Giant brewery headed to Piedras Negras region

January 28, 2007
By Bill Sontag
Feature Writer

What is being touted as the world’s largest brewery is coming to northern reaches of the Mexican state of Coahuila, just 20 miles south of Eagle Pass. And the impact is likened to the arrival of Toyota truck manufacturing near San Antonio.

But Coahuila promoters say the economic benefits are far greater, and expected to touch Ciudad Acuña and Del Rio, as well. The Grupo Modelo brewery will be built in Municipio Nava, now a tiny community just north of Allende. Officials in Piedras Negras and Eagle Pass don’t even try to conceal their glee about the trade and industry windfall.

“It ain’t gonna do nothin’ bad,” chortled Eagle Pass Mayor Chad Foster, Saturday (Dec. 23). “All this is just very, very positive and it’s going to affect the whole region.” And Foster said local railroads that cross from Mexico to the United States will put the Grupo Modelo brewery on a fast track for both construction and product shipment.

“They’ve been working on this project for at least five years,” Foster said, recalling decisions to site the brewery near Nava. “And they’re in a real hurry, because they’ve underestimated demand for Corona.” The popular brew, along with Modelo Light and Modelo Especial, will be the chief Grupo Modelo products piped from new fermentation tanks.

Guillermo Berchelman, economic development coordinator for northern Coahuila, told LIVE! Friday (Dec. 29) that the project is divided into phases, the first of which will complete the basic plant, with a Grupo Modelo investment of $525 million. “At the end of the day,” Berchelman added, “the total plant – with the additional phases – could easily reach $.15 billion.”

Grupo Modelo has put the Nava plant on its company fast freight, for delivery of first product expected in early 2010. “Average time for building a brewery this big is five years,” said Foster, “and they’re trying to get this done in three.”

Berchelman concurred, explaining “Corona got caught up with excess demand. People were just buying out whole supplies, so they’re in a real rush. This beer is not popular – it’s very popular in Europe, Asia, the United States, and, of course, in Mexico, [in a total of 150 countries] but this product will be primarily for the U.S. market, liberating other plants to satisfy worldwide demand.”

Grupo Modelo currently enjoys a 56 percent share of the Mexican beer market, considering its other products, including Corona Light, Negro Modelo, Pacifico, Estrella, Leon and Montejo. St. Louis-based Anheuser Busch controls 49 percent of stock in Grupo Modelo.

The Corona plant at Nava will be big in nearly every important respect – physical size, workforce and production, each an indicator of economic impact in the region. “The building itself – and patios and trailer movement areas paved – will cover 270 acres,” Berchelman said, “and the total land they will build on is 897 acres.” Just to complete construction, 2,000 workers will be hired, and Berchelman anticipates 2,000 more will actually operate the first phase of the plant.

Plant expansion and ancillary manufacturers will swell the workforce to nearly 8,000, Berchelman said. For example, according to Foster, a glass plant will be built on a separate site, relying on a nearby silica sand quarry at Hidalgo to manufacture bottles, and a cardboard box and container manufacturer will also be necessary. “We have asked Grupo Modelo to get as many workers as possible from local workforces,” Berchelman said, “and they responded absolutely positive.”

Production from the Nava plant will hover around 10 million hectolitres (about 264 million gallons, or 8.5 million U.S. barrels) when the plant completes its first year of operation. Ultimately, when expansion is completed, Berchelman believes annual production will climb to 28 million hectolitres (nearly 839 million gallons, or 24 million barrels).

Berchelman credits Coahuila Governor Humberto Moreira Valdés with profound influence exercised in securing the Grupo Modelo plant near this segment of the border. “He put his personal prestige on the line,” Berchelman said. “It was a hell of a battle, because five states wanted it. There’s already another brewery in Torreon [Coah.), and we were asked, ‘Why do you want two?’ and the governor replied that they are two geographic extremes, north and south. Plus we have the labor force here, and the water.”

The all-important water will be piped in a 30-inch aqueduct from the Cinco Manantiales (Five Springs) region, ten miles away from the plant. Mayors of towns in that region – Villa Union, Allende, Morelos and Zaragoza – as well as Piedras Negras Mayor Jesús Mario Flores Garza all threw their support behind the Corona project at Nava, according to Berchelman.

The local officials also pledged an abundant, skilled workforce. “We have stability of labor unions,” Berchelman said. “No strikes, no labor conflicts – We’re very proud of that, and our quality of life, too.”

“This will absolutely be a clean industry in every sense of the word,” said Berchelman. Grupo Modelo will plant their fields of barley, and any effluent will be carefully treated to irrigate the crops or to release into nearby Rio Escondido. “They went all over the world – to Russia, and of course to Germany – before they fine-tuned the specifications for this plant.”

What is the anticipated economic impact on the region surrounding the Corona plant? “Over and above the $525 million to build the first stage, it may generate in the neighborhood of about 30 million pesos per month, but this is very approximate. And I would say it’s very conservative, too,” Berchelman cautioned.

Other industries and supporting institutions will flourish, too. Berchelman said the plant will ship about 200 rail container cars per day. Trinity Industries, Inc., Dallas, is the largest U.S. producer of rail and tank cars. Berchelman said Trinity has a plant in Sabinas, Coah., another in Monclova, and plans to build a third near Piedras Negras. “Trinity is hiring 1,500 people, and they pay well,” said Foster.

In addition, Berchelman says the City of Piedras Negras is getting geared up for the influx of workers and families, building more public schools, expanding university campuses, adding hospital beds, hotels, retail outlets, apartments and restaurants. He anticipates that most Grupo Modelo upper managers and many workers will live in Piedras Negras.

“But this will affect Eagle Pass tremendously, because 60 percent of their retail business already comes from Piedras Negras residents. It’s the whole northern part of the state of Coahuila that will be affected dramatically,” Berchelman said.

Eagle Pass Interim City Manager Marga Lopez concurs. “We do expect a lot more rail traffic through here, and most of the suppliers will be shipping across the bridge to the port-of-entry at Piedras Negras,” said Lopez, last week. She pointed to other locators of economic health in her city. “Lowe’s [Home Improvement store] is confirmed now, and we have another 230,000 square foot outdoor mall, coming in, and another mall on [U.S. Highway] 277 is coming into town.

Foster, a real estate broker and developer when he’s not wearing his mayoral hat, sees additional benefits to the growth spurred by the Grupo Modelo announcement. “Eagle Pass and Del Rio will both see real estate markets become stronger. At Eagle Pass City Council meeting last week, we voted to approve eight new subdivisions here,” Foster said.

Berchelman expects groundbreaking for Modelo’s Corona plant by mid-January or early February, 2007. “The common denominator for all these businesses is that they are all creating jobs that will be here a minimum of 50 years. Families can build homes, plan their lives, and know their kids will be in good schools, and have jobs when they graduate. The maquila industries may come and go, but these new jobs will be here for the long haul,” said Berchelman.

“And they won’t hurt bridge fare revenues, either,” chuckled Foster.