Mexico Aerospace Forum 2018 Impact Report by Mexico Business Publishing

IMPACT REPORT

2018

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2018 Although recent sociopolitical issues have hurt pockets of Mexico’s economy, the country’s aerospace industry is thriving. In 2018, sector exports are expected to grow 13.13 percent in comparison to the previous year, the highest rate for the past five years, to reach a total of US$8.5 billion, according to FEMIA. This impressive performance is underpinned by a young workforce, an ideal location and a competitive labor force, convincing OEMs that the country represents an excellent opportunity.

The sector has mostly managed to circumvent the worst effects of Mexico’s trade dispute with its northern neighbor but industry members are still keeping close track of any changes brought about by the USMCA deal. Mexico’s aerospace industry also has its own challenges. For starters, currency volatility is affecting Mexican manufacturing across the board due to a strong dollar against the Mexican peso. Another significant challenge is the consolidation of the industry’s supply chain as the lack of ready availability of raw materials and special processes reduces the country’s competitiveness.

Against this backdrop, Mexico Aerospace Forum 2018 brings together the sector’s key players and decisionmakers to generate an in-depth conversation about current trends and the future of the aerospace industry. Among the key talking points: the challenges disrupting the industry and the business opportunities ahead.

2018

Quick Look:

“It is the biggest aeronautical event in Mexico and one of the biggest in Latin America. It is a key event to support Mexico’s growing opportunities in the sector” Wing Gen. Rodolfo Rodríguez, President of FAMEX

INCLUDING: ∙∙ Carlos Robles, Bombardier Queretaro ∙∙ Luis Lizcano, FEMIA ∙∙ Antonio Velázquez, Aeroclúster de Querétaro ∙∙ René Espinoza, Chihuahua Aerocluster

TOP SPEAKERS

∙∙ Jorge Gutiérrez, UNAQ ∙∙ Eugenio Marín, TechBA Aerospace ∙∙ Claire Barnouin, Monterrey Aerocluster ∙∙ Rodolfo Rodríguez Quezada, FAMEX ∙∙ Francisco Bautista, EY ∙∙ Jesús Navarro, CEO of Mexicana MRO ∙∙ Felipe Sandoval, FEMIA

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66 COMPANIES REPRESENTED

“The future of the aerospace sector is bright,the sky is the limit and the opportunities keep growing at a steady pace” Carlos Robles, Vice President of Bombardier Queretaro

PARTICIPANTS

“The growth of the aerospace industry is astonishing, this is one of the industries with the greatest added value in the country both economically and in terms of human development” Felipe Sandoval, General Manager of Zodiac Aerospace Mexico and President of FEMIA

CO MPA N Y AT T E NDANC E Aerolíneas Ejecutivas

InDeplo

Aerovitro

INDEX

Altair

Innocentro

AMPIP

Israel Aerospace Industries

Arizona Commerce Authority

Kelly Services

Artha Capital

KPMG

Avemex

Louisiana Economic Development

Axon Interconex

Manny Aviation Services

Bancomext

Maquiladora Association - Index Nogales

Benchmark Inc

Marposs

Boeing

Mexicana MRO

Bombardier

Monterrey Aerocluster

CAMEXA

Oaxaca Aerospace

CENTA

Panalpina

Ceratizit Group

Prettl Electronics

Chihuahua Aerocluster

Prior Aeronautics

Chiron

ProMéxico

Croda

Queretaro Aerocluster

CWT

Quality Aeronautical Engineering Consultants

DB Schenker

Redwings

Embassy of Canada

RH Shipping

Embassy of France

Rohde & Schwarz

Embassy of Russia

SAE

Embassy of the United States

Secretaria de Economia de Chihuahua

Ernst & Young

SITA

FAMEX

Sitres LatAm

FEMIA

Techman-Head

ASESA (Grupo Lomex)

Terrafina

Grupo Prodensa

UNAQ

Hellmann

TechBA

Helmut Fischer

The Haskell Company de Mexico

HT-MX

Tridi

ICAO

Zodiac Aerospace

Profile of Attendants

34.41% C Level Executives 34.41% Mid Level 31.18% High Level Executivel

Satisfaction Level

61.54% Very Satisfied 34.62% Satisfied 1.92% Neutral 1.92% Dissatisfied

Most Valuable Element

48% Content 40% Speakers /Panelists 12% Networking

P R O GR A M

07:30 REGISTRATION 08:30

MEXICO’S FUTURE IN THE AEROSPACE INDUSTRY

Presentation: Carlos Robles, Vice President of Bombardier Queretaro 09:15

THE AEROSPACE INDUSTRY POST-USMCA

Moderator:

Luis Lizcano, Director General of FEMIA

Panelists:

Antonio Velázquez, Director General of Aeroclúster de Querétaro

René Espinoza, President of Chihuahua Aerocluster

Luis Aguirre, President of INDEX

10:15

NETWORKING COFFEE BREAK

11:00

OPPORTUNITIES FOR MEXICO’S SMES IN THE LOCAL MANUFACTURING CHAIN

Moderator:

Jorge Gutiérrez, Dean of UNAQ

Panelists:

Eugenio Marín, CEO of TechBA Madrid-Montreal and TechBA Aerospace

Roberto Corral, Vice President and General Manager of Innocentro

Claire Barnouin, Executive Director of Monterrey Aerocluster

12:45

FAMEX, A PROMOTER OF MEXICO'S AEROSPACE INDUSTRY

Presentation: Wing Gen. Rodolfo Rodríguez Quezada, President of FAMEX 13:30

NETWORKING LUNCH BREAK

15:00

AIR CONNECTIVITY AND MEXICO’S ECONOMIC DEVELOPMENT

Moderator:

Francisco Bautista, Leading Partner of Aerospace Industry at EY

Panelists:

Jesús Navarro, CEO of Mexicana MRO

Juan José Simón, Director of SAE

Bernardo Moreno, CEO of Redwings

16:00

TURBULENCE OR CLEAR SKIES AHEAD? A PANORAMA OF THE SECTOR

Presentation: Felipe Sandoval, General Manager of Zodiac Aerospace Mexico and President of FEMIA 16:45

NETWORKING COCKTAIL

HIG HL I G HTS 201 8

MEXICO’S AEROSPACE GROWTH TO REACH NEW HEIGHTS There is a bright future for the aerospace sector in the coming years in Mexico, according to Carlos Robles, Vice President of Bombardier Queretaro in his keynote

KEY SPEAKER

speech at Mexico Aerospace Forum 2018 at the Hotel Sheraton María Isabel in Mexico City. “The future of the aerospace sector is bright,” he said. “The sky is the limit and the opportunities keep growing at a steady pace.” The context in which the aerospace sector operates in Mexico and internationally has challenges, but the opportunities are greater, he said. “The political context, the fluctuations in the exchange rate, the renegotiation of trade agreements and Mexico’s presidential elections are factors that create a complex environment for the sector,” he explained. But he highlighted that this impact has not stopped the sector’s steady growth.

CARLOS ROBLES Vice President of

According to Robles, the aerospace sector has experienced sustained growth

Bombardier Queretaro

over the last few years, positioning it as a strategic axis for the country. “In the

Carlos Robles started at Bombardier

last 10 years the sector has had an annual growth rate of 14 percent, positioning

as Director of Operations in 2011

it as the fastest growing sector in the country,” he said.

after working for 12 years in several leadership positions at Volkswagen

However, the sector’s steady growth also present challenges for the companies

Mexico. Later, he became General

and the sector itself, he warned. “The main challenge is the coordination of more

Manager at Bombardier where

than 360 industrial installations that operate in the sector, which are a key to

he was responsible for the design

support the success and continuous growth of the aerospace sector in Mexico,”

and execution of the company’s

he explained.

production strategies for Bombardier Mexico’s manufacturing centers.

Other challenges that impact the development of the sector are related to the

In 2017, Robles was named Vice

training of the labor force and the development of strategic alliances to become

President of Bombardier. Robles

competitive as a sector. “One challenge is to encourage talent development to

also is the President of FEMIA and a

satisfy the steady growth of the aerospace sector,” he continued. A third challenge

counselor at the Popular Autonomous

he identified was the transformation of Mexico’s supplier competitiveness by

University of Puebla (UPAEP).

reducing costs to compete with players coming from regions such as Asia.

“The political context, the fluctuations in the exchange rate, the renegotiation of trade agreements and México’s presidential elections are factors that create a complex environment for the sector” Carlos Robles, Vice President of Bombardier Queretaro Robles closed his speech sharing the upcoming opportunities for the country. “By the end of the year, the aerospace sector is expected to provide more than 56,000 directorate positions and surpass the current export rate,” said Robles. He said he thinks Mexico has a positive reputation as an aerospace hub but that there is still plenty of room for it to grow. “Whenever a potential client comes to Mexico for the aerospace sector, there is image of a growing sector with potential opportunities. The outlook is very positive,” he concluded.

NEW TRADE ENVIRONMENT DEMANDS FURTHER NATIONAL DEVELOPMENT After over a year of negotiations, the new USMCA treaty was signed by Former President Enrique Peña Nieto, US President Donald Trump and Canadian Prime Minister Justin Trudeau. Despite uncertainty in the automotive sector due to changes in rules of origin, the aerospace sector was mostly unaffected, according to Luis Lizcano, Director General of FEMIA. “Even though we expected slower growth in the industry’s production and export results due to the NAFTA renegotiation, we experienced quite the opposite,” said Lizcano during the first panel of Mexico Aerospace Forum 2019 held at the Sheraton María Isabel hotel in Mexico City. As moderator, Lizcano opened the discussion highlighting the growth in aerospace exports of US$1 billion for a total of US$8.6 billion in 2018. Luis Aguirre, President of the National Council for the Maquila Industry and Export-oriented Manufacturing (INDEX), said no big changes were made to regulations focused on the aerospace industry moving from NAFTA to USMCA. “There are more advantages because the new treaty gives more certainty to trade, strengthening customs and information exchange,” he said. “Paperwork on certifications of origin was also simplified to expedite operations.” This, however, does not mean the industry is free of turbulence. “USMCA will reconfigure the supply chain,” said Antonio Velázquez, Director General of Aeroclúster of Querétaro. Approximately 80 percent of Mexico’s exports go to the US, so Velázquez said companies will have to be very smart in keeping their competitiveness and operations. “Traceability will also be very important under the new treaty. Compliance with rules of origin will be stricter, demanding companies increase the technological content in Mexican production.”

HIG HL I G HTS 201 8

KEY SPEAKER

Aguirre also mentioned that the only dark cloud remaining after the signing of USMCA was the lingering tariffs on steel and aluminum imports implemented by the US. Even though these were used as a negotiation tactic by the Trump administration to force Mexico and Canada to adopt US terms, the tariffs have not been lifted. Both Peña Nieto and Trudeau urged the US government to address the issue during the signing ceremony but Trump said this issue will be resolved separately with each of its partners. Nevertheless, René Espinoza, President of the Chihuahua Aerocluster does not see this as such a grave problem for the industry. “Mexico imports raw materials that

LUIS AGUIRRE

are later transformed and exported once again to the US, which minimizes the

President of INDEX

impact of steel tariffs,” he said. “There has been a slight impact in sourcing costs

Luis Aguirre is the President of INDEX

but most of the certified mills for aerospace production are in the US anyway.”

and the National Council of the Maquila and Manufacturing Industry.

Regardless of the outcome, USMCA negotiations did shine a light on Mexico’s

Previously, he was Vice President of

dependence on the US and Canada regarding exports, which raised the question

CONCANMIN and President of the

of whether the country could diversify its operations and participate in more

Productive Linking Commission in the

global markets. “There has always been an opportunity for diversification and the

Confederation of Industrial Chambers

CPTPP has opened even more doors for the country,” said Aguirre.

of Mexico. Aguirre was also President of the Commission of National

According to Espinoza, the country is already starting to diversify its operations

Content in the Council of Industry

and even though Mexico’s aerospace industry is still young, global markets like

Chambers of Jalisco and President of

Europe are already paying attention to Mexico as an important manufacturing

the Directive Council of the Institute

hub. “The USMCA negotiation was a perfect launching pad to generate more

for the Promotion of Foreign Trade in

interest from other international regions,” he said.

Jalisco (JALTRADE). He has a Master’s in international business from ITESO.

Panelists agree, however, that more is still to be done to boost the country’s position and the government has a major role to play in this process. “Participation of the federal government is the best way for the industry to grow,” said Espinoza. “Unlike the automotive or electronics industry, if the government does not participate, there will be no development.” He highlights the cases of Brazil and Quebec, where government participation was key to creating two of the largest

OEMs in the industry: Embraer and Bombardier. “Once the private sector and the government decide to create a company, that is when the industry can truly take off,” said Velázquez. “That is what we need right now in Mexico.” Before reaching that point, the country must strengthen its supply chain and keep betting on talent to support manufacturing and technology development processes. Just like in other industries, the country has been very successful in attracting transnational companies. Now, it needs to trust the national industry. “There should be more fiscal incentives for national players and support for SME

“Traceability will also be very important under the new treaty. Compliance with rules of origin will be stricter, demanding companies increase the technological content in Mexican production” Antonio Velázquez, Director General of Aeroclúster of Querétaro

growth,” said Velázquez. “Participation in defense programs is also critical for the industry, because it will open the door to a whole new world of projects and technology.” Aguirre stressed the importance of specific government involvement in key axes. “The new Minister of Economy, Graciela Márquez, has vowed to increase local content in Mexican exports,” said Aguirre. “That can only be achieved through supporting programs in education, financing and training for national players.”

LANDING SMES IN AEROSPACE VALUE CHAINS IN MEXICO AND ABROAD While the Mexican aerospace industry has experienced double-digit growth rates in the last few years, there are still several challenges to counter for Mexican SMEs to enter global supply chains, said a panel of experts at Mexico Aerospace Forum 2018, which took place at Sheraton María Isabel in Mexico City. “It is necessary to develop an aerospace industry with strong national capital, which means developing SMEs,” said Jorge Gutiérrez, Dean of UNAQ. Roberto Corral, Vice President and General Manager of Innocentro agreed and underlined that SMEs must start pushing themselves out of their comfort zones to compete. “The secret for SMEs to take the next step in their advancement is that they start developing their own products,” he adds.

HIG HL I G HTS 201 8 KEY SPEAKER

Eugenio Marín, CEO of TechBA Madrid-Montreal and TechBA Aerospace, pointed out that industrial diversification is a huge challenge for SMEs. He said the main issue is usually not technical capacities or even access to capital, but changing the mindset of Mexican SMEs. “The Mexican manufacturing industry is used to waiting for large foreign companies to come and buy its products and some companies even lack a commercial department,” he explained. “SMEs need to look forward to become global companies.” Claire Barnouin, Executive Director of Monterrey Aerocluster, said Mexico must learn how to sell its engineering capacities because the country offers several

CLAIRE BARNOUIN

advantages in that regard. “The country needs to go from a scheme where SMEs

Executive Director of

lack control over component designs to one in which they develop more added-

Monterrey Aerocluster

value projects,” she points out.

Claire Barnouin has over 15 years of experience in economic binational

Marín pointed out that a study carried out by TechBA discovered that there are about

and regional economic development

182 SMEs in Mexico that are interested in entering aerospace value chains. He added

and specializes in the management

that 90 percent of these SMEs are not hindered by the lack of capital or experience

of clusters and industrial associations.

to engage in aerospace processes. For instance, 74 percent of the SMEs studied do

Prior to becoming the Executive

not understand how to integrate themselves into the aerospace supplier base and

Director of Monterrey Aerocluster

up to 82 percent have no aerospace clients. “We expect to help them achieve that

and specializing in the aeronautics

in less than three years,” he continued. “Our job is to help companies fill these gaps.”

industry, she coordinated the Technical Secretariat of the Mexico-

He added that Mexican SMEs face the challenge of a lot of idle capacity, which

US Foundation for Science (FUMEC).

usually means a cost of opportunity. In lieu of this situation, TechBA has created

Barnouin holds a BA in international

a series of transfer centers where SMEs can reach aerospace clients in order to

studies from the Catholic University of

develop one-stop-shops.

Lyon and a Master’s in international relations from the Avignon University.

Looking ahead, Marín said TechBA is in talks with the new federal administration to create FONAERO, which will be a fund destined to support the development of SMEs. “We need to boost the penetration of SMEs in the aerospace supplier base,” he said. Agreeing, Gutiérrez added that the absence of public policy with a long-term perspective also weighs on the development of SMEs. Corral said without the support of public authorities it will be difficult for the industry to

develop beyond the attraction of OEMs’ FDI. According to Barnouin, it is necessary that the new government carries on the efforts that have been made previously. Closing the panel, Marín said that Mexico’s aerospace industry is competing against the world.

“It is necessary to develop an aerospace industry with strong national capital, which means developing SMEs” Jorge Gutiérrez, Dean of UNAQ

He pointed out that while nations such as China have developed their industries through offset policies, Mexico remains a competitive country despite lacking these incentives. In terms of the role of universities in supporting SMEs’ development, Gutiérrez said there are over 30 academic institutions training technicians, engineers and researchers for the aerospace industry and developing aerospace technology. Barnouin added that these institutions have the role of training the labor of the future. “In parallel, aeroclusters must offer academic institutions feedback on the competences that talent needs to develop,” she concluded. Mexico Aerospace Forum 2018, organized by Mexico Business Events, also promotes the second edition of Mexico Aerospace Review, a publication by Mexico Business Publishing. Mexico’s aerospace sector competes globally, so the new government should provide the financial incentives to meet the industry’s needs.

FAMEX AS A PROMOTER OF MEXICO’S AEROSPACE INDUSTRY

KEY SPEAKER

The Aerospace Fair of Mexico (FAMEX) provides a key space to promote trade and growth of the national aerospace industry in Mexico and abroad, explained Wing Gen. Rodolfo Rodríguez, President of FAMEX in his presentation at Mexico Aerospace Forum 2018 at the Hotel Sheraton María Isabel in Mexico City. “It is the biggest aeronautical event in Mexico and one of the biggest in Latin America. It is a key event to support Mexico’s growing opportunities in the sector,” he said. Mexico’s general overview positions the country as a strong regional and global 15 global economy, the second strongest economy in Latin America and in third

WING GEN. RODOLFO RODRÍGUEZ

place worldwide in investment attractiveness for the aerospace sector,” shared

President of FAMEX

Rodríguez.

Wing Gen. Rodolfo Rodríguez has

economic player, as well as a top player in the aerospace sector. “Mexico is the th

served 44 years in the Mexican To further boost the development of the aerospace industry, FAMEX has a wide

Air Force. While a military pilot,

range of activities, events and collaboration among different actors to promote

Rodríguez studied a Bachelor’s in

holistic development of the sector in Mexico. “FAMEX encourages FDI in our

military administration and a Master’s

country and academic conferences to promote the training of personnel working

in military administration for national

in the field of aeronautics,” he said. “It also promotes business opportunities

defense and security at Mexico’s

through key events where big companies and SMEs can benefit from this.”

Army and Air Force University. He also

Given the changes that Mexico has experienced in recent months, Rodriguez in

from the Alabama War College and

holds a Master’s in strategic studies the name of FAMEX invited the attendees to participate in the upcoming FAMEX

has studied several courses abroad,

2019 event that will take place from Apr. 24-27, 2019 at the Santa Lucia Military Air

including in China and the US. As

Base. “FAMEX-19 will be the new federal government’s first official event where

President of FAMEX, Rodríguez is in

aerospace companies from Mexico and abroad can show the next administration

charge of organizing the Mexican

why it is important to continue investing in the aerospace sector,” he continued.

aerospace industry’s largest event.

HIG HL I G HTS 201 8

“Mexico is the 15th global economy, the second strongest economy in Latin America and in third place worldwide in investment attractiveness for the aerospace sector”

Rodriguez shared with the audience the importance

Wing Gen. Rodolfo Rodríguez, President of FAMEX

To conclude, Rodriguez shared with the audience

of continued promotion of the collaboration between public and private players in the industry. “The efforts between different actors in the aerospace sector, both public and private have been key to its continuous growth,” he added. “We are proud of the broad participation of MROs, OEMs, the government and other players through tax incentives, investment programs and international promotion.”

that the growth expectations for the aerospace sector are positive and the government recognizes its importance to promote the economic growth of the country. “In the global economy up to 2050, Mexico is projected to become the 7th strongest country in the world,” he said. This importance is mirrored in the Ministry of Economy’s proposal to attract 90 new aeronautics companies by 2025 for a total of 420. “Exports are predicted to exceed US$12 trillion and Mexico will rank in 10th position in aeronautic production worldwide,” he said.

NAIM IS NO MORE; REGIONALIZATION THE WAY TO GO Even before entering office, the new President Andrés Manuel López Obrador (AMLO) issued a popular consultation to get feedback from the population on the construction of NAIM. The result green-lit an alternate development in Santa Lucia. But, is this enough to solve the connectivity issues plaguing the country? Maybe for the short-term, said Francisco Bautista, Leading Partner of the Aerospace Industry at EY during a panel of experts at Mexico Aerospace Forum 2018 (MAF) held at the Sheraton Maria Isabel hotel this Wednesday. “Santa Lucía is a short-term solution, maybe for the next 15-20 years,” he said. At the moment, the Santa Lucia project is still at a conceptual stage and there is no certainty of when the project could begin or end. Furthermore, panelists agreed it does not contemplate further development of the aviation industry.

“Industry growth has been exponential since 2010, especially with the introduction of low-cost airlines,” said Bernardo Moreno, CEO of Redwings. Both executive aviation and MRO services have felt the surge in the industry, even considering the economic and political hurdles the country is currently facing. “Demand in MRO services has already surpassed the available offer,” said Jesús Navarro, CEO of Mexicana MRO. “The company had to reject 10 services between February and June 2018 because of lack of space. Furthermore, the company had not planned new hangars at the Mexico City Airport because we were planning to move by 2021.” This challenge could be even further exacerbated according to Navarro, following AMLO’s strategy to decentralize government dependencies. “This situation will create more demand, which means we will have to strengthen routes that do not go through Mexico City,” he said. The problem for Moreno, however, is that growth has been focused on the same routes and toward the center of the country. Mexico has favored its four main airports: Mexico City, Cancun, Guadalajara and Monterrey. Yet, no attention has been given to regional airports and aerodromes that could help alleviate the pressure currently on the Mexico City Airport.

KEY SPEAKER

A regional infrastructure development effort, therefore, could be key to solve part of these issues but there are some challenges in implementing this strategy. Although transportation costs are increasing beyond the offering of low-cost airlines and security concerns are pushing people to fly more, infrastructure in smaller airports and aerodromes has not grown at the same pace as demand. “Insecurity and the drug war have led to the closing of many runways and we have failed to open more,” said Moreno. “We need a national hub to have a single connection point with other countries – maybe an intermodal one – but we need stronger regionality.”

FRANCISCO BAUTISTA Leading Partner of Aerospace

Juan José Simón, Director of SAE said regionality could help detonate the

Industry at EY

economy in otherwise overlooked regions of the country. “Aerodromes have to

Francisco Bautista is a Partner at EY,

be reopened to increase connectivity and also reactivate the economy in regions

leading its Global Trade & Investment,

like the north of the country,” he explained.

Incentives area. He has over 13 years of experience in business and

Regulation has been an obstacle for regional development. According to Moreno,

corporate development in Mexico

aerodromes are forced by the DGAC to operate under the same conditions as

and Asia. He has participated in

larger airports. Because of this, even though the aerodrome might experience

projects with Chrysler, Holcim, Grupo

demand of only 30 passengers, DGAC forces the facility to have the same number

Bimbo, Dupont, Visteon, PMI, Henkel,

of employees to operate thus disincentivizing investment.

Goodyear and Jaguar Land Rover. Bautista is responsible for confirming

“We will soon feel the impact of the lack of infrastructure,” warned Navarro.

nine new investment projects in

“Eventually we will fill all slots available in 24 hours. After that, airlines will have

Mexico, valued at over US$2.5

to start operating with larger airplanes. Once we reach this point, tourism and

billion. He holds degrees in industrial

economic development will stall.” Moreno added that this will lead to an industry

engineering from Anahuac University

plateau. “There might not be an impact on the economy but there will be no

and in business administration from

further growth,” he said.

Geneva International University.

HIG HL I G HTS 201 8 KEY SPEAKER

CLEAR SKIES WITH A CHANCE OF TURBULENCE: A PROMISING AEROSPACE FUTURE The Mexican aerospace industry has clear skies ahead with a chance of turbulence rooted in letting opportunities pass by, said Felipe Sandoval, General Manager of Safran Seats and Aerosystems Operations and President of FEMIA in the closing presentation of Mexico Aerospace Forum 2018 at Sheraton María Isabel. Sandoval said the data supports a positive outlook for the sector in Mexico. He points out that Mexico is the top producer of engineers of OECD, that the middle class is expected to grow substantially in the short term and that the global

FELIPE SANDOVAL

aircraft fleet will more than double by 2037.

General Manager of Zodiac Aerospace Mexico and

“The growth of the aerospace industry is astonishing,” said Sandoval. “This is one

President of FEMIA

of the industries with the greatest added value in the country both economically

Sandoval’s professional career spans

and in terms of human development.” He underlined that Mexico’s aerospace

over 30 years of industrial experience.

industry grows at a rate of 14 percent per annum and that every dollar generated

His goal is to lead Zodiac Aerospace

at the top of the aerospace pyramid means US$75 are generated in the supply

Chihuahua to operational excellence.

chain. “It is the industry that generates the most value to the country,” said

Earlier, he was Vice President of

Sandoval. “For every US$1 that enters Mexico as FDI, US$0.22 stays in the county.”

Integrated Supply Chain and Multi Site Leader at Honeywell Aerospace,

In terms of Mexico’s aerospace supplier base, Sandoval highlighted that Mexico

dedicated to and responsible for

already has most of the large, world-class aerospace players including both OEMs

the performance of the Americas

and Tier 1s, but the Tier 2 and Tier 3 levels have lagged behind. “FEMIA has

Mechanical Operations Center in

gone distances to develop local suppliers,” he said. “But there are great areas

the US and Mexico. Sandoval is an

of opportunity.”

Industrial and Chemical Engineer and holds an MA from New Mexico

Sandoval explained that while Mexico has evolved to more effectively compete

State University and a Global Master

within the global aerospace industry, the country needs to map the industry’s gaps

in Business Administration from

and design strategies to take advantage of them. For instance, he pointed out

Thunderbird and ITESM.

that Mexico has been traditionally an importer of technology but must develop its own in order to move forward.

According to Sandoval, the country could take advantage of the lessons learned from the development of the automotive industry to develop the aerospace one. He said that in the case of automotive, the Mexican government designed, laid out and executed a strategy to succeed. “We need to learn lessons from what we did right in the automotive industry and apply it in the aerospace sector,” he suggested. He added, however, that the automotive industry has commoditized and is sensitive to economic impact while the aerospace industry maintains its momentum thanks to a solid demand for aviation. Sandoval explained that Mexico needs to specialize in mechanical systems, which is already a sector where it has a competitive advantage. On the other hand, he said the country also needs to maintain its lead in terms of new materials, which could strengthen its position in the global aerospace industry. He warned, however, that aerospace is not a national industry, but a global one that plays by macroeconomic rules. “Whatever happens in Mexico has close to no impact on the global industry,” he said. “But Mexico should better take advantage of the opportunities that this industry offers.” He said that demand for aircraft is on the rise and growing on the back of rising demand for plane tickets globally. “OEMs are building planes like they were making popcorn,” added Sandoval. “All of them have backlogs of between 12 and 15 years.” Sandoval closed his presentation by underlining the objectives of the Mexican aerospace industry by 2020. He said the country will be among the 10 most important nations for the global aerospace industry, that this sector’s exports will be worth over US$12 billion. He said this industry will offer over 110,000 quality jobs. “Opportunities are in front of us. It is up to us to take advantage of them to generate value for our country,” he said. “We face clear skies, but turbulence lies in not making actions based on a national strategic plan.”

“It is the industry that generates the most value to the country. For every US$1 that enters Mexico as FDI, US$0.22 stays in the county” Felipe Sandoval, General Manager of Zodiac Aerospace Mexico and President of FEMIA

2019 SHERATON MARIA ISABEL MEXICO CITY OCTOBER 23, 2019

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Bruna Brandã0 bb@mexicobusinesspublishing.com +52 55 5263 0227 Jeroen Posma jp@mexicobusinesspublishing.com +52 55 5255 0077

NETWORKING MATTERS. WE DO THE WORK. YOU GET THE RECOGNITION.

Our networking events, which are exclusively available to our top clients, are a must for C-level professionals who want to expand their business, improve their contacts or simply gain insights from other key stakeholders in their industry.

Networking Breakfast The ideal setting for a gathering of up to 25 industry executives to discuss key topics relevant to their sector while energy is high.

Networking Lunch An intimate working lunch with up to 20 sector leaders designed around a relevant discussion topic and sure to lead to new ideas and ventures.

Networking Cocktail A larger, evening event and the perfect opportunity to unwind over drinks and canapes. Our cocktails feature a VIP speaker invited to provide insight into a trending topic.

events per year

1000+ high-profile attendees

ONE ELITE EVENT. TWO ELITE OPTIONS TO HIGHLIGHT YOUR BRAND. CALL NOW. THIS IS HOW YOU BENEFIT: Exclusive, by invitation only Network with the people and

Exclusive Cocktail Sponsor

US$10,500

businesses that matter to you

Value-added opportunity to discuss trends and strategies Speaker presentations Topics and themes specific to your business segment

CONTACT

C-level participants Bruna Brandã0 bb@mexicobusinesspublishing.com +52 55 5263 0227 Jeroen Posma jp@mexicobusinesspublishing.com +52 55 5255 0077

2019 TABLE OF CONTENTS 1

NATIONAL CHAMPIONS

AGRIBUSINESS

FINANCE & BANKING

FOOD & BEVERAGES

TECHNOLOGY & TELECOMS

RETAIL

SPORTS & ENTERTAINMENT

MANUFACTURING & LOGISTICS

TOURISM

AEROSPACE

AVIATION

ENERGY

PROFESSIONAL SERVICES

LIFESTYLE

THIS IS HOW WE DO IT Filtering out the most important information has become a critical success factor for business and political leaders alike. Rather than time or money, attention has become the scarcest resource. We are committed to delivering the right information to the right people in the right format. This is how we do it:

• • • • •

Cutting-edge information based on interviews with the country's most influential stakeholders Dedicated editorial team with an in-depth understanding of the Mexican business industry Editorial cooperation with the leading voices of the Mexican business industry Customized readership ensuring unprecedented reach among key decision-makers in Mexico and around the world Available on today’s most impactful business intelligence platforms: print, online and iPad

BE AMONG THE INDUSTRY LEADERS WHY MEXICO BUSINESS REVIEW?

LET US WORK FOR YOU. CALL NOW TO PLACE AN AD Inside Cover Double Page | US$30,500

In this changing environment, reliable and relevant

Double Page | US$24,500

information is crucial to take full advantage of both current

Table of Contents Page | US$25,500

and emerging opportunities within the country’s business

Index Full Page | US$20,500

industry. By connecting key stakeholders across the

Full Page | US$17,500

Mexican and international public and private sectors, Mexico Business Review is dedicated to accelerating the exchange of essential industry information that will drive the business industry’s development. Published annually, Mexico Business Review features the perspectives of the leading players in the industry, providing a comprehensive overview of the latest exploration and investment trends, technological

breakthroughs, social and environmental achievements and operational challenges in the Mexican business industry.

WANT TO PARTICIPATE IN MEXICO BUSINESS REVIEW 2019? Nominate a company or submit a guest article on our website:

www.mexicobusinesspublishing.com/business

*20% surcharge for special positioning

CONTACT: Laura Criollo lc@mexicobusinesspublishing.com +52 55 5263 0215 Omar Martínez om@mexicobusinesspublishing.com +52 55 5263 0236