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Investment in Logistics
Mexico: North and South
El Salvador Turns
Up the Heat
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LATIN AMERICA SPOTLIGHT
Infrastructure Plans Will
Draw Investment South
Draw Investment South
Ambitious plans to create new trade corridors and
expand ports
will spark a new round of investment in Latin America.
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everal major infrastructure-related projects in Latin America are helping give new meaning to the term "emerging markets" – a term used in the money management business to characterize still-developing countries that can be risky but also lucrative investment destinations. In the world of industrial development, markets emerge where labor is available, trainable and affordable; where logistics and distribution capabilities facilitate rather than weigh down supply-chain management; and where political and economic stability fosters foreign direct investment.
Such is the case, increasingly, in most of Latin America. But improvements to key ports and plans to build new trade corridors will have a dramatic impact on the region. Shortly after taking office in December 2000, Mexican President Vicente Fox was in Central America seeking support for his Plan Puebla-Panama (PPP), a massive infrastructure expansion plan that would relieve congestion on the Panama Canal by providing new ocean-to-ocean links in the region. PPP also would include major new highways between the southern Mexican states and the seven Central American nations. All of this new infrastructure is intended to promote industrial development in the region and improve the flow of goods into and out of the area.
Opposition to the plan is both vocal and well organized; local indigenous communities and environmentalists throughout Central America are making the case that elements of the PPP would seriously harm the region's natural resources. But the move by Volkswagen to invest US$2 billion and add 1,500 workers at its 35-year-old plant in Puebla, Mexico, could certainly be interpreted as a vote in favor. The factory will begin producing the new Bora line for export to Europe in 2005.
Mexican ports at Manzanillo, on the Pacific coast west of Mexico City, and Progreso, serving Merida in Yucatan, are being expanded, and a new deep sea port is under development in El Salvador. Freeport, in the Bahamas, will see a major investment from global port operator Hutchison Whampoa that will significantly enhance its allure as a commerce hub with close proximity to the U.S. And logistics companies are racing to put in place the warehouse and distribution facilities their customers demand.
Such is the case, increasingly, in most of Latin America. But improvements to key ports and plans to build new trade corridors will have a dramatic impact on the region. Shortly after taking office in December 2000, Mexican President Vicente Fox was in Central America seeking support for his Plan Puebla-Panama (PPP), a massive infrastructure expansion plan that would relieve congestion on the Panama Canal by providing new ocean-to-ocean links in the region. PPP also would include major new highways between the southern Mexican states and the seven Central American nations. All of this new infrastructure is intended to promote industrial development in the region and improve the flow of goods into and out of the area.
Opposition to the plan is both vocal and well organized; local indigenous communities and environmentalists throughout Central America are making the case that elements of the PPP would seriously harm the region's natural resources. But the move by Volkswagen to invest US$2 billion and add 1,500 workers at its 35-year-old plant in Puebla, Mexico, could certainly be interpreted as a vote in favor. The factory will begin producing the new Bora line for export to Europe in 2005.
Mexican ports at Manzanillo, on the Pacific coast west of Mexico City, and Progreso, serving Merida in Yucatan, are being expanded, and a new deep sea port is under development in El Salvador. Freeport, in the Bahamas, will see a major investment from global port operator Hutchison Whampoa that will significantly enhance its allure as a commerce hub with close proximity to the U.S. And logistics companies are racing to put in place the warehouse and distribution facilities their customers demand.