Mexico: Solid Waste Equipment

This sub-sector analysis report provides information regarding the market for equipment that is used for the collection, transport, recycling, and final disposition of solid municipal waste in Mexico. The total market in 2006 for solid municipal waste equipment was USD 833.4 million. It is expected that the total market will increase to USD 863.0 million by the end of 2007. The total market is expected to continue growing at an average annual growth of 4.0 percent from 2007 to 2008.

The market is becoming more competitive, especially due to efforts by companies from Canada, Germany, Japan, France and other countries.

Market Demand

The Secretariat for the Environment, and Natural Resources (SEMARNAT) created an enforcement area in 1992 called the Attorney General for Environmental Protection (PROFEPA). SEMARNAT and PROFEPA have been working together with Mexico’s states towards the creation of more infrastructure needed to dispose of the large quantities of solid municipal waste that is generated annually in major urban and rural areas of the country.

Mexico has an environmental protection regulatory system that has led the way for the 32 states to be responsible for the implementation of local laws and programs to handle the solid municipal waste. Today, the 32 states of the country have adopted their own environmental laws and are responsible for the policies and implementation of programs to properly handle the solid municipal waste generated in their states.

According to SEMARNAT, at the end of 2006, the 32 states were generating daily over 94,000 tons of solid waste. Thirty percent was considered organic waste and seventy percent inorganic.

Mexico has a total of 2,400 municipalities with a population of over 103.2 million and as of December of 2006, had a total of 56 sanitary landfills. According to SEMARNAT, some type of concession exists in 49 of these landfills. The concessions are awarded by the municipalities to the winners of domestic tenders for periods of five to 10 years.

According to SEMARNAT officials, the number of transportation trucks used in Mexico for the collection of solid municipal organic and inorganic waste is over 6000, of which 10 percent are models manufactured from year 2001 to 2006; 50 percent are models from 1990 to 2000; and 40 percent are trucks that were manufactured from 1975 till 1989.

The total of selection plants in 2006 were 20; total of transfer stations 50, and a total of 100 composting plants for organic waste.

Best Prospects

Best prospects for this sub-sector includes the following: garbage carts, compactors, containers, dumpers, trucks washing equipment, hoists, lifters, odour control , on-board computers and scales, transfer trailers, transportation trucks, landfill covers, landfill compactors, liners/geotextiles, methane recovery systems, methane analyzing instruments, scrapers, stationary scales, balers, compost turners, cranes, crushers, recycling containers, screens, shredders, sorting systems, tub grinders, wood chippers, equipment for the recycling of corrugated boxes, paper, tin cans, plastic bottles and bags; garbage incinerators, etc.

Key Suppliers and Purchasers

Key suppliers for this sub-sector includes the following: Balmaster; Caron Compactors, Caterpillar, Continental Biomass Industries, Detroit Diesel, Cummins, Duratech Industries, Geotech Environmental, Equipment, Harris Waste, Industrial Lifters, Hustler Conveyors, Komatsu America, Pioneer Cover, RJM Equipment, Marathon Equipment, PTR Baler and Compactor, Waste Pro, etc.

Foreign firms usually have a representative in Mexico or have a strategic alliance with a local solid municipal waste equipment firm. Many have actively promoted their interests during the last five years by participating in trade shows and technical seminars in Mexican cities where the demand for the equipment is greatest. When shows and seminars are held in their countries, they may invite private sector executives and state officials, and potential representatives to participate with all expenses paid. These visits include tours of the manufacturing plants, landfills, end-users, research institutions, which many times result in cooperation agreements, exchange of research information, and technical training programs.

Canadian firms active in Mexico include Envista Technologies and Proeco Corporation.

The 32 Mexican states have a Public Services or an Environmental Division that often need to learn where to find the solutions to purchase equipment and create or increase their existing infrastructure to properly manage the solid waste generated daily in their major cities.

The cities below are among that as December 2006 had expressed the intention to purchase some type of solid waste equipment: Cuernavaca, State of Morelos; Tlaxcala, State of Tlaxcala; Puebla, State of Puebla; Pachuca, Tula, and Tulancingo State of Hidalgo; Toluca, Nezahualcoyotl, and Metepec, State of Mexico; Tapachula and Tuxta Gutierrez, State of Chiapas, Veracruz, Orizaba, Cordova, and Jalapa, State of Veracruz; Oaxaca, Juchitan, and Salina Cruz, State of Oaxaca; La Paz, Cabo San Lucas and San Jose del Cabo, State of Baja California; Tampico, State of Tamaulipas, Campeche, State of Campeche, Merida, State of Yucatan, Cancun, State of Quintana Roo, etc.

Import, Duties and Taxes

According to the 1998 modifications in the Mexican customs law, the participation of a customs broker is not obligatory for imports if all legal and technical requirements are met. In the same change, in order to import some goods, it is now required that the importer be registered as such with the Secretariat of Treasury and Public Credit (Secretaria de Hacienda y Credito Publico-SHCP). The participation of a customs broker is suggested when the exporter is not familiar with Mexican standards and customs processing procedures.

Almost all solid municipal waste equipment from NAFTA countries are exempt from any import duties. Duty for non-NAFTA countries range from 3 to 15 percent for the same products. For specific tariff information on non-NAFTA rates for the oil and gas industry, contact the Commercial Service’s Francisco Ceron in Mexico City.

A 15 percent Value Added Tax (IVA) is assessed on the cumulative value, consisting of the plant value (invoice) of the product, plus the inland freight charges, any other costs listed separately on the invoice such as export packing plus the duty. The importer will pay other IVA fees for such services as the inland Mexico freight and warehousing. The IVA tax is only 10 percent for border area destinations. The IVA is recovered at the point of sale.

A certificate of origin is required from all foreign suppliers or exporters. If the product qualifies as North American in content, the exporter must use the NAFTA Certificate of Origin in order to benefit from preferential treatment under NAFTA.

Excerpts from “Mexico: The Solid Waste Equipment Market”, U.S. Commercial Service, February 2007.

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