Mexico and Russia are discussing major industrial bi-lateral initiatives during President Vladimir Putin's State visit, the first by a Russian premier to Latin America. The current bi-lateral trade balance stands at just over $300 million, and President Fox says diversification is key to increasing it.

Talks are already well advanced in a project to build a complex in the southern state of Vera Cruz to maintain Russian-built transportation helicopters, which are cheaper than U.S. models and are already dotted around Mexico, Central and South America. The Mexican armed forces already has more than 50.

There is also a plan to build a factory near Mexico City to produce heavy duty vehicles, which President Fox insists will not be for armaments, but rather for heavy transportation, the construction of freeways, and for coping with natural disasters.

President Putin said that Russian experts will help Mexico in the exploration, extraction and transportation of natural gas and petroleum.

Mexico still imports about one third of its natural gas yet possesses considerable untapped reserves. President Putin says that a joint Mexican and Russian project will build a natural gas plant by the year 2007. The most likely site for this will be on Mexico's Pacific coast.

Although the two countries have had diplomatic relations since 1891, Mr. Putin is the first Russian leader to set foot in Mexico on an official state visit. Accordingly he received the full pomp and circumstance of military bands and ceremonial regalia.

Talks between the two men also touched on the ongoing war in Iraq, which both countries vigorously oppose. President Fox said he hopes the Iraqi people can regain their sovereignty and a democratic government with tranquility.