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Information provided by the Mexico Trade Commision - Proméxico's New York Office.

Mexican economy, maintaining a good performance: CEESP
The Economic Training Center of the Private. Sector (CEESP) considers that at the beginning of the third trimester of this year, the upturn of the Global Indicator of Economic Activity (IGAE) in July, of 4,8%, elevates the expectations with respect to a good performance of the Gross Domestic Product.

It exposes that the sector with greater contribution to the indicator was the agricultural, with 8%, as well as the renewed impulse of the manufacturing sector, specially the one of the automotive industry, which in August had a remarkable recovery as far as exports.

CEESP indicates on its Executive Economic Analysis that the sales of commercial establishments, that in June had shown a fall, had a favorable behavior in July, which generates a good perspective on the evolution of the consumption.

The labor market stays in addition healthful, although it will be necessary to hope that these results are not contaminated with some unfavorable effects coming from the outside, as the increase in the international prices of some grains.

On the other hand, the increase of the non underlying component of the inflation in the first fortnight of September, of 1.66% , although puts the Bank of Mexico (Banxico) in alert, it is feasible that their effect is not greater, every time it responds to originating seasonal factors of the increase of prices in some agricultural products.


National market attracts foreign financiers
North American financial institutions have turned to Mexican market where they find huge opportunities to place their resources and services, causing a greater supply of credit instruments.

Renato Martinez Quezada, coordinator of Practical Banking from Baker & McKenzie pointed that this allows all sizes and kinds of businessmen to have greater opportunities to have low interest loans, in order to impel their business develop.

He also indicated that banking institutions are watching a wide development on their investments in small, medium and big companies, after taking care of the biggest corporations.

This implies that companies as JP Morgan, GE Capital, Wells Fargo and others that traditionally used to work only with foreign companies, or used to use this as a guarantee to support operations of the Mexican commerce and industry; now are using other credit instruments.

They pointed that at this time, foreign resources, with more attractive interest rates than the ones local institutions offer, are applied in the construction of shopping centers, industrial buildings, as well as for the purchase of raw materials and other aspects required by the national industry.


Investment of $200 million pesos for the Port of Guaymas
For the 2007-2008 period, there is an anticipated investment. of $200 million pesos to develop infrastructure and to renovate the harbor terminal in the Port of Guaymas, Sonora.

The Director of Integral Port Administration (API), Jose Luis Castro, indicated that they will start with the installation of the terminal for Mineral bulks of Mittal Steel, which has required an investment of $60 million pesos, and it is expected to start operating in November 2007, to handle gradually two million tons per year.

Also, the Center of Marine Traffic Control is built, with an investment of $18 million pesos, trying to accomplish the international rules for ships reception, from which Guaymas received 580 in 2006.

In this ship reception, Guaymas handled 2.5 million tons of products derived from petroleum.

On the other hand, there will be a contest for the second stage for filling the bay, with a cost of $40 million pesos. This project must be finished by December 31, 2007, since the first stage has been finished already.


Ternium goes for Mexico
Ternium, the Latin American iron and steel giant will increase operations in Mexico, where it already concentrates 62% of its sales, after consolidating Hylsa and IMSA.

Daniel Novegil, General Director of the group, indicated that in Mexico they have their biggest potential, since the country imports more than 4 million of steel tons yearly.

Ternium combines Siderar and Sidor (At Argentina and Venezuela respectively) best practices to consolidate the efficiency of its productive processes and bets on the growth of the Americas, and now is investing in Mexico to increase the production capacity of hot rolled strip, in cold, galvanized and painted, besides in products of added value, such as covered pipe, panels, sheets and iron straps.

“In all these, we have an important growth, and Mexico is the country where we believe we have the bigger space to supply needs that are being taken care of from very remote origins” assured Novegil.

Ever since Ternium arrived into Mexico, the total investments this year adds to US$371 million.

The total investment for 2006 was US$131 million and US$241 million for 2007.

The most important investment, until now, is in a new furnace at Hylsa’s mill no.1, with a cost of US$80 million, that will increase the capacity in 400 thousand tons per year, and this just started on September 11th.
 

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