The Mexican Underdog Oggi Jeans Shaking Up the Pants Market

¡Hola amigos empresarios! Get ready for some spicy business news from the land of tequila and tacos. We've got a Taiwanese delegation bringing their curiosity and cash to Mexico, Ternium's ambitious investment plans, credit accessibility, grain imports, corn controversies, berry blues, telecom price cuts, and the rising star of Oggi Jeans. So grab your sombrero and let's dive in!

First up, we have a delegation of sharp-dressed Taiwanese businessmen and chamber of commerce presidents making their way to Mexico. These folks are on a mission to learn all about the competitive advantages Mexico offers for Taiwanese companies looking to grow and establish themselves, especially in the Inter-Oceanic Corridor of the Isthmus of Tehuantepec. The Ministry of Economy (SE) happily shared the news that they've been in contact with the Taiwanese industry and the bigwigs of the electronics and printed circuit board associations. They're all giddy with excitement to explore investment opportunities and diversify their markets down south.

Hold on to your pesos because Banco Santander has some insider information for us. They predict that Ternium, the steel company with grand plans, will be investing a whopping $2.2 billion in a project within its Pesquería complex. This isn't some last-minute decision they made; Ternium had announced this investment four months ago but kept the exact location under wraps. Banco Santander, the Spanish bank with its finger on the pulse, believes that this project will be built in Pesquería, where Ternium already has a complete industrial campus. Talk about a steel mill with some serious steel!

Now, let's talk money. Access to credit cards and loans in Mexico might not be a walk in the park, but we're sitting pretty at the lowest rates among our Latin American amigos. A study by Mastercard reveals that only 58 percent of people in the region have access to a credit card, while 38 percent can get their hands on a loan or line of credit. In Mexico, the access rates are even lower, standing at 18 percent for credit cards and 39 percent for loans. Now, why is this relevant, you ask? Well, amigos, access to credit is like a magic wand that boosts financial inclusion increases purchasing power, and provides a safety net in times of crisis. So, let's work on improving those numbers, shall we?

Calling all-grain enthusiasts! Importers of basic grains in Mexico are throwing confetti and doing the cha-cha because the peso is appreciating, and international grain prices are taking a nosedive. Between January and May 2023, the average price per ton of imported grains, when converted to pesos and adjusted for inflation, dropped by a delightful 16.5 percent compared to last year. That's like getting a two-for-one deal on your favorite tortilla fillings! Wheat and oats are leading the charge, with savings of 20 and 19 percent, respectively. These numbers come straight from an analysis by Grupo REFORMA using data from the trusty Grupo Consultor de Mercados Agrícolas (GCMA).

Now let's talk corn, the staple of Mexican cuisine and the center of a heated dispute with our neighbors to the north. President Andrés Manuel López Obrador, always one to keep things interesting, has announced the imminent imposition of tariffs on transgenic white corn imports. The goal? To make sure that only good ol' non-GMO white corn is used in our beloved tortilla factories. He's all set to sign the agreement and put those tariffs into action. This move aims to support our national producers and protect the integrity of our tortillas. After all, a taco without a proper tortilla is like a margarita without tequila—unthinkable!

We've hit a bump in the road for our beloved berries. From January to April this year, the value of Mexican strawberry and raspberry exports took a tumble, dropping by 3.2 percent compared to the same period in the previous year. Now, why the frown-inducing downturn? Well, it seems that the US government is raising concerns about the possible presence of hepatitis A in some of our fruity exports. This investigation is casting a shadow over the industry, and we might see the berry blues deepen in the coming months. According to Grupo Consultor de Mercados Agrícolas (GCMA), our frozen and fresh strawberries and raspberries raked in sales worth $1.643 billion in the first four months of 2023. While that's still a hefty sum, it's $54 million less than the previous year. Let's hope this investigation doesn't turn sour for our berry exports.

Get ready for some good news, amigos! It's been ten years since the constitutional reform on telecommunications, and the average price of telecom services has dropped by a jaw-dropping 30.8 percent. Can you believe it? According to The Competitive Intelligence Unit (CIU), this fantastic reduction in prices has occurred despite the country's accumulated inflation of 56.9 percent between June 2013 and May 2023. So, keep chatting, streaming, and connecting with my friends, because it's getting cheaper to stay plugged in!

Last but certainly not least, we have the rising star in the pants market—Oggi Jeans. This 100 percent Mexican company is rocking the denim world with designs starting at a wallet-friendly 300 pesos. While foreign brands have dominated the scene, Oggi Jeans has managed to carve out a niche for itself. Euromonitor data reveals that their target market, the standard jeans segment, is equivalent to over 33 million garments sold each year. Talk about putting a hole in the competition! Between 2020 and 2022, Oggi captured a market share of 13 to 14 percent, and they're poised for even more growth this year. With a recovering economy and easing food inflation, Oggi Jeans is set to make big sales. They cater to the middle socioeconomic segment, offering affordability that the global brands can't match. After more than 30 years in the Mexican market, Oggi expects sales to grow by up to 10 percent in 2023, a spicy leap from the previous years' 6 to 7 percent growth rates.

That's a wrap on our Mexican business news roundup. We've explored investment opportunities with our Taiwanese friends, got a peek into Ternium's grand project, learned about credit accessibility, celebrated grain import savings, witnessed the corn tariff drama, commiserated with the berry industry, cheered for telecom price reductions, and celebrated the success of Oggi Jeans.