The Building Material Industry in Xalapa, Mexico

The Industrial Geographer Early Career Focus Article

MANUFACTURING A CITY IN THE TROPICS: THE BUILDING MATERIAL INDUSTRY IN XALAPA, MEXICO

Matthew Fry Department of Geography University of North Texas Denton, TX 76203 [email protected]

ABSTRACT

High rates of urban population growth in Mexico and other tropical (i.e., ‘developing’) nations create large demands for building materials and construction labor. Using a case study, this article analyzes the development of the building material industry in the Xalapa-Perote region of central Veracruz, Mexico. First, it examines the dominant types of materials used and where these are extracted and/or produced. Drawing on traditional location theory, it then explores why clustering occurred among one of the most popular building material producers, concrete block manufacturers. In the final section, the case study demonstrates that the industry’s clustering created a level of competition that not only resulted in the production of poorer quality blocks, but may eventually lessen the job creating capacity of the industry as a whole. This has implications for rural communities, who view access to this local source of employment as its greatest benefit. The research and its findings also have implications for development and industrial geography research in tropical regions, where the combination of traditional location theory and newer locational approaches can be useful for explaining location behavior.

Key words: Cluster competition, construction material industry, labor, location theory, Mexico

INTRODUCTION consumption.” A first step in creating urban infrastructure is the identification Much of the social and environmental of suitable building materials. Indeed, research on tropical countries focuses on the availability of construction materials the outcomes of expanding cities and is central to the establishment of cities as rapidly growing urban populations. well as their continued expansion. Understanding the impacts of urban Typically, regional natural resources, sprawl on land cover, biodiversity, and including geologic and forest resources, watersheds, for example, are important determine which building materials are areas of concern (e.g., Weng 2001; utilized. For example, ancient Athens Pauchard et al. 2006; Li et al. 2007; was built from readily available raw Grimm et al. 2008). However, there are materials, and although mud bricks concomitant social and economic outcomes predominated, marble and limestone were associated with urban expansion that also also quarried from surrounding hills warrant attention, including employment (Wycherley 1974). As cities grow, the opportunities in construction (Ball and scale of construction material extraction Connolly 1987; Firman 1991; Scott and increases. Exhausted mines are Storper 2003). A key component of abandoned and often enveloped by urban capitalist economic development growth (Connolly 1982; Colten 1994). (Hillebrandt 1974; Harvey 1978; Ball and New materials are sought, additional Connolly 1987; Giang and Pheng 2011), mines and quarries exploited, and more the construction sector plays a natural resources are converted into the particularly important role in the urban physical infrastructure. Although economies of urbanizing areas of the the local biophysical environment tropics where housing demands are provides the raw materials, other factors growing at unprecedented rates (UNFPA affect the specific localization of mines 2007). For development and government and building material production decision makers, therefore, understanding facilities. where and how components of the construction sector affect regional The location of construction material economies are integral to development mines is also influenced by tensions initiatives in tropical regions (Scott and between accessibility and land rent, as Storper 2003). This article uses a case well as competing land uses. First, study to examine the role that location, transport costs comprise a large clustering, competition, and labor play in component of the total production costs of the development of the building material construction materials due to their bulk industry in and around Xalapa, the (Wallwork 1974). For this reason, capital city of Veracruz, Mexico. proximity to roads or other forms of transportation often determine the location of material mines. Second, land THE URBAN PROCESS AND values tend to decrease with increasing BUILDING MATERIALS distance from the urban core (Alonso 1964), and the combination of high urban As Harvey (1978 p. 113) notes, “[t]he land rents and low value building urban process implies the creation of a materials serve to push material mining material physical infrastructure for far from city centers. Third, as urban production, circulation, exchange and areas expand, home owners increasingly

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vie for land in urban peripheries; in time, population (INEGI 2011). Urban building concerns about environmental impacts and construction accompanied this and conflicts over aesthetics can force population growth, as evidenced by the mine closures and the relocation of fivefold increase in the volume of concrete mining activities to areas even farther aggregates extracted from 1970 to 2003 from population centers (Campbell and (González-Martínez and Schandl 2008). Roberts 2003). Home construction accounts for a large share of Mexico’s urban construction (Ball The production of materials such as bricks and Connolly 1987). Since the 1970s, and concrete blocks also require informal, self-built homes comprise over secondary processing industries. The 50 percent of homes built in Mexican locations of these industries, sometimes cities (Connolly 1982; Schteingart and close to source areas and other times Solís 1994). For low-income residents nearer to urban markets, may depend on who build their own homes, pre-fabricated the availability of labor. To Walker and concrete blocks are highly desirable due to Storper (1981 p. 497), the profitability of their low cost, durability, and ease of use an area for industrial location not only (Fry 2008). depends on the availability of natural resources, proximity to final markets, On average, concrete is 80% aggregates, and/or agglomerative forces, but also 12% Portland cement, and 8% ultimately involves the labor supply. For water. Portland cement chemically reacts location decisions involving building with water to bond the aggregates. material manufacturers in the United Aggregates are either natural (e.g., sand, States, Canada, Japan, Australia, and gravel, pumice) or manufactured (e.g., European countries the importance of crushed stone, coal cinders, slag). To labor may be of marginal importance manufacture concrete blocks, concrete mix because the manufacturing process is is poured into a mold, compressed by overwhelmingly mechanized. Conversely, either hand or machine, and left to in places where mechanization is absent harden or cure. In some places, crude and/or labor costs low, as in tropical (i.e., blocks are made by hand tamping ‘developing’) countries, the labor factor is concrete mix in molds. Vibrating likely to play a more important role in machines allow for the standardization of locational decisions. In Mexico, one of the block size as well as for their mass most popular building materials is production. Producing blocks is but one concrete blocks (INEGI 2011; Fry 2008). component of the larger construction However, little is known about the sector. relationship between the production of concrete blocks, labor, and the industry’s For Mexico, as well as other capitalist- development. oriented tropical countries, home construction, whether formal or informal, is and will continue to be an integral CONCRETE BLOCKS AND MEXICO’S component of regional economic CONSTRUCTION SECTOR development, especially when access to other types of industries remains limited Since the 1970s, Mexico’s urban (Connolly 1982). Since the construction population has grown from ~28 to ~79 sector is recognized as a region-serving million, and from approximately 60 transaction that recirculates money percent to 76 percent of the country’s total

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through the regional economy, states aesthetics of Xalapa’s built environment sometimes directly intervene to promote (Fry 2008), but the extraction of tepetzil growth in the sector (Harvey 1978). For impacted rural environments and example, Mexico’s government households in the Perote Valley where it deregulated the housing market in the was mined. The block industry also late-1990s and began to finance the provided an important source of purchase of properties, as well as home employment in the region. This article construction and renovation. Harner et examines the relationship between the al. (2009) argue that this not only spurred regional building material industry in construction, but also fueled widespread Xalapa, and block production and labor in speculation and unfettered urban Perote. Three questions guide this expansion in Guadalajara. Even without analysis: 1) How does the production of direct state intervention, non-export- tepetzil blocks compare to other building oriented regional economic development is materials used in the region around fueled by the demand for informal homes Xalapa? 2) How and why did the tepetzil created by large numbers of low-income block industry develop in the Perote rural migrants flooding into tropical cities Valley? 3) What is the relationship (e.g. Padoch et al. 2008; Firman 1991). between labor and the block industry? Isolating components of the construction sector, especially the informal sector, which often falls outside of standard METHODS economic analyses, is one way to shed Field research was carried out during light on how, where, and why individual several visits to the Xalapa region industries develop, as well as how they between 2004 and 2009, with the bulk of affect regional economies. the data gathered during a long field season from June 2005 to December 2006.

Both formal and informal interviews were STUDY AREA AND RESEARCH carried out over the course of the study. QUESTIONS Beginning in 2004, preliminary Since the 1980s, medium-sized cities (i.e., information on the types of construction population of 50,000 to 500,000) have materials, the location of material experienced the largest percentage of sources, and the level of community Mexico’s urban population growth involvement was gathered through (Aguilar et al. 1996). For example, in participant observation (e.g. Xalapa, the capital city of Veracruz, the accompanying truck drivers on deliveries) population more than doubled to over and informal interviews carried out with 500,000 between 1980 and 2000; while its mine owners, workers, and truck drivers surficial area increased sixfold in the in and around Xalapa. In addition, the same time period (Capitanachi Moreno et locations of material mines and tree al. 2003). Accompanying Xalapa’s growth plantations were mapped using a GPS in was an increased demand for construction 2005, 2006, and 2009. materials; particularly, inexpensive lightweight concrete blocks made from To determine supply and demand of regionally mined volcanic pumice known building materials, formal interviews as tepetzil. Tepetzil concrete block were carried out with 39 building buildings not only affected the structural material shop owners and workers in neighborhoods throughout Xalapa. In

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December 2005, material shops were households either refused participation or chosen using a stratified random were unavailable. The survey was sampling method based on neighborhood designed to identify livelihood strategies, growth rates. Specifically, 134 income sources, and other information. neighborhoods were grouped into six Informal discussions with household categories according to growth rates and heads and other family members usually then seven neighborhoods were randomly followed the survey. Semi-structured selected from each category. A total of 40 interviews were also conducted with material shops agreed to participate in municipal representatives, ejido members, interviews. Using structured block manufacturing operation owners, questionnaires, interviews asked about block workers, drivers of front-end the types, amounts, prices, and sources of loaders, and block machine repairmen in materials being used/demanded and the Perote area. historical and contemporary building trends in Xalapa. As well, some respondents with decades of experience in RESULTS AND DISCUSSION Xalapa’s building industry agreed to Regional Building Materials longer, open-ended interviews that provided information on historical The various types of materials observed in developments. buildings throughout the city, in addition to numerous defunct mines and newly In 2005-2006, informal and opportunistic opened mines, testify to the dynamic group interviews were conducted at 78 nature of construction material mining block manufacturing operations in Sierra and use in and around Xalapa. For de Agua in the Perote Valley. Sierra de example, the diverse geology of the Agua is an ejido community where eastern portion of the Trans Mexican tepetzil is mined and blocks are Volcanic Belt, where Xalapa is located, manufactured.1 Block workers and owners enables the exploitation and use of a wide were asked about their clients, production array of construction materials, including: capacity, input costs, and number of years limestone, volcanic basalt, volcanic in operation. Laborers were also asked pumice (i.e., tepetzil), volcanic cinders, where they lived. quarried ignimbrite, pyroclastic sand, and clay deposits. As well, some timber is Many of the laborers working in Sierra de extracted from pine forests and Agua came from the ejido communities plantations on upper slopes of the Cofre Veinte de Noviembre and El Conejo. In de Perote (Figure 1a and 1b). 2006, a total of 190 ejidatario and non- ejidatario households (i.e. land-owning Since the early 1990s, construction and landless households, respectively) material shops, most abundant in those were selected from the three ejido areas with the highest growth rates, communities (in 2006, total populations provided the most commonly used were 1384 in Sierra de Agua, 465 in construction materials to consumers in Veinte de Noviembre, and 1205 in El Xalapa, and thus played an important Conejo). Using a stratified random role in shaping home construction.2 In sampling method, 190 households were 2005, material shop owners reported the selected for interviews. Survey data were volume of material sales in order of gathered from 167 of these households, 23 importance as 1) cement, 2) lime, 3) rebar,

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Figure 1. The Central Veracruz Study Area

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4) sand, 5) tepetzil blocks, and 6) volcanic block industry is explored in the next cinder gravel. With the exception of section. cement and rebar, all construction materials were regionally mined. In addition to over 100 tepetzil mines, the 52 Tepetzil Block Industry active and inactive material mines Evolution and Development mapped include 30 sand mines, 14 gravel mines, 3 stone quarries, and 5 limestone Tepetzil is mined from shallow subsurface mines (Figure 1b). deposits in the Perote Valley. A strip of communities along the southeastern rim Construction aggregates are high of the Valley is the primary area for tonnage, low value commodities. To tepetzil mining and block processing reduce overall production costs, suppliers (Figure 1c). Most of the blockeras, or attempt to minimize expenditures on small-scale block processing facilities, lie extraction and transportation (Wallwork along the historic highway, MX140. The 1974). For this reason, the location of majority are clustered in Sierra de Agua, construction material mines in and close to, or even within, tepetzil mines. around Xalapa depends on the ease of Conversely, only one interviewed material access to geologic deposits. For example, shop owner operated a block-making mine types tend to cluster in areas with facility in Xalapa close to the main large, exploitable deposits that are easily market. Traditional location theory is accessed from roads. Indeed, most mines useful for explaining how and why were located adjacent to or within ~1km clustering occurred in the tepetzil of roads (Figure 1b). As well, although industry, while more recent theorizations obtaining the extraction dates for all help to clarify the competitive advantage mines was not possible, construction maintained by the clustering (e.g. Porter material mining appears to have moved 2000). As McCann and Sheppard (2003) farther from the city over time, suggesting argue, observations of location behavior the most accessible deposits were targeted are best resolved through the combination first. of traditional microeconomic location theory and newer locational approaches. Since the late 1980s, tepetzil became one Accordingly, this section examines the of the most important building materials tepetzil industry in the context of classic in the study region. Tepetzil blocks are location theory, while later sections not only lightweight and therefore examine the industry in terms of inexpensive, but are easy to use, durable, competition. and are ideal for incremental home construction – a common technique used Although Weber’s (1929) location theory by low income home builders (Fry 2008). predicts that heavy industries with high For these builders, blocks were preferred transportation costs tend to cluster to other materials, especially clay and together, Wood (1969) suggests that sand-based bricks. In terms of location, agglomeration of these industries implies both brick and block manufacturers were something more. For example, to Pred located closer to their respective raw (1965) the concentration of value-added material sources, rather than in Xalapa. industries results from self-perpetuating The reasoning for the clustering of the momentum, accumulation of skills, and the standardization of production

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processes, among other things. Indeed, in more laborers (see Table 1). In fact, addition to locating near the raw material laborers were in no short supply due to source, the clustering of the block dramatic declines in agricultural prices industry appears to have resulted from and government subsidies for smallholder self-perpetuating momentum and the agriculture, which occurred in the late standardization of production. 1980s and early 1990s and caused many agricultural laborers throughout Mexico The momentum and production to seek non-farm employment (de Janvry standardization of the block industry in and Sadoulet 2001; Hamilton et al. 2003; Sierra de Agua occurred over time. The Perramond 2008). To one informant, it first tepetzil blocks were fashioned in the was around this time that the block 1960s for local use. At the time, industry fundamentally changed: “the everything was manual: tepetzil was quality [of blocks] changed, the work shoveled onto wagons or wheel-barrows, changed, the people changed, the shovels and buckets of water were used to hours…Neighbors moved in and sold mix the tepetzil and lime mixture, which [blocks] cheaper than we did…It was very was tamped into molds using wood or different than before.” Today, all tepetzil metal pallets, and, finally, the forms were blocks are produced using manually flipped by hand. In the 1980s, increased operated vibrating block machines. demand sparked the opening of more blockeras. More men, particularly non- In 2006, around 350 block manufacturing ejidatarios from Sierra de Agua, began to operations employing approximately 1400 make blocks. Portland cement also workers (i.e., 4 workers per block replaced lime in the concrete mix at this manufacturer) were located in the Perote time. Around 1986, the first vibrating Valley. Most block making facilities were machine arrived in Sierra de Agua, two-stories (blockera sobre desnivel), shortly thereafter, the first front-end many of which opened after 1995 (see loaders arrived; mechanization made Figure 2). In the more successful mass production and large-scale blockeras, dump trucks hauling 5 to 12 m³ extraction possible. of tepetzil arrived on a daily basis. The tepetzil was dumped onto the second story Although the first boom in tepetzil block and funneled downward into a mixer production was in the 1980s, the (Figure 3). After mixing, the mix was renaissance for Sierra de Agua’s block released onto the ground and gradually industry came in the 1990s when shoveled into the block machine. Two improvements in productivity enhanced machine operators filled the vibrating the overall prosperity of the industry (see machine with mix and dropped the e.g., Porter 2000). By 2000, demand for compression lever. The runner pulled two tepetzil blocks had spread well beyond the blocks at a time from the machine, loaded region and today blocks can be found as them onto a cart, and stacked the blocks far north as Nueva Laredo on the United in rows for curing. After a day of curing, States/Texas Border, as far south and east blocks were re-stacked individually by the as Cancún in the Yucatan Peninsula, and stacker to make them ready for loading throughout large urban areas such as onto flatbed trucks. Puebla and Mexico City. More demand, more extraction, more tepetzil, and more vibrating machines led to the need for

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Table 1. Estimated Rates of Tepetzil Block Production in the Perote Region of Central Veracruz

Block Blocks per Blocks produced per Most common block Blocks per 50kg YEAR Laborers worker per day year dimensions (cm) of cement 1976 30 128 1,113,600 50x20x40 42

1986 150 232 10,092,000 12x20x40 62 14x20x50 55 1996 600 532 92,568,000 12x20x40 76 2006 1400 608 246,848,000 12x20x40 77.5

Bars represent the opening of individual blockeras, while the line represents the cumulative count.

Figure 2. Opening Years for a Sample of 25 Blockeras in Sierra de Agua.

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industry. Some even bought ejidatario titles in Sierra de Agua with their block

Source: the author

Figure 3. A Two-Story Block Production Facility (Blockera Sobre Desnivel).

Tepetzil aggregate is funneled to a mixer and shoveled by hand into the vibrating block profits. The small-scale owners were machine. A team of block loaders can be seen in the background to the right. mostly comprised of later entrants to the

block industry.

Among small-scale block owners, whether Owners, Financing, and Input Costs young or old, the capital investment According to data collected from 167 required to establish a blockera was often household interviews, blockera owners shared among family members, typically were ejidatario and non-ejidatario between brothers. As Biles (2004) found residents of Sierra de Agua. In 2006, for households in southeastern Mexico, owners were of two types: those that not few of the block owners sought loans from only owned but worked in one or two formal institutions and instead relied on blockeras (i.e., small-scale owners), and the informal sector. For example, money those that owned, but did not work in, 3 for purchasing a block machine was often or more blockeras (i.e., large-scale obtained through familial loans. In some owners). The majority of the large-scale cases, land-owning parents sold the owners were non-ejidatarios who started tepetzil from below their agricultural making blocks in the 1980s and early fields in order to fund a son’s blockera. 1990s. With the introduction of block Otherwise, as in one instance, a machines, many in this group found respondent sold a sheep herd to buy a themselves in a position to capitalize on a block machine, while another worked in growing network of clients demanding the United States for five years and used blocks, as they had both facilities and the money to buy a block machine and a capital. They eventually became the dump truck. principal financial beneficiaries of the In addition to vibrating block machines, input costs for blockera owners included

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land, building infrastructure, tepetzil, innovation (Porter 2000), but also drives Portland cement, labor, and monthly ineffectual producers out of business. water and electricity fees. In September Although competition may have lead to 2006, 6m³ of tepetzil sold for 90 pesos their industry’s competitive advantage (US$8.50) and the cheapest cement cost over producers outside of Sierra de Agua, 80 pesos (US$7.55) per 50 kg bag. it was of little consolation to small-scale Excluding the fees for water and blockera owners who consistently electricity, the estimated costs associated complained that competition was one of with the production of 1,000 blocks in the biggest hurdles to their prosperity. 2006 were: tepetzil = 469 pesos Many struggled to compete for clients, pay (US$44.25), cement = 1000 pesos for increasingly expensive electricity, and (US$94.34), and labor (average) = 21.5 afford higher priced cement. In order to pesos (US$2.03). Wood (1969, p. 35) notes decrease total costs, some owners paid that the clustering of manufacturers can lower wages, while others cut back on the result from the need to maintain speed amount of cement used to make blocks. and frequency of contacts with consumers Unfortunately, cutting back on cement and suppliers, which may explain the diminishes the structural integrity of concentration of blockeras along MX140. blocks (Fry 2009). Therefore, this In turn, the proximity of blockeras, strategy seems likely to backfire because customers, suppliers, and other low quality blocks probably discourage institutions likely served to amplify customers from returning. Not to competition as well as productivity within mention that the use of inferior blocks by the industry (Porter 2000). home owners will likely have long-term repercussions and present serious safety hazards in a region prone to earthquakes! Clusters and Competition Porter (2000) also argues that competition To Porter (2000), competition among eventually leads to a shift away from cost clustered firms allows clusters to cutting to innovation and differentiation. maintain a competitive advantage. For While some block producers did innovate, block manufactures in Perote, this was the differences between cost-cutting reflected by a sort of ‘brand loyalty’ that strategies and innovation and was associated with blocks produced in or differentiation were not always obvious. around Sierra de Agua. For example, For example, some blockeras were built during interviews in Xalapa, it was often on the sides of tepetzil pits, which could stated that the best blocks were made in be interpreted as a way to reduce input Sierra de Agua. According to Callarisa costs because it used less building Fiol et al. (2009) customers’ perceptions of materials on land acquired relatively the higher value of goods produced within inexpensively; but it also added a third a cluster can act as barriers to producers story, an innovation in the production located outside the cluster. process that allowed gravity to replace For non-clustered producers, the only way one of the laborers (and cut costs) to compete on equal terms would be to normally required for shoveling concrete establish a base within the cluster mix. Conversely, changes in block (Callarisa Fiol et al. 2009 p. 306). Once dimensions suggest the development of embedded within the cluster, competition innovative strategies over time – or what not only enhances productivity and Pred (1965) refers to as the

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standardization of production processes Sierra de Agua participated in all of the (see e.g., Table 1). Likewise, in 2007, one various block related jobs and the blockera owner was experimenting with majority of block owners were non- steam curing, an innovation that reduces ejidatarios with incomes in the top third the water retention capacity of finished of all households. Among the three blocks. However, it remains to be seen surveyed ejidos, the majority of block how cost cutting and innovations will makers were non-ejidatario (i.e. landless) affect the number of laborers working in household members from Veinte de the block industry. This is important Noviembre and El Conejo. because the industry’s primary economic The household interviews show that and social benefit is its use of a large blockera owners earned the most money labor force. and block stackers earned the least (Table 2). Annual incomes for block making Labor and the Block Industry ranged from $1,000 to $5,200, though The conversion of raw materials into more many people did not make blocks valuable commodities occurs at any throughout the year and only worked number of stages. For construction when their household needed money. materials in central Veracruz, the number Moreover, differences in piece wages are of value-added steps depends on the type common in Mexico’s small-scale and nature of the building material construction material industries (e.g. (Figure 4). For example, sand is first Cook 1984). In Sierra de Agua in 2006, a mined and then transported (often by good team of block makers earned up to material stores) to construction sites. The 1500 pesos/week ($142) each, while a good manufacturing of tepetzil blocks requires team of block loaders made as much as two additional stages, one more for 3500 pesos/week ($330) each. Conversely, transport and one for manufacturing. pay was as low as 450 pesos/week ($42) Moreover, and as Figure 4 demonstrates, for block making and 600 pesos/week the amount of labor varies at each stage. ($57) for each member of a less Construction work at the job site and competitive loading team. building material manufacturing are both In 2006, blockeras were the main regional labor intensive. source of employment for unskilled In 2006, Sierra de Agua’s block industry laborers. Most block makers were showed a clear pattern of labor-market “chavos” (young men) from Sierra de Agua segmentation (i.e., differences in the types and other communities in the region. of labor, working conditions, and level of Like agriculture, work in construction has commitment; see e.g. Firman 1991). The few barriers to entry (Ball and Connolly industry was comprised of blockera 1987); this is true for making blocks as owners, block makers, block stackers, and well. According to most informants, older block loaders. Wages in the block residents and ejidatarios remained in industry varied according to type of work their communities and farmed, whereas (i.e., block maker, stacker, loader), the generosity of the owner, the consistency of the customer base, the efficiency of the work team, and the community of origin. Within the block industry, residents of

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young men sought income opportunities outside of their home communities. The availability of jobs in the block industry and higher wages (i.e., as compared to agricultural wage labor; Table 2) attracted many into this line of work.

Unlike block making, which has set working hours usually from 3:00am- 1:00pm, the other labor-intensive component of the block industry, block loading, occurred at random hours. To some, it was also less physically demanding and less routinized than making blocks. For this reason, women and children were also participants in Ovals represent the relative scale of labor required at various stages in the commodity chain block loading. In fact, it was not uncommon for families to comprise an Figure 4. Central Veracruz’s Constructionentire Material loading teamCommodity (Figure Chain 5). Though

men from Sierra de Agua made blocks, many of them also only loaded blocks for their incomes due to their proximity to the industry. The availability of block loading work depended on demand as well as luck. High demand for blocks,

especially at the end of the year and Table 2: Estimated Annual Earnings for duringSelected hurricane Income Sourcesseason, inbrought Perote more opportunities to load trucks. Social Region, 2006capital (e.g., family ties) also played a role in the amount of work available to block Primary Income Source Annual Earnings ($US) loaders. Nevertheless, even though the Own blockero tasks $4,000and benefits - $12,000 between loading and Make blocks making $1,000 blocks - $5,200 differed, neither required Stack blocks to dry higher-level $1,000 - skills.$4,100 This fact has Load blocks onto trucks implications up to for$5,000 interpretations about the Agricultural wage labor industry’s $700 location. - $2,200

Source: household interviews Labor availability seems to be of minimal importance for the localization of low- tech, heavy industries, especially in regions where the labor force is accustomed to migrating for work, as in Mexico. For this reason, the availability of low-skilled labor, though important, did not cause the block industry to locate in Sierra de Agua. As well, because the block industry had few barriers to entry,

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low-skilled laborers from other regions to cities, agriculture regions in northern could have entered into the industry, Mexico, or the United States in order to although their access to certain types of maintain their household’s livelihood – as jobs (e.g., block loading) as well as higher was the case for many rural Mexicans paying jobs would have been restricted. during the late 1990s and early 2000s (see For example, residents from El Conejo e.g. Wiggins et al 2002; Cornelius 1998). were consistently paid less per day for Veinte de Noviembre household members making blocks than residents from either were particularly cognizant of this fact. Sierra de Agua or Veinte de Noviembre. Due to the accessibility of jobs in The greater distance between El Conejo neighboring Sierra de Agua, households and Sierra de Agua (e.g. 30min bus ride, stayed together, lived full-time in their compared to 10min bus ride from Viente home community, and remained close to de Noviembre) may partially explain this family and neighbor support networks. discrepancy. In addition to this spatial By creating jobs, building material distance, the community also entered into manufacturing, like other types of rural the industry later. For example, 65 small-scale industries, not only serve to percent of El Conejo household members generate incomes and regional economic who worked in Sierra de Agua’s block growth (Fisher et al. 1997), but these industry entered after 2000, compared to industries offer social benefits as well. As 19 percent in Veinte de Noviembre and 23 farming wanes, these types of industries percent in Sierra de Agua. In sum, are likely to become the main source of although the labor factor was not employment and income for rural landless instrumental to the localization of the households. Understanding where and block industry in Sierra de Agua, the how building material manufacturing industry’s location in Sierra de Agua affects rural labor markets, therefore, is affected both the type of labor and amount integral to development initiatives in of pay available to laborers. tropical countries, where the demand for construction materials will continue to From a development or applied grow. perspective, the most important aspect of Sierra de Agua’s block industry, as local residents overwhelmingly agreed, was CONCLUSION that the industry’s presence was The importance of construction material beneficial to local communities. manufacturing in tropical nations can be Interestingly, it was not only the economic summarized by two United Nation’s advantages, but also the social studies. In the 1970s, the United Nations advantages that residents most Industrial Development Organization appreciated. Regardless of variations in referred to small-scale industries as “a pay and working conditions, households major development objective” that could in the study area principally benefited “provide adequate employment from their proximity and access to block opportunities and fulfillment of basic industry jobs. The following quote was socio-economic needs of poorer typical, “[b]efore, people left to work in communities, mostly resident in rural other places, but with the tepetzil areas” (UNIDO 1980 p. 5). In 2007, the resource we can stay here and look for United Nations Population Fund work here”. In particular, young men and (UNFPA) found that tropical countries are non-land owners did not have to migrate

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experiencing, and will continue to members (ejidatarios) typically own experience, the highest rates of urban individual parcels of land and often population growth. To Scott and Storper collectively manage communal forests or (2003 p. 580) “the theory of development rangeland. Thus, ejidos are both must incorporate the role of cities and geographic spaces and social institutions. regions as active and causal elements in In 1992, ejido structure underwent the economic growth process.” The significant changes when the federal manufacturing of building materials government amended Article 27 (the represents one example of the Agrarian Law) of Mexico’s constitution. development and economic potential of For example, prior to changes to Article urbanization. 27, neither ejido titles nor land could be sold; instead, title and land were left to As this case study demonstrates, the one heir. Today, ejidatarios have titles to location of construction material mines their land, which they can sell. and the clustering of construction material manufacturers are primarily 2. Though a Home Depot was built in based on local geology and accessibility. Xalapa in October 2005, this type of store Although the availability of labor was not is a relatively new concept in the region. crucial to the block industry’s location in In general, material shops are locally Sierra de Agua, it did provide economic owned and operated. and social benefits to many residents. The development of the industry over time demonstrates how and why ACKNOWLEDGEMENTS clustering occurred. Gaining a competitive advantage over producers in The author would like to thank the other areas was one outcome of the residents of Sierra de Agua, Veinte de industry’s clustering. However, this came Noviembre, and El Conejo, as well as at the expense of increased competition construction material workers in and between the local block producers. In around Xalapa for their hospitality and turn, cost cutting and innovative assistance. I am grateful to Bill Doolittle strategies could have negative effects, for advising me on portions of this including the production of poorer quality research. I also thank three anonymous building materials and decreased demand reviewers and Donald Lyons for their for labor. Indeed, more innovations in the constructive comments. Finally, I am industry, particularly mechanization, obliged to the editors of The Industrial could be detrimental to the industry’s job Geographer for their encouragements. creating capacity, which would remove Portions of this research were supported one of its greatest benefits to communities by the National Science Foundation in the region. Doctoral Dissertation Improvement Grant #0703460 and the Robert E. Veselka Endowed Fellowship Research Grant from NOTES the University of Texas at Austin, Department of Geography and the 1. Ejidos are collective forms of land Environment. ownership that came into being as a result of the Mexican Revolution (1910- 1921). While no two ejidos are alike, ejido

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