Pepsico, Nestle and Cisco on Friday announced major investments that together totaled more than $7 billion in Mexico, where the government has pushed through a series of economic reforms that aim to boost foreign investment and growth.
Mexico has embraced free trade policies in recent decades, and has drawn growing investment interest after President Enrique Pena Nieto made a landmark reform drive in his first year in office, pushing major telecommunications, energy, banking and tax legislation through a divided Congress.
“It is very encouraging to see the enthusiasm that has been awoken by our country due to the structural changes that are happening,” Pena Nieto said at the World Economic Forum (WEF) in Davos.
Pepsico (PEP.N) said it would spend $5 billion in Mexico over five years to strengthen its food and beverage business, adding it planned to expand its production capacity by adding new manufacturing lines and expand delivery routes.
The company said the investment was expected to create 4,000 new jobs.
The Pepsico investment comes despite a new levy on soft drinks and junk foods included in Pena Nieto’s tax overhaul.
Nestle (NESN.VX) said it planned to invest $1 billion in Mexico over five years, building two new factories and expanding a third in its sixth-biggest market.
The world’s No. 1 food maker said it would build an infant nutrition factory in Jalisco and a pet-food factory in Guanajuato, as well as expanding an existing cereal factory.
The investment would create 700 direct jobs, Nestle said.
The Mexican factories will produce goods for the wider region. For example, about 40 percent of the output from the baby food factory will be exported to Latin America and the Caribbean, Reuters informs.
