Merida, 1997: trade opportunities
Merida, Yucatan..I returned to Merida in July, 1997 to follow up on my contacts I had made last year while on my grant to facilitate trade between the Yucatan and the state of Mississippi. ( See previous article.) My grant had been for the period May, 1996 through August, 1996. Upon my arrival this year, several striking differences were immediately obvious.
First, my shuttle flight from Cancun was no longer a prop-jet "puddle jumper," but a full-blown passenger jet. Apparently, air traffic was picking up. Second, upon arrival in Merida, I noticed an inordinate amount of construction. Also, streets and sidewalks appeared much more congested than I had remembered from last year. These were some clues to increased activity.
Last year I had been overwhelmed by the quality of products manufactured in the Yucatan, the extremely low operating costs, and the incredible warmth of the people. In my previous article, I noted that there were over 50 maquiladoras in the state of Yucatan from such places as Hong Kong, Europe, Canada, and the United States and asked the question, "...what do these folks know that you don’t?" I was beginning to think that Merida was no longer a well-kept secret.
Soon, I visited Arturo Lopez, the Director of Promoción Industrial, the equivalent of the economic development commission for the state of Yucatan. Last year, Arturo had provided me with an office and the use of his facilities. Arturo immediately confirmed my suspicions regarding growth and provided me with the following information.
- 1. Maquiladoras
- When I left last August, there were actually 63 companies classified by Arturo and his staff as maquiladoras in operation. At the beginning of August, 1997, there were 88 companies classified as maquiladoras actually in operation. At this time, there are another 17 companies that have signed contracts and all 17 will be in operation within 6 months.
- With respect to employment growth in the maquiladora industry, Arturo’s data shows total employment as of 1990 at 4,724. Employment growth in this industry approximately doubled through 1995. When I left in August, 1996, total employment had grown to 12,017. As of June, 1997 employment was pegged at 15,231. The 17 additional maquiladoras will add an additional 8,880 employees bringing the total to approximately 24,000 employees in this industry by the end of the year.
- 2. Commercial Port at Progreso
- Last year, the most active steamship company had one vessel that made one trip per week between Progreso and Port Bienville in Mississippi. This year, the company has three vessels running the same route.
- Ferry service between Port Isabel, Texas and Progreso is in the planning stages. The port at Progreso is a shallow water port, with a current maximum depth of 25 feet. However, the government has recognized this as a limitation and has plans to enlarge and deepen the port. This will be accomplished by dredging a channel; the channel and port depth will be 35 feet.
- 3. Airport
- The main runway is being expanded from approximately 8,900 feet to about 10,500 feet in order to accommodate larger aircraft. This expansion should be completed by the end of 1997.
- New charter flights from Europe bringing tourists are expected to begin shortly. Also, between the months of November and April, five charter flights per week from Canada are scheduled.
- 4. Highways
- The state government is in the process of improving the highways in the Merida area. This is being done to accommodate the increased commercial traffic from the expansion of the maquiladora industry.
- Many of the maquiladoras are located in surrounding villages. The current governor has begun a program to widen highways and/or construct by-passes that route traffic around these smaller villages. The result is not only safer highways, but also will decrease the driving time for all major arteries that serve Merida.
The secret is out!
It appears as though Merida and the Yucatan Peninsula are no longer one of the best kept business secrets in terms of industrial advantages. Furthermore, the local government is responding to the needs of industry in terms of infrastructure improvements and in continuing to provide necessary assistance through such agencies as Dirección de Promoción Industrial. Doing business in the Yucatan is becoming easier and the advantages are still present. If you are considering locating in a foreign jurisdiction and are fabricating a product that is labor intensive, the trail has already been blazed for you in the Yucatan.
If you have any concerns or questions about Merida or the Yucatan Peninsula, please don’t hesitate to contact me (Gus Gordon) at (email: cgordon@prodigy.net.mx)
Update on Economic Development in the Yucatan: Fall, 2002