GUANAJUATO LAND OF OPPORTUNITY

Thanks to its central location right in the middle of a large percentage of Mexico’s population and economy – its roads, its high demographic density of 5.5 million inhabitants, as well as its high concentration of educational resources serving the industrial sector, Guanajuato has recently become more competitive in attracting investment.
This new competitiveness is reflected by the size of the companies that have chosen to grow or settle in the state, such as Pirelli, whose initial investment of $210 million dollars will create about 700 direct and 300 indirect jobs for the region.
Pirelli will be installed in an 100-hectare area of land in the Guanajuato Interior Port in Silao, where it will produce tires for a variety of vehicles.


Guillermo Kelly, CEO of Pirelli for Latin America, stressed the excellent location of their new plant: their new locale will allow them to respond better not only to their Mexican customers but also to U.S. and Canadian markets, and help to complement their Latin American production.
Similarly, Francesco Gori, CEO of PIRELLI Mundial, pointed out that in Guanajuato they have found strategic and competitive advantages that, thanks to their production plant in Silao, have enabled them to consolidate their presence in U.S. and Mexican markets.
This plant is the firm’s eighth in Latin America and its twentieth worldwide and is expected to operate in mid-2012.


Another investment that stands out in Guanajuato is the announcement early this year by Volkswagen that they will invest around 400 million euros to construct a new engine-production plant in the Mexican city of Silao.
The company drew attention for its interest in the 660-hectare plant’s location inside the Guanajuato Interior Port; building will start in October 2011.
Since 2013, the new plant located in Silao, Guanajuato, will supply engines to the latest generation Volkswagen assembly plants located in Puebla and Chattanooga, Tennessee.
The annual production capacity of the plant will be 330 thousand engines, and it is estimated that the German company will create 700 new jobs.


Along with the arrival of major companies like Volkswagen, Guanajuato is also expecting the arrival of several vendors that will complement the automotive supply chain.
“Another company that also stands out is SRG Guardian, which invested in a Built to Suit in Irapuato’s Castro del Rio Park,” said Jorge Ortega, Business Development Manager for Grupo Prodensa Bajio, who said that, “as far as attracting investment business goes, the State Government has been characterized by its aggressiveness and creativity in promoting favorable conditions for investment.”


Another of the representative investments in Guanajuato so far in 2011 is Procter & Gamble, who announced the construction of a new plant for Gillette razors and blades in Irapuato.
Carlos Paz Soldan, President of Procter & Gamble in Mexico and Central America, acknowledged that the state has all the conditions necessary for being favorable for investments.
Confident of the state’s financial potential, Gillette will invest 3 billion pesos there.
The new plant will produce all Gillette products that are taken to the Mexican
market and will also export to over 100 countries worldwide.



Building ad hoc

It’s worth noting that currently new investors are choosing spaces that are ‘Built to Suit,’ which means that they are in need of speculative spaces built to meet the demands of companies that, for their time or budgets, cannot afford customized constructions.
“Yes, there have been increases in custom-built spaces, but – in inventory plants – growth has been low,” said Ortega, who added that, because 2010 was an atypical year given that the industry was coming out of a widespread recession, it is anticipated that absorption should be approximately 80 or 90% of its current levels.


With its diversified economy, the State of Guanajuato stands out within Mexico for having converged in its territories not only agribusiness, leather footwear, textiles and handicrafts, but also companies in the metalworking and automotive sector.
The manager noted that, particularly in the automotive industry, the state has a great advantage of having a young professionals sector that has maintained a stable and fresh workforce that not only is ready to be trained, but also has sufficient experience to grasp technology-intensive operations.



State Growth

According to information published by the Government of Guanajuato, in 2010, twenty-one new investments were formalized and $1,458,660,000 worth of commitments were made there.
The previously mentioned companies were distributed in ten municipalities: Irapuato received eight and Silao four, among others.
So far, Guanajuato’s conditions in 2011 have been similar to those of rest of the country, with an estimated growth of (+) 9 percent.
The sectors that have experienced the greatest recovery are: the automotive industry, the chemical industry, metalworking, leather shoe, services, and trade, among others. Overall economic developments in Guanajuato have been positive, especially in the secondary sectors.