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posted 2009-02-16
Supermarket sales on rest
The National Association of Supermarkets and Department Stores (ANTAD) reported a very slight sales growth on the month of January 2009 compared to the previous year. Most of the figures were supported by supermarket sales. In contrast, Department Stores suffered a small sales decline.


Jumblers under the crisis

March 30, 2009. 10:01

Comments from the Editor…
Some Mexican jumblers are experiencing a tough hangover during the world economic crisis. Companies that were once seeing as an example in their business fields are now facing the crude reality of their lacking ability to face the downturn.

Comercial Mexicana RETAILER
The supermarket operator Comerci has been facing escalating challenges from a high debt exposure that resulted from an unfortunate management of financial derivatives obligations. The company has been engaged in critical negotiations for a restructuring plan with banks and creditors; mainly because it has been unable to make debt payments since October 2008.
Mexico´s second largest retailer reported a significant loss of 300 million dollars in the last quarter of 2008; an amount that represents 30 percent of the total sales on the same period.

The third largest cement and concrete producer in the world is trying to renegotiate with creditors its estimated debt of 18 billion U.S. Dollars, or at least to refinance majority of the company´s outstanding debt of approximately 14.5 billion U.S. Dollars in syndicated and bilateral obligations. The debt-laden company is struggling to collect cash as a consequence of the sales drop driven by the world economic stagnation. Additionally, the global building materials company faces a debt enlargement of almost 30% from the Peso current devaluation; most of the liability was originally contracted before Black October.

The Mexican Government
The Government revenues are starting to suffer the domestic economic stagnation. The most affected levy is the Value Added Tax. Its collection descended 1 billion dollars in the first two months of 2009, or a 22% rate. During the same period, the total revenue reported a negative balance of approximately 560 million dollars, or a 9.1% rate. In addition to this, on April 22, 2009 the IMF projected a deeper shrink in the Mexican economy in 2009. According to the IMF´s April World Economic Outlook, the Mexican output will decline by 3.7 percent in 2009; and in 2010 it will reemerge, but with a growth of 1 percent.

The global supplier of mobile electronics and transportation systems has implemented numerous technical work stoppages at their 48 facilities in Mexico. The struggling in General Motors, who consumes 40% of the company´s production, has resulted in a strong fall in the demand of the products manufactured by Delphi. In 2008 the company decided to sell off cheaply three facilities located in Saltillo (breaks), San Luis Potosi (catalytic converters), and Tlaxcala (batteries). In April 2009 the company announced the closure of two more manufacturing plants (harness) in the northern state of Chihuahua.
Delphi has been immerse in a restructuring plan to emerge from Chapter 11 bankruptcy protection declared in 2005; but this time GM is not there for support.

DoingBusinessInMexico Staff
Published: March 30, 2009. 10:01 | Last updated: April 23, 2009. 11:54
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