McALLEN, RGV – Investment by manufacturing and logistics companies moving to McAllen and Reynosa looks set to top $140 million, with over 10,000 jobs created, says Keith Patridge, president of McAllen Economic Development Corporation.
In his monthly report to the MEDC board of directors, Patridge said he was not sure why, all of a sudden, companies had decided to pull the trigger on projects that were previously on hold.
“I can report the MEDC team has had a lot of success with new companies. We do not announce the companies until they have formally signed a lease. They commit but then there is a period of time when they are negotiating leases or negotiating purchases of property,” Patridge said.
“Ralph has been very successful in Reynosa. We have about ten companies. When they are fully staffed, according to their projections, they will employ over 8,000 new employees.”
Ralph Garcia is MEDC vice president for Mexico Business Recruitment.
“On the U.S. side Janie has had a lot of good success also, with, I think, about seven new companies,” Patridge said. “If they hit their numbers, they will create 2,190 jobs. They will use about 400,000 square feet of space on the U.S. side. Investment-wise, I just did some real-quick numbers. On the Mexican side the investment is about $94 million. On the U.S. side about $48 million of investment.”
Janie Cavazos is MEDC vice president of U.S. Business Recruitment.
Patridge said not all the companies would be announcing their investments in the coming weeks. “We do not announce until the company tells us we can announce. Sometimes they will hold off for several months because of other issues. This will kind of trickle out over the next few months,” he said.
Patridge said the MEDC team has been working on some of these projects for several years. “We have had a lot of luck but it is not all luck. A lot of it is skill. On average, about 18 months is what it takes (to see a project to fruition). There is a lot more coming, a lot more interest, a lot of activity. I am not sure why all these companies decided to stall and then make a decision all at once but we are pleased to see it.”
Patridge said there are other projects in the works but he was not at liberty to say what they are at this stage. He did say the areas of operation include transportation, the international bridge, education, workforce training and entrepreneurial startups. He said MEDC is working with South Texas College on some of these projects.
In his report, Garcia, MEDC vice president for Mexico Business Recruitment, said there were six prospect visits over the last month. The companies are looking at purchasing or leasing 400,000 square feet of space and hiring over 1,000 employees. “A lot of these prospects are moving very well, as Keith mentioned. We are hoping to make some announcements in the next month. We have a project that should sign on the 19th for real estate, and we have got a couple of other projects that are gaining proposals. We have around seven built-to-suit facilities that we are looking at in Reynosa so it is substantial in terms of investment,” Garcia said.
Garcia said that working with INDEX Reynosa, the maquila trade association, MEDC recently staged a very successful supply chain expo in Reynosa. “We had 15 suppliers that were very specific in terms of looking at metal fabrication and plastic injection molding. We had over 60 people attend. Some of them were corporate buyers from Emerson, Eaton, Ametek. We are starting to see a big pool for a localized supply chain.” Garcia said because of the success of the recent expo, MEDC is looking at staging them quarterly.
Garcia also reported that he recently attended the Kia Motors inauguration at Planta Pesquería, just outside of Monterrey, Mexico. “A lot of our local suppliers like TRW, Delphi, Alps, are suppliers to this company. It was pretty well attended. It is quite an investment they have going on in Pesquería,” Garcia said.
“I think there are some challenges in terms of what resources are made available to the municipalities, but I think over time you are going to see a huge transformation in that region. Going into the Monterrey area, you see a lot of things similar to what we see in Reynosa. There are a lot of people recruiting, hiring.”
Garcia added: “In Mexico, for the most part, there is tremendous growth. But, with that comes the growing pains of finding all the skills talent. Keith and I were talking about this yesterday. We are going to be incorporating some projects with UTRGV and STC to see how we can help in resolving some of those issues and finding the localized talent.”
UTRGV stands of the University of Texas-Rio Grande Valley. STC stands for South Texas College.
Kansas City Southern
MEDC President Patridge also reported that he visited with officials of Kansas City Southern in Kansas City, Missouri, on Aug. 23. Also participating in the meeting, Patridge said, were McAllen Mayor Jim Darling and Mission Mayor Norberto ‘Beto’ Salinas. He said the meeting was held to discuss bringing a freight rail connector to the McAllen/Mission area.
“It was a very good meeting. We met for two, to two and a half hours. The entire management team of Kansas City Southern was there,” Patridge said “This is a long term project. It is not going to happen in six months. Just to get the environmental stuff passed it is going to take three to five years. We are talking about one of those long term projects but it is one of those we really need in order to grow that heavier type of manufacturing that will need a rail component.”
Patridge said the meeting went well. “They (Kansas City Southern) are on board. They are very supportive of the project. There are some hurdles we will have to get over and they will have to get over. The chairman has instructed his staff to work with us.”
Patridge also reported that the Bi-National Economic Development project is starting to take shape. BiNED involves entities such as Matamoros, Brownsville, Harlingen, Reynosa, McAllen, Mission, Hidalgo County and Cameron County working together on major regional projects. The entities involved signed a Memorandum of Understanding at the Regional Academic Health Center in Harlingen in August, 2015.
“BiNED is really a regional group that is looking at promoting the region. Not much has happened with that since the signing of the MOU. Right after the signing we went into an election campaign, both on the U.S. side and the Mexican side. We were kind of waiting to see who was going to be elected on both sides before we moved forward. We had a meeting of BiNED yesterday, to start that back up again. We are preparing so we can hit the ground running on the more regional issues that we are looking at,” Patridge said.
Japan and Indonesia
The day after the MEDC board meeting, Patridge flew to Asia for meetings with industrialists in Japan and Indonesia. Joining Patridge on the trip were Miguel Gonzalez, the former UT-Pan American dean of engineering, MEDC Chairman Robert Lozano, McAllen Mayor Jim Darling, Theresa A. Maldonado, senior vice president of Research, Innovation, and Economic Development at UTRGV, Andreas Holzenburg, associate vice president for research infrastructure at UTRGV, and Carlos Margo, dean of industry training and economic development at South Texas College.
“We have been invited by the chairman of Alps to the Alps Technology Show. The (McAllen) Mayor (Jim Darling) has been asked to speak at the World Technopolis Show. It is an international group affiliated to the United Nations that is focused on cities and countries and developing technology, both in education and in the community,” Patridge said.
The 10th Annual World Technopolis Association Show takes place in South Tangerang, Indonesia, between Sept. 20-23. It includes a WTA Mayor’s Forum.
“The Mayor will talk about technology development in the city. This is kind of an honor for us because he will be speaking along with the likes of the mayor of Paris, Brussels, Frankfurt, Germany, lots of big cities and McAllen, Texas,” Patridge said.
Economic Development in Tamaulipas
Patridge said he recently met with the incoming economic development secretary for Tamaulipas. Because this person has yet to take office, he has asked that his name not be given out. The appointment will be confirmed by incoming governor, Francisco Cabeza de Vaca, once he takes office on Oct. 1.
“We have already met with new economic development secretary for Tamaulipas. The new governor of Tamaulipas has a lot of ideas he wants to hit the ground running with, very quickly that are tied to economic development. We will have a lot to discuss over the next few years,” Patridge predicted.
Editor’s Note: The main image accompanying this story shows a maquila worker at a manufacturing plant in Reynosa, Mexico. The photo was taken on a tour of Reynosa maquilas organized by McAllen Economic Development Corporation in October, 2015.
Editor’s Note: The above story is the second in a two-part series about economic development in the McAllen-Reynosa area. Click here for Part One.