Mexico cenbank highlights Tehuantepec nearshoring opportunities, credit risks

While highlighting opportunities companies seeking to operate in the Tehuantepec isthmus rail corridor could take advantage of, Mexico’s central bank (Banxico) also mentioned risks due to lack of credit. 

In its December financial stability report, the bank said, “the results indicate that, in the sectors with the greatest propensity for relocation, fewer companies obtain credit from private banks in the south-southeast of Mexico.”

It added, “part of this could be due to the fact that in the south-southeast (and in those sectors) companies are associated with more credit risk. In particular, they are more likely to default, which also increases the amount of reserves for banks. However, it is also observed that development banking is more present in that region.”

Source: Banxico

The government is seeking to launch tenders for 10 industrial park areas along the 300km Tehuantepec isthmus corridor that will create the country’s first interoceanic link, between Veracruz state's Coatzacoalcos port and Oaxaca state’s Salinas Cruz port. A special tax regime will apply to the parks to attract companies to the logistics hub modeled on the Panama Canal hub.

Banxico said metals, textiles and construction materials producers will benefit most from relocating to the corridor, highlighting that the credit risks could be cushioned by a deal between the government and the Inter-American Development Bank (IDB), which will provide up to US$2.25bn in loans to companies looking to relocate. IDB Group’s Mexico head, Ernesto Stein, told BNamericas in October that the deal represents a great opportunity for the bank. 

Meanwhile, the finance ministry said in a statement that the IDB seeks to "enhance the value of assets in the interoceanic corridor and accelerate investments in the first industrial poles [parks]" by helping interested companies with financing.

But tenders for the parks have not advanced, and an expert told BNamericas last month that the area will reach its full potential only in a decade.

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