Despite the tough global economic climate, Mexico is bucking trends and showing strong growth. The Organisation for Economic Cooperation and Development (OECD) estimates Mexico’s growth rate to be 3.6 per cent in 2012, however, many commentators believe it could actually reach 4 per cent.
According to Alonso Quintana, CEO of Grupo ICA, Mexico’s largest engineering and construction company, Mexico owes its success to some key factors.
Mexico has enjoyed several years of economic stability. It has increased its international reserves and has a well capitalised pension system. The country can trade its excellent capabilities in automotive and aerospace manufacturing with its northern neighbour, the United States. And Mexico’s demographics are a linchpin of progress, with a young population and large labour force that is 78 million strong. The OECD and World Trade Organisation both rank Mexican workers among the hardest working in the world, in terms of the amount of hours worked yearly.
Mr Quintana explains: “All these factors mean we have a middle class that is growing significantly and that wants to move onto the next economic level. This ambition allows us to gather additional factors for growth; and as companies seek more competitive locations to do business, Mexico has become a country of choice for many.”
In order to support future growth and the aspirations of the growing middle class, infrastructure has become a key focus. The government’s National Infrastructure Programme has been a response to the need to drive infrastructure development in Mexico, without which the country cannot move to the next level of economic progress. As one of the most competitive sectors in Mexico, infrastructure is itself providing a major boost to the economy, driving job creation and economic prosperity.
Grupo ICA has been tasked with building Mexico’s infrastructure for 65 years and has been at the forefront of some of the largest infrastructure projects in the country. With 16 hydroelectric plants, 30 dams, 310 miles of aqueducts, some 12,500 miles of road, 43 airports and more than 125 miles of subway under its belt, the company has streamlined the construction process for optimal efficiency. As a result, it has been able to build impressive projects in record time – such as the iconic Los Cabos Convention Centre, the home of the Mexico G-20 Summit in June 2012, which it built in just six months.
"We believe we have much to contribute to local businesses abroad who need a partner with greater experience in larger projects." ALONSO QUINTANA,
CEO of Grupo ICA |
Mr Quintana believes that rigorous corporate governance standards have been key to the company’s success, allowing Grupo ICA to win the confidence of the government, private-sector partners and capital investors. Moreover, the company upholds high standards of sustainability and social responsibility. In November 2011, Grupo ICA was selected to be one of the members of the new Sustainability Index launched by the Mexican Stock Exchange (BMV). The BMV Sustainability Index members were selected from among the 70 most-traded stocks on the BMV, and rank above the average of 3,500 international companies for sustainability measures.
The company also maintains one of the best health and safety records in Mexico and strives to contribute to the communities in which it operates by building schools or recreational parks. Its not-for-profit arm, the ICA Foundation, provides scholarships to young people to train as engineers, thereby contributing to the technical engineering capacity needed by the country.
As a result of these measures, Grupo ICA has become the leading construction company in Mexico, with 40,000 employees and a compound annual growth rate of 12 per cent in revenue over the past five years. But Mr Quintana does not want the group’s impressive growth to stop there; he plans to expand the business so that 25 per cent of revenues are earned internationally. Already the company is working across Central and South America in countries like Costa Rica, Panama, Colombia and Peru. He explains: “We believe we have much to contribute to local businesses abroad who need a partner with greater experience in larger projects.”
Mr Quintana states that there has been no better time for UK investors seeking opportunities in Mexico, as the infrastructure boom looks set to continue for some time, particularly in the fields of hydrocarbons and aerospace. Moreover, companies like Grupo ICA, who are veterans of the country’s infrastructure sector and who adhere to rigorous corporate governance standards, offer excellent alliances for investors seeking reliable construction partners in Mexico.
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