Corporate Statement for the CEO of Cargo Group Logistics, Mr. Mauricio Boy

I have over 27 years working in this industry. We made an alliance with BDP to become a global company. I made a statement when we had the joint-venture party, I came up with the slogan: Global network, local roots. We bought the shares back from BDP International because we wanted to grow even more and explore new and interesting markets in Latin America that others may not have the vision yet to see, and we also didn’t want to get categorized not only in one main sector, which was predominantly chemicals.

Logistics is very tied with the GDP growth, if the GDP grows 3.5% it is very likely that the industry grows at that rate. The difficulty comes when the GDP compresses, we are directly affected as well. After the election year, and the new reforms the government announced with 4% growth but we closed the year with a 1.2% growth, which affected all sectors, specifically logistics because we depend from the industry.

We have analyzed our internal reports and they match the economic growth of the Central Bank, which makes it difficult to imagine how in the next eight months, Mexico is going to duplicate its growth and match what the government had predicted at the beginning of the year. But the one thing that Mexican businesses are relying on, and have been relying on, independent of Mexico’s economy, is the recovery of the US economy, which will naturally make Mexico’s economy grow since around 80% of our commerce is dependent on the US.

The relationship with the United States could be strengthened if we look at the NAFTA market, not as a US, Canada and Mexico, but if we look at it as a whole, as NAFTA: three very powerful countries working together to become a dominant economic and global force. China or any other country would no longer be relevant in competition.

Mexico’s competitive advantage is that it is the neighbor of the biggest economy in the world. For our industry, and our company, We are in the perfect position because the Chinese may have a cheaper product than if it was manufactured in Mexico, but if the customer needs it in 24 hours, their only option would be air-freight which is very costly, so Mexico becomes the next best option as we can have anything distributed in less than 18 hours in the US.

The energy reform will bring in very interesting opportunities for logistics and transportation. It will increase the amount of companies that will explore and drill offshore. Platforms need to be built, material needs to be transported, and most importantly, food and drinks need to get delivered to the workers as an example.

We as a strong company, understand the American market, and their customers, as well as the new merging markets like Latam opportunities but at the same time, it is our experience of our Mexican roots that enables us to have the know-how of the country. In Mexico, there is a lot of competition, and this is where the experience and the work we have done and learn in the past demonstrates with confidence to potence new or even old customers that we still having the same capabilities as a global company with local roots and international solutions with own offices, partnerships and agents in more than 12O countries around the globe.

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