Chihuahua Global Initiative: Making Chihuahua the “Gateway to North America.”
By Nancy J. Gonzalez
Attracting Foreign Direct Investment (FDI) is crucial for Chihuahua; therefore, having an entity that works every day to bring new companies to the state is highly important for its wellbeing.
Alfredo Nolasco, managing director of Chihuahua Global, shared with BorderNow readers the mission and vision of Chihuahua Global, a new civil association dedicated to attracting value-added companies to the state.
What is Chihuahua Global?
Alfredo Nolasco.- Chihuahua Global is a private sector initiative that seeks to attract foreign investment to the state. We are a non-profit civil association, and we are becoming the unifier of promotional initiatives from both the public and private sectors, who are guaranteeing continuity in different projects and coherence in their messages.
In the past, Chihuahua has had several initiatives similar to Chihuahua Global, but they were public sector initiatives then, when the administration would change, these initiatives would be lost. As a result, Chihuahua lost competitiveness. The idea is to give consistency to the projects.
Chihuahua is growing organically and it is a very attractive state for investments, but we need to get out of that comfort zone and go the part of starting to attract companies with higher added value.
We want to highlight that in Chihuahua we are the “Gateway to North America.”
What kind of investment are you looking for?
We will not discriminate against any investment that arrives, large or small. The intention is to put Chihuahua within the top three destinations of FDI in the next five years. The state is currently below that place.
It must be taken in to consideration that Mexico City and the State of Mexico concentrate a lot of investment, but we seek to bring Chihuahua to that point systematically. We are going to do it by taking into account the sectors where we have a competitive advantage.
In Chihuahua there are almost all sectors but we are concentrating on advanced manufacturing in five sectors. The first is aerospace, which is depressed but airplanes and drones are still being built and we need to be competitive. So, instead of companies leaving, they see Chihuahua as a place to be more effective in using their resources and instead of closing here, they close elsewhere and come to Chihuahua. We are not talking about closing in another part of Mexico, but other places in the world. In Mexico, each state has its competitive advantage in the aerospace sector and we can be very complementary.
The second sector is automotive. This sector is the most important one in Chihuahua. The change in technology is leading this industry towards electric vehicles and towards new mobility.
There is also a change in the paradigm of the organization that instead of there being many corporations, there are many SMEs that are entering that market. Today, the automotive sector represents the majority of investments in the state but they are focused on internal combustion vehicles. If we are not able to migrate to electric vehicles, we are going to have a problem, so the state has to reconvert now.
The third sector is that of biomedical supplies. Chihuahua is a leader in Latin America in the production of medical supplies, but we want to bring more and greater added value products. As in the aerospace sector, there are regions with which we can complement ourselves.
The fourth sector is electronics and electromechanics. There is a very high demand for microchips and computer manufacturing. We must be very careful because there are conditions that are favorable such as the assembly of computers but we have disadvantages such as the production of chips because it requires a significant amount of water. It does not mean that we are going to abandon projects but we must see which ones are more viable.
The fifth sector is logistics, because the geographical location of Chihuahua puts us at the center of the border. The famous “X”, icon of Juarez, marks something that is real, which is the center of the border and the logistics center of the e-commerce giants in the U.S. as it is the consolidation center of the rail transport that comes from the four cardinal points and converge in Juarez and El Paso. The USMCA puts us in good shape to be a strategic distribution center.
We want better jobs, better technologies and go to high-tech. We want the stigma of the maquiladora status to be removed from us.
The maquiladoras played a very important role in this state, but what we have is first-rate manufacturing, advanced manufacturing, and we have the capacity to give greater productivity to the products and services that we provide in the state.
Is it hard to attract FDI to Mexico nowadays?
It was complicated due to the pandemic, but we actually have a relatively strong recovery in the state. Today, we see that there are important requests from some companies that are exploring the possibility of establishing themselves in the state.
There are investments that did not stop like a Canadian company that makes recreational vehicles. We have companies that are nearshoring and allyshoring in Chihuahua because of its proximity to the U.S. We are working with our counterparts in West Texas and New Mexico to be considered as strategic allies of the federal strategy of the U.S. government.
There is already a significant queue of companies that want to come to the state. Chihuahua grows organically. What Chihuahua Global wants to do is to make this organic growth bigger with better jobs and a better quality of life. There is much that has to be done, especially in matters of perception, especially in security issues and in being just about maquiladoras. Chihuahua is much more than that.
Also, Mexico has the shelter program. Shelter is a system that was born at the border and has been very successful and is now being replicated in other countries, including China.
Who are the Chihuahua Global partners?
Chihuahua Global is a civil association and I would like to see it as a business club. The partners include practically all industrial park developers operating in Mexico. Other partners are shelter operators, brokers in the industrial sector and other service partners related to attracting investment: consultancies, law firms, accounting firms, customs agencies, logistics services, among others.
We have other partners, who are a minority in our capital, which are national and foreign governments. The government of the City of El Paso participates and, indirectly, the Texas government does as well. The idea is to be able to sell the region as a competitive advantage across borders. We are a mega-region.