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$1.3 Billion to be Invested in Mexico by Retailer Wal-Mart de Mexico


12/08/2016


$1.3 Billion to be Invested in Mexico by Retailer Wal-Mart de Mexico
In what is perceived as a show of commitment to Mexico at a time of uncertainty after the election of Donald Trump, retailer Wal-Mart de Mexico has announced that it will invest $1.3 billion in logistics in Latin America's No. 2 economy.
 
Wal-Mart spokeswoman Jo Warner assured the media that their decision to make the investment in Mexico will not result in any jobs being moved from the United States and there would be no job losses in the U.S., a prime concern for President elect Donald Trump.
 
"The investment is funded by Walmex and is necessary for expansion of Wal-Mart's Mexican business," she said.
 
After the company made the announcement of investment in Mexico, the question of whether the company had heard from Trump were not commented on by Warner. However since the investment is not the same as companies moving jobs to Mexico, she clarified that the investment decision should not be viewed as a company moving out of the U.S.
 
Recently, after the U.S. president-elect worked out an agreement with United Technologies Corp's Carrier’s United Technologies Corp's Carrier CEO, Gregory Hayes,  the company’s unit decided to keep half of the 2,100 Indiana jobs it was to shift to Mexico.
 
Due to the fact that Trump has threatened to renegotiate or scrap a major trade agreement with Mexico and has attacked U.S. companies investing south of the border, Mexico's business world has been thrown into uncertainty by the U.S. election.
 
Wal-Mart’s chief executive, Guilherme Loureiro said that investments in back-end infrastructure would be part of the investment, a large part of which will be made over the next three years. Some 10,000 permanent new jobs would be create dby the investment, he said.
 
"It will involve the building of new distribution centers, as well as the expansion of ones we already have," he said at an event with President Enrique Pena Nieto at the president's office.
 
In the last four years the company had already invested 80 billion pesos ($3.93 billion) in Mexico, Loureiro said.
 
By expanding its fresh food business and by boosting its core business of running discount retail and membership stores, Wal-Mart has been looking to double sales in Mexico by 2024.
 
In order to streamline operations in the country, Wal-Mart sold its Suburbia clothing chain to El Puerto De Liverpool for about $852 million in August.
 
Mexico was singled out as a top priority market by David Cheesewright, head of the overseas division at Wal-Mart during a shareholder meeting of the company in June. Outside of the United States, largest number of stores of the company is to be found in Mexico.
 
While Walmex has remained a bright spot with third-quarter revenue growing 10.8 percent to 126.86 billion pesos ($6.25 billion), the company has struggled in overseas markets, including Britain and China.
 
(Source:www.reuters.com)