For the last five years, the mining sector has been one of the five outstanding sectors in Mexico’s economy. According to a report from INEGI (Mexico’s Geography and Statistics Agency) for 2011, Mexico’s total production of mining materials reached $11 billion with 23 different commodities, the major commodities being gold, silver and copper.
In 2011, Mexico was the world’s first producer of silver and second of fluorite. There is a lot of interest from foreign firms to invest in Mexico based primarily in the vast mining resources scattered in the country’s territory. That year, Mexico’s overall FDI was $21 billion and $979 million were invested in the mining sector.
There are currently more than 300 foreign companies operating in Mexico with over 700 open projects in different states. The list of major drivers of national production is reduced to 4 companies, namely, Penoles, Ternium, Gold Corp and Minera Frisco.
Logistics is one of the most important factors for distribution of the mining products. Mexico depends almost entirely in their railroad infrastructure and their maritime ports, not so much in the highways and roads. The number of companies that are providing logistic services abound but, the largest projects have been assigned to the largest international companies. These latter have presence in Mexico and at the major logistic centers, a network of specialized subcontract partners and a wide list of complementary services. They have mastered the Mexican business culture and are providing competitive prices and guarantees. In many cases, these companies arrived along with big mining projects or distribution projects of other sectors.
Any new company, seeking an opportunity in the Mexican logistics market shall study their competitors thoroughly and then outline a market entry strategy containing their champioin products, prices and guarantees. Their knowledge and contacts at the main logistic centers, including their presence are keys for success.
Opinion and Next Steps
Any logistics service provider must have a good mix of products and professional capabilities to be able to offer integral services. This gives them a competitive advantage before most small and medium size Mexican based companies which still need to subcontract complementary services.