexican engineers have become increasingly qualified and gained valuable experience," says Alfredo Juárez, a director at the country's top engineering school, the National Polytechnic Institute in Mexico City. "We constantly have major multinationals here trying to recruit dozens of engineers at a time." MEXICALI MECCA One is GE, which employs 550 engineers at a tech center in the colonial city of Querétaro to help design and test jet engines and energy turbines. It's one of a handful of Global Engineering Centers that the company has worldwide, including India, Poland, and Russia.) Eduardo Lemini is a GE engineer at Querétaro. He spends his days huddled over CAD displays, making design changes and performance calculations, running tests on commercial and military jet engines, and working with his GE counterparts around the world. The 28-year-old holds a doctorate in engineering from the Institute of Science & Technology at the University of Manchester, England, where his research focused on computational fluid dynamics. Mexico's National Council of Science & Technology footed the bill for Lemini's studies abroad. Says Lemini, who was immediately hired by GE when he returned home: "This is a great time to be an engineer in Mexico." And a great time to employ one. Companies are creating or expanding research and development and testing centers from Mexico City to Mexicali. The young engineers being hired are capable, and they're a bargain, earning on average one-third what their U.S. counterparts do. A newly minted engineer earns around $15,000 a year, and those with experience take home $25,000 to $35,000. Vladimiro de la Mora, director of GE's R&D center in Querétaro, figures he'll hire 200 new engineers this year, as GE's Aviation and Energy divisions throw more work his way: "We're growing because Mexico's technical expertise is deepening, but also because it costs us 30% to 40% less to do the work here than in the U.S." The global aerospace industry is the latest to seek out Mexican expertise. Honeywell Aerospace recently broke ground on a $40 million systems integration and testing laboratory in Mexicali, along the border with Arizona. It will employ 300 Mexican engineers and run simulations for aircraft systems developed by Honeywell worldwide. Canadian aircraft maker Bombardier Inc., meanwhile, is relocating all electrical wire harness work for its planes to Querétaro from Montreal, Toronto, and Wichita, and shifting fuselage assembly to Mexico from Belfast. If all goes according to plan, the Canadian company will be assembling entire aircraft in Mexico in 7 to 10 years. To win the Bombardier investment, Mexico even pledged to build a new aerospace university nearby. "We're impressed by the government's commitment," says Réal Gervais, a Bombardier vice-president who heads the Mexico operations. A success story? Yes, but one with some caveats. As promising as the future is, Mexico's engineering schools may be a few years ahead of the country's industrial development curve, churning out too many professionals for current demand. While multinationals are taking the cream of the crop, the rest of Mexico's engineers must compete against less educated but experienced, lower-cost technicians for a limited number of supervisory positions. Mexico has been educating these technicians in record numbers as well. Electrical engineer Jorge Perez, 42, knows what this competition is like. Perez worked for Siemens' (SI <javascript: void showTicker('SI')> ) medical equipment group for 12 years. He just completed Bombardier's training course and hopes to work as a supervisor in the wire harness factory, a task for which he is probably overqualified. "An engineering degree doesn't guarantee you a job in Mexico, even today," says Perez. "I know a lot of underemployed engineers." Mexican officials hope that as more multinationals get hooked on the expertise of local technicians and engineers, they will keep sending more sophisticated work to Mexico, providing plenty of quality jobs for everyone and moving the country further up the ladder of development. The youngest Mexican engineers fervently believe this will happen. Twenty-three-year-old Mayra Ponce holds an undergraduate degree in aeronautics engineering from National Polytechnic. She is about to wrap up a 12-week intensive training course that will put her first in line for an engineer's job assembling aircraft fuselages for Bombardier. "I see this as a great opportunity to start at the bottom and learn how airplanes are made," she says. Her goal: design aircraft someday, even though Bombardier has not announced plans to do such work in Mexico. A lofty aspiration, but also a sign that Mexico is still in the global race for the best jobs.


http://yahoo.businessweek.com/magazine/content/06_21/b3985070.htm