Weekly Report 64 by PRODENSA

GENERAL SITUATION IN MEXICO

Weekly Review # 64 I July 21, 2021

MANUFACTURING INDUSTRY MEXICAN EXPORTS ARE AT RISK DUE TO CLIMATE CHANGE POLICIES.

The European Union announced its intention to tax imports of products manufactured with low carbon dioxide emissions efficiency. At the same time, it intends to register only zero-emission vehicles as of 2035, which poses serious challenges for our country when its energy policy has relegated clean energies. Mexico has received three alerts in the last five days regarding the risk to its exports if it does not develop policies in line with new international regulations already announced or outlined by the governments of its leading global markets. These alerts occur in a context in which the Mexican federal government has as a higher priority the strengthening of Pemex and the Federal Electricity Commission (CFE) than the rapid development of domestic production of clean energy to ensure a sustainable energy supply and sustainable exports of products.

Firstly, the European Commission proposed this Wednesday that it will only register new vehicles with zero emissions as of 2035, a measure that still requires the approval of the European Parliament but which is widely supported by the governments of the bloc. It would have significant implications for Mexico because it is one of the world leaders in automotive exports, with car sales to the European Union for 5 billion dollars in 2020. The European Commission stated that it is necessary to combine measures to address the increase in emissions in road transport to complement emissions trading. Expressly, it indicated that stricter CO2 emission standards for passenger cars and vans would accelerate the transition to zero-emission mobility by requiring emissions from new vehicles to decrease by 55% from 2030 and 100% from 2035 compared to 2021 levels.

MANUFACTURING INDUSTRY THE REACTIVATION OF MEXICAN INDUSTRY STALLS Industrial activity in Mexico is recovering at a slow pace and last May advanced by a marginal 0.1% at a seasonally adjusted monthly rate, according to data released yesterday by the National Institute of Geography and Statistics (Inegi). On a disaggregated basis, three of the four components of the indicator had advanced, with manufacturing -the most important- being the only one that declined. Mining increased 1%, public services (electricity, gas, and water), 1.3%, and construction grew 2%, while manufacturing fell 0.7%. From October of last year to date, industrial activity has grown just 0.3% monthly on average, after experiencing rapid growth between May and September, following

the suspension of non-essential economic activities to halt the advance of COVID. Among the causes that impacted the manufacturing sector in May were declines of 2.9% in transportation equipment manufacturing activity, 2.6% in computer and communication equipment production, and 1.9% in electrical appliance manufacturing. “Shortages of semiconductors and other electronic parts continue to affect producers, while other input costs continue to rise at an accelerated rate. This will continue to jeopardize the growth of industries in the coming months,” said Janneth Quiroz, an analyst at Grupo Financiero Monex, in a report.

KEY POINTS OF PRESIDENT ANDRES MANUEL LOPEZ OBRADOR’S Morning Press Conference July 14-20, 2020 HEALTH PULSE The Undersecretary of Prevention and Health Promotion, Hugo Lopez-Gatell, pointed out that in Mexico 38.5 million people have been vaccinated, representing 43% of the population of legal age. The third wave is affecting young people, and the vast majority of hospitalized people are not vaccinated, which is why he called on the population to apply the vaccine against COVID-19.

CONSTITUTIONAL REFORMS The President expressed that, although his mandate has made significant progress at the constitutional level, there are three reforms that he will be presenting:

RETURN TO CLASSES The President asked the parents and teachers to start organizing the preparations for the return to school on August 30 under a voluntary scheme. He affirmed that there would be no problems with infections since all older adults will already be vaccinated. It has been shown that children are less likely to be infected and experience serious consequences.

2. The second is related to the National Guard since it is intended to prevent it from being corrupted, as what happened with the Federal Police. This entity must be attached to the SEDENA.

CUSTOMS He reported that the decree that separates the customs functions from the SAT was published in the Official Gazette of the Federation, for which a decentralized entity is created for its control. The President affirmed that customs would be strengthened with the support of the Defense and Navy Secretariats to combat smuggling, the entry of drugs, and tax evasion. He indicated that, at the operational level, the armed forces would be in charge of it.

ELECTIONS PERU The President sent congratulation to Peru because yesterday the electoral authorities recognized the triumph of Mtro. Pedro Castillo Terrones to be President. He will send Chancellor Marcelo Ebrard to take office as representative of the Mexican Government.

SOURCE: https://www.youtube.com/channel/UCxEgOKuI-n-WOJaNcisHvSg

1 The first, an initiative to strengthen the CFE, given that today it has been wanted to give preference to foreign companies and, in particular, Spanish.

3. The third is an electoral reform so that electoral fraud is eliminated. It is intended to reduce the cost of elections.

MEASURES TAKEN BY STATES IN MEXICO

BAJA CALIFORNIA The State of Baja California is considered in the low-risk tier or green light, except for the municipality of Mexicali, which is still considered in the medium risk or yellow light. Baja California’s Health Secretary reported that there are currently 353 active cases with hospital occupancy at 34.49%, with 229 hospital beds available and 243 respirators available for COVID-19 patients. Official reports confirmed the first case of the Delta variant in Baja California. The person who acquired the Delta variant of COVID-19 had the complete vaccination scheme, and he only presented mild symptoms such as headache and runny nose for three days. The vaccination plan continues applying Pfizer second doses for adults, and this week 59,800 Astra Zeneca vaccines arrived in Baja California to be applied to adults over 40 years old. Baja California’s Health Secretary reported that 72.69% of the State’s adults population has the complete vaccination scheme.

SONORA The State of Sonora has the vast majority of its municipalities in medium risk tier or yellow light. Only 8 municipalities out of 72 are in the high-risk tier or orange light. Official reports confirmed that are currently 1,784 active COVID-19 cases and 227 hospitalized patients, of which only 44 patients are in critical conditions. Two hundred forty-three new confirmed cases were reported in the past 24 hours. The vaccine plan continues this week in different municipalities with the application of the second dose of Pfizer to adults between 50 and 59 years old and applying the first dose of Astra Zeneca and Pfizer to adults between 18 and 49 years old.

MEASURES TAKEN BY STATES IN MEXICO

COAHUILA Coahuila has a model that allowed the reduction of both hospitalizations and the percentage of positivity, so no restrictions or closures of establishments are projected at the third wave of COVID-19 cases. The governor of Coahuila, Miguel Angel Riquelme Solis, also announced that they plan to accelerate the vaccination processes for the population from 20 to 39, which are the ones with more mobility are vulnerable. TAMAULIPAS The government of Tamaulipas confirmed the presence of the Delta variant of COVID-19 after five patients from different municipalities of the state tested positive. NUEVO LEON The Secretary of Health in Nuevo Leon, Manuel de la O Cavazos, announced that the third wave of the COVID-19 virus, which has already started in the state, “is coming big.” A meeting was held to form a “Common Front” to reduce the impact of the third wave and were representatives of the chambers, the clusters, the rectors of the universities, representatives of various sectors, and the directors of the public and private hospitals of the entity participated.

MEASURES TAKEN BY STATES IN MEXICO

QUERETARO Through the voice of Governor Francisco Dominguez Servien, the Government of Queretaro issued an alert message for the population to strengthen the preventive measures and thus face the new wave of the virus. In this sense, the State government announced deploying the necessary human and material resources to reinforce the tools and platforms to face the disease. Likewise, Dominguez pointed out that the decisions taken collectively have not been enough to stop the transmission of the virus since the new variants are of concern and are already in the state. People between 20 and 49 years old represent more than 70% of the infections; although they did not have previous diseases, they are being admitted to the intensive care areas of COVID hospitals with severe pneumonia Last Thursday, six positive cases of infected children were recorded. Regarding the return to school, economic recovery, and social harmony, Dominguez Servien explained that the success of these activities depends on the decisions made by the population during the following weeks. “Today, we face a crucial moment in which everything we have achieved in previous weeks and months is at stake; do not wait to live a painful experience to change,” expressed the Governor. Coronavirus containment measures will be strengthened. In his message, the

state government said that he instructed his team to enhance all areas of care and containment through a series of tools and platforms: Strengthening of the structure for hospital care COVID, Numerical references, and social training, to give the population visibility of the speed with which the phenomenon rises or falls, A permanent operational platform, starting with reliable communication channels, the call center, free testing, medical and psychological consultations and case follow-up, The modulation of the scenarios defined by the Technical Committee for the attention of COVID-19, to find the best balance between health, economy and emotional health and the necessary adjustments to the legal framework to strengthen health supervision. AGUASCALIENTES In Aguascalientes, vaccination against coronavirus will begin tomorrow for people over 18 years old in the municipalities of Rincon de Romos, Cosio, and San Jose de Gracia. This age group will receive doses from the pharmaceutical company AstraZeneca. With this, the state will become the first non-border state to begin vaccination for this age group. In this regard, the authorities have invited everyone to participate. It is essential that as many people as possible receive at least one dose, especially when Mexico faces the third wave of COVID-19.

MEASURES TAKEN BY STATES IN MEXICO

GUANAJUATO During the last 24 hours, the Ministry of Health of Guanajuato reported 139 confirmed cases of COVID-19 throughout the state. Once again, Leon was the city that registered the newest cases yesterday with 56, and it has been several days without documented deaths. However, it has been several days in which the state reports more than 100 new confirmed coronavirus cases per day. The Secretary of Health of Guanajuato, Daniel Alberto Diaz Martinez, pointed out that the young population is currently the most susceptible to contracting this disease because they are not vaccinated. With 139 new cases, Guanajuato has an accumulated 135,837 confirmed infections, of which 11,315 have lost their lives, and 123,113 have recovered. In addition, conditions were reported in 16 municipalities, with Leon being the city with the highest number of cases, followed by Penjamo with 11 and Celaya and Irapuato with ten each. The number of active cases reported in the state is 1,422. In particular, Leon has accumulated 45,178 infections, of which 40,703 people have recovered, and 3,839 have lost their lives. The Ministry of Health also announced that 37 people had been hospitalized with confirmed COVID-19, of which 17 are men, and 20 are women. The health condition of 8 of these patients is critical, while 26 others remain serious, and only three are stable.

JALISCO On Tuesday, July 20, anti-COVID-19 vaccination will begin for people between 30 and 39 years of age in 20 municipalities of Jalisco, including Zapotlanejo and Ixtlahuacan de Los Membrillos, which are part of the Guadalajara Metropolitan Zone (ZMG). Vaccination of 30 to 39 year-olds begins in Jalisco. The Jalisco Ministry of Health confirmed that the first dose of the vaccine will be administered to people 30 years and older and to those who have not received their first dose between the 20 municipalities from July 20 to 23. Only Cuquio and Ixtlahuacan del Rio begin on Wednesday 21. Pregnant women over nine weeks will also be vaccinated. AstraZeneca pharmaceutical doses will be applied in the 20 towns for the general population, while Sinovac doses will be used for pregnant women. The schedule for the application of vaccines will be from 8:00 AM until 4:00 PM, or when the doses are assigned. The state of Jalisco began applying the first dose of vaccine for people between 30 and 39 years of age in 42 municipalities in the interior of the state on July 6.

MEASURES TAKEN BY STATES IN MEXICO

STATE OF MEXICO The state of Mexico will continue to be in the yellow color of the epidemiological stoplight.

CDMX Mexico City continues to be in yellow despite the increase in cases. Hospitalizations have also increased, according to health authorities.

VACCINATION PROGRESS

As of July 18th, 54,542,551 doses of vaccine have been applied in all of Mexico since December 24th, of which 21,700,199 have the complete scheme (57%), and 38,222,492 have at least one dose. The states with the most remarkable progress in immunization are Baja California, Mexico City, Baja California Sur, Chihuahua, Yucatan, and Sinaloa, with percentages ranging from 79 to 52 percent.

TOWARDS THE “NEW NORMAL”

DISTRIBUTION OF DEATHS PER STATE DUE TO THE PANDEMIC

THIS WEEK THERE’S NO EPIDEMIOLOGICAL STOPLIGHT:

The Ministry of Health presented to the National Health Council a project to measure the Epidemic Risk Stoplight. The agency indicated, without specifying what the changes will consist of, that the new criteria respond to the current dynamics of infections, hospitalizations, and deaths, and the ages mainly affected by the epidemic. According to the General Director of Health Information, the new methodological proposal provides greater amplitude to the continuity of socioeconomic activities, privileges the primary reproduction number of infections, the hospitalization and mortality trend rates as early warning indicators to take timely measures as the risk rises. INFORMATION UPDATED ON JULY 19TH 2021 AT 19:00 HRS LOCAL TIME.

NEW CASES REPORTED: 5,307

SOURCE: https://www.gob.mx/salud/

CONFIRMED CASES: 2,664,444

NEW DEATHS REPORTED: 138

CONFIRMED DEATHS: 236,469

INCREASE OF CONFIRMED CASES SINCE THE FIRST REPORT MAP WITH THE DISTRIBUTION OF THE INCIDENCE RATE OF ACCUMULATED CASES OF COVID-19 BY ENTITY OF RESIDENCE.

National rate 61.60

0 to 10.0 (1 states)

40.1 to 50 (5 states)

10.1 to 20 (7 states)

50.1 to 60 (0 states)

20.1 to 30 (4 states)

60.1 to 70 (4 states)

30.1 to 40 (3 states)

>70 (8 states)

Elaborated by Prodensa with information from the Health Ministry of Mexico

PANDEMIC’S SITUATION IN THE WORLD • As of July 19th, 2021, globally, there have been reported confirmed 190,597,409 cases (427,576 new cases) of COVID-19 and 4,093,145 deaths (7,145 recent deaths*). Lethal rate: 2.2%. • In the last 14 days, the number of new cases accounts for 3% (6,438,028) of accumulated cases.

SOURCE: https://www.gob.mx/salud/

TOWARDS THE “NEW NORMAL” INCIDENTS OF CONTAGIONS IN THE POPULATION BY REGION AS OF JULY 20

DEATH INCIDENTS IN POPULATION BY REGION AS OF JULY 20

SOURCE: https://www.gob.mx/salud/

EHS

RECOMMENDATIONS PREVENTION STRATEGIES TO REDUCE TRANSMISSION OF SARS-COV-2 IN SCHOOLS

COVID-19 prevention strategies remain critical to protecting people, including students, teachers, and staff, who are not fully vaccinated, especially in areas of moderate-to-high community transmission levels. Prevention Strategies • Promoting vaccination • Consistent and correct mask use • Physical distancing • Screening testing to promptly identify cases, clusters, and outbreaks • Ventilation • Handwashing and respiratory etiquette • Staying home when sick and getting tested • Contact tracing, in combination with isolation and quarantine • Cleaning and disinfection The need for layering specific prevention strategies will vary, and localities might implement fewer COVID-19 prevention strategies based on community transmission levels, vaccination coverage, and local policies and regulations. The government continues to recommend masking and physical distancing. However, if considering whether, conditions and how to remove prevention strategies, one prevention strategy should be removed at a time, and students, teachers, and staff should be closely monitored (with adequate testing through the school or community) for any outbreaks or increases in COVID-19 cases.

DAVID ANTUNEZ Environmental, Health, and Safety Director.

REACTIVATION NOW! Many economic sectors have been calling for months asking for the reactivation of work in different segments closed due to COVID. Today, most sectors are open, allowing companies to survive and jobs to be protected and generated. Today it is time to raise our voices again, not to reactivate productive sectors, but for all of us to reactivate the preventive measures against COVID in the face of the challenge that the third wave represents. Let us educate workers in the workplace about the importance of reducing mobility to the essentials, avoiding crowds, and not staying for more than fifteen minutes in public places without adequate ventilation, in addition to the use of masks and social distancing.

ALVARO GARCIA HR, Vice President

WHY ARE COMMUNITY RELATIONS IMPORTANT FOR THE CONTINUITY OF YOUR BUSINESS?

PUBLIC AFFAIRS

LABOR

It is essential to establish and maintain a good relationship with the communities in which you operate; it is a milestone in your business continuity. Building relationships with the local communities can be one of the critical communication activities of an organization, yet it is often overlooked.

YOELLE ROJAS Public Affairs & Communications Director

You can start a beneficial relationship between your company and the community by hosting a friendly meeting or an open house while listening and mapping out the community’s needs. By doing this, the community stakeholders will see your approachability. This practice will help you strengthen ties; thus, it is highly recommended to initiate community outreach programs consistent with your values. Communities appreciate that companies assist them with community development programs that improve the quality of the environment. A solid community relations program can help any organization achieve good community branding. Let us be your partner to position your community branding.