Finland in Mexico

Finland in Mexico

MEXICONOW Staff Report

On May of 2015, Sauli Niiniströ, President of Finland made his first State Visit to Mexico to strengthen bonds with the Mexican Government along with several development and academic institutions. Mexico and Finland signed during this State visit four Memoranda of Understanding, a Cooperation Agreement and a Letter of Intention in favor of the educational, financing and research development. These agreements were signed by representatives of both countries in the presence of the Presidents of Mexico, Enrique Peña Nieto, and Finland, Sauli Niiniströ. Also a Memorandum of Understanding was signed between the State Government of Jalisco and Technological Research Centre of Finland in the same date of May of 2015, along with a Memorandum of Understanding on cooperation in export credit between Bancomext, the National Credit Society of Mexico and Finnvera PLS de Finlandia.

Sauli Niiniströ, President of Finland and Enrique Peña Nieto, President of Mexico.

A memorandum of understanding between ProMéxico and FINPRO RY was also signed with CONAFOR and the University of Helsinki of the Republic of Finland with the Agreement of Collaboration and Exchange between the Faculty of Law of the UNAM and the Faculty of Law of the University of Helsinki. As a result of the Free Trade Agreement signed between Mexico and the European Union back in 2000, both countries are now major commercial and investment partners in which Finland has taken advantage of a strategic position with Mexico. The signing of this agreement reinforced Mexico as the first country with preferential access to the two largest markets in the world and in this way creating certainty and improvement in its strategic role in world trade. Sauli Niinistö said that Mexico is an important country as a member of the G20: “We see the reforms as positive news about Mexico. We also want Mexico to further in regards of its reforms” “We have a large delegation of business people, representing the Finnish industry, but we also have experts in different areas.” expressed Sauli Niiniströ, President of Finland. “Currently 48 companies operate in Mexico with Finnish capital, including the largest manufacturer of power plants. Finland exports to Mexico cargo vehicles, high-quality paper and paper machine parts” He said. Kone is a leading producer of elevators. This Finnish enterprise established operations in Matamoros so they could produce electric stairs along with elevators using the most up-to-date technology while provisioning diverse industries as well as providing maintenance and services required for automated gates. Luvata is the leading manufacturer of tubes, coils and coolers for the heating, ventilation, air-conditioning and refrigeration (HVAC) industry. Luvata Monterrey S. de R.L. de C.V. is one of Luvata’s newest copper-tube manufacturing facilities.  Located in the Monterrey area of Nuevo Leon Mexico, Luvata Monterrey focuses on delivering fast and frequent orders of copper tube to both large OEM manufacturers and smaller local customers in the air-conditioning and heating industry. Luvata Monterrey delivers copper tube using Luvata’s own cast-and-roll technology.  The Luvata Mexico facility also offers the continuous 1-ton Tube-In-A-CubeTM (TIACTM) package – a solution which requires fewer changeovers in downstream manufacturing, resulting in less scrap and greater uptime on equipment. Wärtsilä is a Finnish Corporation which manufactures and services power sources and other equipment in the marine and energy markets. The core products of Wärtsilä include large combustion engines used in cruise ships and ferries. As of 2014 the company employed close to 18,000 workers in more than 70 countries and it is headquartered in Helsinki. Wärtsilä has three main businesses; Power Plants focusing on the energy market, Ship Power focusing on the marine market and Services which is supporting both markets. Wärtsilä is developing a power plant fueled by natural gas in Monterrey, Nuevo Leon. With that, Finland aims to help Mexico to reduce reduce electricity prices stressed the Minister for European Affairs and Foreign Trade of the European nation, Lenita Toivakka.

The power plant of Wärtsilä for Smart Power Generation installed in Monterrey, consist of seven units Wärtsilä 50SG, the largest gas engine in the world. In this unique project, electricity will be exported through Mexico to Guatemala. The company will deliver approximately 950 GWh of electricity per year. To reach the target, the baseload power plant will run at full output for 24 hours a day. “Another reason was fuel efficiency. In this size range, engines are the most efficient technology. We also like the fact that engines maintain high efficiency in extreme temperatures.” To maximize efficiency, Wärtsilä Flexicycle power plants include a combined cycle steam turbine. “Mexico is a very interesting market for us. Flexible engine power plants can help optimize the power system by providing efficient peaking power and fast-reacting back-up for wind and solar energy. This can lead to significant savings,” says Raul Carral, Wärtsilä’s Business Development Manager recently. Finland has been a major investor at Mexico from the European Union and in Exhibit 1 we can see Finnish Investment in Mexico.

Exhibit 2 summarizes the Trade Balance between Mexico and Finland. It shows that commerce between the two countries reached its maximum level in the year 2008 (US$1.02 billion) which is the only time that trade has reached the US$1 billion stat. The bilateral commerce historically has been negative from Mexico, with the exception of the years 2008 and 2009. Important factors in the trade balance between Mexico and Finland are revealing. Take, for instance, the fact that during the 17 year time span from January 1999 to December 2015, total exports from Mexico to Finland increased from US$8.18 million to US$116 million. And at the same time, imports from the Finland to Mexico also showed an impressive growth from US$175 million (1999) to US$500 million (2015). Total commerce between the two countries and reciprocal action brought in US$616.85 million during 2015 in trade between the two partners, where commerce stats decreased 19% over the data of 2014.