A handshake, a hug, a pat on the back at your first meeting with new business partners? This sort of scene would be unusual in Germany – but in Mexico it’s a common courtesy. Susanna Hess-Kalcher is very familiar with this and many other quirks of Mexican business life (more on this in the interview. The political science graduate has been living in Latin America for 25 years and since 2007 has been the Managing Director of the German Centre Mexico in Mexico City – one of a total of six German Centres worldwide, four of which are owned by LBBW. The Bank also has its own local financing company in the German Centre Mexico, LBBW México Sofom, whose Managing Director Volker Helms has a great deal of experience with the special challenges facing German companies in Mexico.
Opportunities on a market of millions
LBBW selected Mexico as a location as early as 2001. There were and still are good reasons for this: “The market here is an excellent springboard to North, South and Central America,” explains Susanna Hess-Kalcher, who has also been a member of the German-Mexican Chamber of Commerce and Industry (CAMEXA) since 2011.
But Mexico itself also offers great potential for businesspeople looking for new markets. With a gross domestic product of USD 1,046bn (as of 2016), the Central American country, which covers an area five times the size of Germany, ranks 15th among the world’s largest economies. With its more than 120m inhabitants, it has an enormous internal market – which makes it more independent of international economic developments than many other Latin American states.
Germany the most important trading partner in Europe
With a trading volume of EUR 16.2bn, Germany is Mexico’s most important partner among the EU member states. Around 1,900 German companies currently have branches or production sites in Mexico, some have already been there for a hundred years. The German automotive industry is well represented with its own production sites. A good example for the range of German companies assisted in their market launch by the local LBBW team is the construction machinery manufacturer Liebherr. Founded in Kirchdorf/Iller in Baden-Württemberg, the company has been in Mexico since 2009 and now has two branches in Monterrey and Mexico City.
How LBBW assists German companies in Mexico
Together with her 16-person team, which consists of local and German employees, Susanna Hess-Kalcher provides support for companies in Mexico with offices, consulting and networks. And she can also count on expert support here.
German financing expertise: LBBW México Sofom
LBBW has had a representative office in Mexico since 2001 and also a local finance company, LBBW México Sofom, since 2008. Its target group is the many companies from German-speaking countries that establish their own production facilities in Mexico – a trend which has picked up again and continued since 2012. The combination of skilled labor and proximity to the US makes Mexico an attractive production location for many industries. LBBW México (“Sofom” means universal financing company) works in a unique niche here as no other bank from Germany, Austria or Switzerland offers local financing.
The positive aspects for companies range from structural, tax and operational advantages to the personal service for LBBW customers that they often do not find from the usual major banks on site. The person in charge of this is Volker Helms, the Managing Director of LBBW México, which – in addition to investment and working capital loans – also offers commercial financing in the region in addition to consulting and the arrangement of other services. Helms (47) lives with his Mexican wife and five children just ten minutes’ drive from the German Centre in the business district of Santa Fe. He has found that “our customers expect first-class, all-round support, because that’s exactly what they’re used to from our colleagues in Germany. Whether that means LBBW, BW-Bank, LBBW Rheinland-Pfalz Bank, LBBW Sachsen Bank or one of any number of subsidiaries, the standards are high.” (Find out more about the role of German companies in Mexico in the interview).