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PepsiCo, Nestle & Cisco Invest More Than $7 Billion in Mexico

04 February, 2014

Three of the world’s largest corporations announced plans to collectively invest more than $7 billion in Mexico, where a series of recent historic reforms have created an excellent environment for business. Throughout the first year of President Enrique Pena Nieto’s term in office, the government has tackled landmark economic reforms, including progressive new telecommunications, energy, banking and tax legislation. 

“Two of the world’s largest drink and snack makers are pouring billions of dollars into their Mexican operations, sending powerful signals the country is too lucrative to avoid,” writes the Wall Street Journal. “Many companies continue to see Mexico as a major source of growth amid slowing sales in other parts of the world.”

Foreign direct investment (FDI) in Mexico hit more than $28 billion by September of 2013, compared to $15 billion in 2012. In addition, the government is expecting the nation’s economy to expand by nearly 4 percent in 2014.

PepsiCo will invest at least $5 billion in Mexico over the next five years and plans to expand its marketing efforts, as well as its production capacity, by adding new lines in its manufacturing plants and increasing delivery routes, creating at least 4,000 new jobs in the process. Mexico is reportedly PepsiCo’s third-largest source of revenue, following only the U.S. and Russia, generating an average of more than $4 billion (around 6 percent) of the company’s annual global sales.

“We see tremendous opportunities to further expand our food and beverage business,” shared PepsiCo Chairwoman Indra Nooyi in a statement. “The company is confident in Mexico’s future.”

Nestle plans to invest more than $1 billion in Mexico over the next five years and will build two new factories, including an infant nutrition and a pet-food facility. In addition, it will expand an existing cereal factory in Mexico, which is the company’s sixth-largest market, creating at least 700 new jobs.

“The investment reflects our commitment to Mexico, and our long-term vision in a market with high growth potential,” Nestle CEO Paul Bulcke told the Wall Street Journal.

Finally, network equipment maker Cisco Systems,Inc. will invest $1.35 billion in its manufacturing operations and to build a new support center in 2014. Cisco also announced plans to expand its Networking Academy in Mexico, which will increase the number of skilled workers and teach students how to design, build, secure and maintain computer networks. 

Topics: Investment