The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Sweetener-maker Tate & Lyle Plc, a UK household name due to its former glory days of supplying Britons with sugar for their tea, rose the most in three months on Tuesday after President Donald Trump said the US is pursuing a new trade accord with Mexico to replace the North American Free Trade Agreement.
The 97-year-old company’s stock has fallen because of questions over Nafta since Trump took office, given that it exports some products to Mexico from production plants in the US.
Companies whose products make soda taste nicer are just one European industry exposed to changes in US-Mexican trade relations.
The news is positive for firms like Tate & Lyle as about 10 percent of US high fructose corn syrup production, commonly used in food
and drink production, is exported to Mexico, Liberum analyst Nico von Stackelberg said in a note to clients on Tuesday.
Focus will turn later to US peer Ingredion Inc., which earns about 16 percent of its revenue in Mexico, according to data compiled by Bloomberg.
Carmakers exposed to Mexico followed their American peers higher on Tuesday. The preliminary agreement would allow them to import vehicles duty-free if 75 percent of the content is made in the US and Mexico. That’s up from a 62.5 percent minimum under Nafta.
Fiat Chrysler Automobiles NV is among the most exposed to Nafta, earning about 66 percent of its revenue from the trading bloc in 2017, according to data compiled by Bloomberg.
BMW AG, the world’s second-largest maker of luxury cars, is building a $1 billion factory in Mexico with capacity to make as many as 150,000 3-Series sedans a year as of mid-2019. A company spokesman said it welcomed the “ambitious agreement.†German peers Volkswagen AG and Daimler AG also have plants to build vehicles in the country.
Autoparts-makers are also exposed: Valeo SA got 9 percent of its global original-equipment manufacturer revenue from Mexico during the first half of 2018. German competitor Continental AG and France’s Faurecia have plants in Mexico too.