In February, the government announced an additional $25 billion for its infrastructure development plans

For President Felipe Calderón, there are few indicators of progress that are better than the development of new and improved infrastructure. Consequently, with its 2007-2012 National Infrastructure Plan, the government plans to show the progress the country is making by increasing investment in infrastructure to 8% of GDP by 2010. There are now more than 300 projects under proposal, based on a public-private partnership (PPP) model.

Complementing this is the more general National Development Plan (NDP), covering the next four years, which provides a road map of how the Calderón administration aims to improve living standards in the country through multi-sector development and increased economic competiveness. Construction and real estate are two of the sectors targeted by the plan. Compared with the slowdown in these sectors in more developed economies, in Mexico they are still seen as strong contributors to economic growth, mainly due to housing shortfalls in many regions.

The government’s commitment to building a stronger Mexico should have a postive affect across the economic board as well as on FDI inflow, and the country’s cement producers are looking forward to this fresh impetus. Among these is Cooperativa Cruz Azul, one of Mexico’s oldest cement manufacturers and its second-largest after Cemex, itself now third-largest in the world. Although the company has participated in a number of large-scale tourism and infrastructure projects over the past few years, Executive Director Guillermo Álvarez Cuevas says that it is gearing up to increase production in light of new government plans to expand the economy.

“We are eager to modernize our cement factories and increase the volume of concrete produced. Right now we produce eight million tons per year, and we want to increase that to ten million within the next two years,” he says.

This increased production will undoubtedly be channeled into real estate, a sector that used 18.6 million tons of cement in 2006 alone.The Calderón administration will also continue the credit program for low-income households begun by the previous Fox government, which helped to fuel the largest housing boom Mexico has seen in recent years.

NDP has estimated that the country needs approximately six million additional housing units, but has stressed that the sector must also be sustainable, both financially and in terms of location and quality. Along these lines, the cement industry is also highly aware of the environmental impact of the cement production process. In February 2006, 15 major cement-producing companies, including Cruz Azul, Cemex and Altos Hornos de México, were recognized by the Environment Ministry for publicly reporting their greenhouse gas emissions.

“Our concerns about ecological issues are not limitied to gas and dust, we also consider noise and water treatment in all our factories,” says Álvarez Cuevas of Cruz Azul. “We’ve just made a significant investment. Containing the dust and gas used to require a lot of water, but we now have facilities that allow us to save up to a million liters of water daily.”

Modern facilities and more efficient methods of production mean that the cement industry can look forward to playing a major role in Mexico’s infrastructure development. This includes plans for three new airports as well as expansion projects on an additional 31 airports, five new ports and the modernization of another 21, and work on more than 17,000 kilometers of roads.

Cuevas adds, “Road construction is of the highest priority here. We need motorways that provide direct links between the larger cities, without having to go through all the smaller villages and towns in between.” Indeed, no region has been left out of the government’s plans for infrastructure development, an attempt to spread progress to strategic areas outside of the capital as well, such as the United States-Mexican border and the Yucatán peninsula.

Now it’s a question of making these plans a reality. In February 2008, the president of the Mexican Construction Chamber of Commerce (CMIC), Netzahualcóyotl Salvatierra, asked that the infrastructure projects be implemented quickly in order to attract investment, create jobs and, most importantly, respond to the economic slowdown taking place in the United States. That same month, the government annouced that an extra $25 billion will be added to the National Infrastructure Fund over the next five years, making it clear that both the private and public sectors are anxious to get started.

Now the challenge must also be met by companies such as Cruz Azul. While a commitment to Mexico and its people has remained a constant throughout the company’s history, involvement in the proposed construction projects will provide it with another chance to demonstrate its commitment to national development, under the auspices of a government policy that aims to make Mexico a better place to live and do business.