UPDATED 2020: Neighbors produced an updated report in September 2020 for the Virginia Economic Development Partnership on opportunities in Mexico in Defense and Security. See it here. Ask us for our other industry reports!
Both US and Mexican governments recognize cooperation as critical to regional security. Collaboration in this area between US companies and the Mexican federal government is relatively close. However, the presence in Mexico’s security sector of European and other international companies, despite the relative proximity and potential cultural advantages of US companies, is quite strong. This indicates that, with well-informed strategy, there is room for US companies to make more headway in the market.
Neighbors will be in Norfolk, Virginia Nov 2-6, 2015 as part of the Virginia Economic Development Partnership’s 67th Conference on World Trade. If you’re going, we’d be happy to talk to you more there about the following opportunities, but of course feel free to get in touch with us either directly or, if you are based in Virginia, through the VEDP Going Global Defense Initiative.
End-User Demand
Mexican defense spending is projected to increase from $6.9bn to $11.6bn by 2019. Surveillance, aircraft, naval vessels, border and port security, intelligence and special operations capabilities, and communications systems are all expected to be in the budget.
Like the Mexican Federal government, Mexico City’s police force has indicated that intelligence is a priority. Across Mexico, Smart City projects are catching on, following the successful implementation of Mexico City’s «Ciudad Segura» program. Also in law enforcement, due to a historic criminal trial process reform placing burden of proof on the state, police and prosecutors nationwide are training their personnel in forensics and chain of custody.
For capabilities that can be applied in the private sector, industry has significant appetite for asset protection, and for large multinationals especially, cyber security.
Mexican Channel Partners
Local distributors catering to defense, law enforcement, aviation and private security are numerous. Security and technology integrators often seek to enhance their offerings to government and private clients alike with unique and innovative products, as well as through high-value-added services such as training and consulting.
Spanish language ability, localized marketing and frequent in-person sales calls are essential, and Mexican channel partners will prove invaluable in these areas. Good partners can also assist in navigating government purchasing requirements and customs regulations, and many are familiar with ITAR and EAR controls. If opting for a partner, plan to travel to Mexico several times to foster your relationship with them and help them get to know your product.
US Government Channels
Companies new to exporting may gain access and valuable experience in Mexico through the US Federal Government, which issues tenders in support of joint US-Mexico projects. One avenue is the Merida Initiative, in which the US acquires goods and services on behalf of Mexican law enforcement, for counternarcotics efforts. Note that Merida acquisition requests originate with the Mexican beneficiary, so it is important when courting these opportunities to visit the Mexican client to explain your product benefits and suggest they take advantage of Merida. US Government contracts deliverable in Mexico are announced through regular US Government purchasing platforms such as FBO.