As global industries pivot towards nearshoring, Mexico has become a favored destination for relocating supply chains from Asia. The backdrop of nearshoring amplifies Mexico's pre-existing water challenges, pushing both local and national stakeholders to develop innovative solutions, strengthen policies, and harness technology to meet surging demand, particularly in cities like Monterrey that epitomize nearshoring's benefits yet grapple with water shortages.

Corporate Responsibility and Government Collaboration

The crossroads between nearshoring and industrial water management manifest vividly in Monterrey. The city faces escalating water demand driven by industrial expansion, necessitating accelerated local policies, innovative technological interventions, and optimal extraction efficiency to address water challenges.

Conversations about corporate responsibility and transparency in water use have gained momentum. While companies seek security, infrastructure, and renewable energy, it is also essential for government entities to regulate water usage in production processes. The onus of addressing water challenges is more than just on the industrial entities, it is a collaborative endeavor with the government.

Key Water Projects Underway

A significant stride towards alleviating water challenges is the progression of crucial water projects under the aegis of the Mexican water authority, Conagua. With a priority portfolio of 93.5 billion pesos (US$5.3 billion), Conagua has earmarked 15 pivotal water projects, five of which are nearing completion this year. These encompass a range of initiatives, including aqueducts, dams, and water treatment programs across various Mexican states.

For instance, the El Zapotillo dam in Jalisco, poised to supply water to Guadalajara, reflects a notable step towards enhancing water supply infrastructure. Similarly, the El Cuchillo II aqueduct in Nuevo León, with 70% completion, aims to satiate Monterrey's burgeoning water demands. The Agua Saludable para La Laguna program between Durango and Coahuila, the Santa María dam in Sinaloa, and the Alejandro Gascón Mercado irrigation district in Nayarit further illustrate Mexico's concerted efforts to tackle water scarcity amidst the nearshoring wave.

An Industry Shift Towards Sustainable Water Usage

Heavy industries such as paper and steel mills and power plants, which are significant water consumers, are now transitioning to more sustainable practices. A notable example is the Argentine steel company Ternium, which announced a US$3.2 billion investment in its Nuevo León plant to integrate recycled wastewater into its production processes. This depicts a growing industry trend in which global best practices are shared and implemented to reduce water use.

The evolution of water technologies and the sharing of best practices across industries, including competitors, is driving a paradigm shift towards reducing water footprints. Investments in technologies that control, monitor, reduce, reuse, and recycle water are not merely about environmental stewardship but also a pragmatic approach, given the high costs of water in Mexico.

Crafting a Sustainable Future

As nearshoring propels industrial growth in Mexico, addressing the water challenges through a blend of policy reform, technological innovation, and corporate responsibility is indispensable. Monterrey, among other cities, stands as a testament to the potential rewards and water challenges that lie in the trajectory of nearshoring, underlining the need for a cooperative framework to secure sustainable water supplies across Mexico.