Mexico: Implementing a modernization drive for industry and infrastructure
In recent years, Mexico has developed into a powerhouse in the south of North America. In many cases the country has given impulses for the economic development of Middle and South America. One fifth of silver mined worldwide comes from this country. In addition, this southern neighbor to the US is one of the world’s most important manufacturers of cars and automotive parts. It also has a large food and drinks industry. The 2018 partner country to Hannover Messe has industrialized at an almost dizzying rate over the past two decades. Now, Mexico is looking to reduce its dependency on the US market and strengthen its trade relations with Europe and Asia. The fact that Mexico imports around 80 percent of all machines and systems is of particular interest to the international capital goods industry.
With a population of 123 million and the second largest economy in Latin America after Brazil, Mexico is a major economic player in the Americas. It has been a member of the North American Free Trade Agreement (NAFTA) since 1994 and has had a free trade agreement with the European Union since the year 2000.
Expanding hydropower: Hydraulic equipment from Bosch Rexroth
Mexico is seen as one of the most proactive countries in the world in its commitment to transitioning to renewable energy. Although many people immediately associate Mexico with deserts and high plains, hydroelectric power plants actually generate over 18 percent of electricity. The La Yesca hydroelectric power plant, for example, was commissioned in late 2012. Two generators with a nominal capacity of 750 megawatts generate an average of 1,210 gigawatt hours of power per year, supplying around one million inhabitants. Bosch Rexroth designed and delivered all of the hydraulic equipment. The company has also established itself as a system partner for the modernization of older hydroelectric power plants, replacing the drives used to open and close spillways at the Malpaso dam in the east of Mexico. The drive and control specialist also met the operator’s request to keep as much of the value added as local as possible. The solution was made the standard for all other upgrades of hydroelectric power plants in Mexico.
80 percent of machines imported
In recent years, foreign companies alone have invested almost 30 billion US dollars per year. This has made Mexico the world’s fourth largest manufacturer of automotive parts. In 2017, the country built around 3.7 million cars, making it the seventh largest car producer in the world. Five million cars are expected to roll off the production line in 2020. The fact that three German car brands alone will be opening three new plants between 2017 and 2019 aligns perfectly with this trend. Until now, exports were focused on North America. Now, however, the government and companies are looking to diversify. In 2016, exports to Asia rose by 15 percent, with exports to the EU increasing by six percent.
In response to the expanding export business, companies have to increase automation in order to reproduce products to the requisite quality levels. Mexico itself does not have a sizable engineering sector. According to statistics, only 20 percent of factory equipment is sourced from within the country. The remaining 80 percent is imported. This why companies play a bigger role in planning and implementing factories in Mexico than is normally the case in other regions. In addition to this, globalization is putting the Mexican industry under increasing pressure to accelerate networking with the Internet of Things and Industry 4.0. This is the only way that manufacturers can integrate as suppliers in global value-generating networks. Companies are also looking for support from internationally experienced automation partners like Bosch Rexroth.
Kick-starting an education offensive
Mining is another important industry. Mexico is the world’s largest silver producer, with a market share of around 20 percent. The country also mines many other minerals and metals. However, investments in this industry have remained at a relatively low level of around 4.7 billion US dollars since the drop in raw material prices. As a result, an investment backlog has been building up for years. This is set to clear over the coming years.
The Mexican Government has set itself a clear goal to improve basic and vocational training for the many young people entering the Mexican labor market. It has also started to introduce a dual work/training program for students who leave the education system after attaining a high school qualification. This program is being rolled out with support from the German Government and private initiatives. Around 300 companies in fifteen states have taken part to date. As a result, demand for training systems for all automation technologies is high in Mexico.
Bosch Rexroth has been operating in Mexico since 1982, assembling tailor-made hydraulics systems. With ten sales affiliates and three service centers, the company covers all key regions. In addition to steel construction for hydraulic engineering and mining, Bosch Rexroth places particular focuses on metallurgical applications and factory automation. Automation solutions for the automobile industry and its suppliers, the aerospace sector, and the food industry are top priorities here.
In recent years, Mexico has developed into a powerhouse in the south of North America. In many cases the country has given impulses for the economic development of Middle and South America. One fifth of silver mined worldwide comes from this country. In addition, this southern neighbor to the US is one of the world’s most important manufacturers of cars and automotive parts. It also has a large food and drinks industry. The 2018 partner country to Hannover Messe has industrialized at an almost dizzying rate over the past two decades. Now, Mexico is looking to reduce its dependency on the US market and strengthen its trade relations with Europe and Asia. The fact that Mexico imports around 80 percent of all machines and systems is of particular interest to the international capital goods industry.
With a population of 123 million and the second largest economy in Latin America after Brazil, Mexico is a major economic player in the Americas. It has been a member of the North American Free Trade Agreement (NAFTA) since 1994 and has had a free trade agreement with the European Union since the year 2000.
Expanding hydropower: Hydraulic equipment from Bosch Rexroth
Mexico is seen as one of the most proactive countries in the world in its commitment to transitioning to renewable energy. Although many people immediately associate Mexico with deserts and high plains, hydroelectric power plants actually generate over 18 percent of electricity. The La Yesca hydroelectric power plant, for example, was commissioned in late 2012. Two generators with a nominal capacity of 750 megawatts generate an average of 1,210 gigawatt hours of power per year, supplying around one million inhabitants. Bosch Rexroth designed and delivered all of the hydraulic equipment. The company has also established itself as a system partner for the modernization of older hydroelectric power plants, replacing the drives used to open and close spillways at the Malpaso dam in the east of Mexico. The drive and control specialist also met the operator’s request to keep as much of the value added as local as possible. The solution was made the standard for all other upgrades of hydroelectric power plants in Mexico.
80 percent of machines imported
In recent years, foreign companies alone have invested almost 30 billion US dollars per year. This has made Mexico the world’s fourth largest manufacturer of automotive parts. In 2017, the country built around 3.7 million cars, making it the seventh largest car producer in the world. Five million cars are expected to roll off the production line in 2020. The fact that three German car brands alone will be opening three new plants between 2017 and 2019 aligns perfectly with this trend. Until now, exports were focused on North America. Now, however, the government and companies are looking to diversify. In 2016, exports to Asia rose by 15 percent, with exports to the EU increasing by six percent.
In response to the expanding export business, companies have to increase automation in order to reproduce products to the requisite quality levels. Mexico itself does not have a sizable engineering sector. According to statistics, only 20 percent of factory equipment is sourced from within the country. The remaining 80 percent is imported. This why companies play a bigger role in planning and implementing factories in Mexico than is normally the case in other regions. In addition to this, globalization is putting the Mexican industry under increasing pressure to accelerate networking with the Internet of Things and Industry 4.0. This is the only way that manufacturers can integrate as suppliers in global value-generating networks. Companies are also looking for support from internationally experienced automation partners like Bosch Rexroth.
Kick-starting an education offensive
Mining is another important industry. Mexico is the world’s largest silver producer, with a market share of around 20 percent. The country also mines many other minerals and metals. However, investments in this industry have remained at a relatively low level of around 4.7 billion US dollars since the drop in raw material prices. As a result, an investment backlog has been building up for years. This is set to clear over the coming years.
The Mexican Government has set itself a clear goal to improve basic and vocational training for the many young people entering the Mexican labor market. It has also started to introduce a dual work/training program for students who leave the education system after attaining a high school qualification. This program is being rolled out with support from the German Government and private initiatives. Around 300 companies in fifteen states have taken part to date. As a result, demand for training systems for all automation technologies is high in Mexico.
Bosch Rexroth has been operating in Mexico since 1982, assembling tailor-made hydraulics systems. With ten sales affiliates and three service centers, the company covers all key regions. In addition to steel construction for hydraulic engineering and mining, Bosch Rexroth places particular focuses on metallurgical applications and factory automation. Automation solutions for the automobile industry and its suppliers, the aerospace sector, and the food industry are top priorities here.