Denmark in Mexico

MEXICONOW Staff Report

Denmark and Mexico started their diplomatic relations in the year 1827 with a Treaty of Friendship, Trade and Navigation and today, 185 years later, Denmark is Mexico’s largest investor among the Nordic countries.

Lego bricks manufacturing at the Nuevo Leon plant
Denmark and Mexico have executed the following bilateral treaties: On July 19th of 1827 both countries signed a treaty which stipulated that the products from Denmark may be carried to Mexico from any part of the world without paying duties any higher than the ones charged on the same articles imported by vessels from the most-favored nations. An agreement concerning the reciprocal protection of works by authors, composers and artists was signed in Mexico City on July 12th, 1954. Also, in Mexico City in December of 1980 the Agreement on Economic Cooperation was signed.

And most notably, Denmark, as member of the European Union has access to the Free Trade Agreement signed between Mexico and the EU back in the year 2000.

Denmark is among of Mexico’s largest trading partners from the European Union. Exhibit 1summarizes the Trade Balance between Mexico and Denmark. It shows that commerce between the two countries reached its maximum level last year 2014 (US$689.62 million). This certainly reflects the excellent moment that the bilateral relation is now having. The bilateral commerce historically has been negative from Mexico.

Several important factors in the trade balance between Mexico and Denmark are revealing. Take, for instance, the fact that during the 14 year time span from January 1999 to December 2014, total exports from Mexico to Denmark increased from US$49.12 million to US$146.45 million (198%). And at the same time, imports from Denmark to Mexico also showed an impressive growth from US$126.60 million (1999) to US$543.16 million (2014), a remarkable 329% of growth.

Total commerce between the two countries and reciprocal action brought in US$689.62 million during 2014 in trade between the two partners and has consistently been with sustained growth or similar figures, especially from the period since 2010. This was when, for the first time, that total commerce “stats” were available identifying over US$600 million. And another interesting detail is that in 2014 commerce stats increased 22.50% over the level of 2013.

In Exhibit 2 we can see Danish Investment in Mexico. During the period from January 2000 through March of 2015, companies with capital from Denmark invested US$1.87 billion. According to this information Denmark is the 11th largest investor in Mexico and it is the seventh largest from the European Union, representing 1.4% of the accumulated investment from the EU.

At the year 2012, 193 companies with Danish investment were registered in Mexico. Among the most important companies with Danish capital presence in Mexico are Nilfisk (NKT Holding A/S); Lego; Novo Nordisk A/S; Grundfos; A.P. Møller – Mærsk A/S and Fl Smidth & Co. A/S. Also, there are Danfoss A/S, Danisco A/S, ISS and Lundbeck.
Lego Plant inauguration at Cienega de Flores, Nuevo Leon<br /> From left to right: Jens Peter Clausen, VP Operations Mexico, Bali Padda, COO/Chief Operations Officer Executive<br /> Vice President Operations, Jørgen Vig Knudstorp, CEO/Chief Executive Officer, Thomas Kirk Kristiansen, Sharehol-<br /> der and representing the fourth generation of the owner family and Jaime Fuentes, CEO of LEGO Mexico.
Maersk A/S has invested US$900 million at a container facility at Mexico’s Port of Lazaro Cardenas.

Maersk container ship at Lazaro Cardenas portThe largest LEGO plant of the Danish company is located in Mexico, the manufacturer of plastic blocks to make toys just invested US$125 million in an expansion. The inaugural event was presided over by Jørgen Vig Knudstorp, President and CEO of LEGO Group; Jens Peter Clausen, VP Operations and Jaime Fuentes CEO of LEGO Mexico. Also present was Thomas Kirk Kristiansen, grandson of the founder of LEGO Group, Ole Kirk Kristiansen. The complex, located in Cienega de Flores, Nuevo Leon, outdoes in size and production any other plant in Denmark, the Czech Republic and Hungary. The plastics molding and injection plant is fully robotized.