April 19 th, 2012

Mexico´s Economic Outlook Mexico was hard hit by the 2009 world recession, with a GDP fell of 6.8%. However 2010 has proven the strength of Mexicos economy with an increase of 5.4% in the GDP and a sustainable 3.9% for Expectations for growth in 2012 have risen steadily to 3.5% in The IMF forecasts significantly higher growth for Mexico in 2011 and 2012 compared to the U.S., Canada, Germany and Japan, to mention some. It is expected that by 2015, the GDP of Mexico will have an average annual growth of 2.3% Source: Banco de Mexicos Monthly Survey of Private Sector Economists Source: IMF World Economic Update, January 2011

Main strengths of the Mexican economy 1. Market size: Population of 113 million. 2. Large exporting base: One of the 15 largest exporter nations in the world. 3. Energy availability: Ranked 17 th in proven oil reserves (Source-Pemex 2010). 4. Demographic bonus: Dependant population ratio will fall to 46% in Ample network of trade and investment agreements: 12 free trade agreements with 44 countries (60% of the worlds GDP). 6. Biodiversity. Ranked 4 th worldwide. Strengths of the Mexican economy Source: International Monetary Fund; for 2010RankCountry GDP 2010GDP 2010 (billion dollars)(billion dollars) 1 European Union 14,900 2United States 14,720 3China 9,872 4Japan 4,338 5India 4,046 6Germany 2,960 7Russia 2,229 8Brazil 2,194 9United Kingdom 2,189 10France 2,160 11Italy 1,782 12Mexico 1,560 13Korea, South 1,467 14Spain 1, Canada 1,335 16Indonesia 1, Turkey Indonesia 1, Turkey 958

Advantages 1. Competitive manufacturing costs. Mexico offers significant savings on labor costs when compared to other investment options in America, Europe and Asia. For example, transferring operations to Mexico can lead to savings of close to 90% in labor costs. 2. Same time zone and quick response toward opportunities in North American markets. a. Manufacturing in Mexico makes Just in Time easy. b. Door to door deliveries in less than a week, compared with China where it can take 6 weeks. 3. Low freight costs Mexico is located in between the main global consumer markets: Target GermanyBrazilChinaColombiaKoreaUSAIndiaMexicoPolandTurkey New York L.A Rotterdam Yokohama Source: Sea Rates Sea freight days to main consumer markets

Advantages 1. The amount of time and procedures required to open a business are crucial to the success of international business. 2. In Mexico, investors only need 9 days and 6 procedures to open a business, and 105 days and 11 procedures to obtain a construction permit. This is significantly lower than what is required in India, China or Brazil. Simplicity of operation Source: World Bank, Doing Business, 2011

Real exchange rate advantage Mexico´s exchange rate performance is expected to be more attractive for investment in the coming years than other countries. Mexico´s real exchange rate with the dollar and euro is expected to stay stable between 2008 and Countries such as China, South Korea and India are expected to post strong currency appreciation in real terms against these currencies, giving Mexican exports a significant advantage. Source: ProMéxico, Global Insight data Expected Real Exchange Rate variation; in respect to U.S market ( ) Expected Real Exchange Rate variation; in respect to euro market ( ) Source: ProMéxico, Global Insight data

Legal Certainty for Foreign Investment Agreements on Reciprocal Promotion and Protection of Investments (RIPPA) are an important part of the governments strategy to provide national and foreign investors a legal framework that offers stronger protection for foreign investment in Mexico and Mexican investment abroad. Mexico has signed 27 of these agreements: CountryYearCountryYearCountryYear Switzerland1996Austria2001Panama2006 Argentina1998Sweden2001Iceland2006 Netherlands1999Korea2002Australia2007 France2000Italy2002Trinidad & Tobago2007 United Kingdom2000Uruguay2002Spain2008 Portugal2000Greece2002India2008 Denmark2000Cuba2002Slovakia2009 Finland2000Belgium2003China2009 Germany2001Czech Rep.2004Belarus2009 Source: Ministry of Economy 2011

Mexico has one of the most competitive labor costs in the world. This turns the country into an excellent export platform for North American and European markets. Competitive labor costs Source: United States Department of Labor (International Labor Comparisons 2009)

Note: Index includes raw materials, labor, overhead (energy costs, plant and equipment, taxes), freight, duties, inventory, and exchange rates. Source: Alix Partners February 2010 Source: KPMG Competitive Alternatives 2010 Average cost advantage /disadvantage relative to the US (27 input items applied to 12 industries) Competitiveness findings: 1. Mexico has a business cost advantage of 18% average (of 12 industries) relative to the US. 2. There are also advantages in industrial construction costs, land, rent, and taxes. Manufacturing cost index relative to the US. (2005) 100% Manufacturing cost index relative to the US. (2009) Manufacture costs Additionally, Mexico has a better manufacture costs profile than countries such as Canada, China, India and Brazil

Automotive Industry Mexicos automotive industry: Among the largest in the world th producer of motor vehicles in the world. 2. Mexican production surpassed 2.26 million units in They are exported to more than 100 countries, 80% is exported to United States. 3. Companies such as Ford, VW, GM and Fiat announced investments for more than $5 billion USD in Between 2008 and 2010, the investments from OEMS in Mexico, figured more than $9 billion USD**. 4. Car production in Mexico will increase from 2.26 million in 2010 to 3.1 million in 2015 according to Business Monitor**. ** FDI Markets *** Estimated in 2011

Renewable Energies Mexico has approximately 1,925 MW of installed power capacity based on renewable energies. We are enforcing the transformation of the national energy market in a wide range of sectors (residential, commercial, industrial and governmental) to encourage the consumption of renewable energy trough programs and projects in order to boost the internal market. By the end of 2010, investments of more than 6.2 billion dollars were announced for various projects, from the building of the worlds largest electric power bank (Rubenius), to the development of more wind parks in La Ventosa in the state of Oaxaca. By 2024, 35 percent of the installed capacity for electric power generation is expected to be from renewable sources. In addition to promoting investment in renewable energies, Mexico is working on a plan to promote investment in equipment and sparing components, specifically Compact Fluorescent Lamps (CFL's). SENER together with the United Nations and the World Bank defined a program intended to substitute traditional lamps for energy saving lamps in a period of 30 years, starting in 2009.

Other industries with great opportunities Competitive advantages in smaller delivery times, qualified labor force, high quality-high yield production, flexibility. 18 Fortune 500 firms operate in Mexico. Between January and October 2010, the sector recorded exports of $76 billion dollars. Electric and Electronic devices IT Services Mexico climbed to the 6 th place in the overall Index Service Location 2011, published by ATKearney. Mexican IT companies exported $3.7 billion USD in Out of 51 Fortune 5000 companies with international operations, 36 operate in Mexico. More than 6.5 million Americans live outside the US; out of those 1.2 million live in Mexico. International Living magazine has ranked Mexico as the best country to retire to for two straight years out of 29 nations. For the second year in a row, Mexico was granted the Agents Choice Award 2009 as the best winter tourist destination Second Homes

Mexicos Security Status Mexico is the main pathway to introduce drugs to the United States, which is the largest drug consumer market. The same geographic proximity that makes Mexico an attractive investment destination also makes the country highly desirable for drug trafficking From the beginning of President Calderón administration strong measures have been taken as part of a vital effort to disrupt and dismantel drug cartels. Since then the pressure has been steadely increased to the point that there are now aproximately military personnel along with elements from the federal and state police. Local police are being reorganized, retrained and purged of corrupt elements, and changes have been made to streamline criminal trials. The result has been an unprecedented number of arrests, extraditions, prosecutions and large-scale seizures of drugs, weapons, cash and assets. These efforts have also led to increased violence as criminal gangs confront government forces and battle among each other for control of key territory. These events have been widely publicized.

Mexicos Security Status MEDIA COVERAGE OFTEN FAILS TO PROVIDE SUFFICIENT CONTEXT A more comprehensive approach is needed to understand the current situation and its implications since the perceptions of Mexico as a place to live, work and do business are very often at odds with the reality. Although the number of armed confrontations has increased markedly since the governments enforcement efforts were implemented three years ago, the widely-reported death toll is confined to a relatively small region of the country. The confrontations are concentrated in relatively few regions within the country. These areas tend to be along the drug trafficking corridors including the border cities of Nuevo Laredo, Reynosa, Ciudad Juárez and Tijuana. Source: FBI Database, 2008 Homicides per 100,000 Inhabitants

Mexicos Security Status Governments efforts have led to an estimated casualties since 2006, however it is important to put these numbers in context About 90% of those killed are cartel members Approx 7% were soldiers, police or other government agents Roughly 3% involve civilian bystanders Although any civilian loss is unacceptable, statistically speaking, in a country with over 110 million inhabitants, the risk of becoming a victim of drug violence is extremely small. INSECURITY IS NOT A GENERAL PHENOMENON

Mexicos Security Status Mexicos homocide rate during the 1990s was above 18 per 100,000, while in 2009 the rate is situated at 14 per 100,000 Murder rate for Brazil in 2009 was 25 persons per 100,000. Colombia's murder rate has fallen dramatically, but in 2009 the rate was still at 36. International comparison

An Overview EU-Mexico FTA The EU-Mexico Free Trade Agreement is one of the most comprehensive in the global economy. It covers trade in goods and services and has specific chapters on access to public procurement markets, competition, intellectual property rights and investment. Bilateral trade of organic food increased by 63 % since its entry into force in October 2000 reaching a value of 1,311 million euros in Mexican exports of organic food products to the EU have increase by 86% since 2000 and have managed to become among the three major providers for more than 25 organic food products in the EU. Source: Mexican Ministry of Economy

Trade Mexico -Finland Source: Mexican Ministry of Economy with data from Eurostat & Banco de México

/ 21 / © Finpro ry / 21 Trade between Finland and Mexico Trade between Finland and Mexico has been growing during the past years. Currently the trade balance presents a surplus for Mexico. Currently Mexico counts for only 0,25 % of total exports of Finland. Source: National Board of Customs

/ © Finpro ry Finnish companies established in Mexico 1.Ahlstrom 2.Amer Group Ltd. 3.Assa Abloy 4.Comptel 5.Elcoteq 6.Glaston Corporation 7.Filtros Larox 8.Hiab 9.Huhtamaki 10.Kemira México 11.KCI Konecranes 12.Kone Industrial 13.Kone México 14.Luvata 15.Metso Minerals 16.Mirka 17.M-real 18.Nokia Siemens Networks 19.Nokia México 20.Outotec Mexicana 21.Perkin Elmer 22.Perlos 23.PKC 24.Pöyry 25.Savcor Group 26.Stora Enso 27.Rolls Royce Oy 28.Tecnotree 29.UPM Raflatac 30.Vacon México 31.Visko 32.Wärtsilä de México S.A. de C.V. There are 32 Finnish companies established in Mexico, 13 of these have one or more production sites in Mexico: Production Sales

/ © Finpro ry Location of the main Finnish production sites in Mexico Chihuahua Nuevo Leon Coahuila Durango Jalisco Sonora Tamaulipas Tlaxcala Guanajuato State of Mexico

Final remarks México: excellent opportunity for higher profits 1. Production turn Mexico into a solid alternative for higher profits. This is crucial in a world economy characterized by intense global competition. 2. Mexicos competitiveness is being enhanced by the governments massive infrastructure programs, a growing human capital base and the development of high value added industries. 3. Among the worlds largest and most dynamic economies for the next decades (BRICs and N11), Mexico has a privileged place due to its location and the size of its domestic market. 4. It is because of this advantages that many analysts around the world, consider Mexico to be the excellent opportunity for solid, high yield, high profit operations.