Yucatán’s Shipbuilding Boom: Warships Next?

Mérida, Yucatán — The historically peaceful state of Yucatán may soon find itself integrated into the global supply chain for military equipment. This development follows NATO’s recent warning that its member nations will increase defense spending, driving up the market value of companies specializing in defense manufacturing. Among these firms is Fincantieri, an Italian shipbuilder with prior ties to Yucatán, whose stock has surged by 225% over the past year amid escalating global conflicts.

A Strategic Opportunity for Yucatán

Mexico already manufactures trains, automobiles, and aircraft components. The question now is whether it can also produce ships. A major obstacle has been the lack of coastal access in the country’s primary manufacturing hubs, such as Monterrey, Querétaro, and Ciudad Juárez. However, Yucatán possesses key advantages: an expanding Puerto Progreso, dozens of hectares available for a shipyard, and a longstanding plan to collaborate with Fincantieri, the Trieste-based shipbuilding giant.

Adding to the momentum, President Claudia Sheinbaum has pledged to extend the Tren Maya railway to the peninsula’s commercial coast, while the USMCA trade agreement continues to facilitate cost-effective production for exports to the United States.

A Revived Plan Under New Leadership

The proposal for a large-scale Fincantieri shipyard was initially drafted during the administration of former Yucatán Governor Mauricio Vila, a member of the PAN party, with support from President Andrés Manuel López Obrador. At the time, insufficient government funding and a lack of robust market demand stalled the project.

Now, Yucatán’s newly elected Morena party Governor, Joaquín Díaz, aims to revive the initiative. Massimo Costa, Fincantieri’s Director of Operations, recently joined Díaz and Gustavo Lorenzo Alonso Trani, the new head of Puerto Progreso’s National Port System Administration (Asipona), on an inspection tour of the port facilities. Costa’s visit signaled the company’s interest in exploring potential investments.

Fincantieri’s Growing Market Presence

The geopolitical landscape has shifted in Fincantieri’s favor. The company reported a 15% increase in annual sales, reaching €8.665 billion in the 12 months ending March, according to Bloomberg data. After posting net losses in 2023, the firm turned a profit last year, with analysts projecting further growth.

During a May earnings call, CEO Pierroberto Folgiero and CFO Giuseppe Dado highlighted the company’s expanding defense portfolio, including contracts for multipurpose defense vessels in Indonesia and frigate tenders in Norway and the Philippines. Additionally, Fincantieri has launched a new submarine division with a 17% profit margin—unusually high for the industry—while expanding its U.S. shipyards and optimizing operations in Italy, Romania, and Vietnam.

Puerto Progreso’s Expansion

Currently used for grain, fuel, and manufactured goods trade, Puerto Progreso has begun dredging operations to accommodate larger vessels. Fincantieri’s strategy focuses on improving profitability, as shareholders currently retain only $0.60 for every $100 in revenue. Historically, Mexico’s low production costs have benefited automotive manufacturers—could the same apply to shipbuilding?

The question remains: Will Yucatán soon produce ship components—or even entire warships?