Veracruz has been one of the Mexican states that has benefited the most from the Interoceanic Corridor of the Isthmus of Tehuantepec, CIIT (partly due to its maritime border with the United States and Europe) on par with the investment received by the federal government, which in the last six years has allocated nearly 18 billion pesos, says Enrique Nachón García, Secretary of Economic and Port Development of the State of Veracruz, in an interview with Real Estate Market & Lifestyle.
As for state investment in Veracruz, there is talk of almost 3 billion pesos reflected in the construction of four Development Poles for Wellbeing (PODEBIS) within its territory.
Enrique Nachón García, Secretary of Economic and Port Development of Veracruz.
"The [private] investments during this administration are historic," acknowledges Nachón García. "Nestlé arrived with its coffee commerce, though it was already present within the dairy industry. The company, Constellation Brands, also arrived with an investment of 1,300 million dollars, the largest investment in public-private history in the state of Veracruz". Furthermore, he mentions others like one of "4.5 billion dollars from the company TC Energy, in a strategic alliance also with the Federal Electricity Commission, and many more have arrived. It would be unfair not to mention them all, but there are many more companies and we are in negotiations with others".
"Veracruz is becoming attractive to investors," the interviewee adds proudly. "Why? Because when we talk about nearshoring, many of the companies we talk to imagine being on the border. But if we define a border as the line that divides two nations, we have the largest imaginary border that Mexico has with the eastern United States and Europe. In Veracruz we have 750 km of coastline with the Gulf of Mexico, making the work we are doing with the ports of Tuxpan, Veracruz and especially Coatzacoalcos even more efficient thanks to the Isthmus of Tehuantepec.
We are working with the Chambers of Commerce of the United States and Canada, twinning ports. Something else that’s very important: the only rail ship that operates in Mexico goes from Coatzacoalcos to Mobile, Alabama. That is to say, in 24 or 48 hours you can load railroad cars in Coatzacoalcos and unload them in Mobile".
Port of Coatzacoalcos, Veracruz (2023).
Real Estate Market & Lifestyle (REM): What is going to trigger this project in the country?
Enrique Nachón García (ENG): In 2018 we started planning this project with the Singaporean company Surbana Jurong. They made us the master plan and it is estimated that in the medium term it will generate about half a million jobs (between 2040 and 2050). The study has the assumption of generating 5% of the Gross Domestic Product. To put it into context: Veracruz is the sixth economy of the country, only behind Mexico City, the State of Mexico, Nuevo Leon, Jalisco and Guanajuato, and we have 4.5% of the Gross Domestic Product, that is to say, the generation of value that this project gives to Mexico is an economy akin to that of the state of Veracruz itself.
REM: What incentives does the state offer for investment?
ENG: We have aligned ourselves with the Federal Government and the governors of Oaxaca and Veracruz have signed a noncompete agreement between the two states. So, for example, we give all the tax benefits in the acquisition of land, deeds and domain rights are 100% subsidized for the first three years, and 50% for the second three years; the tax on education, payroll, acquisition of products, new or used vehicles, all of that is the same, 100% in the first three years; 50% for services in three years. They are the same aligned for the two states and more or less with the same approach that was given with the Federal Government, the only thing we cannot offer investors is the Accelerated Depreciation that is derived from the Federal Government.
REM: How many and which Development Poles for Wellbeing (PODEBIS) will be built in Veracruz?
ENG: We have two in the municipality of Coatzacoalcos (Coatzacoalcos I and II), one of which is within the port of Coatzacoalcos. Both have a great industrial vocation, very focused on the chemical and oil industry; these two PODEBIS are already at 100%, Mota Engil won them during the bidding. However, there is a consortium there with two other Mexican companies which will apparently be incorporated.
There are two other Podebis that have great potential: one is in Texistepec with a pharmaceutical vocation. The group that wins this bidding is very important, Profharmax and Trasnportadora Comexa (Proistmo), which is also at 100%; in the first weeks of January 2024 the company Corredor Interoceánico del Istmo de Tehuantepec gave them possession, not only legally but also physically to this developer. The fourth Podebi is located in San Juan Evangelista and was won by Grupo Constructor Urcedic.
REM: What economic vocations do you think will be more natural in the four PODEBIS of the entity?
ENG: I think that, for Veracruz, agribusiness, petrochemicals and pharmaceuticals are very important; I [also] think that the supply of the large automobile assembly plants that we have in Mexico is very important. Let me give you another fact: 66% of the import and export of vehicles in our country is done today through the Port of Veracruz yet we do not have any assembly plants in our state.The logistics allow us to offer these services that we can provide without competing. Additionally, the highway network that connects the ports of Veracruz allows you to reach the U.S. border in 14 hours.
REM: How much investment do you project that each PODEBIS will bring to the state?
ENG: We are focusing a little more on the generation of jobs, wealth and profit. We estimate that these four Development Poles will be generating close to 300,000 jobs by 2040. Investments are very variable. For example, we have just received a notable one from a company called TC Energy from Canada, which invested 4.5 billion dollars in the state of Veracruz. Constellation Brands, another company invested 1.3 billion dollars and the first investment in a Development Pole, in Coatzacoalcos II, where Braskem Idesa invested 400 million dollars; a brazilian-mexican company which makes petrochemical products who’ve already had a presence in Coatzacoalcos and are now building a mirror plant within the Podebi.
Petrochemicals.
REM: In the future, do you see an important industrial development in the whole state?
ENG: Of course, how is the economy of our state? The agricultural and livestock industry constitutes its primary sector (about 6%). The secondary sector, industry, represents 30 percent of its economy, while the remaining 64 percent is the tertiary sector. This is the great opportunity for industrial growth and to transform into an agro-industrial based economy. It’s a great opportunity for us, the state must industrialize with better jobs along with improved benefits.
REM: How is energy production in Veracruz? Not only for CIIT, but also for nearshoring.
ENG: Veracruz is the number one energy producer; we produce three times more energy than we consume. In a very important strategic alliance with the Ministry of Energy and all the companies in the state that are sectorized with the Ministry, we have been giving talks and clarifications during the bidding processes of the Development Poles where there is a commitment to supply the energy required. We have had work tables with companies interested in investing in Veracruz and all doubts are resolved through this commission. Collaboration agreements are signed with the companies already in the state, and those that are interested in investing, find us there. We simply link, support and facilitate the management and it’s given us good results.
In Coatzacoalcos II Braskem Idesa invested 400 million dollars.
REM: What about real estate development?
ENG: We signed an agreement with the housing developers in the state with Infonavit. We have an extraordinary national service which is unprecedented in other countries. Infonavit provides the constitutional right that Mexicans who work and have a laboral relationship with the private sector can acquire a home through a credit. We are also working to have the necessary housing for all workers and businessmen who come to Veracruz, especially in the southern region.
REM: Do you consider that, in the future, when these industrial parks are installed, people will commute by train to reach these Development Poles?
ENG: Of course, we are preparing ourselves. Conveniently, there are two Development Poles in Coatzacoalcos. In southern Veracruz there is a very important conurbation zone: Minatitlán, Coatzacoalcos and Cosoleacaque are three conurbation municipalities (there are others, of course) that even share services. We are working on a development with investors, housing developers and with Infonavit itself. We have already identified a site because the state government has a territorial reserve and is supporting the disposition of the housing developers to create the necessary infrastructure for what is required along the way.
Coatzacoalcos National Port System.
REM: One last question regarding gas in the region. What is the status of the gas pipeline?
ENG: Of course, it is giving us the certainty that what we are promoting will have all the facilities and will have everything necessary to invest. For example, there is already the marine gas pipeline project. This is very important, the marine gas pipeline that goes from Tuxpan to Coatzacoalcos and from there to the Dos Bocas refinery, will provide the natural gas needed by the industry, showcasing that the most economical energy at an industrial level will be available here.
IQUISA Coatzacoalcos, Veracruz.
Since 2018, it was planned
- The strategic planning of the CIIT resulted from a project conductedout in 2018 by Surbana Jurong, a Singaporean consultant specializing in urban, industrial and infrastructure matters.
- Enrique Nachón García, Secretary of Economic and Port Development of the State of Veracruz, comments, "A comprehensive study was conducted to determine the suitability of locations such as La Cruz. We also considered the foundation for the Development of Mexico with the United States. It was essential to have nearby populations with the necessary labor force and connectivity to highways, roads, and railway lines. Ultimately, the Port of Coatzacoalcos and Salina Cruz emerged as the most suitable due to their natural advantages."
- In the case of Veracruz, a thorough analysis was conducted to assess its vocational, touristic, and industrial potential. Nachón García adds, "All selected sites are ideally situated, located within 1 to 3 kilometers of major highways and railway lines. The railway passes through Veracruz. The only missing element is the last-mile services, which are part of the bidding proposal submitted to the winning companies."
Text:Gisselle Morán
Photo: ARMANDO MEDINA / Secretaría de Desarrollo Económico y Portuario del Estado de Veracruz / chandlervid85 / braskemidesa / puerto_de_coaztcoalcos