Mexican telco giant eyes Philippines, envoy says

Warren de Guzman, ABS-CBN News

Posted at Jun 22 2016 03:28 AM

Mexico's ambassador to the Philippines Julio Camarena says more "top Mexican" companies are eyeing investments in Manila.

MANILA - As Mexico's largest cement and building materials manufacturer Cemex prepares to list its Philippine subsidiary at the Philippine stock exchange next month, Mexico's ambassador to the Philippines Julio Camarena on Tuesday said more "top Mexican" companies are eyeing investments here.

Camarena didn't name names, but he did describe one interested party. "It is a big telecommunications company that is looking at offers here. But this company is not only telecommunications, it is also into retail, and it is looking at retail options as well," he said.

Mexico's largest telecom is America Movil, which is also present in the United States, Austria, and nearly all of Latin America. It is controlled by one of the richest men in the world, Carlos Slim Helu. Slim, through his conglomerate Grupo Carso, is also into retail as well as construction, energy and vehicles.

Camarena did not confirm or deny the identity of the interested telco, only saying "many negotiations are going on, and many advances as well, but nothing concrete."

Camarena said the interest is very real, with Cemex a prime example of Mexico's intent to invest more in the Philippines. Cemex's IPO at the PSE is expected to generate as much as P40B pesos, which could make it the largest IPO of the year.

The proceeds from the IPO will be used by Cemex to pay off hundreds of millions of dollars in debt incurred as part of the Cemex's expansion in the Philippines, including the $300-million expansion of its Solid Cement plant aimed at adding an additional 1.5M tonnes of annual cement capacity by 2019. Cemex had a net income of P2.2 billion last year, four times 2014's net total of half a billion pesos.

Other Mexican operations already in the Philippines include appliance company Mabe, a partner of General Electric, and FEMSA, the largest Franchise bottler of Coca Cola Products in the world.

Duterte effect

Camarena said many Mexican companies are engaged in negotiations for possible investments in the Philippines, but some of the negotiations have been put on hold ahead of the change in government.

Camarena said this "pause" in talks is not an indication the possible investors are discouraged. Rather he says it is an act of prudence, so the investors can gauge how to do business with the incoming government of President elect Rodrigo Duterte.

He said he has met with the new leader of the Republic thrice before he was elected to lead.

During those three meetings Camarena said they discussed several things, including Duterte's comments in January saying "I will not allow our country to become Asia's Mexico. We will not become a narco-state."

Camarena said he politely requested Duterte to refrain from calling Mexico a narco-state, noting Mexico is actually the 11th strongest economy in terms of purchasing power in the latest World Bank rankings, and ninth most visited country in the world in the World Tourism Organization's rankings.

The Mexican embassy said Mexico welcomes 32 million visitors a year. Camarena said Duterte was very polite and courteous during their meetings.

Camarena has yet to pay a courtesy call to Duterte after his election victory. The ambassador says he is waiting for an official invitation from the Duterte camp.