Economic Observatory State´s Economics Lights State´s lights ∙Goals to transform the Country. ∙To measure 10 fundamental variables. ∙Does Mexico has the potential to growth 6% and to generate 1.2 million jobs per year? México moves at a different pace

Chihuahua, How are we going? INDICATORSGOALSLAST DATALIGHT Economic GrowthGrow at 6% annualy 6.9% (1Q – 2015) Job GenerationCreate 13,200 jobs per quarter 15,171 (2Q – 2015) ProductivityMore pesos produced per hour worked From $621 to $669 (1Q – 2014 vs 1Q – 2015) Working PovertyReduce the % of the population who can not afford food basket with their labor income From 28.5% to 27.5% (1Q – 2014 vs 1Q – 2015) Exports PromotionMore state exports as % of GDP From 131.8% to 127.7% (2012 vs 2013) Rule of LawReduce vehicle theft rate From 52 to 37 (Jun 2014 vs Jun 2015) InformalityReduce Informal employment From 32.8% to 31.5 % (2Q – 2014 vs 2Q ) Workforce DiversityReduce % of Jobs that depends of the State From 3.9% to 3.3 % (2Q – 2014 vs 2Q ) Public DebtReduce debt as a percentage of GDP From 9.2% to 8.6 % (2014 vs 2015) InequalityReduce income inequality From to (2Q – 2014 vs 2Q )

Employment, FDI and GDP by sector In Chihuahua Manufacturing 21% 16% 5% 8% 50% Commerce Services Others Construction 85% 6% 3% Mining Others Services 2%2% 4% Total IED de $18, % 15% 8% 7% 20% Others sectors Manufacturing Commerce Construction Agricultural Commerce Employment (2014) 753,329 FDI ( ) $ 16 B usd GDP (1T-2015) $ 485,034 mdp Manufacturing

GDP Employment FDI 2nd in accumulated FDI since BUSD Last 5 years new investment projects Chihuahua, one of the most cost-competitive locations in Mexico Education > 1 million students +5 K Engineers & +34 K skilled trades graduates per year Access to +1.2 B consumers through a network of 45 FTA´s 1st in annual growth 5.4% (2013) Every day in the US-Mexico border Best platform to export to the US 1st exports (15%) 1st imports (14%) Trade $ 400 B Country´s Exports in $ 1 M US-Mexico Bilateral Trade per minute CHIHUAHUA accounts for: 18% US-Mexico car traffic 800 Kilometers 10 Border crossings/5 Ports of Entry +1 M People crossing the border +300 K Vehicles crossing the border A reliable and attractive investment destination Young, talented, trained people + 160,000 new employees in 5 Years Lowest rate for informal employment (15.4%) 1st IMMEX employment 1st Trade 2nd FDI 3rd IMMEX establishments Manufacturing industry

Relevant investment projects ∙A reliable and attractive investment destination World-Class companies Strong growth in a range of industrial clusters $ 17 B USD Accumulated FDI since 1999 ($ 1.7 B USD in 2015) + 3 K Expats living in Chihuahua + 80 M ft2 of industrial real estate (+ 7 M ft2 available) Cd. Juárez Chihuahua Meoqui Camargo Cuauhtémoc

Chihuahua´s industrial endeavor SECTOR # COMPANIES EMPLOYEES AUTOMOTIVE K + The largest employer in Mexico AEROSPACE K + 5 out of the 7 OEM´s in Mexico ELECTRICAL-ELECTRONICS K+ Main engine for jobs in Mexico MEDICAL DEVICES K+ State of the art products TEXTILE/GARMENTS K+ A tradition in Chihuahua METAL-MECHANIC K+ Transversal support for the mfg. industry ∙Chihuahua´s main industrial sectors

Chihuahua´s Clusters integration Our workforce is the greatest asset for industrial growth... Educational and training centers are linked to support the industry needs 65 Vocational- technical institutions Education, Training and R&D Government and Private Sector Industry >550 facilities of medium and large companies

Chihuahua´s main poles of competitiveness Union-Free State Government supportive of local businesses Advanced communications infrastructure. Modern Utilities: electrical, water, natural gas. Developed multi-modal transportation network (road, rail, air). Low humidity and average temperatures of 63-77° F. Lows around 25°F in Winter and highs of 100°F in Summer 300 sunny days per year Non-seismic region World-Class hospitals Extensive leisure options: golf, shopping, restaurants. Modern, new hotels for international brands. Bilingual schools Quality of life Favorable Climate World-Class Infrastructure Business Friendly Environment State´s population 3.4 Million inhabitants (3%) < 22 years. average age

Chihuahua´s main poles of competitiveness

REAL ESTATE SUPPORT 28% 7% 19% 5% 3% 4% 2% 1% 9% Distribution of mfg. employment by Industrial Zone in Chihuahua City Others 15% Chihuahua´s North East Side 70 % of employment 30% of Total Population

BTS Site locations for IMPRO´s investment project South Industrial Park Supra Industrial Park Las Americas Industrial Park Tabalaopa Industrial Park Chihuahua Industrial Complex Los Encinos Industrial Park CIVILIAN LABOR FORCE (EAP) 403,000UNEMPLOYMENT UNEMPLOYMENT RATE 23, % LABOR AVAILABILITY ESTIMATION 40,500 LABOR AVAILABILITY= [ UNEMPLOYED + 30% EMPLOYED WITH NO MEDICAL BENEFITS]

In order to generate competitiveness and job creation in the State of Chihuahua, the Government is willing to offer companies a tailor-made incentives proposal based on the characteristics of its new project and to work together with the 3 levels of government. FEDERAL INNOVA PYME PROINNOVA INNOVATEC INOVATION FUND MIXED FUNDS AVANCE PH´S AND M.S. INCORPORATION IMMEX SME´s PROMEXICO AUTO DECREE PRODIAT PROSEC DRAWBACK PROGRAMS ORIENTED TO PROMOTE: Human Capital Development Investment Attraction Increase Competitiveness Supplier Development Foster Innovation STATE STATE INCENTIVES FISCAL (PAYROLL TAX) SELECTION,RECRUITMENT, TRAINING LAND AND INFRASTRUCTURE LINKAGE WITH EDUCATION INSTITUTIONS AND COMPANIES SOFT LANDING SERVICES CITY PROJECTS FOCUSED ON TECHNOLOGY SCHOLARSHIPS FOR TRAINING CONSTRUCTION LICENSE PERMITS PROPERTY TAX LAND AQUISITION TAX Strong policy for sectorial development (Incentives and Support Programs)