Final hours! Save up to 55% OFF InvestingProCLAIM SALE

Mexico rolls out investment plans for southern industrial corridor

Published 05/08/2023, 01:52 PM
Updated 05/08/2023, 07:17 PM
© Reuters. FILE PHOTO: Mexico's President Andres Manuel Lopez Obrador speaks during a news conference at the Secretariat of Security and Civilian Protection in Mexico City, Mexico March 9, 2023. REUTERS/Henry Romero/File Photo

By Kylie Madry

MEXICO CITY (Reuters) -The Mexican government on Monday set out fresh details of a plan to attract businesses to a corridor straddling a narrow isthmus of southern Mexico, part of a larger push to pump investment into the relatively poor region.

The plan, called the Inter-Oceanic Corridor, will include 10 new industrial parks along the stretch connecting the Pacific port of Salina Cruz in Oaxaca state with the Gulf coast hub of Coatzacoalcos in Veracruz state, officials said.

The government will provide incentives for companies who set up business in the parks, including waiving taxes on rent and value-added taxes (VAT), in return for creating a minimum number of jobs, the economy ministry said.

Officials also hinted at plans to construct four wind plants across the area, home to major installations of state-run oil company Pemex. They did not provide further details.

The scheme, which aims to encourage manufacturing in poorer states rather than northern and central industrial hubs, is a priority for President Andres Manuel Lopez Obrador, complementing his plan for a transoceanic freight rail line.

"A big worry of this administration has been focused on lowering the asymmetries between north and south," Economy Minister Raquel Buenrostro said at a presentation of the plan.

Another reason to push manufacturing to the south is that the north - which benefits from its proximity with the United States - is facing a drought, officials say.

Buenrostro noted that Lopez Obrador would soon issue a decree altering rules for water-usage concessions in areas - including the north - where the resource is scarce, and decide which companies should receive exemptions.

© Reuters. FILE PHOTO: Mexico's President Andres Manuel Lopez Obrador speaks during a news conference at the Secretariat of Security and Civilian Protection in Mexico City, Mexico March 9, 2023. REUTERS/Henry Romero/File Photo

The industrial parks plan will be pitched to firms from the United States, Canada, Taiwan and Germany, among others who may wish to bid, Buenrostro added, with auto makers, tech companies, and semiconductor producers tipped as potential park investors.

The project's anchor project, the freight rail line linking Mexico's Pacific and Gulf coasts, is scheduled to be finished this year and ultimately aims to compete with the Panama Canal as a channel to move goods.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.