Marcelo Funes-Gallanzi-President Mexican Federation of Aerospace Industries

WHAT IS THE CURRENT SITUATION OF THE AEROSPACE INDUSTRY IN MEXICO?


The Aerospace Industry in Mexico is having a great time, and since 2004 has been enjoying a steady 20 percent yearly increase. In 2011, the Aerospace Industry exported over US$4.5 billion and imported US$3.2 billion of which 2.5 represents raw materials and specialized products.

This includes over 600 million in spare parts for the Mexican private fleet. The fl eet was made up of approximately 5,670 airplanes in 2011 and more good news because we are expected to grow over 14% during 2012, when compared to 2011.

WHAT IS THE FUTURE OF THE AEROSPACE INDUSTRY IN MEXICO?

If we continue to work together, the authorities, the industry and the education entities, I think it is fair to say we can become one of the 10 biggest Aerospace Industry suppliers in the world.

Together with the Secretary of Economy, FEMIA launched Pro-Aereo which is the National Strategic Aerospace Industry Program. In this way we have made the promise to develop the necessary strategies to continue with organized and well-structured growth throughout this important industry. We are doing this in order to reach milestones in the international markets in this sector and all this has propelled us toward ambitious goals all the way to 2020.

These five over-reaching strategies have been defined so that we can reach the objectives and a dynamic vision being planned that includes the following: the Promotion and Development of the internal and external markets; the strengthening and development of potential capabilities in the national industry; development of all the necessary human resources; and technical development.

In addition, there is development of the public-private programs assisting with the growth of the Aerospace Industry.

Along with this, don’t forget, we have the Relevant Milestones, for instance, such as establishment of formal coordination and administrative-management mechanism providing essential linkage between industry, governmental and others.

Our goals through 2020 entail being within the 10 largest suppliers of the Aerospace Industry in the world in exports.

We want to reach over US$12 billion in exports a year. Another aim is to have over 110,000 workers in the Aerospace business and to reach another 50% of local content in our raw materials and products.

Mexico is now part of the Wassenaar Arrangement. This means we can manufacture double- purposed manufacturing machines even before entering the defense market in Aerospace. Nobody knows its actual size but it might even be between 3 to 4 times larger than the Aerospace commercial market, and that is estimated at approximately US$550 billion.

HOW MANY MEMBERS ARE PART OF FEMIA?

FEMIA is a non-profit association established in November 2007 and presently has over 65 members.

WHAT IS THE OUTLOOK IN NUMBERS FOR THE AEROSPACE INDUSTRY IN 2012-2014?

Let us talk about what we expect from 2012 to 2015. In 2012 we expect to reach over US$5 billion, with 32,000 workers and we will have at least 275 Aerospace companies in Mexico, where we are now 260 corporations. In 2015, following the Pro-Aereo, we are planning to have 37,000 employees, that includes 350 companies and generates a projected US$7.5 billion. This reflects an increase of 30% more in the national supply.

WHAT ARE THE COMPETITIVE ADVANTAGES FOR MEXICO IN THE AEROSPACE INDUSTRY?

We have always mentioned that the Aerospace Industry in Mexico is growing at such a steady rate because Mexico is in the largest Aerospace market in the world. Around 60-65% of our workers and specialists, engineers and designers relate to the Aerospace Industry and they offer the same quality work as any first world country, at the same offering a lower cost that might be anywhere between 28-34% in North America, and close to 40% in relation to selected European and Asian markets.

There is still another “plus”. In addition, Mexico has the biggest network of Free Trade Agreements (44) in the world. This certainly gives us a great advantage in tariff treatments in this important sector. We only have one import-export tariff on Aerospace products. It is a 0% general import tax for certified DGAC companies in Mexico and this is approved by Customs.

WHAT OUTCOME SHOULD WE EXPECT FROM THE RECENT FARNBOROUGH INTERNATIONAL AIRSHOW AND THE UPCOMING MEXICO’S AEROSPACE SUMMIT IN
QUERETARO?

I think that visiting the international events of the aerospace industry always help the corporations to see what the market wants, to see new products and ideas, to see possible clients, new ventures, joint ventures, subcontracting and to tell the aerospace industry of the world that Mexico is in the industry with advantages to develop a win, win, win situation. We meet with people with new projects.

Trade shows also allow companies to get acquainted with the market, with other companies, with new technologies and with new relations. Mexico is now known in the aerospace industry and it has a great reputation of quality, price and competitiveness in the sector.

ANY LAST COMMENT FOR THE MEXICONOW SUBSCRIBERS?

Keep on promoting industries that give Mexico the advantage over other countries. The aerospace industry is now a strategic industry with a full future to become one of the leaders. We will keep working together to reach this reality.