HÉCTOR VILLARREAL MURAIRA

Mexico 2022 | ECONOMY | VIP INTERVIEW

TBY talks to Héctor Villarreal Muraira, Director General of COMCE Noreste, about the impact of the pandemic, external trade trends, and opening new offices.

Which sector do you consider the most dynamic considering the impact of the pandemic?

As a result of the pandemic, some sectors have been more active than others and have performed better as a result. For instance, the construction and home renovation sectors is doing particularly well given the long periods of time being spent at home. The food sector has also grown, specifically supermarkets and food delivery. The metal-mechanic industry also performed well this year. On the whole, every traditional exportation sector has recovered and is growing even more than before the pandemic. 2021 will be a good year, given the fact that the US will need to update its equipment and infrastructure. This will positively impact several sectors in Mexico.

How have you adapted your modus operandi to launch external trade?

In order to get all these products to other countries, logistics and keeping competitive across all routes are essential. This includes all means of transportation (by land, train, sea, or air) and its costs, because if you do not calculate your logistics costs well, when you reach the market you might end up with a much higher final price than anticipated. For example, China has become more expensive lately and that has affected some companies, forcing them to turn to Mexico and other countries to become more competitive. In the last year, interest in exports and commercial relationships with Asia has grown. There are more Asia-based companies that want to install operations here in order to export to the US. Furthermore, now there are many companies that are not only looking to export from China but to China.

How has your plan for diversification been developed?

It has been difficult because there were doubts as to whether NAFTA would be renewed. This caused concern, and we decided not to rely solely on the US. It was then when we realized that we had to diversify our markets. However, we were unable to diversify as we had envisaged, and USMCA was later signed and now, pretty much of our business continues to come from the US. We feel safe in the knowledge that we will continue to have work coming in from the US, although this also means that we might forget to diversify. We have developed a diversification plan with Central and South America, though the reality is that 80% of Mexican exports go to US. In other words, the US market has so much potential that it is difficult to diversify. Only medium-sized and large corporations that already have a strong presence in the US dare to break into other markets.

How are you helping fill in the void caused by the closure of ProMexico?

ProMexico should not have been closed down. Perhaps some procedures needed to be restructured, but the image and positioning that Mexico had achieved was too important to leave vacant. We have been trying to fill the void and support companies. We are a non-profit private initiative, and our mission is to help and promote Mexican Foreign Trade not only within our membership, but also with any company or person who approaches us for assistance. With COVID-19, we had to carry out all our courses, seminars, and services, such as diagnosis and consulting via online. This was not easy because we had barely digitalized and did not have anything on Zoom or any other platform; everything we did was face-to-face. First, we started offering free webinars and later introduced longer and more complete paid courses. This went well because we had both local participants and participants from across the country. We went from having an average of 30 participants to 80.

What are the main objectives behind your new office in Laredo?

We did it because we have several partners in Laredo, Teas. We were able to open the office through one of our Board Members who lives there and due to an agreement we signed five years ago with the city of Laredo. The city of Laredo is interested in collaborating with us so that goods will pass customs through Laredo, generating income from taxes and job positions. Our interest is for our member companies to have an agile route, we signed an agreement to work out how to make the crossing of goods more efficient in terms of security along the logistics chain. The other issue was checking the infrastructure of highways, customs, and inspection points so that everything works as efficient as possible. More than 14,000 trailers cross Laredo daily. Laredo College also offered us a space in which to open an office and work in support of Mexican companies to help them with their paperwork, permits, and information on US markets.

Why is it important to incentivize more foreign trade activity in Mexico?

Foreign trade activity is fundamental for the economic development of our regions and our country as a whole. This has been the case since the signing of NAFTA. The growth of foreign trade, which has been steady, has led to significant growth in terms of Mexico's GDP. In fact, currently about 72% of GDP is made up of foreign trade (exports and imports). Therefore, as long as we have more companies participating in international markets, this generates more international trade, which in turn boosts GDP. The more GDP Mexico generates, the better we can develop our regions, states, and cities. All these will generate a sense of economic well-being for the people.