Carlos Zambrano

Nuevo Leon sparkles with growth and becomes Mexico's exemplary economic jewel

Don Carlos makes you feel welcomed. He has succeeded in attracting record levels of foreign investment to Nuevo Leon in spite of the economic recession most everywhere else.

Carlos Zambrano Plant, a Public Accountant and businessman, has been Secretary of Economic Development for the last 5 years under the administration of Governor Fernando Canales. Don Carlos' remarks reveal a carefully structured economic development plan.

What is the State's strategy for attracting foreign investment?

Don Carlos: From the beginning of the administration our efforts to attract foreign investment have come from an industrial perspective: high technology industries that have the potential to pay high salaries, industries that are environmentally friendly and use local talent from universities here in Nuevo Leon. In short, industries interested in a longterm commitment. That is our focus, specifically following industrial sectors for which we already have an important base. But we are interested in expanding our foothold on the automotive industry, electronics, telecommunications, software, biotechnology, metallurgy (a tradition of ours since 1900), plastics, and household appliances. Based on market conditions and the international economy, we have recently made the decision to also promote the aeronautics industry.

With promotion and hard work, Monterrey could become soon an important development center for the Aeronautics Industry.

How do you identify and approach the companies in the industrial sectors you target?

Don Carlos: We have in the Department an under-secretary for the international trade division, they sell our product, which is Monterrey, Nuevo Leon, through industrial exhibitions and conventions, for example, that are focussed on countries that have capital, business leaders with an eye for foreign investment, and adequate technology. Obviously we target the United States and Canada as they are our neighbors and NAFTA partners, but we have also seriously pursued prospects from the European Union in countries like Spain, England, France, Germany, and Italy. In Asia we aim for Japan, South Korea, and Singapore.

Right now China is attracting a lot of attention, I think China would be a great place to export our products, rather than seeking investment, although China has already begun to invest outside its borders. Maybe next year we will define China as one of our strategic promotion locations, but right now it is not in our plans.

We are not focusing our promotion on traditional export manufacturers; we have been targeting industries, foreign and local, that create value chains, clusters, and that have a strong linkage with national the existing supply chains in Nuevo Leon and the rest of Mexico.

I believe we've been very successful in our promotional activities, as evidenced by the employment rate in Nuevo Leon, which is better right now than it was in the previous peak in November 2000. We could say that we are almost at full employment. Maybe the unemployment statistics that triggered the international recession, particularly in the United States were much less severe to Nuevo Leon than other states in Mexico. This in no way means that our economy did not falter, it did, but not to the depths of unemployment that other parts of the county reached. One reason we didn't fall as far as the rest of the country may be because we sell our products both local and markets abroad.

And while the foreign market has had its troubles, the national market didn't suffer as much. The foreign companies that we've attracted based on their high level of local assimilation have been able to sell in the national market and so the recession wasn't too bad for them. But the strict export manufacturers, which exclusively sell outside the country, found themselves facing a serious problem when international markets fell and they couldn't find another option for their products. In the last five years we have attracted 8.7 billion dollars, which surpasses 1,700 million dollars per year, 70 percent of which comes from the very companies we targeted in the first place.

What other actions do you consider a key to your promotional success?

Don Carlos: We truly work hand in hand with the private sector and the educational institutions, we all are involved and coordinated in making our strategy work. We need the universities to produce qualified people in electronics, which is the common denominator in all the business sectors we wish to attract. This includes the automotive sector, because, as you know, cars nowadays are designed electronically, produced electronically, and furnished with many electronic gadgets. Because we are becoming an area in which electronics skills are very much in demand, our universities have to supply us with qualified people.

In the telecommunications industry, three of the largest long distance telephone companies in Mexico have their service centers and hardware in Monterrey. In addition, the local company Extel, which provides wireless service to the entire country, is here.

As the main promoter of the state, what are some of your plans for 2003?

Don Carlos: Allow me to brag about the progress we are making and will make in attracting aeronautics projects. We are successfully inducing local established companies to try aeronautics and bring American aeronautics industry providers here to Nuevo Leon. We have great faith that the combination of efforts of the state government, the private sector, and the universities will be fruitfull, with each doing its part, as evidenced by the Autonomous University of Nuevo Leon which has started an Aeronautics Engineering major here in Monterrey.

Is the state offering any type of special incentives for the aeronautics potential projects?

Don Carlos: Our biggest incentives are industrial infrastructure and talented college graduates from the best universities not only in Mexico, but all of Latin America. But I could also mention a two-year reduction on payroll taxes and vocational skills programs, which are similar to what other states in Mexico offer.

In Monterrey there is an entrepreneurial spirit that permeates education and infrastructure.

Most foreign manufacturing operations established here agree that Monterrey has the most efficient, highest quality, and most productive workforce of their other locations in the world. We are extremely proud of this fact, and use it to promote our state.


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