100 Firms Plan to Invest $6.3 Billion in Mexican Plants : Latin America: Foreign companies are taking advantage of the devalued peso to beef up their existing operations.

Illustrating how attractive Mexico has become to manufacturers since the peso’s devaluation, 100 major foreign companies declared Monday that they will invest $6.3 billion in their existing operations here in 1996, a 53% boost over the current year.

President Ernesto Zedillo convened dozens of business leaders at a news conference to announce their investment plans, saying it reflected foreign investors’ long-term faith in Mexico and in his blueprint for economic recovery.

But comments by executives of General Electric and Nissan of Japan made clear that Mexico’s main attraction, for now, is less as a market than as an “export platform” where products can be made efficiently and cheaply for export to the rest of the hemisphere.

That’s because the economic crisis has dramatically undercut Mexicans’ spending power, reducing the market for foreign as well as domestic products. Meanwhile, the devaluation has made Mexico a cheaper source of labor and raw materials and thus a good place to make things.

“If we were investing solely for the domestic market now, it wouldn’t make sense. Mexican consumers have been hurt tremendously,” said Kenneth C. Brown, president of General Electric de Mexico, in comments to reporters.

GE plans to invest $150 million in Mexico next year, its share of a $650 million electric power plant near Chihuahua that may be Mexico’s biggest new foreign-financed project in 1996. Its partners are Grupo ICA of Mexico, Bechtel Corp. of San Francisco and El Paso Natural Gas Co.

A GE spokesman said some of the energy from the plant may be exported to power-poor El Paso. The company also plans to expand its Mexican factories that make washing machines, gas ranges, light bulbs and transformers, much of which is exported to the United States, Central and South America.

Masao Yamachika, general director of Nissan Mexicana, said the auto maker will invest $80 million in its Mexican facilities in 1996--despite this year’s 70% drop in Mexican domestic car sales because of the weak peso’s effect on Mexicans’ purchasing power.

Nissan has partly offset the loss of domestic sales by increasing shipments of completed cars to the United States and elsewhere in Latin America. Nissan suppliers will plow another $20 million into new facilities in Mexico, Yamachika said.

“Nissan Mexicana is one of the most important productive and commercial bases in Group Nissan’s global strategy,” Yamachika told the gathering at Los Pinos, Zedillo’s residence, which included American, Asian and European executives.

American companies will lead foreign investment next year with $3.57 billion, a 40% increase. Asian companies say they will invest $1.18 billion, a 247% increase. Europe, with $1.15 billion, will boost its outlay by 26% over last year, Secretary of Commerce Herminio Blanco said.

Blanco declined to give details on companies’ plans, but specified that auto investment would consist of expansions rather than new plants. However, he said he expects unnamed Korean electronics companies to build new facilities.

The investment figures are higher than the $5 billion that the government had been forecasting, and would represent about 2% of the sum total of Mexico’s economic output in goods and services in 1996.

According to the Mexican Investment Board, a government agency, the 100 companies currently employ 300,000 and generate sales of $35 billion.

By industrial sector, the biggest investments include $1.44 billion in automotive facilities, $1.1 billion in electric and electronic plants, $913 million in chemical and petrochemical sites, $893 million in telecommunications and $694 million in agriculture-related projects.