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Sep 032015
 

Mexico’s seven leading food and beverage multinationals have invested a total of 7.42 billion dollars overseas in the past five years. The investments include acquisitions of other firms, building new plants and enlarging or remodeling existing plants.

The seven firms are:

  • Coca-Cola Femsa
  • Grupo Bimbo
  • Arca Continental
  • Gruma
  • Sigma Alimentos
  • Grupo Lala
  • Grupo Herdez

In terms of the number of countries where they have a presence, the two most globalized food and beverage firms in Mexico are Grupo Bimbo and Gruma, which are in 22 and 18 countries respectively (see map). Both firms are now quite dependent on foreign earnings. About 61% of Bimbo’s revenues, and almost 70% of Gruma’s revenues, originate from outside Mexico. Both firms have the longest reach of any of the food and beverage multinationals: Bimbo as far as China, and Gruma in Australia.

Mexican food-related multinationals

Mexican food-related multinationals are present in all the countries colored blue

In this post, we take a quick look at each of these seven firms and their recent activity abroad:

Femsa, based in Monterrey, is the world’s largest bottler of Coca-Cola products, with 45 plants in Latin America, including Colombia, Brazil and Venezuela, as well as 19 plants in the Philippines. It spent 1.855 billion dollars to buy Brazilian firm Spaipa, and a further 258 million dollars on building a new plant there (its tenth plant in Brazil), as well as 688.5 million dollars for 51% of the Coca-Cola Company in the Philippines. Femas also operates the OXXO chain of convenience stores, the largest such chain in Latin America.

Grupo Bimbo is the world’s largest bread maker and the biggest bread seller in the USA. It is the world’s 4th largest food company behind only Nestle, Kraft, and Unilever. Bimbo has 85 plants in the USA and Canada, 39 in Mexico, 32 elsewhere in Latin America, 10 in Europa and one in Asia. It has expanded primarily via acquisitions. It bought Canada Bread in 2014 for 1.66 billion dollars. In 2011, U.S. agencies authorized its purchase of Sara Lee for 709 million dollars. It also bought Bimbo Iberia (Spain) for 160 million dollars in 2011. It is now awaiting approval from Spanish regulatory authorities to complete its purchase of Panrico for 210 million dollars.

Gruma (main brands Maseca and Mission) is the world’s largest producer of corn flour and tortillas. It has 79 production plants worldwide and operates in North America, Europe, Asia and Oceanía. Gruma recently bought Azteca Foods Europe (Spain) for 48 million dollars. In 2014, it bought Mexifoods (Spain) for 15 million dollars. It also owns Albuquerque Tortilla Company. Gruma has also invested in new factories, including a 50-million-dollar plant in California, opened in 2010, as well as a new factory in Russia costing a similar amount.

Arca Continental, the second largest Coca-Cola bottler in Latin America, has 35 plants in the region. It purchased a milk products firm, Holding Tonicorp (Ecuador), in 2014 for 400 million dollars, and spent around 330 million dollars in 2012 to acquire two snack food firms: Wise Foods (USA) and Inalecsa (Ecuador).

Sigma Alimentos (cold cuts, cheese, yoghurts and other milk products) has 67 production facilities in total, including (in addition to Mexico) the U.S., Costa Rica, El Salvador, Spain, France, Italy, Netherlands, Belgium and Portugal. It recently bought Spanish firm Campofrío for 345 million dollars.

Grupo Lala (milk products) has 18 production plants in Mexico and Central America. It recently bought Nicaraguan firm Eskimo (ice-cream and other milk products) for around 53.2 million dollars.

Grupo Herdez has 13 plants in Mexico, one in the USA and one in Chile. It recently bought Helados Nestlé in Mexico.

What these firms have in common is that they specialize in making products that are relatively easy to adapt to local tastes (glocalization). They have also started their expansions outside Mexico by focusing initially on markets with familiar languages and culture before venturing further afield.

As interesting as where the companies ARE is where the companies are NOT. Astonishingly, the map suggests that no Mexican food-related multinational yet has a toe-hold in any country in Africa, for example.

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Aug 312015
 

This interesting graph comes from “El sistema de alerta temprana ante ciclones tropicales desde una perspectiva de riesgo” (“The early warning system for tropical cyclones from a risk perspective”) by Dr. Víctor Orlando Magaña Rueda and his fellow researchers Adalberto Tejeda Martínez and Gustavo Vázquez Cruz, published in: H2O Gestión del agua #1 (Sacmex, 2014).

It shows the economic losses (line graph) and loss of lives (bar graph) resulting from hydro-meteorological events between 1980 and 2013. Some major storm events are named on the graph. The two background colors divide the period into before and after the introduction, in 2000, of Mexico’s early warning system (Sistema de Alerta Temprana ante Ciclones Tropicales, Siat-CT).

Graph from

Graph from Magaña et al (2014)

Overall, the trends are for some reduction over time in loss of life, but a rapid escalation since 2004 in the economic costs associated with storms and other extreme weather events. This echoes the changes seen in impacts around the world for most hazard types in recent decades.

Given that lives are still being lost, however, the researchers suggest that it is time to re-evaluate Mexico’s early warning system for tropical cyclones. Storms such as Wilma and Stan in 2005, Alex in 2010 or Manuel and Ingrid in 2013, they say, show that the system has not been entirely successful in its principal objective of avoiding loss of life.

The increase in economic costs of hazard events is sometimes attributed to insurance payments but in Mexico’s case, and taking the example of Hurricanes Ingrid and Manuel, only about 20% of total losses were covered by insurance, according to the Mexican Insurers Association (Asociación Mexicana de Instituciones de Seguros). Mexico’s federal Finance Secretariat now assumes that hazard impacts will amount to 1% of GDP a year, a figure that reduces the nation’s economic growth rate by about 0.1% a year.

The authors argue that, in addition to an improved early warning system, other changes are needed in order to reduce vulnerability. Specifically, the system should be modified to:

  • target the most vulnerable sectors of the population so that alerts reach them in ample time
  • incorporate periodic reviews, and allow for modifications to be implemented
  • be fully integrated into all levels of government (national, state and local) and the programs of all government agencies

In addition, they suggest that the reliance on the early warning system on the Saffir-Simpson scale, first developed in the 1970s, as a measure of likely damage, should be reconsidered, given that some recent storms (e.g. Stan in 2005, and Manuel in 2013) have led to far greater damage than would have been expected from their position on that scale. The researchers point out that the current model does not do well in predicting local variations in impacts.

As a result, they propose that identifying categories of risk is at least as important as categories of storm intensity. For example, they suggest that the risks associated with both the intensity and accumulation of precipitation should be taken into account, combined with soil conditions and the water levels of streams and reservoirs. Studies of the spatial distribution of impacts after storms could help identify risk factors and suggest ways to improve future warnings.

Even with an efficient early warning system, other actions are still needed. Buildings could be subject to more stringent construction regulations, especially in those coastal areas that are most at risk, while better programs of beach restoration, environmental planning and hazard event response are also needed.

There is no such thing as a perfect prediction and early warning system, but hopefully Mexico will lead the way in Latin America in reducing human fatalities from hazard events.

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Case study of Hurricane Alex (30 June–1 July 2010)

Aug 272015
 

Mexico welcomed a record number of tourist last year: 29.1 million visitors, a 20.5% increase over 2013. The number of tourists is projected to grow 8% this year. Most tourists visiting Mexico come from the U.S., followed by Canada, U.K., Colombia and Brazil. During the first six months of 2015, the average expenditure/tourist was 865 dollars.

Mexico is the top international destination for U.S. tourists and according to U.S. Commerce Department data, visits to Mexico by U.S. tourists rose 24% in 2014 to a record 25.9 million, despite U.S. travel warnings relating to parts of the country. Figures from the Mexican side of the border suggest a more modest, though still substantial, increase of 11.8% in U.S. tourists entering the country. The differences in the figures reflect slight differences in definitions and methodology.

Just how did Mexico achieve its tourism success? The answer appears to be a combination of its fortuitous proximity to the USA allied with some smart policy decisions. This helps to explain why the Organisation for Economic Cooperation and Development (OECD) has chosen Mexico as the basis for developing a transferable model to demonstrate the potential of tourism in international development. The in-depth study, to be published next year, will focus on the economic and political aspects of international tourism.

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Aug 242015
 

The Index of Human Development ranks Spanish as the second most important language on earth, behind English but ahead of Mandarin.

Spanish is the third most widely used language on the internet (graph), although less than 8% of total internet traffic takes place in Spanish. Spanish is the second most used language on Facebook, a long way behind English but well ahead of Portuguese.

Languages used on the Internet (2015). Source: Internet World Stats

Languages used on the Internet (2015). Source: Internet World Stats

According to El español, una lengua viva – Spanish, a living language, a report from the Instituto Cervantes in Spain (which promotes the Spanish language abroad via language classes and cultural events) there are about 559 million Spanish speakers worldwide. This figure includes 470 million native speakers and an additional 89 million who have some command of the language.

While Mexico remains the world’s largest Spanish-speaking country, with about 121 million Spanish speakers, second place belongs to the USA, followed by Colombia. The USA has an estimated 41 million native speakers of Spanish plus 11 million who are bilingual; Colombia has 48 million Spanish-speakers.

In terms of economic importance, the report’s authors calculate that Spanish speakers contribute 9.2% of the world’s GDP. About two-thirds of Spanish-linked GDP is generated in North America (USA, Canada and Mexico) and the European Union, while Latin America (excluding Mexico) accounts for 22%.

The main concentrations of Spanish speakers in the USA are in the states of New Mexico (47% of the population), California and Texas (both 38%), and Arizona (30%). 18% of New Yorkers speak Spanish and, somewhat surprisingly, more than 6% of Alaskans are also Spanish speakers. Interestingly, the US Census Office estimates that by 2050, the USA will have 138 million Spanish speakers and could then overtake Mexico as the largest Spanish-speaking nation in the world. This assumes that current predictions for Mexico’s population increase over the next 35 years hold true.

Want to learn more?

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Aug 202015
 

This Chiapas map and index page lists the most interesting posts on Geo-Mexico related to the southern state of Chiapas, and also links to a selection of articles about agriculture and poverty that place Chiapas in the national context.

mapchiapas

Map of Chiapas. Click here for interactive map of Chiapas on Mexconnect.com.

Geological background

Indigenous communities:

About 20% of the 4.8 million people living in Chiapas belong to one or other of the state’s numerous indigenous groups. Development and cultural issues relating to indigenous communities in Chiapas are many and varied as can be seen in the following articles:

Tourism:

Chiapas has huge tourism potential, apart from the Mayan site of Palenque, the state capital Tuxtla Gutiérrez, and the beautiful colonial city of San Cristóbal de las Casas (the former capital).

Mexico’s list of Magic Towns has long included the San Cristóbal de las Casas, but now boasts two more recent additions in Chiapas:

Chiapas is also the site for a (proposed) different type of tourist development:

Agriculture in Chiapas:

Posts which refer to Chiapas in the context of national data on agricultural production include:

Poverty and inequality in Chiapas

Chiapas is recognized as one of the poorest states in Mexico: Articles containing recent data on this topic:

Other topics:

Aug 172015
 

Two recent articles in OOSKAnews, a publication dedicated to news in the water industry, have profound implications for Mexico’s water supply situation. The first (10 July 2015) is a report of a meeting in Guanajuato of national water and water treatment specialists (Segundo Encuentro Nacional de Áreas Técnicas  de las Empresas de Agua y Saneamiento de México).

Selected quotes from the report include,

Mexico’s legal framework for water is out of date and does not reflect the country’s current reality…

Nationwide, water users only pay about 20% of the cost of production; 80% of water costs are subsidized, a situation that is not sustainable…

Legal reforms aimed at protecting human rights with regard to water had harmed service providers, who cannot cut off service to customers who fail to pay their bills.”

The report also comments on the on-going El Zapotillo dam project on the Rio Verde in Jalisco state, saying that it,

is a priority for President Enrique Pena Nieto’s administration, despite ongoing delays and legal conflicts. The $1.24 billion dollar project was approved in 2005 and is more than 80% complete. However, residents of Temacapulín, Acasico and Palmarejo have been fighting construction of the dam, which would flood their villages.”

sacmex

The second report focuses on Mexico City and the estimate by Ramón Aguirre Díaz, the head of Mexico City’s Water System (SACMEX), that fixing leaks in the city’s potable water distribution network would cost around US$430 million. This is a huge cost when compared to the system’s annual budget for maintenance and improvement of infrastructure of about US$135 million.

Aguirre claims that 40% of available water is lost because of leaks in the network. SACMEX is launching a program in 2016 to provide a long-term solution to the problem. In a press interview, the official said that, “A city like ours should be able to supply every citizen by producing 26 cubic meters/second, but currently our system requires 30.5 cubic meters/second”.

The sections of the city with the most severe losses are those like Coyoacán and Tlalpan built on the soft sediments of the former lake-bed, as well as those such as Miguel Hidalgo, Cuauhtémoc, and Benito Juárez, where the supply pipes are more than 70 years old. Combined, these areas house over 2.5 million people.

Aguirre also outlined the progress made in bringing reliable access to potable water to all 1.8 million inhabitants of Iztapalapa, one of the poorest and most densely populated sections of the city. Some 72,000 residents in Iztapalapa lack piped water supply to their homes, and therefore have to depend on provision from tanker trucks. Even those who do have access to piped water have to cope with inadequate pressure, poor water quality and frequent supply outages.

According to Aguirre, the city administration will meet its goal of reliable access to piped water for all of Iztapalapa by 2018. Reaching this point requires the construction of 22 water treatment plants and various other major infrastructure modernization projects.

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Aug 132015
 

Like many of our readers, we love looking at maps. It is always interesting to study maps compiled by cartographers working in different countries and different languages. It can also be a great way to learn some new words and phrases in a foreign language.

world-atlas-spanish

This latest resource is therefore well worth recommending. It is an outstanding Spanish language World Atlas, accessible online as a series of three pdf files:

The lavishly illustrated atlas was prepared by experts from the Geography Institute of Mexico’s National University (UNAM). It is aimed at high school students and the maps are complemented by carefully selected info-graphics and informative text.

Exploring these maps is a great way for native English speakers to improve their Spanish language geographic vocabulary!

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Aug 102015
 

Earlier this summer, Mexico City’s Water System (SACMEX) inaugurated a network of 230 drinking fountains installed in public spaces across the city. The fountains are part of the city’s initiative to curb reliance on bottled water. (Mexicans consume more bottled water per person than any other country in the world).

water-fountains-mexico-city

Click for interactive map of Mexico City water fountains

The sites for the fountains were selected taking local water quality into account. An interactive website enables residents and visitors alike to find the locations of the fountains, and offers up-to-date information about the water quality parameters.

water-quality-xochimilco-july-2015.

Sample water quality report – Xochimilco, July 2015 [Click to enlarge]

Water from all the fountains is being tested on a regular basis to ensure that it complies fully with official water quality standards.

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Aug 062015
 

Last year, three Mexico City climate researchers published a comprehensive study of the 7300+ deaths due to lightning in Mexico during the period 1979 to 2011.

In “Deaths by Lightning in Mexico (1979–2011): Threat or Vulnerability?“, G. B. Raga, M. G. de la Parra and Beata Kucienska examined the distribution of fatalities due to lighting, looking for links to population density, vulnerability and other factors.

The number of deaths from lightning averaged 230 a year for the period studied. Given Mexico’s population, this means a rate of 2.72 fatalities from lightning for every million people. This is the highest rate in the Americas.

Fatalities were not distributed evenly. Seven of Mexico’s 32 states accounted for 60% of all lightning fatalities. Almost one-quarter of all deaths from lightning occurred in the State of México. Other states with high rates included Michoacán, Oaxaca and Guanajuato.

More than 45% of all deaths from lightning were young males under the age of 25 (with those aged 10 to 19 at particular risk). Overall, far fewer females died from lightning than males, though for females, too, the highest rates were for the under-25 age group.

Most deaths happened in the first half of the rainy season, between June and August, when thunderstorms are most likely.

Lightning incidence, North America, 2012-2014

Lightning incidence, North America, 2012-2014. Credit: Vaisala

What do all these numbers mean?

The incidence of lightning strikes in not equal across the country. For example, in the period 2012-2014 (see map) there were far more lightning events in in central and southern Mexico than in the northern part of the country and the Baja California Peninsula. This means that there is no clear connection between deaths by lightning and population density. However, neither is there a clear connection between deaths by lightning and the places where most lightning strikes occur.

The key factor is not just how likely a lightning strike is to occur in a particular place but also how vulnerable the local populace is. Some sectors of the population are much more vulnerable than others. Those working outdoors, for example, are at higher risk than those working indoors. This makes rural workers more vulnerable than urban workers. It also makes younger people more vulnerable than older people.

Education and awareness also play a part. Many countries have seen a dramatic fall in deaths from lightning as a direct result of launching campaigns to make people more aware and provide education about safety precautions. In the USA, fewer than 40 people now die each year from lightning, compared to about 400 in the 1930s, when the population was smaller.

For this reason, the study also concluded that the large number of deaths in Mexico is partly due to “the government’s failure to implement education and prevention strategies in communities living and working in vulnerable conditions”. Sadly, this means that there will probably be further tragic incidents similar to the one that took the lives of several members of the same family last month in the remote mountainous community of Mesa Cuata in Guanajuato.

Reference:

G. B. Raga, M. G. de la Parra, and Beata Kucienska, 2014: “Deaths by Lightning in Mexico (1979–2011): Threat or Vulnerability?”. Weather, Climate & Society, 6, 434–444.

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Aug 032015
 

As we saw in “How long is Mexico’s coastline?“, geographical “facts” and “records” are often not quite as simple to determine as might appear at first sight.

Take waterfalls for example. Mexico’s “highest” waterfalls are not necessarily the same as Mexico’s “tallest” waterfalls, since height refers to elevation, rather than stature. I’m not sure which is Mexico’s highest waterfall, but assume it is likely to be a small waterfall near the summit of one of Mexico’s many major volcanic peaks.

Mexico’s tallest waterfall, on the other hand, is well-known, or is it? Older sources still list the Cascada de Basaseachic in the Copper Canyon region of northern Mexico as the country’s tallest waterfall. That waterfall is 246 meters (807 feet) tall, according to geographer Robert Schmidt, a calculation subsequent confirmed by measurements made by members of a Mexican climbing expedition.

This short Postandfly video shows the Basaseachic Waterfall from the air:

The Basaseachic Waterfall is normally considered to operate year-round, though very little water flows over it on some occasions during the dry season.

In terms of total drop, however, and if we include waterfalls that are seasonal, the Basaseachic Waterfall is overshadowed by the nearby Cascada de Piedra Bolada (Volada). The Piedra Bolada Waterfall, has a total drop of 453 meters (1486 feet), but flows only during the summer rainy season. It is much less accessible, and its true dimensions were only worked out for the first time by an expedition as recently as 1995 by members of the Speology Group of Ciudad Cuauhtémoc, led by Carlos Lazcano.

This latter sections of this amateur video of the Piedra Bolada Waterfall show some of the amazing scenery in this remote area of Mexico:

Curiously, there is some debate as to whether this waterfall should be called Cascada de Piedra Volada (which would translate as the “Flying Stone Waterfall”) or Cascada de Piedra Bolada (“Round Stone Waterfall”). According to members of the Speology Group of Ciudad Cuauhtémoc, its true name is definitely Piedra Bolada, a name referring to a spherical stone, and used in addition for the local stream and for the nearest human settlement.

So, which is Mexico’s tallest waterfall? Well, it all depends…

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