Home' Trinidad and Tobago Guardian : May 18th 2017 Contents MAY 18 • 2017 guardian.co.tt BUSINESS GUARDIAN
REGIONAL | BG13
Public, private sectors to boost
manufacturing in Nuevo León, Mexica
Active trade promotion abroad
and closer ties between in-
dustry, government and
academia should help fuel
the Mexican state of Nuevo
León through its next wave
of industrial advancement, helping to offset
any barriers the new US administration may
erect against free trade.
Seeking new council
In a step in this direction, Fernando Turner,
secretary of economy and labour for the state
of Nuevo León, announced plans in early April
to establish a special Council of Industry 4.0,
bringing together top business stakeholders,
university heads and government officials to
tackle the challenges of industrial transfor-
Expected to begin in May, the council will
include the rectors of the four main local uni-
versities, who will look for ways to modify cur-
ricula to fill skills gaps and better respond to
labour market needs.
The new group is part of Nuevo León's an-
swer to a countrywide development roadmap
launched last year referred to as Industry 4.0
-- a reference to the blend of big data, analytics
software, computer interfaces and 3D printing
that many analysts expect to drive the next
wave of productivity gains in manufacturing.
By weaving together new sensors, robotics
and computing systems to create smart fac-
tories, the north-eastern state hopes to usher
in an era of industrial development focused on
Fourth industrial revolution?
The first phase of the 4.0 plan, due to run to
the end of 2017, aims to build up institutional
clout by attracting stakeholders in industries
such as automotive, agro-industry, education
and electronic appliances.
For each key field identified in the plan,
the government intends to create a series of
mini-consortia to coordinate the implemen-
tation of projects. To this end, it has set up
a fund worth MXN100m-120m (US$5.4m to
US$6.4m), with private investors to provide
the remaining financing in each sector.
To garner international support, a group of
industry stakeholders--- including state offi-
cials, developers and financial service provid-
ers---travelled from Nuevo León to South Korea
in early April to promote the state's competitive
More than 100 companies in Seoul and Busan
took part in an investment seminar aimed at
attracting new deals to the state.
About 140 South Korean companies are
already present in Nuevo León, contributing
some of $2.8bn in foreign direct investment
over 2011-16. Just under half of these compa-
nies have entered in the last three years.
Human capital needs
Given the job losses often tied to automation,
the government has made a priority of ensuring
that Mexico's future workforce is employable
by developing a network of trained profession-
als and universities.
According to a recent report by consultancy
McKinsey, about 52 per cent of jobs in Mexi-
co---some 25.5m positions---will be subject to
automation over the next decade or so. Indeed,
purchases of robots in the country tripled in
2015 to reach 6320 units.
"While there is a large number of work-
ers with higher education degrees in Nuevo
León, there is a lack of technical staff, hence
the importance of developing human capital
development and training activities," Rodri-
guez Tovar, director of the Energy Cluster of
Nuevo León, told OBG earlier this year.
In the World Economic Forum's "Human
Capital 2015" Report, Mexico ranks 65th out
of 130 economies and 10th out of 24 in Latin
America and the Caribbean, behind Colombia
(64th) and Panama (52nd) but ahead of Peru
(79th) and Venezuela (89th).
The innovation space
Links between industry and training pro-
grammes will also extend to research and de-
Nuevo León's auto industry, for example,
inaugurated a new innovation centre in March
of last year---the Automotive Centre for Tech-
nological Development and Talent---to develop
specialised skills in the sector and streamline
The first of its kind in the state, the centre has
cost roughly MXN30m ($1.8m) to date, half of
which came from the state Ministry of Econo-
my and Labour, and half from the five member
companies in the state's automotive cluster.
According to the 2014 State Competitive
Index compiled by the Mexican Institute for
Competitiveness, Nuevo León moved up one
place from the 2012 report to fifth in terms of
However, while R&D in Nuevo León is im-
proving, there is still room for growth, accord-
ing to Enrique Noche, COO at Luvata, a metal
solutions manufacturing company.
"R&D is a division that companies have to
take into consideration differently," he told
OBG earlier this year.
"The goal of manufacturing companies is
to reach an optimum production process so,
thanks to innovation, they can reduce produc-
tion time or take better advantage of waste,
achieving greater efficiency."
This Mexico economic update was produced by
Oxford Business Group.
Puerto Rico's development bank in deal with creditors
Puerto Rico's development bank has entered into a deal with
financial creditors that would allow it to avoid a lengthy bank-
ruptcy proceeding, the leader of the debt-swamped US island
The liquidation agreement still has to be formally approved
by creditors of the Government Development Bank, which for
decades played a major role in the US Caribbean territory's
A financial oversight board and US District Court for Puerto
Rico also must sign off on the pact.
But Gov Ricardo Rossello said in a Monday statement that
the so-called restructuring support agreement negotiated over
the last two months is backed by "a significant portion of its
The deal focused on the bank is just one piece of an over-
all US$73 billion public debt load that the government of the
struggling island is seeking to restructure. Puerto Rico is mired
in a decade-long recession.
Rossello said the agreement will allow bondholders and other
creditors to exchange their claims against Puerto Rico's de-
velopment bank for one of three tranches of new bonds with
varying payment terms.
Details were fuzzy about how issuing new debt to cover old
debt would pan out. But Rossello said the bank's creditors agreed
to "substantial discounts to the principal" and touted the pact
as "an example of the government regaining the credibility it
had lost over the past few years."
Rafael Rojo, a spokesman for Puerto Rico creditor group
Bonistas del Patio, said in the government statement that the
creditors were voluntarily accepting losses up to 45 per cent.
"We are Puerto Ricans first and we recognize the circum-
stances in which Puerto Rico is today," Rojo said.
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