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RR RUEHCD RUEHGD RUEHHO RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHMC #0032/01 0290153
ZNR UUUUU ZZH
R 290153Z JAN 09
FM AMCONSUL MONTERREY
TO RUEHC/SECSTATE WASHDC 3438
INFO RUEHME/AMEMBASSY MEXICO 4484
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHMC/AMCONSUL MONTERREY 8985

UNCLAS SECTION 01 OF 02 MONTERREY 000032 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAGR TBIO ECON EINV KIPR PGOV MX
SUBJECT: NUEVO LEON'S COLLABORATIVE MODEL FOR BUILDING ITS BIOTECH 
INDUSTRY 
 
MONTERREY 00000032  001.2 OF 002 
 
 
¶1.  Summary.  The State of Nuevo Leon has identified the 
biotechnology industry as one of five key sectors for potential 
growth, building on its comparative advantages of strong 
universities, a business friendly climate and a tradition of 
public/private partnerships.  The state and its private sector 
partners have promoted biotechnology through conferences, a 
biocluster and a research center.  Although Nuevo Leon's 
biotechnology industry is very much at the beginning stages, 
local experts believe that it has high potential, provided that 
the sector continues to receive political support.  End Summary. 
 
 
 
 
Moving Towards a Knowledge Based Economy 
 
 
 
¶2.  Governor Gonzalez Paras has worked hard to move Nuevo Leon 
from its traditional manufacturing-based economy to a higher 
value added knowledge-based economy.    Nuevo Leon's GDP growth 
since 2003 has been 1.5% higher than the national average and 
Nuevo Leon received the most foreign direct investment of any 
Mexican state outside of the Federal District.  As part of his 
2004-2009 development plan, Gonzalez Paras focused on five main 
areas:  software development, healthcare, automotive 
manufacturing, aerospace, and biotechnology.  Of all the 
industries, biotechnology is the newest and offers tremendous 
potential for investment in Nuevo Leon.  The state's efforts in 
biotechnology are also a model of how the state has used 
public-private cooperation to promote economic growth.  Within 
the biotechnology industry, Nuevo Leon is primarily focusing on 
pharmaceuticals, healthcare, food security and biofuels.  Only a 
small percentage of Nuevo Leon's economy is agricultural, 
although several important companies are in the processed food 
industry.  Note:  As for public opinion of biotechnology in 
Nuevo Leon, the prevailing view is that agricultural 
biotechnology can help address increasing food productivity and 
help alleviate poverty.  There is no public controversy 
surrounding biotechnology, as people consume imported biotech 
food products without complaint.    End Note. 
 
 
 
¶3.  Nuevo Leon has many advantages over other states in Mexico 
in growing a biotechnology industry.  A state with a large 
number of manufacturing companies and a growing population of 
4.5 million, Nuevo Leon is a big consumer of biotechnology 
products.  This demand is currently being met by imports primary 
from the United States.  Given the state's economic 
sophistication, there is, however, a large pool of private 
sector researchers and scientists to draw upon to develop 
research in-house.  Nuevo Leon also hopes to focus its over 
150,000 university students to work in its targeted industries. 
The state already has excellent hospitals with many doctors 
trained in the United States.   Monterrey TEC University and 
Nuevo Leon's Universidad Autonoma, in particular, offer leading 
biotechnology programs and, like many of the other universities 
and hospitals in the state, have long standing partnerships with 
companies and universities in the United States.  For example, 
companies such as Roche, Merck and Pfizer have already 
outsourced clinical trials of drugs and medical devices to 
hospitals and universities in Nuevo Leon. 
 
 
 
A Collaborative Model 
 
 
 
¶4.  Nuevo Leon's plan to promote biotechnology features the work 
of two state agencies, conferences, trade groups, and a research 
center.  These efforts are led by the Consejo de Ciencia y 
Tecnologma del Estado de Nuevo Lesn (Cocytenl), headed by the 
widely respected Luis Eugenio Todd, former state Health 
Minister.  Econoff and a trade specialist from the Foreign 
Commercial Service met with Todd and he is eager to work more 
closely with the Consulate to promote research in Nuevo Leon. 
According to Todd, the industry is starting from a small base 
but Cocytenl has been successful in meeting its goals for the 
four years it has been in operation.  Using the United States' 
National Science Foundation as a model, Cocytenl is aggressively 
promoting research in the state.   The council has worked to 
develop courses in the state's primary universities, and also 
promoted exchange programs with U.S. universities and private 
companies.  One of its current projects is to help researchers 
learn how to commercialize their work.  In the past there has 
not been a strong effort by universities to reward innovative 
researchers or create patents.  Infringement of intellectual 
property rights is a major concern of companies operating in 
 
MONTERREY 00000032  002.2 OF 002 
 
 
Mexico. 
 
 
 
¶5.  Cocytenl also organized BioMonterrey to increase 
collaboration on biotechnology.  The last such conference in 
2008 was a three day event that attracted 800 scientists and 
government policy makers from all over Mexico, Europe and North 
America.  The conference covered a wide variety of subjects 
including sustainable development, agriculture, nanotechnology 
and collaborative development.  Governor Gonzalez Paras gave the 
keynote address and called Nuevo Leon's transformation into a 
hub of research a development "critical" in order to compete in 
a globalized world. 
 
 
 
¶6.  The primary state agency charged with developing the 
biotechnology industry is the Ministry of Economic Development 
(SEDEC).  Alongside Nuevo Leon, four other states are 
competitive for biotechnology research: Morelos, Guanajuato, 
Jalisco and Baja California.  These other states also have 
strong university systems and a high concentration of 
researchers.  SEDEC competes for investment in Nuevo Leon by 
offering tax incentives, promoting strong public/private 
partnerships, market research and assistance with state and 
federal regulation compliance.  Also, SEDEC works closely with 
companies to propose laws and policies that promote growth 
especially by commercializing research and the transfer of 
technologies to the private sector. 
 
 
 
¶7.  The Monterrey Biocluster is a trade group started by SEDEC 
to develop the industry.   It is modeled after the successful 
San Diego biocluster and officials from the San Diego Biocluster 
advise their counterparts in Monterrey.  The group is currently 
funded entirely by SEDEC but has plans to start collecting dues 
from its members this year to ensure its survival past Governor 
Gonzales Paras' administration.   Note.  The Governor's term 
ends in October 2009.  While his successor is likely to continue 
the state's pro-business agenda, it is unknown if he or she will 
continue to emphasize the potential of biotechnology.  End Note. 
  The association helps its members earn international 
certification and provides a forum for members to address issues 
such as intellectual property rights, funding and working with 
universities.  The biocluster also supports exchange programs 
with U.S. companies and universities.  There are only two dozen 
registered members in the biocluster but it is only one year old 
and there is strong buy-in from important institutions such as 
the federal ministry of economic development and Monterrey TEC 
University, one of Mexico's leading universities. 
 
 
 
¶8.  The FEMSA Biotechnology Center is another initiative 
dedicated to biotechnology research.  The center is privately 
funded by the large food and beverage company FEMSA in 
cooperation with Monterrey TEC University.   The US$ 40 million 
center is geared toward commercially viable research in the area 
of agriculture and food safely.  According to the director of 
the center, Dr. Manuel Zertuche Guerra, the center differs from 
other university research programs because of its business 
focus.  The work done at the center has helped a wide range of 
companies, such as grocery store chain HEB in the area of food 
transportation and Genentech in the area of anticarcinogens. 
One of the center's current major projects is with Cemex to 
develop biological compounds that are able to reduce pollutants 
in the cement making process. 
 
 
 
¶9.  Comment.  While the biotechnology industry is still in its 
infancy, the government of Nuevo Leon has shown its commitment 
to development of the industry and its eagerness to work with 
private companies.  For 2009, the U.S. Foreign Commercial 
Service office in Monterrey has identified biotechnology as a 
high growth industry and will work with American companies to 
increase their presence in the market.   If the state continues 
to fund this effort despite the current economic climate and 
political support continues, Nuevo Leon's biotechnology sector 
bears watching.  End Comment. 
WILLIAMSON