Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Ikea acquires 42,000-acre forest in Texas; Port of Brownsville gains approval for $38 billion LNG projects; Laredo border bridges see long lines for cargo trucks; Global logistics provider Röhlig expands in Mexico.
Ikea acquires 42,000-acre forest in Texas to source local wood for furniture
Ingka Group, the holding company that runs the majority of Ikea stores, recently acquired a 42,000-acre pine forest in east Texas.
The purchase was an investment to source local wood for its home furnishing products, according to Ingka officials.
“We are pleased to continue our forestland acquisitions in the U.S., as we see a good match between what the market has to offer and our high standards related to responsible forest management,” Krister Mattsson, managing director of Ingka Investments, told The Dallas News.
In addition to the recent forestland purchase in Texas, Ingka Group has also acquired 18,000 acres of forest in southeast Oklahoma, 25,000 acres in Alabama, and 17,000 acres in South Carolina.
Ikea paid $58 million for the forestland in South Carolina, but did not disclose the cost of its other recent acquisitions.
Ikea also recently announced plans to open its first retail store in Mexico City in fall 2020. The company will also be opening a new 161,000 square-foot distribution center to service the new store.
Ikea was founded in Sweden in 1943, and currently has 374 stores in more than 30 countries.
While Ikea has stores around the world, the company’s furniture manufacturing facilities are in Europe, China and Russia, according to the Wall Street Journal.
The Swedish company recently closed its only U.S. manufacturing plant, located in Danville, Virginia, according to CBS News.
The Danville plant, which opened in 2008, employed 300 people and manufactured wood-based furniture for Ikea stores in the U.S. and Canada.
Ikea officials said the reason for the Danville plant closure was the high cost of raw materials in the U.S.
“We made every effort to improve and maintain the competitiveness of this plant – unfortunately the right cost conditions are not in place to continue production in Danville,” Bert Eades, site manager, Ikea Industry Danville, said in a statement.
Port of Brownsville gains approval for $38 billion liquified natural gas terminals
The Port of Brownsville recently received approval for three new liquified natural gas (LNG) projects totaling $38.75 billion from the Federal Energy Regulatory Commission (FERC).
Texas LNG, Annova LNG and NextDecade Corp. were approved for proposed export terminals at FERC’s monthly meeting in November.
The Port of Brownsville is a deep water seaport in Brownsville, Texas, a port of entry on the U.S.-Mexico border. The port is connected to the Gulf of Mexico by a 17-mile-long deep water ship channel.
Port officials hail the three new LNG projects as economic generators that will add thousands of job opportunities, leading to significant economic progress in the area.
“The fact that the Port of Brownsville was sought out and chosen for these three LNG projects is a testament to our strategic location and Brownsville’s important role in both the energy industry and international trade,” Eduardo A. Campirano, CEO and director of the Port of Brownsville, said in a release.
The next step for the three LNG projects are final investment decisions (FID) to be made by the applicants, which could be as early as the first quarter of 2020, according to port officials.
However, the LNG projects are facing opposition from the Sierra Club and an environmental advocacy group called Save RGV, according to the Brownsville Herald.
“It’s disappointing that FERC failed to recognize that these proposed fracked gas facilities would be a disaster for the Rio Grande Valley, but today’s approval is far from the end of the fight,” said Sierra Club Brownsville Organizer Rebekah Hinojosa.
Laredo border crossing sees long lines for cargo trucks before Thanksgiving
Trucks carrying freight northbound from Mexico into the United States experienced wait times of up to five hours on Nov. 26, according to several media reports.
The customs computer system at the Nuevo Laredo-Laredo port of entry stopped working around 9 a.m., according to a report in Milenio.
In Nuevo Laredo, around 7,000 truck operators waited in long lines due to the failure of the customs computer system, according to the newspaper El Mañana.
Nuevo Laredo is the sister city of Laredo, Texas, directly across the U.S.-Mexico border.
Global third party logistics provider Röhlig expands its Mexico operations
Röhlig Logistics, which is headquartered in Germany, has acquired 100% of the shares in a previous joint venture operation in Mexico.
“We now operate independently in the Mexican market under the name Röhlig,” Michael Gerding, managing director of Röhlig Mexico said in a release.
As part of the expansion of its local presence, Röhlig Mexico has also opened another office in the city of Puebla, Mexico. Röhlig Logistics did not disclose the name of its previous joint venture partner or the price of the transaction.
Röhlig Logistics is an international sea and air freight business based in Bremen, Germany. Röhlig has 165 offices in 35 countries with more than 2,200 employees.
“Mexico is an important industrial location for the Americas. Numerous international companies produce there, especially those from the automotive industry,” Ulrike Baum, member of the Röhlig Global Executive Board, said in a release.
In addition to its new office in Puebla, Röhlig Logistics also has offices in Mexico City and Monterrey.