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International News From the Field: Mexico, Brazil, and Latin America

As we roll into 2022, the momentum in Latin America has not let up. Brazil’s manufacturing boom continues to initiate major investments from the likes of VW, BMW, and ArcelorMittal. Mexico, as the new near-shored automotive parts winner, sees major ...
Jan 14, 2022

As we roll into 2022, the momentum in Latin America has not let up. Brazil’s manufacturing boom continues to initiate major investments from the likes of VW, BMW, and ArcelorMittal. Mexico, as the new near-shored automotive parts winner, sees major investments in everything from EV steel cores to thermoplastic injection molding. Argentina, Colombia, and Costa Rica are not without news. For additional details and other tidbits, read on.  

Brazil

For more information, contact Achilles Arbex (aarbex@AMTonline.org).

  • Dutch truck manufacturer DAF, a Paccar company, will invest $75 million in its Ponta Grossa, Paraná, facilities to expand capacity, improve technologies, adjust machinery equipment to Industry 4.0, and deliver products according to Euro 6 requirements.

  • The private sector is expected to invest $10 billion in the railway system to complement the planned public investment of $1.5 billion. Plans are to add over 2,000 miles to the existing railway system. An additional $20 billion of investments are waiting for approval from authorities.

  • The trailer and equipment sector recorded 30% YOY growth in 2021, delivering over 156,000 units. The segment remains optimistic for 2022.

  • ArcelorMittal, the multinational steel giant, announced investments of over $1 billion over the next two years in its Minas Gerais facilities to expand production capacity. The company will continue to invest in local production, saying that Brazil remains very competitive and has a very positive consumption outlook.

  • BMW announced a $100 million investment to produce X3 and X4 models at its Araquari, Santa Catarina, facilities. BMW’s plans are to not only sell in the Brazilian market but to export to other South American countries.

  • Volkswagen will invest $1.5 billion over the next four years to produce new compact models in Brazil. Compacts are the main driver of success for the company in the South American region. Acquisition of equipment and machinery, as well as digitalization, are included in the investment plans.

  • Brazilian WEG, the electric engineering, power, and automation company, is investing $40 million in upgrading machinery and equipment as well as expanding capacity of its Linhares, Espírito Santo facilities. Plans are to expand the production capacity of electric motors for the local and export markets.

  • U.S.-based axle manufacturer Meritor continues to invest in renewing equipment and machinery with its push toward Industry 4.0. The company is planning to purchase 13 new robots that will be used in the automation of 10 manufacturing cells for measuring, welding, and machining.

  • Brazilian Romi recorded 46% YOY growth in Q3 2021. Its machine tool division grew 53%, while the company reported 16% growth in new purchase orders[DH1] . Their order backlog reached over $135 million in the first three quarters, which represents 55% growth YOY.

Mexico

For more information, contact Carlos Mortera (cmortera@AMTonline.org).

  • Plastibell, the thermoplastic injection company, will expand its operations in Torreón Coahuila, with an investment of $18 million.

  • The Japanese company Kurabe will invest $35 million in a new plant in Aguascalientes to manufacture automotive seats and steering wheels. It will be the company's first location in North America. 

  • Bosch announced an investment plan for its Aguascalientes plant in the amount of $85 million for the installation of a new production line for the IPB (integrated power brake) system that integrates ESP (electronic stability program) technology.

  • POSCO International Corp., the commercial arm of South Korean steelmaker POSCO, is prepared to build a plant in Mexico to produce traction motor cores for electric vehicles to cover the North American market and take advantage of the benefits of the USMCA.

  • Daetwyler, the Swiss supplier of electronic components, is investing $2.2 million in Silao for a new high-tech injection line to serve their customers in the automotive sector.

  • The Ministry of Economic Development (SEDECO) announced that more automotive companies will arrive in San Luis Potosi in 2022. He stated that this would represent a total investment of $31 billion for the state.

  • NBHX Trim Group, the German company specializing in the manufacture of thermoplastic injection-molded automotive components, is planning an investment of $17 million in Aguascalientes.

  • Following a meeting between aerospace industry businessmen and the Mexico City government, an investment of $572 million was announced for the Vallejo Industrial Zone in the capital city. 

  • In November 2021, Mexico had an increase of 14% in the wholesale sale of heavy vehicles.

  • With an investment of $3.5 million, Coplasco, the Mexican manufacturer and supplier of packaging material and industrial packaging, inaugurated its fifth plant in Ramos Arizpe, Coahuila.

  • Lear Corp. launched the Lear Seating Structures project in the municipality of Arteaga, Coahuila, with an investment of $20 million to manufacture seating structures to serve the automotive sector.

Colombia

For more information, contact Carlos Mortera (cmortera@AMTonline.org). 

  • Ecopetrol, one of the largest petroleum companies in Colombia, announced board approval of domestic investments between $4.8 billion and $5.8 billion for 2022.

Paraguay

For more information, contact Carlos Mortera (cmortera@AMTonline.org). 

  • In 2021, 82 new investment projects in the industrial sector totaling $150 million were approved. 

  • In 2021, the maquila program in Paraguay, which allows for duty-free importation of raw materials, components, and equipment needed for the assembly or manufacture of finished goods for subsequent export, produced a 54% increase of exports and a 16% increase of employment compared to 2020.

Costa Rica

For more information, contact Carlos Mortera (cmortera@AMTonline.org). 

  • In 2021, Costa Rica reported over 103 investment projects, 30% more than 2020, with companies like Bayer, Roche, Inter, Concentrix, and Firestone announcing expansion and investments in the country.

Argentina

For more information, contact Carlos Mortera (cmortera@AMTonline.org). 

  • The government announced the creation of the Cuyo Metallurgical Technology Center (CETEM Cuyo), with an investment of $266 million that will be allocated to Mendoza to develop innovation projects related to metalworking.

  • In 2021, automotive production grew 66% compared to 2020 and 34.4% compared to 2019.

  • To accompany the growth of the automotive and metallurgical industries, German company Henkel announced an investment of more than $120 million in its plant located in the La Cantábrica Industrial Park. This amount will be used to increase and optimize the production of adhesive technologies.

  • The Toyota factory in Zárate, where the Hilux and SW4 pickups are produced, will expand to increase production from 140,000 to 167,000 units per year.

  • Ford Argentina announced an investment of $580 million to modernize its General Pacheco factory and launch the next generation of the Ranger pickup in 2023. Part of that investment (30%) consists of the development of new auto parts to better vertically integrate and address supply chain concerns.

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Author
Achilles Arbex
Director, Global Services
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