Nearly 200 Canadian companies seek to take advantage of nearshoring: Scotiabank Mexico CEO 


Mexico City — Taking advantage of the relocation of production chains, better known as nearshoring, has not only attracted special interest in companies dedicated to manufacturing or the industrial sector. New opportunities appear on the same radar that seek to be taken advantage of by the bank of Canadian origin, Scotiabank. 

In an interview with Bloomberg Línea, the CEO of Scotiabank in Mexico, Adrián Otero, said that there are close to 200 Canadian companies that want to come to Mexico to take advantage of the so-called Mexican moment. 

     “This opportunity will not only be given to companies. When an investment arrives, an ecosystem begins to be generated around it” 

With the arrival of companies, not only are jobs encouraged, “it will require schools, housing, activities (…) it is an economic development that is beginning to take place since they begin to require services.” 

Scotiabank is already working on the development of various internal processes such as connectivity between Mexico and Canada, simplification of processes and monitoring the series of requirements that may arise, including legal ones. 

Its objective: to increase the demand for value from companies, according to Otero. 

The executive also commented that he will be meeting this week with officials, managers and specialists in Monterrey, the capital of the northern state of Nuevo León, with whom they will discuss issues related to the use of nearshoring since 50% of the opportunities are generated in this location. 

Nuevo León is the Mexican state where Tesla, Elon Musk’s automaker, chose to house its new GigaFactory. The state reached a historical maximum of Direct Foreign Investment in the first quarter of 2023, with US$2,332 million dollars, 110% more compared to the same quarter of 2022 

Nuevo León has become a magnet for more than 4,000 foreign companies in various sectors, according to Invest Monterrey, an investment promotion agency. 

Data from the Ministry of Economy show that, in the first quarter of the year, Foreign Direct Investment from Canada reached US$831 million, of which 33% corresponded to accounts between companies and 5.64% to new investments. 

The states with the greatest commercial relationship in the country are Mexico City, Zacatecas and the State of Mexico. In general, there are 3,159 companies of Canadian origin operating in Mexico, according to information from the Government. 

Scotiabank is the sixth largest bank in the country by total assets, according to data from the National Banking and Securities Commission as of June with a total of 6.03% of the market. 

In Canada, some companies have shown interest in reaching Mexico and taking advantage of the expected reconfiguration of the Mexican economy. Otero mentioned that there are close to 200 interested companies. 

“We have identified a little more than 200 Canadian companies that also want to come of different sizes,” said the manager. 

The CEO of Scotiabank in Mexico mentioned that they do not belong to a particular sector. They do not seek to specialize either. They seek to provide financial services and be facilitators, even in legal matters. 

Regulation your protection 

In March of this year, fears of a possible financial collapse alerted the financial system in the US, months after two rating agencies mentioned that the credit notes of various banks, including the largest, would be reviewed. 

A possible contagion effect is not part of Scotiabank’s concern. The trust of the firm, according to Adrián Otero, is the corporate governance and the series of regulations that must be complied with both in Mexico and Canada. 

“Our strength is in the institutional part and in corporate governance (…) because we are an international bank we have two regulators, the local one, and we also comply with the risk parameters,” he said. 

 Source: Bloomberg