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75 Percent of All Korean Investment in Mexico Is along US Border


Photo: Posco

By THÉRÈSE MARGOLIS     

Three-quarters of all recent South Korean investment in Mexico has been in states that border the United States, according to a recent study conducted by the Universidad Tecnológico de Monterrey (Tec de Monterrey) in cooperation with the Korean Embassy here.

“More than 80 percent of all accumulated Korean investment in Mexico — which now amounts to nearly $6 billion — has been realized over the course of the last 10 years,” explained Elvia Elena Naranjo Priego, a Tec de Monterrey researcher, during a daylong conference on Mexican-Korean trade and investment relations at Mexico City’s Hyatt Regency Hotel on Tuesday, Nov. 27.

“And a full three quarters of that investment has been in three northern states: Nuevo León, Baja California and Tamaulipas.”

Naranjo Priego went on to say that 80 percent of that investment has been in the manufacturing sector, especially in automotive parts, auto production and electronics.

The lion’s share of those products are earmarked for export, providing crucial foreign revenues for Mexico, she added.

Korean Ambassador to Mexico Kim Sang-il, who also spoke during the presentation, noted that Korea now has more than 18,000 companies with capital holdings in Mexico.

“Those companies provide jobs for 142,000 Mexican workers,” Kim said.

Naranjo Priego also said that the study revealed that those same Korean companies have created at least $8.1 billion in direct or indirect investment for the country.

By the same token, she said, over 80 percent of Mexican workers at Korean companies receive an average or above-average salary compared to workers in similar jobs within the manufacturing sector.

“What that means is that we are talking about high-quality, highly desirable jobs,” she said.

The largest Korean company in Mexico is Pohang Iron and Steel Company (Posco), which invested $706 million in construction of a high-quality laminated steel plant in Altamira, Tamaulipas, in 2007, and two factories in both San Luis Potosí and Puebla two years later.

 Meanwhile, Kia Motors began manufacturing cars in Nuevo León in 2016 (despite an almost deal-breaking tantrum by the state’s governor Jaime “El Bronco” Rodríguez Calderón at the start of that year) and has so far produced more than 300,000 vehicles.

Naranjo Priego said that both of these Korean firms have made significant contributions and donations to a number of social development programs in Mexico and helped out in cases of national emergencies.

Samsung Electronics, which has been in Mexico since first establishing a television plant in Tijuana, Baja California, in 1988, donated 22 million pesos to help families left homeless after the Sept. 19, 2017 earthquake and has also played a role in helping to sponsor a program to protect Mexico’s fragile coral reefs.

“Korea and Mexico are strategic partners who will continue to work together to establish themselves within the global marketplace,” said Ambassador Kim,

Kim also said that he had high hopes that a proposed free-trade agreement between Mexico and South Korea could be realized in the coming year.

Notwithstanding, it is unlikely that the bilateral free-trade accord, which was first proposed in 2007, will be finalized any time soon due to strong opposition from the Mexican automobile industry and backward-thinking entities like the Mexican Chamber of Manufacturing Industries (Canacintra), and because Mexico currently has a very large trade deficit with Seoul (nearly $10 billion).

 

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Categories: Asia, Business, Embassies, Intenational Relations, International Trade, MexicoTags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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