Mexico back on track New York January 9, 2013
01. GDP real growth Source : SHCP y BCB México Brasil 15% 10% 5% 0% -5% -10% -15% i ii iii iv i ii iii iv i ii iii iv i ii iii iv i ii iii iv i ii iii iv i ii iii iv i ii iii iv i ii 2004 2005 2006 2007 2008 2009 2010 2011 2012
01. Private consumption Source: INEGI y BCB 10% Annual growth México Brasil 5% 0% -5% -10% -15% i ii iii iv i ii iii iv i ii iii iv i ii iii iv i ii iii iv i ii iii iv i ii iii iv i ii iii iv i ii 2004 2005 2006 2007 2008 2009 2010 2011 2012
01. Retail sales 10% Source: INEGI Real annual growth 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% e f m a m j j a s o n d e f m a m j j a s o n d e f m a m j j a s o n d e f m a m j j a s o n d e f m a m j j a s o n d e f m a m j j a s o n d e f m a m j j a 2006 2007 2008 2009 2010 2011 2012
01. Employment Source: IMSS 16 Millions of workers 15 14 13 12 11 10 9 emmj s nemmj s nemmj s nemmj s nemmj s nemmj s nemmj s nemmj s nemmj s nemmj s nemmj s nemmj s nemmj s nemmj s nemmj s nemmj s nemmj s nemmj s nemmj s 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
01. Gross Fixed Investment Source: INEGI Real annual growth Total Machinery and equipment 25% 15% 5% -5% -15% -25% -35% e m m j s n e m m j s n e m m j s n e m m j s n e m m j s n e m m j s n e m m j s n e m m j s n e m m j s 2004 2005 2006 2007 2008 2009 2010 2011 2012
01. Bank Lending Activity Source: INEGI Real annual growth Total Consumer Housing Firm 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% j m m j s n j m m j s n j m m j s n j m m j s n j m m j s n j m m j s n j m m j s n j m m j 2005 2006 2007 2008 2009 2010 2011 2012
01. Mexico s Export Performance 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% e f m a m j j a s o n d e f m a m j j a s o n d e f m a m j j a s o n d e f m a m j j a s o n d e f m a m j j a s 2007 2008 2009 2010 2011 Source: INEGI */ Over the same moth last year. Total exports Manufacturing
01. Market share: name of the game Source: USDOC US imports (except oil) Market share 2008 2009 2012 22.3% 22.3% 19.8% 14.3% 13.0% 12.6% 12.3% 11.9% 10.9% 8.8% 7.1% 8.1% 6.1% 5.5% 5.7% 2.9% 3.1% 3.1% 3.2% 2.5% 2.6% 2.5% 2.2% 2.2% China Mexico Canada Japan Germany South Korea UK France
01/01/2005 01/03/2005 01/05/2005 01/07/2005 01/09/2005 01/11/2005 01/01/2006 01/03/2006 01/05/2006 01/07/2006 01/09/2006 01/11/2006 01/01/2007 01/03/2007 01/05/2007 01/07/2007 01/09/2007 01/11/2007 01/01/2008 01/03/2008 01/05/2008 01/07/2008 01/09/2008 01/11/2008 01/01/2009 01/03/2009 01/05/2009 01/07/2009 01/09/2009 01/11/2009 01/01/2010 01/03/2010 01/05/2010 01/07/2010 01/09/2010 01/11/2010 01/01/2011 01/03/2011 01/05/2011 01/07/2011 01/09/2011 01/11/2011 01/01/2012 01/03/2012 01/05/2012 01/07/2012 01. Yuan has reevaluated Source: INEGI 110 Annual growth Nominal: yuanes per pesos Nominal: yuanes per dollars 105 100 95 90 85 80 75 70 65 60
01. Sound public finances: low debt to GDP ratio Source: IMF Gross debt as a percentage of the GDP 110% 107% 100% 94% 90% 80% 70% US Eurozone Mexico 60% 50% 43% 40% 30% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
01. Source: Banxico and OCDE 80 Sound public finances: longer debt maturity than ever before Average term to maturity for Total Government debt (months) 70 60 50 40 Mexico US 30 20 10 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
01. 2012 Presidential Elections 2012 was more of a three way race Neither PAN PAN nor PRD 25.41% collapsed PRI 38.21% PRD 31.59% Source: IFE, preliminary results
01. Possible coalition Constitutional reforms require qualified majority (2/3) Federal law reforms require an absolute majority (>50%) House of Congress PRI + PVEM + Panal: 250 (50%) PRI + PAN: 323 (64.6%) PRI + PRD: 306 (61.2%) Senate PRI + PVEM + Panal: 63 (49.2%) PRI + PAN: 91 (71.1%) PRI + PRD: 75 (58.6%) Source: Reforma
01. A Pact for Mexico Policy Legal Reform Fiscal Reform Universal health insurance No Yes Elderly pension system Yes Yes Unemployment insurance Yes Yes Education reform No No Mexico Institutes in different countries Yes Yes Universal broadband access Yes No Competition in television entertainment industry Yes No Competition in the telecom sector Yes No Increase investment in Science and Technology to 1 percent of the GDP No Yes
01. A Pact for Mexico Policy Legal Reform Fiscal Reform Transformation of Pemex Yes Yes Competition in gasoline supply chain Yes No Fiscal responsibilities for federal and municipal entities Yes No National plan for prevention and social participation No Yes Coordination between Federal and State level policies Yes Yes National Police Force Yes Yes New justice system No Yes Single criminal code Yes No Integral reform for the prison system No Yes Homologate local transparency institutions No Yes National and state level anti corruption commission Yes No
01. Mexico s challenges More competition in key sectors Rule of law Increase access to technology Education reforms Violence Approval of reforms Source: The Economist
01. The Rise of Mexico
01. Brazil takes off
01. France: time bomb
01. Nafta will make you strong
T P P TPP is the only game in town, being the most ambitious multilateral trade negotiation taking place. EPN s new government has repeatedly expressed its commitment with the agreement. This in turn confirms a now longstanding Mexican commitment with open markets and free trade. 2013 is the critical year for TPP.
02. Mexican textile and apparel Performance Indicator 2009 2010 2011 2012* GDP (annual growth %) -7.1% 8.3% 3.5% 3.3% Indicator 2010 2011 2012 3 Employment (1) 388,062 401,747 414,638 4 Retail sales (annual rate) 8.0% 4.2% 2.0% 3 Source: INEGI, IMSS and Banxico. (1) Jobs Sept 2011 (2) Cumulative 2Q 2012 (3) August 2012 (3) September 2012 23
02. US Textile and Apparel total imports Top suppliers Share (%) (January Aug 2012) Source: OTEXA.ITA Mexico: 6 th in 2011 4 th in 2012 supplier the US Market China Vietnam India México Indonesia Bangladesh Pakistán Honduras Camboya
02. US Textile and Apparel total exports Top markets Share (%) (January Aug 2012) 21.7% 17.4% 13.6% Mexico: 2nd destiny of US Exports 6.1% 3.0% 2.7% 2.7% 2.0% 2.0% 1.8% China México Canadá Honduras Turquía República Dominicana El Salvador Corea del Sur Japón Reino Unido 25
02. US Apparel imports from Mexico US apparel imports from Mexico 4.11% 3.27% 3.26% % Share in US$ value Product US$ M Cotton Apparel 1,596 Wool Apparel 155 MMF Apparel 753 8.51% 13.73% 5.03% 42.17% Cotton Apparel MMF Apparel MMF Non-Appare Made Ups / Mis Fabrics Wool Apparel Yarns Others 19.91% 26
02. Mexico your best options for sourcing denim and jeans 2012: Mexico 1st. supplier of Men Denim Trousers * % Share US total imports *HS USA: 6203424011 Source: OTEXA 27
02. Mexico: a whole opportunity beyond denim Item Rank % Share(value) Wool Shirts/Blouses, Not-Knit 1 33.9% M/B Cot. Trousers/Breeches/Shorts 1 21.7% M/B Suits, Wool 2 18.3% M/B Wool Trousers/Breeches/Shorts 1 16.3% M/B Not-Knit MMF Shirts 3 14.5% Other MMF Manufactures 2 13.9% Other Cotton Apparel 2 13.7% Cotton Hosiery 5 12.8% M/B Suit-Type Coats, Wool 4 11.3% M/B MMF Sweaters 3 9.5% Other M/B Coats, Cotton 3 8.7% M/B MMF Knit Shirts 4 8.1% Wool Hosiery 4 8.1% M/B MMF Trousers/Breeches/Shorts 5 7.1% Cotton Gloves And Mittens 3 7.1% MMF Gloves And Mittens 4 6.3% Other MMF Apparel 3 5.4% W/G MMF Knit Shirts / Blouses 5 5.3%
02. Mexican denim for your jeans sourcing in CAFTA-DR 2012 jan-nov 63.1% 12.6 2011 80.9% 16.2 Fill rate Imports (millions SME) 2010 35.9% 7.9 0 5 10 15 20
02. Mexico: a whole opportunity beyond denim Yarns (cotton/mmf) Knitt shirts (M/B, W/G) % Share US total imports 1st supplier -Men s T-shirts MMF (26%) 2nd supplier - Men s cotton T-shirt (14%) Hosiery 4th supplier - Cotton hosiery (14%)
02. Mexico: a whole opportunity beyond denim Cotton trousers (other than denim) Sport wear (M/B, W/G) Shits 1st supplier - Men s cotton trousers (22%) (no denim) 1st supplier - Men s trousers MMF (19%) (no denim) 1st supplier -Men s cotton jumpsuits (64%) 1st supplier -Men s jumpsuits MMF (69%) 3th Supplier - Men s shirts MMF (18%) % Share US total imports
02. Mexico: a whole opportunity beyond denim Suits 3th supplier - Men s suits of wool (17%) % Share US total imports Sweaters 3th supplier (7%) - Women and girls MMF Swimwear (M/B, W/G) 5th supplier - Women and girls swimwear (9%) Non woven garments 1st supplier - Surgical drapes (52%)
03. MEXiCO FiTS Initiative MEXiCO FiTS is an initiative of the fiber-textile-apparel Mexican supply chain and supported by the Government to work closer with our international customers, in their relentless search for sourcing opportunities.
03. MEXiCO FiTS 2012-2013 MEXiCO FiTS has been working with each customer s request to identify reliable Mexican suppliers of the textile-apparel chain and providing them with all the assistance needed for a successful business experience.
03. Mexico s textile and apparel transformation Competition as main driver Low and lower MFN duties Anti-dumping duties from China eliminated in December 2011 Average MFN % Textiles 8 Apparel 21 Applied (including FTA s) % Textiles 3 Apparel 19
03. Mexico s textile and apparel transformation Proliferation of Retailers in Mexican Market: o Growth in retail stores. o H&M, Gap, Express, Old Navy. MEXiCO FiTS Main Objective: o Increase market shares in Mexico Gain ground on informality Brands Vertical Integration Increase Market Share in US o Competitiveness o Solutions for clients o Repositioning of Mexico
03. Services We bring customers close to the industry by understanding specific needs and market segments in which they operate. We provide the best options to effectively fulfill sourcing expectations. We team up with customers to give a fast response and tailormade agenda for visits in Mexico. We handle for visits. Information related to clothing our customers carry, as well as materials they require to manufacture it, so they can preselect suppliers that best meet their manufacturing requirements.
03. Services We are also the best source of information relative to: o Sourcing assets o Clothing specifications o Market trends o Import and export procedures o Retail opportunities in Mexico o Compliance o Regulatory framework o Preferential access
03. Service enhancement during the last year We have cooperated with global companies in the analysis and processing of the information on the textile industry operating in Mexico: strengths, major exporters, and producers. MEXiCO FiTS has developed specific services to meet concrete demands of global customers in a personalized way, becoming a widely appreciated business tool thanks to its flexibility and commitment.
03. EPN s Commitment to the textile industry National Innovation and Fashion Center of the Textile and Garment industry Objective: To drive competitiveness in the textile-fiber-garmentcommerce chain of value through innovation, design, fashion and technological development.
03. EPN s Commitment to the textile industry The 20 th of May, Peña Nieto signed a written commitment to: Support the National Innovation and fashion Center of the Textile and Garment Industry, based out of the state of Hidalgo. Both CANAINTEX and CANAIVE are directly involved in the project.
03. EPN s Commitment to the textile industry Services that the Center will provide: Innovation and technological development Regularization Certification First-class reference laboratory Intelligence unit Fashion and design Human resources formation
03. MEXiCO FiTS upcoming events The MEXiCO FiTS Initiative has a very ambitious agenda, and thus has secured slots in major fashion shows and events in the coming years: o Colombiatex o Sourcing at Magic Las Vegas o Stand Alone New York
03. MEXiCO FiTS: your trusted partner for succesful sourcing in Mexico For more information please contact: Mariam Yitani MEXiCO FiTS Director Tel. 5255-52808637 myitani@canaintex.org.mx www.mexicofits.com 44