Mexico’s investment in the United States

No, I am not referring to immigration.  The net flow of immigrants is negative, but capital investment is rising:

Cemex, the Mexican cement and building materials manufacturer, is now the largest producer in its segment in the US – commanding 10.5 per cent of a highly fragmented market.

In 2010, Grupo Bimbo, the Mexican baker, announced the purchase of Sara Lee, the US baker, in a deal initially estimated at US$959m. The acquisition, which received approval from the US Department of Justice late last year on condition of some divestitures, consolidated Bimbo as America’s biggest breadmaker.

Televisa, the Mexican broadcaster, significantly deepened its exposure to the US market in 2010, investing $1.2bn in Univision, the US’s largest Spanish-language network. It took an initial 5 per cent stake and debentures convertible into an additional 30 per cent equity stake in the future.

Probably the most recognised Mexican brand in the US in the past 20 years is Corona Extra, the beer in the clear glass bottle served, in the US at least, with a wedge of lime in the neck. Corona is now the best-selling imported beer in the US – a title it has held every year since 1997.

Even Alfa, the Mexican conglomerate with interests stretching from petrochemicals to food processing, has started to drill for natural gas – not in Mexico, where the country’s constitution restricts private investment, but in Texas in a partnership with Pioneer Natural Resources and Reliance.

Between 2006 and 2011, the US received US$8.4bn in direct investment from Mexico, according to data from the US Department of Commerce’s Bureau of Economic Analysis. The figure is higher than that for any previous six-year period (though 2000 was the highest year on record with US$5bn).

The article gives further good economic news about Mexico, a country which is oddly understudied in the United States.

Comments

"a country which is oddly understudied in the United States": Mr Sailer has been saying that for years.

I never thought about this much before, but it is a really striking point. There is a lot of focus on immigration and the drug war, but not much beyond that.

Mexico seems quite complex. They had an Austrian nobleman who was crowned Emperor in the 1860's. They granted asylum to Trotsky, and to other Soviets, who proceeded to assassinate Trotsky in a highly memorable fashion. The Cardinal of Mexico was assassinated in 1993. The cartel wars--are they actually a manifestation of some sectarian or intertribal conflicts? Is anybody even asking? I'm sure there are contrasting positive stories that would illustrate the complexity of this very old place.

Cowen and Sailer are right. Journalists are bizarrely incurious about Mexico which, unlike Haiti, Israel, Syria et al., is right next door. Indeed, has moved in with us.

"Has moved in with us" - to our net benefit.

In my experience, women tend to be significantly more racist than men.
And the hot-weather-girl phenomenon is a perfect example of why. It is a rare, rare, race that doesn't have at least some women that make most men think "Well the [fill in blank] aren't ALL bad..."

The Corona claim on #1 import beer does not surprise me. However, it is also the only imported beer that anyone ever seems to buy in this country. Think back to 1997 when people would often serve imports at parties as a sort of luxury treat. Now that treat beer money goes strictly into American micro craft breweries and only Corona is left standing.

That what I was thinking. Pretty good Black Butte Porter yesterday.

Well, there's Heineken. But I think you point still stands.

I've been pleasantly surprised by the increasing availability of Radeberger in the states. Also, I'm used to seeing imports like Spaten, St. Pauli, Dos Equis, Guinness, Kirin...

Aside from Guinness, how often do you see those beers outside of German, Mexican, or Asian restaurants?

Stella Artois is pretty common in bars now, as is Dos Equis with its funny and kind of overplayed ads.

Apparently, in America, Bimbo's place is in the kitchen.

How do you know Mexico is understudied, much less that it is odd? What is odd is to read an economist saying something is "under-" or "over-" anything in the absence of any evidence showing market distortions.

Given your comment, I assume you have come armed with facts. Please enlighten us.

Not all is good news regarding Mexican corporates. The FT article also mentions that most of these acquisitions have been financed through rents generated from highly concentrated markets. Thus, the success in expansing abroad is been largely financed by Mexican consumers which are paying significantly higher prices than in the US. Both this post and the article failed to mention that Grupo Modelo, which owns the Corona beer brand, was recently bought by Anheuser-Busch InBev, although this is irrelevant to the previous point.

And Corona's parent company was bought by the Belgian Inbev, which also owns Budweiser.

People don't believe that InBev is a Belgian company, do they?

http://www.ab-inbev.com/go/about_abinbev/management_structure/organization_chart.cfm

Don't see a lot of Flemish names on that list.

After seeing Bimbo on a Mexican soccer team's jersey/ad I curious as to what they did, thanks.

They are on the front of an American soccer team's jersey as well now. They signed a 4-year sponsorship deal with the Philadelphia Union.

Step into the Latino section of the supermarket and (unless you're East Coast) you'll find Bimbo bread on the shelves.

They missed one recent purchase: http://www.forbes.com/sites/erincarlyle/2012/04/23/mexican-billionaire-buys-advance-america-largest-payday-lender-in-u-s/

Should I be wounded or complimented by the "understudied" claim, Bernard?

Grupo Bimbo's brands include various brands that most people in the USA would not think of as Mexican: Thomas' English Muffins, Sara Lee, Oroweat, Mrs. Baird's, Entenmann's, Ball Park buns, Brownberry, EarthGrains, Boboli, Arnold, and a few more. They seem to be much more interested in taking over market share than in expanding their brand.

Probably smart. Bimbo seems as likely to become a successful brand in America as the Chevy Nova did in Mexico...

don't forget all the real state investment in Texas, Mexicans close to the border have to hide all the cash somewhere.

LaLa, the largest dairy in Mexico, and the third largest i the world, is as off the purchase of National Dairy Holdings in 2009 from Dairy Farmers of America, is now the third largest US fluid milk processor.

External investment = capital flight.

Net immigration is negative? By all appearances that is an outrageous statement.

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