Chinese construction machinery group Lingong Machinery (LGMG) plans to build an industrial hub in the northeast Mexican state of Nuevo León that it says will generate $5bn in investment.

Mexico News Daily reports that the project will include a 10ha industrial park around a LGMG factory, and three “clusters” designed to attract investment in related sectors.

The park will be located near the city of Monterrey. The company, which has its US base in Dallas, said in a press release on Monday that the city had “excellent transportation and logistics infrastructure, along with strategic proximity to the US” making it “an ideal location for international trade and investment”.

By basing its production in Mexico, LGMG is able to avoid tariffs and sanctions imposed by the US on Chinese imports.

LGMG added that the “clusters” would provide “a one-stop service environment for overseas investment, with a primary focus on energy, heavy industry, automobile manufacturing and new materials industries”.

Samuel Garcia, governor of Nuevo León, said in a post on social media platform X that the investment would create 7,000 jobs.

Foreign direct investment into Mexico reached a record $40bn in 2022. In the first half of 2023, it increased by 40% compared with the same period in 2022, led by automotive and industrial manufacturing projects.