DURANGO - In Durango... conquer the future along with us

When I was asked to visit the state of Durango to check out the competitive advantages of investing in that region, I sincerely had my doubts. I still remember my first visit to the city of Durango. It was in January, 1993. I was passing through; coming from Mazatlan by bus on a small hilly road that feels like having 900 curves. A trip I will never forget, neither will my stomach.

Riding into town, from the airport this time, I did not recognize the Durango I used to know: I did not see the dust and dirt in the streets, nor the ramshackled buildings. On the contrary, I entered a clean, neat and attractive city, with the clear presence of industry, commerce, and even modern shopping malls, self-service and department stores and fast food restaurants. What has happened in the past 9 years? Why is Durango positioning itself as the new pole of economic development in Northern Mexico? Let's take a closer look....

GEOGRAPHIC INFORMATION AND INFRASTRUCTURE

The attractive location of Durango in the northern central part of the Republic of Mexico establishes it as an interactive region with the northern, central and western parts of the Republic, as well as with first-rate ports and harbors in the Pacific Ocean and the Gulf of Mexico to which it is connected by a broad system of roads, highways and railways.

This strategic location implicates an easy accessibility to major borders cities of Texas, without necessarily sharing the borderzone's main problems. Given its physiographic characteristics, Durango is one of the wealthiest states in Mexico with respect to natural and manmade resources: vast supply of water deposits, electric power surplus, hydraulic infrastructure, drainage and public water services and a solid natural gas distribution infrastructure.

Furthermore, its low annual precipitation, its meteorological stable conditions and its moderate average annual temperatures contribute to make Durango one of the ten most suitable states in Mexico for entrepreneurial activities. Or as Salvador Garcia, Production Director Minas Luismin, testifies: "...when I first came to Durango,15 years ago, I had no intention at all of living here...I still live here because it has lots of water reserves, an excellent weather, and above all: safety."

QUALITY OF LIFE

The Durango I recently visited seemed to be offering an environment suitable for work and family interaction. Durango stands out for having a solid, high level education infrastructure, which offers the investor availability of skilled labor at all levels, highlighting the technical and engineering levels and attending 100% of the educational and industrial demands.

"In Durango", explained Satoru Shimizu, Site Manager of Aamsa-Yazaki, "we found the proper environment for us to develop, because of the highly competitive young professionals and operative personnel with a great disposition towards capacitation. The operative level of the supervisors is also very high, so they learn their skills really fast. All of these put together means nothing but very good results ...as well as the security of the environment and quality of life."

The educational system has shown to be flexible and successful, suiting itself to the labor market demands. A labor market that has proved itself to be very stable and with a low turnover of the work force as confirmed by Eduardo Tricio, President of the Board of Lala Group Industrial Sector: "Labor environment is fundamental for any entrepreneur, the truth is that we have never had a single problem in Durango...we feel quite happy to work here."
The educational system has shown to be flexible and successful, suiting itself to the demands of the labor market

INDUSTRIAL GROUPS

The state of Durango has developed five important industrial clusters, with an extensive net of goods, components and services suppliers, that guarantee the competitive force of the industrial branches:
  • Textile and Apparel
    Second producer of denim pants and in the tailoring of dress apparel in the world.
  • Forestry and Lumber by-products
    Number one producer of lumber in Mexico, accounting for 30% of the national production.
  • Food and Drink
    Important producer of bovine meats, processed and raw chicken parts and a broad variety of milk products.
  • Automotive and Steel Products/Manufacturing
    Established supplier for the automotive sector through which diverse companies offer products such as air conditioning and heating units, automotive radiators, automotive harnesses, electric motors and internal combustion motors.
  • Electronics
    New area of development with the installation of LG Philips in the eastern part of the State.
  • Mining
    The reason the city was founded and most of the historic center of the capital was built with its money. Durango is the number one producer of gold and number two of silver in Mexico.

ECONOMIC REGIONS

In the state of Durango the most attractive economic regions for investment are the Central Region with the capital city of Durango, having a population of nearly half a million people and offering the best levels nationwide of public safety, and the Laguna Region.

The Laguna Region is strategically located in a way that it is an obligatory crossroad to communicate the northern region with the central part of the country, and the Gulf of Mexico with the Pacific Ocean, fact that boosts its export calling. The Laguna Region, where the three cities of Gomez Palacio, Lerdo and Torreon are located, offers the investor a significant economy, representing a market larger than one million people.

I have to point out, as mentioned by Esteban Rosas, the Coordinator of Promotion of Investments of the State of Durango, that these zones are not the only ones for investment. The rural communities along the modern highways are compatible and make perfect industrial corridors. The state of Durango offers the investor seven industrial parks and industrial zones, two in Durango and five in the Laguna Region.

GOVERNMENT SUPPORT

"The Government here has been really supportive to us, all the way from the beginning...by searching sites for us... plants...someone who would build our plant..." as stated by Larry Price, Financial Manager, Greater Durango, Sun Apparel.

The law of Promotion of the Economic Development of the State of Durango allows the government to offer various incentives and ways of support to the investors: - Total exemption of the Tax on Pay Roll for up to 4 years.

- Exemption on the payments of the registration rights in the Public Property Registry of 25% to 60% for industrial companies, 15% to 50% for commercial and services companies.

- Agility of paperwork and registries.

- Training scholarships through the State Employment Service.

- Additional support for companies that generate more than 500 jobs or that are labeled as strategically important for the state, such as:
  • Site leveling.
  • Construction of access roads.
  • Construction of acceleration/deceleration lanes.
  • Electricity and water infrastructure.
  • Residual water sewers.
  • Railroad spurs.
Due to the recession, there has been an important loss of jobs and plants, mainly in the textile and apparel business in the Laguna Region, but with the recent establishment of LG Philips, the majority of the jobs lost have been recuperated. "For that same reason", as clarified by Esteban Rosas, "the state of Durango has changed its focus, after some extensive studying of the options, towards a less volatile industry, one that depends less on the cheap labor force, but emphasizes a higher technology and higher added value, offering better salaries to its employees. We in Durango have more than enough highly qualified graduates of our state universities. We want to stop the migration of our talented technicians and engineers to other national and international regions and offer them jobs in their own hometown. That is why we are stimulating the linking of the university's study plans to the demands and projects of the enterprises."

In the few days I spend in the state of Durango, I saw a changed Durango, a Durango in plain development, a Durango with strong competitive factors with positive effects on the attraction of national and foreign private investment.

Besides its other multiple advantages, the state of Durango is a natural corridor that connects the economies of Europe and Asia, by communicating the Pacific Ocean to the Atlantic in only 11 hours through the construction of a new and modern super highway, less demanding to the stomach and without the 900 curves it took earlier. All of this makes Durango a good alternative and a new pole of economic, industrial, commercial and mining development in Northern Mexico.

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