Latin American Economy & Business - January 2017 (ISSN 1741-7430)

Garza family trouble in Mexico: Uncertainty over US President-elect Donald Trump’s policies toward Mexico have had a big negative impact on Grupo Xignux, the Mexican industrial and agro-processing company controlled by two wings of the Garza family, considered one of the country’s most powerful business clans. Sales in the first nine months of 2016 were down by 7.1% to US$1.39bn. Over the same period, Ebitda slumped by nearly 26% to US$110.8m. According to analysts Signum Research, Xignux could be impacted by any renegotiation of the North American Free Trade Agreement (NAFTA). It is also carrying significant US dollar debt, and its margins are being squeezed as the Mexican peso depreciates against the US dollar. To some extent, this can be managed with currency hedges. “Dollar debt is an important issue now. Some companies have begun to change their sources of finance” says Luis Garinian of Grupo Bursátil Mexicano.

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