Benzinga - by FreightWaves, .
Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Investment surges in Mexico as companies shift supply chains, plan new factories; Michigan 3PL acquires Mexican freight brokerage, signs lease for Arizona warehouse; American Woodmark (NASDAQ: AMWD) opens $45M plant in Monterrey, Mexico; and Zipline Logistics acquires supply chain provider Summit Eleven.
Investment surges in Mexico as companies shift supply chains, plan new factories
Investment in Mexico has surged in the first three months of 2024 as more companies are looking south of the border to establish supply chain and manufacturing hubs, officials said.
From January through mid-March, Mexico has received investment commitments worth more than $31 billion, compared to $36 billion total in 2023.
"Mexico has become the greatest attraction in the world for investments" Mexican Secretary of Economy Raquel Buenrostro said during the 41st general assembly of Mexico's Business Coordinating Council (CCE) on March 19.
The CCE is one of the country's most influential organizations representing Mexico's private sector.
Buenrostro said nearshoring continues to play a big role in attracting more investments to the country.
"[Nearshoring] is here to stay and that is not going away" Buenrostro said. "We have to see how we integrate and how we take advantage of these opportunities at this moment."
Buenrostro said between that Jan. 1 and March 15 there have been 73 investment announcements by both foreign and domestic companies.
Mexico has achieved a high number of investment announcements despite the fact some predicted "2024 could be a weak year due to the electoral year, both in Mexico and the United States, but we are seeing that the pace of the arrival of investments is not going to change" Buenrostro said.
"Mexico has become the greatest attraction in the world for investments" said Mexican Secretary of Economy Raquel Buenrostro. (Photo: Courtesy/Mexican government)
According to data from Mexico's Ministry of Economy, some of the most recent investments include:
— Mercado Libre (NASDAQ: MELI), e-commerce: $2.4 billion
— Walmart (NYSE: WMT), retail: $2.1 billion
— Yokohama Tire Corp., automotive industry: $380 million
— IKD, automotive parts supplier: $178 million
— Minth Group, automotive industry: $173 million
— Carnot Laboratories, pharmaceutical industry: $142 million.
Other companies making recent investment announcements in Mexico include Amazon (NASDAQ: AMZN), DHL Supply Chain, Volkswagen, Maersk, FEMSA, Ternium (NYSE: TX), Solarever, ELAM-FAW and Unison Shanghai.
So far, the majority of investments in Mexico this year have originated from firms in the United States (57%), followed by Germany (17%), Argentina (14%) and China (6%), according to the Ministry of Economy.
Mexico's manufacturing sector received the majority of investments in 2024 so far at 54%, followed by media (16%), commerce (15%) and transportation (14%).
The Mexican state of Queretaro in the center of the country has received the largest share of investments at 18%, followed by the state of Mexico at 14%, with the northern state of Nuevo Leon receiving 10%.
The investments announced so far this year could take about two to four years to come to fruition, but could generate over 39,100 new jobs by 2028, according to Mexican authorities.
Michigan 3PL acquires Mexican freight brokerage, signs lease for Arizona warehouse
Supply Chain Solutions LLC (SCS) has acquired Transport Accion S.A., a Mexico City-based freight forwarder and brokerage.
"This acquisition is a strategic move that reinforces our commitment to offering comprehensive solutions in international logistics, enhancing our service offerings across the globe" SCS CEO Les Brand said in a news release.
SCS is a global supply chain and transportation management solutions company headquartered in Grand Rapids, Michigan.
In a September 2023 interview with FreightWaves, Brand said SCS aims to boost its cross-border Mexico services as more firms leave China and nearshore manufacturing operations south of the border.
"China trade is slowing down and it significantly took a big portion of our revenues down because consumers are buying locally now" Brand told FreightWaves.
SCS also recently leased a 156,751-square-foot warehouse at the Sight Logistics Park in Tempe, Arizona. Sight Logistics Park is an industrial facility comprising two Class A buildings totaling 357,000 square feet.
American Woodmark opens $45M plant in Monterrey, Mexico
Winchester, Virginia-based American Woodmark Corp. has opened a 275,000-square-foot plant in Monterrey, Mexico.
The $45 million facility in Monterrey is the American Woodmark's second plant in Mexico and is expected to generate around 400 direct jobs. It will support the company's stock kitchen and bath manufacturing capacity, according to a news release.
The company also has a manufacturing facility in Tijuana, Mexico.
American Woodmark is one of the largest cabinet manufacturers in the U.S., with more than 10,000 employees, operating 19 manufacturing and distribution facilities.
Zipline Logistics acquires supply chain provider Summit Eleven
Zipline Logistics announced it has acquired Austin, Texas-based freight brokerage and supply chain services provider Summit Eleven.
The acquisition will enable Zipline to expand its transportation solutions in the consumer packaged goods (CPG) space across Central Texas, while capitalizing on Summit Eleven's temperature control and flatbed capabilities, officials said.
"With an impressive management team and mutual commitment to exceptional service, this union allows us to expand our presence and navigate the vibrant landscape of Austin, Texas" Walter Lynch, CEO of Zipline Logistics, said in a news release. "Together, we're positioned to offer exceptional retail logistics solutions to fast-growing CPG brands."
Columbus, Ohio-based Zipline Logistics is a private equity-backed third-party logistics provider focused on the CPG space.
The post Borderlands Mexico: Investment surges in Mexico as companies shift supply chains, plan new factories appeared first on FreightWaves.