As investors with interests all over the world we are used to facing conflicts and difficulties between expanding companies and local communities. But sometimes the challenges are located inside the company.
This is the case in Mexico, where we have invested in various companies including PKC, a subcontractor to the American car industry. Mexico is one of the most dangerous places in the world with the on-going drug wars claiming more than 50,000 lives in the past six years.
But it is also an area with great potential. A number of large American companies have expanded south of the border, and this development is only expected to increase in the next decade..
Nevertheless, it is a difficult country to navigate in as a company and as an investor. Union corruption has been a big issue, and the powerful unions have done little to improve working conditions for their members.
Outside the factories there are even bigger problems. Violence, kidnappings and killings happen every day in the Northern parts of Mexico. But things are slowly moving in the right direction. As investors we have the opportunity to boost this positive development. By supporting companies that treat their employees well and share our approach to running a responsible and sustainable business. These are the countries that will help turn Mexico around and generate positive returns on many levels.