SecProbe.io

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<TYPE>CORRESP
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<FILENAME>filename1.txt
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                                                      September 13, 2005

Rufus Decker,
   Accounting Branch Chief,
      Securities and Exchange Commission,
         100 F Street, N.E.,
            Washington, D.C.  20549.

         Re:  Grupo Imsa, S.A. de C.V. -- Form 20-F for the fiscal year ended
              December 31, 2004
              Form 6-K filed July 28, 2005
              File No. 1-14544
              ----------------

Dear Mr. Decker:

         On behalf of our client, Grupo Imsa, S.A. de C.V. (the "Company"), we
enclose herewith the Company's response to the staff's comment letter (the
"Comment Letter") dated August 16, 2005 concerning the Company's Annual Report
on Form 20-F for the fiscal year ended December 31, 2004 (the "2004 Annual
Report") and Report of a foreign issuer on Form 6-K filed on July 28, 2005 (the
"Form 6-K"). The information provided in response to the Comment Letter has been
supplied by the Company, which is solely responsible for the adequacy and
accuracy of the information as well as the disclosure in the 2004 Annual Report
and in the Form 6-K. The Company also acknowledges that the staff's comments or
changes to disclosure in response to the staff's comments do not foreclose the
Securities and Exchange Commission from taking any action with respect to the
2004 Annual Report or the Form 6-K, and that the Company may not assert the
staff's comments as a defense in any proceeding initiated by the Securities and
Exchange Commission or any person under the federal securities laws of the
United States. Capitalized terms used herein and not otherwise defined herein
have the meanings ascribed thereto in the 2004 Annual Report.

         To facilitate the staff's review, we have included in this letter the
captions and numbered comments in bold text and have provided the Company's
responses immediately following each numbered comment. References to page
numbers herein are

<PAGE>

Grupo Imsa, S.A. de C.V.                                                  Page 2

references to page numbers in the 2004 Annual Report. Figures presented below
are derived from audited financial statements. Figures in future filings will be
updated and are subject to audit. Except as otherwise noted, figures are
presented in Mexican pesos.

GENERAL
-------

1.   WHERE A COMMENT BELOW REQUESTS ADDITIONAL DISCLOSURES OR OTHER REVISIONS
     PLEASE SHOW US IN YOUR SUPPLEMENTAL RESPONSE WHAT THE REVISIONS WILL LOOK
     LIKE. THESE REVISIONS SHOULD BE INCLUDED IN YOUR FUTURE FILINGS.

     Response
     --------

     The Company is including in this letter examples of modified information to
     be included in future filings.

SELECTED FINANCIAL DATA, PAGE 2
-------------------------------

2.   PLEASE REVISE YOUR TABLE TO INCLUDE THE U.S. GAAP EARNINGS PER SHARE AS
     WELL AS ANY OTHER ITEMS REQUIRED TO BE PRESENTED IN SELECTED FINANCIAL DATA
     UNDER MEXICAN GAAP IF DIFFERENT ON A U.S. GAAP BASIS. PLEASE SEE THE
     MINUTES TO THE AICPA INTERNATIONAL PRACTICES TASK FORCE JULY 15, 2003
     MEETING, SPECIFICALLY AGENDA ITEM 12.

     Response
     --------

     As requested by the staff, the Company will revise the table under Selected
     Financial Data in future filings to include U.S. GAAP earnings per share as
     follows:

                                   2004       2003       2002      2001     2000
           U.S. GAAP:
     (Figures in Mexican pesos)
         Earnings per share        2.07       0.42       0.53      0.55     0.34

     The Company has concluded that there are no additional items required to be
     presented in selected financial data under Mexican GAAP that are different
     on a U.S. GAAP basis other than those items already disclosed.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS, PAGE 43
-----------------------------------------------------------

3.   PLEASE REVISE YOUR TABLE OF CONTRACTUAL CASH OBLIGATIONS TO INCLUDE THE
     FOLLOWING:

     o ESTIMATED INTEREST PAYMENTS ON YOUR DEBT;
     o ESTIMATED PAYMENTS UNDER INTEREST RATE SWAP AGREEMENTS; AND
     o PLANNED FUNDING OF PENSION AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS.

<PAGE>

Grupo Imsa, S.A. de C.V.                                                  Page 3

     BECAUSE THE TABLE IS AIMED AT INCREASING TRANSPARENCY OF CASH FLOW, WE
     BELIEVE THESE PAYMENTS SHOULD BE INCLUDED IN THE TABLE. PLEASE ALSO
     DISCLOSE ANY ASSUMPTIONS YOU MADE TO DERIVE THESE AMOUNTS. IF YOU CHOOSE
     NOT TO INCLUDE THESE PAYMENTS, A FOOTNOTE TO THE TABLE SHOULD CLEARLY
     IDENTIFY THE EXCLUDED ITEMS AND PROVIDE ANY ADDITIONAL INFORMATION THAT IS
     MATERIAL TO AN UNDERSTANDING OF YOUR CASH REQUIREMENTS.

     Response
     --------

     As requested by the staff, the Company will revise the table of contractual
     cash obligations in future filings to include the requested items as
     follows:

<TABLE>
<CAPTION>
                                                         Payments Due by Period
                                                      (In millions of U.S. Dollars)
                                        Total     Less than 1     1-3       3-5      More than 5
                                                     year        years     years        years
<S>                                     <C>          <C>         <C>        <C>           <C>
      Estimated interest payments:
            - Debt                       2.36         1.17        1.19        0            0
            - Swap Agreements (1)       51.25        18.90       31.30      1.05           0

     Planned pension plan funding:       17.1          1.0         4.5       5.9          5.7

        Post retirement benefit
              obligations:               13.0          1.6         4.4       3.6          3.4
<FN>
     (1) Because all the Company's major credit facilities have variable rates linked to LIBOR,
     for purposes of calculating future interest expense, it has been assumed that LIBOR rates
     are equal to LIBOR swap rates effective as of December 31, 2004 for the average life of
     each obligation.
</FN>
</TABLE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES, PAGE 44
---------------------------------------------------

4.   IT IS UNCLEAR WHY YOU BELIEVE THAT THERE ARE NO CRITICAL ACCOUNTING
     POLICIES AND ESTIMATES THAT MAY HAVE A MATERIAL IMPACT [ON] YOUR FINANCIAL
     STATEMENTS. SIGNIFICANT ESTIMATES AND ASSUMPTIONS ARE INHERENT IN THE
     PREPARATION OF FINANCIAL STATEMENTS IN ACCORDANCE WITH U.S. GAAP AND, AS
     YOU STATE IN NOTE 3(S), MEXICAN GAAP. PLEASE REVISE OR ADVISE.

     Response
     --------

     The Company agrees that the assertion that "there are no critical
     accounting policies and estimates that may materially affect its more
     significant judgments and estimates used in the preparation of its
     Consolidated Financial Statements

<PAGE>

Grupo Imsa, S.A. de C.V.                                                  Page 4

     and, therefore, have a material impact on the Company's Consolidated
     Financial Statements" is confusing because the Company describes policies
     that require the application of critical estimates and/or judgments in the
     MD&A discussion of critical accounting policies and in the notes to the
     Company's Consolidated Financial Statements. The Company advises the staff
     that it will delete this sentence in future filings.

5.   YOUR CRITICAL ACCOUNTING POLICIES AND ESTIMATES SECTION SHOULD FOCUS ON
     THOSE ESTIMATES THAT ARE CRITICAL TO YOUR CONSOLIDATED FINANCIAL
     STATEMENTS. THE DISCUSSION SHOULD INCLUDE A DISCUSSION OF THE MATERIAL
     ASSUMPTIONS YOU MADE IN ARRIVING AT THE CRITICAL ESTIMATE AND ADVISE AN
     INVESTOR OF THE FINANCIAL STATEMENT IMPACT SHOULD ACTUAL RESULTS DIFFER
     FROM YOUR ESTIMATES. PLEASE REFER TO SEC INTERPRETIVE RELEASE NO. 33-8350
     AND SEC OTHER RELEASE NO. 33-8040, BOTH OF WHICH YOU CAN FIND ON OUR
     WEBSITE AT WWW.SEC.GOV. PLEASE IDENTIFY ALL OF YOUR CRITICAL POLICIES AND
     ESTIMATES AND EXPAND YOUR DISCUSSION TO ADDRESS THE FOLLOWING AREAS:

     o TYPES OF ASSUMPTIONS UNDERLYING THE MOST SIGNIFICANT AND SUBJECTIVE
       ESTIMATES;
     o SENSITIVITY OF THOSE ESTIMATES TO DEVIATIONS OF ACTUAL RESULTS FROM
       MANAGEMENT'S ASSUMPTIONS; AND
     o CIRCUMSTANCES THAT HAVE RESULTED IN REVISED ASSUMPTIONS IN THE PAST.

     Response
     --------

     As explained in the Company's response to the previous comment, the Company
     has identified all of its critical accounting policies and estimates and
     believes that the related disclosure is sufficient.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, PAGE F-1
-----------------------------------------------------------------

6.   PLEASE NOTE THAT THE REPORT YOU OBTAIN FROM YOUR INDEPENDENT ACCOUNTANT
     SHOULD INDICATE THE CITY AND STATE WHERE THE REPORT WAS ISSUED.

     Response
     --------

     A copy of the original report issued by Galaz, Yamazaki, Ruiz Urquiza,
     S.C., Member of Deloitte Touche Tohmatsu ("Deloitte & Touche"), which was
     provided to the Company prior to filing the 2004 Annual Report, is attached
     to this response letter. Deloitte & Touche has advised the Company that the
     letterhead on which the original report was printed includes the city,
     state and country in which the report was issued as required by Rule 2-02
     of Regulation S-X (Accountants' Reports and Attestation Reports on
     Management's Assessment of Internal Control over Financial Reporting). The
     electronic copy of the report that was filed with the SEC did not contain
     the information included in the letterhead. In response to the staff's
     comment, the Company can confirm that

<PAGE>

Grupo Imsa, S.A. de C.V.                                                  Page 5

     reports of Deloitte & Touche included in future filings will include the
     city and state in which the report was issued.

INDEPENDENT AUDITORS' REPORT, PAGE F-3
--------------------------------------

7.   WE NOTE THE REFERENCE TO AUDITING STANDARDS GENERALLY ACCEPTED IN THE
     UNITED STATES. PLEASE NOTE THAT AUDITING STANDARD 1 ISSUED BY THE PCAOB
     REQUIRES THAT AUDITORS' REPORTS ISSUED OR REISSUED AFTER MAY 24, 2004 STATE
     COMPLIANCE WITH THE "STANDARDS OF THE PUBLIC COMPANY ACCOUNTING OVERSIGHT
     BOARD (UNITED STATES)," RATHER THAN U.S. GAAS.

     Response
     --------

     The Company advises the staff that it will request that the auditor of its
     South American subsidiary ABC Battery Company, L.L.C. change its reference
     from U.S. GAAS to Standards of the Public Company Accounting Oversight
     Board (United States) in future filings. Please be advised that the Company
     has sold its South American subsidiary.

NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES, PAGE F-9
--------------------------------------------------

E. INVENTORIES AND COST OF SALES, PAGE F-10
-------------------------------------------

8.   PLEASE DISCLOSE THE TYPES OF EXPENSES THAT YOU INCLUDE IN THE COST OF SALES
     AND OPERATING EXPENSE LINE ITEMS. PLEASE ALSO DISCLOSE WHETHER YOU INCLUDE
     INBOUND FREIGHT CHARGES, PURCHASING AND RECEIVING COSTS, INSPECTION COSTS,
     WAREHOUSING COSTS, INTERNAL TRANSFER COSTS, AND THE OTHER COSTS OF YOUR
     DISTRIBUTION NETWORK IN THE COST OF SALES LINE ITEM. WITH THE EXCEPTION OF
     WAREHOUSING COSTS, IF YOU CURRENTLY EXCLUDE A PORTION OF THESE COSTS FROM
     COST OF SALES, PLEASE DISCLOSE:

     o IN A FOOTNOTE THE LINE ITEMS IN WHICH THESE COSTS ARE INCLUDED AND THE
       AMOUNTS INCLUDED IN EACH LINE ITEM FOR EACH PERIOD PRESENTED, AND
     o IN MD&A THAT YOUR GROSS MARGINS MAY NOT BE COMPARABLE TO THOSE OF OTHER
       ENTITIES, SINCE SOME ENTITIES INCLUDE ALL OF THE COSTS RELATED TO THEIR
       DISTRIBUTION NETWORK IN COST OF SALES WHILE OTHERS LIKE YOU EXCLUDE A
       PORTION OF THEM FROM GROSS MARGIN, INCLUDING THEM IN THE OPERATING
       EXPENSE LINE ITEM.

     Response
     --------

     Expenses related to inbound freight charges, purchasing and receiving
     costs, inspection costs (including quality control) and warehousing costs
     are recorded within the cost of sales line item. Because the Company's

<PAGE>

Grupo Imsa, S.A. de C.V.                                                  Page 6

     distribution network is primarily organized throughout its different
     business segments by independent distributors, the Company does not
     consider distribution costs to be material and charges them to operating
     expenses. During 2004, the above-mentioned expenses recorded within cost of
     sales amounted to approximately Ps 1.4 billion and distribution expenses
     charged to operating expenses amounted to Ps 37 million.

     NOTE 15 - BUSINESS SEGMENT DATA, PAGE F-19
     ------------------------------------------

9.   WE NOTE ON PAGE F-9 THAT FINANCIAL STATEMENTS AND RELATED NOTES HAVE BEEN
     RESTATED TO REFLECT THE EFFECTS OF INFLATION. IT APPEARS THAT SOME OF THE
     2003 CONSOLIDATED AMOUNTS ON PAGE F-19 HAVE NOT BEEN ADJUSTED FOR INFLATION
     AS THEY DO NOT AGREE TO THE CONSOLIDATED FINANCIAL STATEMENTS. PLEASE
     ADVISE OR REVISE.

     Response
     --------

     The Company advises the staff that the apparent differences between some of
     the 2003 consolidated amounts on page F-19 and the consolidated financial
     statements relate to the Total Assets and Total Liabilities of the Company
     and are the result of a 2004 change in the Company's business segments
     following the sale of the Company's automotive battery business. As
     explained in the paragraph immediately preceding the business segment data
     table, discontinued operations are presented separately on the Company's
     balance sheet and are included in the Company's Total Assets and Total
     Liabilities as follows:

                                         Assets                    Liabilities

     Total per balance sheet            $ 36,030                  $  19,491
     Less:
          - Current amounts                1,838                      1,715
          - Non-current amounts            2,607                      1,135
     Total per segment footnote         $ 31,585                  $  16,641

NOTE 17 - DIFFERENCES BETWEEN MEXICAN AND UNITED STATES ACCOUNTING PRINCIPLES,
------------------------------------------------------------------------------
PAGE F-21
---------

10.  IT IS UNCLEAR WHETHER YOU HAVE PRESENTED THE ADJUSTMENTS IN THE
     RECONCILIATION OF NET INCOME ON A GROSS BASIS AND REFLECTED THE TAX EFFECT
     OF THE ADJUSTMENTS IN THE DEFERRED TAX LINE ITEM. PLEASE PRESENT THE
     RECONCILING ITEMS ON A GROSS BASIS WITH THE TAX EFFECT OF RECONCILING ITEMS
     REFLECTED IN A SEPARATE LINE ITEM.

<PAGE>

Grupo Imsa, S.A. de C.V.                                                  Page 7

     Response
     --------

     The Company confirms that the adjustments in the reconciliation of net
     income are presented on a gross basis. The deferred tax effect of those
     adjustments is included in the deferred tax line item.

STATEMENT OF OPERATIONS DATA, PAGE F-22
---------------------------------------

11.  PLEASE REVISE YOUR TABULAR DISCLOSURE RELATED TO PROPORTIONATELY
     CONSOLIDATED ENTITIES TO INCLUDE GROSS PROFIT AS REQUIRED BY ITEM
     17(C)(2)(VII) OF FORM 20-F AND RULE 1-02(BB)(1)(II) OF REGULATIONS S-X.

     Response
     --------

     The Company advises the staff that, in future filings, it will report its
     subsidiaries' gross profit on a proportional basis as follows:

                                             2004           2003         2002
                                             ----           ----         ----

Statement of Operations Data:
         Net sales                            341           873