Aernnova Composites Aeronáuticos México, S.A. de C.V. (Mexico)

Sponsor:  Aernnova Aerospace, S.A.U.
Activity:  Aeronautical industry components
Industry: Aeronautics
Product: Joint venture loan to the project company
Total investment: 27 million dollars
Resources: FIEX

Composite materials are acquiring an increasingly prominent presence in the aeronautics industry. Made of carbon fibre-reinforced resins, these materials are characterized by light weight, strength and corrosion-resistance. Hence the increase in the demand in the aeronautical industry over the last few years.

AERNNOVA Group, a world benchmark and TIER-1 supplier to the aircraft manufacturing majors (Airbus, Boeing, Embraer and Bombardier), has three composite plants in Spain. After the agreements concluded by the group and Airbus in 2008, AERNNOVA decided to build and commission a production plant in Mexico to manufacture components made of composite materials. This new plant will cover an area of 19,000 m2 in the Mexican state of Querétaro. It will be the group’s third production plant in that country. In 2007, AERNNOVA commissioned its first two Mexican plants, one engaging in the manufacture of aeronautical components and the other in the assembly of aeronautical structures. Both received COFIDES financing, with resources drawn from the Fund for Foreign Investment (FIEX).

From the social and economic standpoints, the many benefits deriving from AERNNOVA’s Mexican investments include the generation of a total of over 750 new direct jobs. Staff training is a key to project success, given the high specialization required in this industry. It also ensures technology and know-how transfer to the Mexican production plants, whose business supplements AERNNOVA parent activities in Spain.

As FIEX fund manager, the Compañía Española de Financiación del Desarrollo, COFIDES, S.A., participated in the financing for this new operation in Mexico with a 17.4 million-dollar joint venture loan granted to the AERNNOVA Group. This loan covers 65 % of the project’s non-current asset needs in 2009-2011.

By providing over 65 million dollars’ worth of financing for AERNNOVA’s three Mexican projects, COFIDES has lent instrumental support to the group’s international strategy and its choice of Mexico as the primary platform for its international production. Mexico has enormous potential in the aeronautics industry due essentially to its proximity to the United States, home to several aircraft manufacturing majors. In addition to the country’s competitive cost structures, AERNNOVA has benefited from federal government and Querétaro state initiatives to favour the development of the aeronautics industry.

Mexico is a priority market for Spain and the target of a Comprehensive Market Development Plan designed by the Secretary of State for Trade. The strategic lines of this plan include the encouragement of business in industries with a high technological content, the reinforcement of Spanish enterprise in Mexico and the support for investment in that country. Similarly, in 2007 the Ministry of Industry, Tourism and Trade presented it Strategic Plan for the Spanish Aeronautics Industry 2008-2016, one of whose objectives is to enhance the aeronautic industry’s presence in high added value activities and products. Consequently, in addition to financing the expansion of Spanish companies with international ambitions such as AERNNOVA, COFIDES and the funds it manages contribute to attaining a number of objectives defined by the central government to foster Spanish foreign trade and economic relations.