Grokë, Paul O.
M.B.A. (Master of Business Administration)
Department of Business
Investments; American--Mexico; Aluminum industry and trade--Mexico
The exemplary nature of Mexico's economic development has drawn the attention of potential direct investors in the secondary aluminum producing industry. International trade does not take place in secondary aluminum ingot, and, consequently, if foreign markets are to he served, it is necessary to establish a producing plant in countries that are to he served. It was the purpose of this investigation to determine the potential market for the secondary aluminum producing industry in relation to the primary aluminum industry in Mexico. There were three aspects that were investigated: (l) the growth patterns in the Mexican economy; (2) an analysis of the primary aluminum consuming industry with reference to secondary aluminum, and (3) the analysis of U.S. direct investment with special reference to manufacturing in Mexico. Data were gathered from primary and secondary sources. Primary data were obtained from questionnaires sent to firms in Mexico that were involved in, or associated with, the aluminum industry. The intent of the survey was to gather data concerning the role and impact that secondary aluminum has made on the aluminum industry as well as the prospects for establishing a producing plant in Mexico. Secondary data came from publications pertinent to the field and area under study. The growth patterns exhibited in the investigation were indicative of a rapidly growing economy that was coupled to political stability. Recent government legislation over foreign direct investment has been directed towards greater local control over foreign owned investments, and it was concluded that, even though foreign investors were faced with a higher degree of localization, the upward tendencies and solidarity of the economy portrayed a bright future for potential investors in Mexico. Government constraints were subject to considerable interpretation, as the newness of the legislation and the lack of recent application made the determination of its impact unresolved. A clear lesson from the legislation is that economic development must take place in all parts of the country as opposed to the Mexico City area. Utilization of secondary aluminum was found to be less than satisfactory to a potential investor in the industry because the raw material sources were insufficient. The research findings indicated that aluminum scrap was not allowed to be imported and that the major source of aluminum scrap in the country was no longer able to serve the market because of the power shortage. They did not envisage a time in which it would be able to enter the market again since the power shortage that limited its operations was reasoned to be a long term problem. Research findings indicated that the major sources of scrap were closed to the secondary aluminum industry. Therefore, it is not advisable at this time for a firm to make the necessary investment to serve this market.
Jackson, H. Noel, "An analysis of the potential market for secondary aluminum in Mexico" (1974). Graduate Research Theses & Dissertations. 1150.
Northern Illinois University
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