Nearshoring is leading to Mexican demand growth

Nearshoring is leading to Mexican demand growth
05 January 2023

The growing development of industrial properties due to nearshoring is leading to a rise in Mexico’s cement demand of approximately 10 per cent, particularly in the north of the country. The focus of demand is reported to centre on the Ciudad Juárez, Chihuahua.

"In segments such as the construction of warehouses, industrial and commercial parks, in Mexico due to all the nearshoring activity we are seeing an increase in this segment of around 10 per cent this year," according to GCC’s  general director, Enrique Escalante.

He added that while the company is working hard to meet this increase in demand, it is registering a delay of approximately six months in the production of sufficient volumes of cement. Moreover, going forward demand in the industrial and commercial construction sector is expected to remain robust, along with demand for infrastructure works.

However, 2023 is expected not to be without challenges as inflation continues to impact production costs, particularly in terms of fuel.

“In terms of fuel we are pretty confident that we are going to stabilise our cost from increased production at our mining operation in Colorado by the end of the year,” he said to RealEstate. “So that's a great coverage and a great advantage that we have in terms of the primary fuel for our plants. We have several plants that run on renewable energy that are fixed or partially fixed contracts for at least part of the consumption of those plants. And we haven't seen any significant increases this year,” he added.

Published under Cement News