MEXICO CITY: Rampant violence in the Mexican state of Guerrero is taking its toll, as everyday more and more companies are packing it up and taking their business elsewhere.
In the town of Iguala, the infamous site of the forced disappearance of 43 student teachers last year and several other violent episodes, companies such as German automaker Volkswagen, Coca-Cola, and cement manufacturer Canteras de México are among the latest to move their operations to other locations.
FEMSA, the largest franchise Coca-Cola bottler in the world, shut down its distribution center in Iguala and Arcelia on May 20. The company announced it will outsource the distribution center’s operations, but will maintain its facilities in other parts of the state.
The Coca-Cola bottler has not publicly commented on the reasons for its decision to move from Iguala, but its 2014 annual report warned that rising drug-cartel violence could harm their business.
“Insecurity in Mexico could increase, and this could negatively impact our earnings. The violence between drug cartels, and between them and the armed forces that seek to enforce the law, could represent a risk to our business,” the FEMSA report states.
Earlier this year, members of a local teachers union kidnapped two FEMSA employees and demanded the release of three of their colleagues, who police had arrested for looting a Coca-Cola truck. After the incident, FEMSA closed its distribution center in Chilpancingo, Guerrero, and sacked 600 employees.
Zacarías Rodríguez Cabrera, head of Mexico’s National Chamber of Trade, Services, and Tourism, says the fact that important companies are now leaving Iguala represents a “grave issue.” He confirmed that Spanish automaker Seat has joined Volkswagen in closing their offices in the city.
