State’s exports to Mexico Booming

— This article appeared on page A1 of the Albuquerque Journal
By Kevin Robinson-Avila / Journal Staff Writer on Wed, Feb 20, 2013 

Ed Camden, president of Southwest Steel Coil Inc. in Santa Teresa, said company sales to Mexican assembly factories, or “maquilas,” doubled two years in a row in 2011 and 2012. This year, he expects sales to Mexico to grow another 35 percent to 40 percent.

“We expanded our facility in Santa Teresa by 20,000 square feet last year, and we just broke ground today on another 35,000-square-foot expansion that will be finished in October,” Camden told the Journal on Tuesday. “By fall, we’ll have expanded from 55,000 square feet to 110,000, doubling our production capacity.” 

His company’s explosive growth is part of a boom in export activity by businesses in southern New Mexico, and in other parts of the state, that are shipping goods and services to Mexico at unprecedented rates.

The value of New Mexico exports to its southern neighbor grew 33 percent last year, from $464.5 million in 2011 to a record $617.6 million in 2012. And last year’s growth follows robust expansion every year since the recession ended in 2009, driving total export income from sales to Mexico up 61 percent in the past four years.

Mexico alone accounted for about one-fifth of the $2.98 billion in New Mexico exports worldwide last year. Those exports include everything from fabricated metal products to computer chips to agricultural goods.

The southward boom reflects strong activity in Mexico’s maquila industry, and in that country’s economy overall, which is projected to expand by between 4.1 and 4.4 percent in 2013, according to the New Mexico Economic Development Department.

Economic Development Secretary Jon Barela said concerted efforts by Gov. Susana Martinez’s administration to promote trade with Mexico also have been a major factor.

“We’ve pursued a multi-faceted, deliberate approach to increase trade worldwide, but with Mexico in particular,” Barela said. “It’s not just coincidence that we’re seeing strong growth in our export numbers.”

State initiatives include monthly meetings between Barela and his counterpart in the Mexican state of Chihuahua, which borders New Mexico. Chihuahua signed a memorandum of understanding with New Mexico last year to promote trade and commerce.

Barela’s staff also organizes frequent trade missions to Mexico and other countries to help New Mexico business people find foreign buyers for goods and services, and to assist them in navigating trade regulations and issues. A new Gateway to Exporting program, funded by the Small Business Administration, has helped the state offer those services.

Barela said exports increased from businesses across the state. But about 50 percent of products and goods sent to Mexico are shipped from southern New Mexico, particularly from Santa Teresa’s two industrial parks, where a growing number of maquila suppliers and related businesses are locating.

New Mexico has promoted business development at Santa Teresa for about 25 years, but the border industrial zone is bustling with activity like never before, said Jerry Pacheco, a long-time trade consultant and executive director of the International Business Accelerator at Santa Teresa.

“The activity we’re experiencing is unparalleled,” said Pacheco, also a Journal columnist who writes on trade. “I can’t remember any other time we’ve seen such interest in southern New Mexico and Santa Teresa.”

Union Pacific Railroad’s $400 million investment in a massive intermodal refueling facility has drawn many more businesses to the industrial parks, Pacheco said. Three new companies announced plans to set up operations last September, and an El Paso-based freight-container firm just bought land to relocate its operations at Santa Teresa.

“A lot of deals are in the hopper,” Pacheco said. “Things are just going gangbusters.”