VZCZCXRO8326
RR RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #3418/01 3382029
ZNR UUUUU ZZH
R 042029Z DEC 09
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 9275
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE

UNCLAS SECTION 01 OF 04 MEXICO 003418 
 
SIPDIS 
SENSITIVE 
 
STATE FOR WHA/MEX, WHA/EPSC 
STATE FOR EEB 
USDOC FOR 4320/ITA/MAC/WH/ONAFTA/GWORD 
TREASURY FOR IA 
ENERGY FOR WARD, LOCKWOOD AND DAVIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN ETRD ENRG ELTN EAIR PGOV SENV MX
SUBJECT: Mexico Economic Weekly - December 4 
 
¶1.  (U) The Mexico Economic Weekly supplements reporting 
from Mission Mexico Consulates and the Embassy Mexico 
Economic Section to provide a sense of ongoing trends. 
Please contact Adam Shub (shubam@state.gov) or Sigrid 
Emrich (emrichs@state.gov) for questions or comments 
about this report. 
 
¶2.  (SBU) Table of Contents: 
 
 
ECONOMY AND FINANCE: 
-------------------- 
 
REMITTANCES DROP 35.8% - Mexico City 
 
 
TRADE AND INVESTMENT: 
--------------------- 
 
MEXICO HOSTS CONGRESS ON COMBATING COUNTERFEITING AND 
PIRACY - Mexico City 
 
SUCCESSFUL SHRIMP INDUSTRY ATTRACTS BIOFUEL RESEARCH - 
Hermosillo 
 
(SBU)COSMETIC PACKAGING FIRMS RELOCATE TO NORTHEAST 
MEXICO - Matamoros 
 
(SBU) MATAMOROS MAQUILAS PRAISE MEXICAN CUSTOMS 
FLEXIBILITY - Matamoros 
 
HOTEL OCCUPANCY RATES DOWN 20% IN NUEVO LEON - Monterrey 
 
AMB PROPERTY ANNOUNCES INVESTMENT IN NUEVO LEON - 
Monterrey 
 
 
TRANSPORTATION AND INFRASTRUCTURE: 
---------------------------------- 
 
VIVAAEROBUS ANNOUNCES EXPANSION PLANS - Monterrey 
 
 
ENERGY AND ENVIRONMENT: 
----------------------- 
 
DECREASE IN DEMAND HIGHLIGHTS EXPO ELECTRICA 2009 - 
Monterrey 
 
GOM TO PROPOSE SECOND ENERGY REFORM - Mexico City 
 
MEXICO AND US ENHANCE COOPERATION ON WEATHER FORECASTING 
- Mexico City 
 
BISON RETURN TO MEXICO - Mexico City 
 
 
------------------- 
ECONOMY AND FINANCE 
------------------- 
 
¶3.  (U) REMITTANCES DROP 35.8%:  Remittances in October 
stood at 1.69 billion dollars, a 35.8% drop from the 
previous year (when the inflow reached an all-time high 
of 2.64 billion dollars), according to the Bank of 
Mexico.  The total accumulated over the previous twelve 
months stood at 21.65 billion dollars, the lowest level 
since December 2005.  The most likely cause is higher 
unemployment among Mexicans working illegally in the 
United States, especially in sectors such as 
construction.  Remittances are a main source of income 
for many families in Mexico.  An estimated 80-90% of 
remittances received are spent on basic consumption such 
as food and clothing.  On average, each remittance 
received during October totalled 299 USD, a significant 
fall from the 395 USD average in October 2008.  While 
significant peso depreciation over the past year 
partially compensated for lower remittances, the drop 
still represents a major blow for many families.  (Mexico 
City) 
 
-------------------- 
 
MEXICO 00003418  002 OF 004 
 
 
TRADE AND INVESTMENT 
--------------------- 
 
¶4.  (U) MEXICO HOSTS CONGRESS ON COMBATING COUNTERFEITING 
AND PIRACY:  The Mexican Institute for Industrial 
Property (IMPI) and INTERPOL co-hosted the 5th Global 
Congress on Combating Counterfeiting and Piracy in Cancun 
December 1-3.  More than 800 international public and 
private sector IP experts attended from over 30 
countries.  US speakers included senior officials from 
CBP, USTR, FBI and PTO.  Judge Ronald Lew, Senior U.S. 
District Court Judge in the U.S. Central District Court 
of California and a well known expert on IP cases, also 
participated.  The Global Congress allowed global IP 
experts to present their views on what can and should be 
done about the menace of counterfeiting and piracy during 
the current economic crisis, and identify how to 
collaborate to make target scarce resources where they 
are most effective.  Mexico used the opportunity to 
showcase its efforts to protect and enforce intellectual 
property.  Following the conference, US Embassy Mexico 
(ECON and USAID) invited Judge Lew to come to Mexico City 
and meet with Mexican Supreme Court Justices, the 
President of the National College of Judges and 
Magistrates, and several other senior Mexican judges on 
December 4.  (Mexico City) 
 
¶5.  (U) SUCCESSFUL SHRIMP INDUSTRY ATTRACTS BIOFUEL 
RESEARCH:  Mexico is the 6th largest producer of farmed 
shrimp in the world, and the state of Sonora cultivates 
65 percent of the country's product.  Last year Sonora 
exported USD $400 million in farmed shrimp to the United 
States.  Despite the economic crisis and price decreases 
of 15 percent last year, farms are expanding and industry 
leaders are optimistic about the future.  On November 
9th, econoff toured a 2,300 acre shrimp farm during the 
last week of the harvest.  Farms are constructed on 
desert coastland by dredging canals to feed seawater to 
10 acre ponds.  In these ponds, shrimp larva are grown 
over six months to adulthood and harvested once a year. 
Seventy-percent of the harvest is exported to U.S. 
restaurants and households, and the remainder is for 
domestic consumption.  Unlike traditional farmers and 
ranchers in the state, the government does not provide 
subsidies to the industry.  The large enterprise in 
Sonora has attracted a unique biofuel project by Global 
Seawater Inc. (GSI) to use the residual waters from these 
farms as a fertilizer to adjacent Salicornia crops.  This 
plant thrives in saltwater, is a cheaper competitor to 
corn ethanol and soy, and does not use freshwater 
resources.  The crop yields a clean oil that can be used 
to produce jet fuel.  In October, Airbus announced a USD 
$10 million project partnering with GSI, GE, and Interjet 
to develop the technology in hopes of using the fuel for 
test flights starting in 2010.  In addition to fuel, the 
crop can also be used as feed for livestock. 
(Hermosillo) 
 
¶6.  (SBU) COSMETIC PACKAGING FIRMS RELOCATE TO NORTHEAST 
MEXICO:  A majority of the top 12 players in the cosmetic 
and personal care packaging industry will relocate to 
northeast Mexico (in the Mexican state of Tamaulipas) in 
the next 5 years according to Carlos Rubio, General 
Manager of Alcan Packaging.  Rubio says the industry is 
shifting production from China back to North America to 
be closer to their customers.  The cost of labor in China 
is not the bargain it once was, and the close proximity 
of the U.S. and Mexico allows companies to keep inventory 
levels low.  Rubio notes the risk of shipping damage is 
much lower and response time to market much faster than 
the 6-8 week norm from China.  HCP packaging announced 
plans to open a 60,000-sq foot operation in Reynosa, 
Mexico.  HCP is a Chinese firm under Taiwanese ownership 
with operations in China, the U.S., and now Mexico.  The 
company focuses on packaging design, development and 
manufacture for the cosmetics, toiletries, skin care and 
fragrance industries.  The plant will be located close to 
the soon to open Anzalduas International Bridge and will 
focus on injection molding, injection blow molding, UV 
lacquering, vacuum metalizing, as well as decoration and 
assembly.  HCP Reynosa should be fully operational during 
the first quarter of 2010, and will employ approximately 
 
MEXICO 00003418  003 OF 004 
 
 
130 people.  Contacts at the McAllen Economic Development 
Corporation confirm a second packaging firm is in the 
final stages of real estate negotiations in the area and 
anticipate they will close negotiations before the end of 
the year. (Matamoros) 
 
¶7.  (SBU) MATAMOROS MAQUILAS PRAISE MEXICAN CUSTOMS 
FLEXIBILITY:  The Matamoros maquila association's 
director and president both praised local and national 
customs authorities' flexibility in a recent conversation 
with ECONOFF.  They said authorities at both levels 
understand the needs and concerns that local and national 
maquila associations have brought to their attention, 
such as requests for extended hours for call centers and 
north bound port staffing.  They feel Mexican customs is 
more business oriented now than in the past.  Our 
interlocutors noted custom's extended service hours are 
so valuable to their businesses that they offered to pay, 
but Hacienda indicated that it was not legal under 
current regulation.  (Matamoros) 
 
¶8.  (U) HOTEL OCCUPANCY RATES DOWN 20% IN NUEVO LEON: 
The Association of Nuevo Leon Hotels reported that 
occupancy rates among its members fell 20% in 2009, 
despite the numerous offers and incentives such as lower 
room rates.  The organization's president, Miguel Angel 
Cantu Gonzalez blamed the bad year on the economic crisis 
and the outbreak of H1N1 influenza, which he said had 
made life "complicated" for the tourism industry 
throughout the country.  (Monterrey) 
 
¶9.  (U) AMB PROPERTY ANNOUNCES INVESTMENT IN NUEVO LEON: 
Maryland-based AMB Property announced on December 1st 
that it will begin construction of the AMB-Agua Fria 
Industrial Park in the Monterrey suburb of Apodaca. 
Although the company has not revealed the cost of the 
project, the media reported that AMB will invest about 
$110 million.  The initial construction phase will 
include three buildings with a total of 44,000 square 
meters.  Once completed, the park will have over 200,000 
square meters of industrial space and cater to 
manufacturing distributors.  AMB has already signed lease 
agreements with Raven Rubber, Energy Alloys, Ceva Freight 
Management, Span de Mexico, Johnson Controls, and Arauco 
for the new facility.  (Monterrey) 
 
--------------------------------- 
TRANSPORTATION AND INFRASTRUCTURE 
--------------------------------- 
 
¶10.  (U) VIVAAEROBUS ANNOUNCES EXPANSION PLANS:  On its 
third anniversary, Monterrey-based budget airline 
VivaAerobus announced plans to add four aircraft to its 
fleet and begin service on 12-15 new domestic and 
international routes in 2010.  The company's CEO Donal 
Rogers said that, despite the economic crisis, his 
airline had 1.6 million passengers in 2009, an increase 
of 15% over 2008, with a load factor of 79%. 
VivaAerobus, a joint venture between the Mexican bus 
company IAMSA and the Ryan family (proprietors of 
Ryanair), began operations in 2006 and operates a fleet 
of seven Boeing 737 aircraft flying to 30 destinations in 
Mexico and to Las Vegas.  It suspended service between 
Monterrey and Austin, TX, its other international route, 
earlier this year. (Monterrey) 
 
---------------------- 
ENERGY AND ENVIRONMENT 
---------------------- 
 
¶11.  (U) DECREASE IN DEMAND HIGHLIGHTS EXPO ELECTRICA 
2009:  Annual electricity demand nationwide had decreased 
by 4% through November, the largest reduction recorded 
since the founding of the Federal Electricity Commission 
in 1937.  Speaking at the November 25 - 27 Expo Electrica 
2009 in Monterrey, Gabriel Garza Herrera, President of 
the Mexican Chamber of Electrical Manufacturers, 
attributed lower demand to the economic crisis and 
increased conservation measures.  He expected demand to 
rise during December due to the Christmas holidays. 
(Monterrey) 
 
 
MEXICO 00003418  004 OF 004 
 
 
¶12.  (U) GOM TO PROPOSE SECOND ENERGY REFORM:  The Energy 
Secretariat is drafting a new energy reform, which will 
include some of the issues that were cut excluded from 
the first reform, including private investment in 
downstream activities.  According to Energy Secretary 
Georgina Kessel, a second generation reform is aimed at 
strengthening Mexico's public finances and significantly 
reducing reliance on oil revenues.  (In October, 
budgetary and oil revenues fell 33.9% and 49.7%, 
respectively, the deepest decline since 1990.)  Kessel 
said the Energy Secretariat also aims at transforming 
Pemex to a public company similar to Statoil and 
Petrobras, which were opened to private capital. 
According to Kessel the reform will be submitted to the 
Congress before the beginning of the congressional 
sessions in February.  (Mexico City) 
 
¶13.  (U) MEXICO AND US ENHANCE COOPERATION ON WEATHER 
FORECASTING:  Ambassador Pascual and Mexican Environment 
Minister Juan Elvira Quesada on December 3 signed a 
bilateral agreement between the U.S. National Weather 
Service (NOAA) and the Mexican Water Commission (CONAGUA, 
part of the Environment Ministry), renewing a 67-year- 
long collaboration on weather forecasting and 
hydrological (flooding) prediction.  In his remarks, 
Ambassador Pascual stressed the impact of climate change 
on weather, and the importance that our respective 
presidents place on responding to these climate change 
impacts.  The Director of the National Weather Service 
for the southern region of the United States and the 
Director of the Weather Service's Office of International 
Affairs attended the signing as well.  (Mexico City) 
 
¶14.  (U) BISON RETURN TO MEXICO:  As a part of a 
collaborative effort between Mexico and the US to restore 
bison to their historical range in Mexico, twenty-three 
bison from South Dakota's Wind Cave National Park were 
released into Mexico's high desert on November 27.  The 
bison were released in the 44,000 acre Rancho El Uno 
reserve in Chihuahua.  The ceremony was attended by 
Secretary of Environment Juan Elvira as part of the 
celebration of Mexico's National Conservation Day. 
(Mexico City) 
 
PASCUAL