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Monday, February 25, 2002
La Laguna Hot Spot for Foreign Firms
By Jerry Pacheco
For the Journal
Business people who want to explore opportunities in Mexico often limit their prospects to the immediate border area.
Although distance and the size of Mexico can be daunting when trying to make contacts with prospective buyers or joint-venture prospects, business can still be found in commercial/industrial centers relatively close to the border.
One such center about 280 miles south of Chihuahua City is La Laguna (the lake) region, named for a lake that has long since dried up. Located on the border of the states of Coahuila and Durango, La Laguna includes the cities of Torreon (Coahuila), Gomez Palacio (Durango) and Ciudad Lerdo (Durango). This region comprises the heart of north- central Mexico.
The ethnically diverse population of La Laguna is approximately 1,250,000. The region is recognized as an immigration center. People of Japanese, German, American, Spanish, Chinese and French heritage have settled there. Today, the area has become a major automotive, mining, textile and food production center.
La Laguna has benefited tremendously from the North American Free Trade Agreement for several reasons.
First is the region's geographic advantage with its location close to the borders of two important ports. Modern four-lane highways connect La Laguna to Laredo, 368 miles to the northeast, and Juarez, 514 miles north.
Mexico City is 626 miles south, and Monterrey, with its major industries, is only 225 miles to the northeast.
The region is served by international flights to Houston, Los Angeles and El Paso. Domestic flights leave daily to most major Mexican cities. The Ferromex rail line runs through the heart of La Laguna, enabling bulk shippers and other major industries access to rail cargo.
In general, the region's infrastructure is modern compared to most areas in Mexico.
In addition, Torreon, the region's industrial/commercial powerhouse, has been rated as one of Mexico's safest cities. During the last three years, the city of 176,000 houses has had only 23 robberies. The 5,500 commercial establishments reported only seven robberies. Over the same period, La Laguna recorded only 12 car thefts and no bank robberies.
La Laguna is also known for a highly trained and productive work force. There are 17 institutions of higher education in the region, including the prestigious Monterrey Tech Institute. Additionally, there are 20 technical schools and six R&D centers in the region.
These factors have combined to allow for the rapid industrialization of the region.
Currently, 42 percent of the region's work force is involved in manufacturing. This compares to only 14 percent in retail/general commerce and 6 percent in agriculture. The manufacturing work force has increased by 106 percent since 1994, with more than 59,000 new jobs created in this sector.
The region lists 10 industrial parks occupied by many internationally recognized corporations. A lot of companies from central Mexico have located in the region, having been drawn by the location and business environment.
The La Laguna region also is proof that major foreign automotive companies have begun moving their production farther into Mexico's interior. With companies such as Caterpillar, Renault, John Deere, Delphi Automotive and Sumitomo located in Torreon, the region has become a major diesel and gas engine manufacturing center.
La Laguna also is a major textile producer. Currently, the region is the leading maker of denim in all of Latin America, with companies such as Hanes and Wrangler producing more than 5 million articles of clothing a week.
Historically, mining has played a major role in the region's economy. Although this industry has taken a backseat to manufacturing, 3,200 Laguneros still work in mining, mainly for Mexico's Penoles Corporation. Today, the region is the world's largest producer of refined silver.
Due to its industrial boom, the region has become less and less dependent on agriculture. However, Lala Corporation, a major producer of dairy products, has made La Laguna Mexico's largest milk producer. Almost 200,000 dairy cows produce more than 4.5 million liters of milk every day. This production is shipped throughout Mexico.
For business people wishing to explore opportunities in La Laguna, two organizations should be contacted. First is the Torreon branch of Canacintra (011-52-871-712-6047), Mexico's National Chamber of Commerce of Industry and Transformation.
Canacintra's La Laguna membership consists of 500 companies, representing every industrial sector. This is an important group with which to establish contact if your company is involved in manufacturing. Its network of producers and suppliers comprise the bulk of the region's industrial base.
From May 22 to 24, Torreon will host Canacintra's National Delegation Convention. Eighty of the nation's Canacintra subchapters will converge upon Torreon for meetings and a major trade fair attended by manufacturers and suppliers. Torreon's Canacintra branch is available to arrange for business meetings between buyers and sellers at this event.
La Laguna Economic Development Association, known as Fomec (011-52-871-721-1144), is another key source of information for foreign business people. Fomec is a private, non-profit economic development group that works with the public and private sectors to develop the region's economic base.
This group can provide business people valuable coordination between state and city officials. It's also a good source of statistics and other important business information. A list of Fomec's services can be found on its Website at www.fomec.org.mx.
Utilizing these two agencies can help convert La Laguna's industrial base and relatively close location to the border into successful business relationships for foreign companies.
Jerry Pacheco is an international trade consultant and a partner in Global Perspectives Integrated, an Albuquerque international research and business development company. He also is a former director of the New Mexico Trade Office in Mexico City.