Mexico's fraught security situation amid a continuing government-led war on drug gangs has raised prospects for more law enforcement agencies buying modern military equipment to deal with the threat.

U.S. security solutions supplier Safeguard Security Holdings, Inc. will deliver 40 armored vehicles to a Mexican government agency, which has indicated an option on an additional 50 of the Level 6+ vehicles, the company said.

Mexico is being aided in its fight against drug-related violence by several U.S. agencies in an effort to stem the flow of cocaine and other drugs across the border into the United States and Canada.

Safeguard said the armored vehicles will be supplied by subsidiary SYSTEMSgroup Global, the company's marketing group for Latin America operations.

Mexican authorities are under increasing pressure from the nation's own and U.S. businesses in the country. Many among an estimated 18,000 U.S. firms active in Mexico have raised voices for greater protection of their employees and assets.

The recent surge in drug-related violence led to comments from U.S. companies they would consider moving out of Mexico altogether, thus raising the stakes for officials. U.S. businesses alone lost more than $700 million in intercepted in stolen cargo, published estimates said.

Mexican President Felipe Calderon has vowed to continue the war on drug warlords but critics of the campaign say it may be some time before the extensive crackdown begins to take effect. More U.S. assistance may be called for but success will depend on approaches to the growing threat of drug-related violence.

Critics say the security issues are as pressing as those in Afghanistan and need a coordinated bilateral effort by experts on both sides of the Mexican-U.S. border, plus investment in protecting vulnerable groups in the community. Businesses have already seen their security costs soar because of the worsening situation.

Safeguard said the export order raised hopes it could sell more armored cars and other security equipment to ports, transportation hubs and regional and federal government agencies involved in law enforcement.

Sean Finegan, Safeguard's vice president for business development, said the initial deal was worth $5 million but eventual confirmation of an additional order for 50 more armored vehicles would significantly raise that figure.

Safeguard Chief Executive Officer R. Michael Lagow said, "We see a tremendous growth opportunity to serve several government agencies in Mexico as we build our relationships there. We are working with several different types of agencies in an effort to expand into mining, sea ports, state and federal operations."

He termed Mexico "target rich" for the company's armored products inventory as well as security surveillance services.

Safeguard has headquarters in Dallas, where it operates a number of subsidiaries.

earlier related report
Mexico soldiers find narco 'tank' factory
Monterrey, Mexico (AFP) June 6, 2011 - Soldiers on patrol in a Mexican border town discovered a warehouse where armor-plated "tanks" were being prepared for the Gulf drug cartel, a military source said Monday.

The patrol came across the warehouse when they clashed with a group of armed men in the town of Ciudad Camargo, in the far northeastern state of Tamaulipas. Two of the gunmen were killed in a firefight, while two hid inside the warehouse.

"We found two home-made armored trucks in the warehouse, which belongs to the Gulf Cartel," the military source told AFP, speaking on condition of anonymity.

The trucks were covered in steel plates one inch (2.5 centimeters) thick, strong enough to "resist the caliber of personal weapons the soldiers use," said the source.

The air-conditioned armored vehicles were equipped with portholes where snipers could open fire from and remain protected.

Soldiers also found two other trucks that were in the process of being armored, as well as 23 powerful big-rig trucks that were apparently going to be armored.

The vehicles, locally known as "monsters," can even resist fire from a heavy .50 caliber machine gun and can only be destroyed with anti-tank weapons, according to the military.

The home-made tanks are used in clashes with other drug cartels as well as to protect drug shipments.

In recent years, soldiers deployed in the northeastern Mexican border region have confiscated 109 home-made armored vehicles -- including one dubbed the "Popemobile" because it carried an armored cabin similar to that used to protect Pope Benedict XVI in foreign trips.

In May, police in the western state of Jalisco carrying out a sweep against the Los Zetas drug cartel discovered an armored vehicle large enough to carry 20 armed men and also equipped with weapons portholes.

Members of the Gulf Cartel and the Zetas are engaged in a bitter fight to control the lucrative smuggling routes in eastern Mexico into the United States.

Separately, investigators in the northern state of Coahuila said Monday that they had discovered 1,314 pieces of human bones that they believe are the remains of victims whose bodies were burned.

Soldiers found the remains in 20 pits near the town of Guerrero along with 60 bullet shells and personal items such as clothing and watches.

Mexico has seen an explosion in drug-related violence which has left some 37,000 dead, according to media reports, since the government launched a military crackdown on organized crime in 2006.

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