The Mexican Chamber of Commerce in Hong Kong

September
EUISMOD ELEMENTUM

From left to right, Ricardo Castro, Alejandro Miln, Mario Steta, Irasema Castellanos, Germn Muoz, Evaristo Trevio, Heriberto Ramrez, Javier Huerta, Vctor Arredondo, Mauricio Lozano and Jorge Melchor.

Mexico in Hong Kong

Photo: V.Arredondo

Un-locking the potential of Asian Markets (Highlights of Mr. M. Steta conference for MEXCHAM)
Our mindset though seems to finally be changing to venture beyond our easy US and Canadian markets... M. Steta
In the top of the highest tower in Hong Kong, The Ritz Carlton Hotel in Kowloon, Mario Steta did not hesitate to say that the Mexican growing agro-industry most to develop an stronger interest in the Asian markets, specially China. Mr. Steta was very emphatic when he said that after 20 years, the North American Free Trade Agreement has been the source of remarkable experience and achievements. Today we ship a wide variety of agroproducts suc h as tomatoes, peppers, cucumbers,every day of the year. In the past, we were limited to export all those products just by a veru specific season. Thanks to an alignment of efforts, technology and policies, the exporters are increasing the volume of their offer. In 2010 Mexico supplied 68% of the US fresh vegetable demand and 27% of fresh fruit. That volume has a $ 6 billion total value contrasting with the $ 1,2 billion that Mexico trade in 1993. Talking about berries, in 1993 Mexico exported to the US $ 15 million dollars. At the end of 2013 the exportations will be around $ 800 million. These results encourage our will to explore the Asian markets, Mr. Steta said. According with the experience obtained fom NAFTA, the Chinese economic growth is a promisory market. What we are attempting to do is to cultivate the opportunities in a market with great rate of growing. If we look at the Chinese Per Capita income, we will be surpised by a powerful pace of economic grew: 9 % between 1990 and 2011.

Guest Spaker

Monthly Business Breaakfast

Mario Steta

Agronomist from the Monterrey Institute of Technology in Queretaro, with a MS Degree on Vegetable Crops from the University of California, Davis, and participant of IPADEs AD2 program and of Californas Agricultural Executive Seminar. With experience in the vegetable seed sector, has been involved on horticultural farming and production for over 20 years, with specific focus on controlled environments and export markets, establishing one of the first high tech greenhouse facilities in Mexico. In recent years participated in organic production and has been directing Driscolls operations in Central Mexico since 2009. Responsible for founding and heading Mexicos Greenhouse Growers Association and the Berry Exporters Association, and for establishing trading companies and partnerships, has been involved in several international industry and trade groups, being an invited columnist and speaker in different industry forums, and has participated as Board Member in various companies including Agros, Agropark, Grupo IDESA.

The near Future

Extrapolating past real GDP growth rates into the future, the size of the Chinese economy surpasses that of the U.S. in purchasing power terms between 2012 and 2015; by 2025, China is likely to be the world's largest economic power by almost any measure.

The Size of the Market 9 GDP

60 % of family income is dedicated to consumption items

Free Trade Agreements 10

Free trade Agreements signed by China with Pakistan, New Zealand, Singapore, Chile, Peru, Costa Rica...

Retailers & Sales $ 6,5 Billion

Sales of 182 Carrefour stores in China

36 %
Percentage of urban household spending of their income in food

50
he number of Free Trade Agreements that Mexico ahs signed with more than 40 countries....China is not within them

$ 6,2 Billion
sales in 2010. Wall Mart had 219 stores in over 100 cities

43 %
Percentage of rural household spending of their income in food

600%
The growth of trade between China and Peru in a period of 6 years (2001-2007)

$ 2,4 Billion
Tesco, with 109 stores has grown in China in 5 years what took them 80 years in the UK

The NAFTA experience and the New Prospective: Asia

Mr. Steta said that the NAFTA experience has been a booster for the Mexican economy in many ways. However, it is a real need to expand the market choices. The partnership with The US is something inavoidable by geography determinism and for good and for bad- will be present on our life. But there is an opportunity to expand our capabilities in terms of production and the rol that Mexico could play in other regions of the World. China is an economic power that is eager of a wide offer of products. Its profile as a market is changing dramtically for the best interest of nations like Mexico.

consumption items and McKinsey has estimated that women buy more than man...particularly on beauty and health care, and more interesting: on food.

We will be successful?
For Mr. Steta there is a factor of Timming. He is deeply convinced that Mexico is moving inthe right direction with a frame of political will to promote the exchange with China after the reciprocal visit of the presidents; logistically with the connection of flights between Mexico (Guadalajara) and differente points in Asia, including the flight of Cathay that will be on trail next month; in terms of promotion, the presence of Mexico is more frequent in commercial fairs thanks the efforts of entities such as Promexico and the Ministery of Agricutture; and finally, in terms of diplomacy, having a true career diplomat in Beijing and the good work of ambassador Alicia Buenrostro in Hong Kong.

The Rol of Gender and the Market.

Within other considerations in terms of marketing criteria, Mr. Steta said that the increasing demand of food and quality creates a different scenario comparing what it was seen just very few years ago. Similar to Mexico, the income for women has increased and they are deciding more often what is consumed in their families. In 2011, 77% of the decisions on family expenses were taken by women. About 60% of the family income is dedicated to

Berries from Mexico

Talking about berries, Mr.Steta said that Mexico should be hitting the amount of one billion US dollars in berries exports within the next 3 to 4 coming years. The goal is to generate export values around USD $75-100 millions within 5 years of gaining acces to China.

US AG trade balance on fresh fruits and veggies was almost even in 1994 at aprox 3.0 billion. By 2012 the value of imports is over $13 billion and exports are less than $6 billion. The US is the main market for Mexican fresh and processed fruits/vegetables (importing 83% of Mexican fruit exports and 91% of vegetables).

Germn Muoz Daz, Hong Kong 2013