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                                                                     EXHIBIT 1.1

                              (ENGLISH TRANSLATION)

                  BY-LAWS OF CORPORACION DURANGO, S.A. DE C.V.

                              (UP TO JUNE 8, 2005)

                                   CHAPTER ONE

                      NAME, PURPOSES, DOMICILE AND DURATION

ARTICLE FIRST. The name of the corporation is "Corporacion Durango" which always
shall be followed by the words "Sociedad Anonima de Capital Variable" or the
abbreviation "S.A. de C.V."

ARTICLE TWO. The Company has the following purposes:

1. To promote, incorporate, organize and participate in the capital and
patrimony of any kind of commercial or civil corporations, partnerships,
associations or industrial, commercial, service or any other type of
enterprises, either Mexican or non-Mexican, as well as to participate in the
management or liquidation thereof.

2. To acquire, sell or carry out all other legal acts concerning stock,
certificates of participation, bonds, debentures, partnership interests and all
type of securities issued by Mexican and non-Mexican corporations.

3. The acquisition, establishment and lease of any type of personal and real
property that may be required for the fulfillment of the corporate purpose and
the execution of the acts and agreements that may be required or appropriate for
such purpose, being able to acquire, dispose of and lease, whether for
consideration or without consideration, by any legal means, all kinds of
personal property, real property and equipment.

4. To obtain, register, buy, lease, hold, use, introduce, sell, assign or
otherwise dispose of all types of trademarks, commercial names, patents,
inventions, improvements and products used in connection therewith and which may
be obtained under Mexican or non-Mexican registrations or patents or in any
other manner use, exercise, take advantage of, obtain benefits from or grant
licenses in respect to such trademarks, patents, licenses and the like.

5. To have representations, in the Mexican Republic or abroad, as commissioner,
intermediary, factor, legal representative or attorney in fact for all kinds of
corporations or individuals.

6. To grant and obtain credits, whether secured or unsecured, and issue credit
instruments, including debentures in accordance with law, as well as to apply
for and obtain surety bonds and insurance of all type and to discount credit
instruments and invoices.

7. To create or grant guaranties for obligations contracted by the corporation
or by third parties in which the Company has a participation, whether direct or
indirect.

8. To enter into and perform all kinds of acts and civil and commercial
agreements related to the aforementioned, activities and as permitted by law.

ARTICLE THREE. The company shall have its domicile in Durango, State of Durango,
(Mexico) although it may establish representative or branch offices within the
Mexican Republic and abroad, without its domicile deemed to have changed
thereby.

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ARTICLE FOUR. The duration of the company is 99 years, commencing on January 22,
1982.

ARTICLE FIVE. Any foreigner who at the time of incorporation or at any time
thereafter, acquires a corporate interest or participation in the corporation
shall be considered by that fact alone as Mexican with respect to such interest
or participation and it shall be understood that he agrees not to invoke the
protection of his Government under penalty, in case of failure to comply with
such agreement, of forfeiture of such interest or participation in favor of the
Mexican Nation.

                                   CHAPTER TWO

                     CAPITAL STOCK, SHARES AND SHAREHOLDERS

ARTICLE SIX. The social capital is variable. The minimum fixed capital not
subject to withdrawal, is $982,074,172 (Nine Hundred and Eighty Two Million,
Seventy Four Thousand One Hundred and Seventy Two Pesos National Currency)
represented by 65,419,089 common shares, registered, without par value, Series
"A", all of which are subscribed and paid.

The variable portion of the capital stock shall not exceed ten times the amount
of the minimum fixed capital not subject to withdrawal and shall be represented
by registered common shares without par value.

All the shares shall confer equal rights and obligations to their holders. There
will be two series of shares, the series "A" (or Mexican) shares, which may only
be owned by Mexican individuals or corporations with exclusion of foreigners
Clause or by immigrant foreigners who are not related with economic decision
centers outside of Mexico, and the series "B" (or free subscription) shares
which may be owned by any of the persons who own Series "A" (or Mexican) shares
as well as by any person that may be considered foreigners in accordance with
the Law of Foreign Investment (Ley de Inversion Extranjera); provideD, however,
that the series "B" shares shall not exceed the 49% of the capital stock of the
Company and, at all times, at least 51% of the capital stock of the Company
shall be owned by Mexican investors. Within the aforementioned imitations, the
Ordinary Shareholders Meeting may convert the Series "A" shares into Series "B"
shares or viceversa.

Each issuance of shares as a result of an increase in the capital stock or for
another reason shall constitute a subseries, each of which shall be given a
successive number followed by the year, except to the extent that the
Shareholders' Meeting resolves otherwise.

In no event shall the corporations in which the Company holds a majority of the
shares of stock or interest, directly or indirectly, invest in shares of this
Company or of any other company which is a majority shareholder of this Company
or which, not being such, is considered by the shareholders of the Company to be
such, except to the extent such shares of this Company are acquired by such
companies in connection with stock option plans which have be en granted or
designed, or which may be granted or designed, in favor of the employees of such
companies.

ARTICLE SEVEN. The capital stock may be increased by resolution of the
Extraordinary or Ordinary General Meeting of Shareholders, as the case may be,
in accordance with the rules set forth in this Article.

Increases of the minimum fixed capital of the Company shall only be resolved,
and the limits on the variable portion shall only be modified, by resolution of
the Extraordinary Meeting of Shareholders and the consequent amendment of these
By-laws.

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The Company may increase the capital and issue non-subscribed shares for their
public placement in accordance with the provisions of Article 81 of the
Securities Market Law (Ley del Mercado de Valores). In order to facilitate the
public offer of securities, in the Extraordinary Shareholders' Meeting which
decides the issuance of non-subscribed shares it shall be expressly resigned any
preemptive right referred to in Article 132 of the General Law of Commercial
Companies (Ley General de Sociedades Mercantiles). With the required quorum
under the terms of these bylaws, the adopted resolution shall produce all its
effect and be applicable even to those shareholders non-attending the meeting
leaving the Company with the authority to sale and distribute the non-subscribed
shares in the open market, without the necessity to comply with the publication
mentioned in the Article previously mentioned. Should a minority representing at
least 25% of the outstanding shares, resolve against the resolution to issue
non-subscribed shares, then such resolution shall be denied. The notice calling
to the Extraordinary Shareholders Meeting must expressly mentioned for the
purpose referred to herein. Any shareholder voting against the resolution
pretending the issuance of such non-subscribed shares will be entitled to demand
to the Company that his or her shares be included in the public offering related
to the non-subscribed shares, at the price established for such offer. The
Company will have the legal duty to first distribute the shares of those
shareholders not approving the resolution, in the mentioned public offer.

Increases of the variable capital stock, within the limits provided for in
Article Six of these By-laws, shall be resolved by the Ordinary General Meeting
of Shareholders, the corresponding minutes having to be formalized before a
Notary Public, without these By-laws having to be amended nor the respective
deed having to be registered with the Public Registry of Commerce, except if
such increases derive from public offerings of self-owned shares or the treasury
shares in which such self-owned shares has been converted, where neither a
Shareholders Meeting nor a Board of Directors resolution will be required for
the respective capital increase or the public offering of such shares. No
increase shall be resolved until all shares previously issued are fully paid.
When taking the respective resolutions, the Meeting of Shareholders which
resolves upon the increase, or any subsequent Meeting of Shareholders, shall
establish the conditions and basic terms in accordance with which such increase
must be carried out.

Shares issued by virtue of an increase of the variable portion of the capital
stock and which, by resolution of the Meeting of Shareholders which decides upon
their issuance, are deposited with the treasury of the Company in order to be
delivered upon subscription, may be offered for subscription and payment by the
Board of Directors in accordance with the capacity granted to the Board of
Directors by the Meeting of Shareholders, in all events granting to the
shareholders of the Company the preemptive rights referred to in this article.

Increases of capital stock may be effected through the capitalization of
reserves, of profits pending to be applied or of surplus, or by payment in cash
or in kind. In the case of increases by capitalization of reserves, of profits
pending to be applied or of surplus, all of the holders of subscribed, paid and
outstanding shares at the time of such increase shall have a preemptive right to
subscribe a proportional part to their actual holdings of the shares being
issued.

In the case of increases through payment in cash or in kind, the shareholders
who hold subscribed, paid and outstanding shares at the time the increase is
resolved, shall have a preemptive right for the subscription of the new shares
being issued or offered, during a term of fifteen days commencing on the date of
the publication of the notice of the increase in the official newspaper of the
domicile of the company and in one of the newspapers of general circulation in
said domicile of the company. Such fifteen days term shall commence on the date
when the Meeting of Shareholders was held, in the event that the entirety of the
shares representing the capital stock was represented in such Meeting of
Shareholders.

In the event that, after the expiration of the term during which the
shareholders must exercise the preemptive rights granted to them pursuant to
this Article, shares remain unsubscribed, such shares shall be offered for their
subscription and payment in the terms and conditions set forth by the same
Meeting of Shareholders which had resolved upon the increase or in the terms
provided therefor by the Board of Directors, as the case

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may be, at a price which shall not be less than that at which the shares were
offered to the shareholders of the Company for their preemptive right
subscription.

All increases of the capital stock must be registered in the capital register
ledger which the Company shall maintain for such purpose.

ARTICLE EIGHT. All reductions in the fixed portion of the capital stock shall be
resolved by the Extraordinary Meeting of Shareholders and the subsequent
amendment to the By-laws in compliance with Article Nine of the General Law of
Commercial Companies (Ley General de Sociedades Mercantiles). Except in the case
where a reduction in the capital stock results from the exercise of the right of
withdrawal referred to in Article Nine hereof, reductions of the variable
capital may be effected by resolution of the Ordinary Meeting of Shareholders
with the sole formality that the corresponding minutes shall be formalized
before a Notary Public, and without the need to register the respective deed
with the Public Registry of Commerce, except if such reductions derived from the
acquisition of self-owned shares paid off from the Company's net worth or if
such self-owned shares are transformed into treasury shares, where a
Shareholders Meeting resolution shall not be required for the respective capital
stock reduction, and only a decision by Board of Directors shall be needed.

Reductions in the capital stock may be effected in order to absorb losses, to
reimburse the shareholders for partial payments for stock subscriptions which
have not been carried out and in the event that the shareholders exercise the
right of withdrawal referred to in this Article Nine hereof. The reductions of
capital in order to absorb losses shall be effected without the need to cancel
shares, given the fact that the latter do not have a par value.

A reduction of the variable capital stock may be effected by means of the total
or partial withdrawal of the contributions made by the shareholders, upon prior
notification to the Company of its proposal for withdrawal, which withdrawal
shall be effective at the end of the then current fiscal year if the
notification is received before the last quarter of such fiscal year and until
the end of the subsequent fiscal year if it is received later. Nevertheless, the
shareholders shall not exercise their right of withdrawal if, as a result, the
fixed capital stock which is not subject to withdrawal, would be affected.

In the event that the Company receives requests for withdrawal which would
result in a reduction of the capital stock to a level below the minimum thereof,
the Company shall be required to satisfy only those requests which do not have
such result, giving preference to those which are received first.

In the event that the Company simultaneously receives several requests for
withdrawal which would have the effect of reducing the capital stock to a level
below the minimum thereof, then the Company shall only reimburse those shares
the reimbursement of which will not cause the reduction of the capital stock to
a level below the minimum thereof and such reimbursement shall be carried out,
with respect to each shareholder making the request, in a manner which is
proportional to the number of shares the reimbursement of which has been
simultaneously requested.

The procedure for the exercise of the right of withdrawal, in addition to being
governed by Article 220 and Article 221 of the General Law of commercial
Companies (Ley General de Sociedades Mercantiles), shall be subject to the
requirement that the corresponding reimbursement shall be the lower of the
following two values: (1) 95% of the value of the price quoted on the Mexican
Stock Exchange calculated from the weighted average price for the transactions
which have been effected during the last thirty days in which the shares of the
Company have been quoted prior to the date on which the withdrawal is to take
effect and within a period not exceeding six months, or (2) the book value of
the shares in accordance with the year end general balance pertaining to the
immediately previous fiscal year in which the withdrawal is to take effect,
which statement shall have been previously approved by the ordinary General
Meeting of Shareholders. If the number of days where shares of the Company have
been quoted during the six months period previously mentioned is less than 30
days, then the actual number of days where

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shares of the Company were quoted shall be considered. If during the mentioned
period there is not even one quotation, then the book value of the shares shall
apply.

Reimbursement shall be payable by the Company commencing on the day subsequent
to that of the Ordinary General Meeting of Shareholders which has approved the
general balance pertaining to the fiscal year in which the withdrawal is to take
effect.

All reductions of the capital stock shall be registered in a specific ledger
that the Company shall maintain for such events.

ARTICLE NINE. The Company may acquire shares representing its own capital stock
in accordance with Article 14 Bis of the Securities Market Law and related
applicable provisions including without limitation Articles 56 to 63 of the
"General Dispositions Applicable to Securities Issuers and Additional
Participants of the Stock Exchange", issued by the National Securities and
Banking Commission (Comision Nacional Bancaria y de Valores) with Article 134 of
the General Law of Commercial Companies not being applied, if the acquisition is
made affecting the equity as long as the shares belong to the Company or affect
the capital stock if such shares are transformed into treasury shares, in which
case, a Shareholders' Meeting resolution shall not be required.

The Ordinary General Shareholders' Meeting shall expressly resolve, for each
fiscal year, the maximum amount that may be used to buy self-owned shares, with
the only limitation that such amount shall never exceed the total balance of net
income of the Company, including those previously retained.

The Board of Directors shall designate the representatives that shall be
responsible of the acquisition and resale of self-owned stock and resolve the
general terms applicable to such representatives and to the Directors, Officers,
and additional members with any participation in the production, analysis,
approval and presentation of the information that shall be filed with the
National Securities and Banking Commission, the respective stock exchange and
the public market, that may help to determine when such persons shall not
request the execution of any transaction with securities of the Company. Such
general terms shall include, without limitation, the terms referred to in
Article 60 of the "General Dispositions Applicable to Securities Issuers and
Additional Participants of the Stock Exchange" issued by the National Securities
and Banking Commission (Comision Nacional Bancaria y de Valores).

While the shares be owned by the Company, such shares shall not participate in
any kind of Shareholders' Meeting.

Without prejudice of the rules included in the General Law of commercial
Companies (Ley General de Sociedades Mercantiles), those shares property of the
Company or the treasury shares previously mentioned, may be resale in the stock
market and neither a Shareholders Meeting nor a Board of Directors resolution
will be required for the respective capital increase or and the offering itself.

The Company may also amortize stock with distributable profits, in accordance
with Article 136 of the General Law of Commercial Companies (Ley General de
Sociedades Mercantiles), without reducing its capital stock. The stock
certificates to be amortized pursuant to such Article 136 shall be canceled. The
designation of those shares which are to be amortized or repurchased, as the
case may be, shall be effected by means of their acquisition on the stock Market
under the terms and conditions which are decided upon by the Shareholders'
Meeting or by the Board of Directors, as the case may be. With the prior written
approval from the National Securities and Banking Commission (Comision Nacional
Bancaria y de Valores) and with Article 198 of the General Law of Commercial
Companies (Ley General de Sociedades Mercantiles) not being applied, the Company
may issue stock with no voting power as well as with additional limitations to
other corporate rights or, shares with restricted voting power apart from those
contemplated in Article 113 of the General Law of Commercial Companies (Ley
General de Sociedades Mercantiles). Except with the written approval from the
National Securities and Banking Commission (Comision Nacional Bancaria y de
Valores) the issuance of shares other than ordinary shares, shall not exceed
twenty five percent of the capital stock to be distributed in the stock market,
of the total outstanding shares distributed therein. In order to determine of
the mentioned percentage it shall not be considered the

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shares or fiduciary titles representing them and that, for reason of citizenship
of the owner implies a limitation in the voting power as determined in the legal
dispositions applicable to foreign investment matters. The non-voting power
stock shall not be considered to determine quorum at any Shareholders' Meeting
while those shares with restricted or limited rights shall be computed to decide
if quorum is present and the resolutions in the Shareholders' Meeting that the
beneficial owner of those restricted or limited shares may attend to exercise
the voting power.

ARTICLE TEN. In the event that the registration of the Company's stock in the
Securities Section of the National Securities Registry of the National
Securities and Banking Commission (the "Commission") (Comision Nacional Bancaria
y de Valores) is cancelled those shareholders which beneficially owns the
majority of the issued and outstanding ordinary shares of the Company or those
with the possibility by any means to impose resolutions in the Shareholders'
Meetings or to elect the majority of the Board of Directors' members, shall have
the obligation to carry out a public purchase offer (the "Offer") to the
minority stockholders before such cancellation becomes effective and to apply
and deposit the required amount to purchase the respective shares in trust for a
minimum period of six months to purchase the minority shares at the price of the
Offer, to the shareholders who did not participate in the Offer in the event
that, once the Offer has expired and before the cancellation of the registration
in the referred Registry, the majority shareholders have not acquired 100% of
the total issued and outstanding stock.

The aforementioned Offer shall be executed at the higher price resulting from
the closing average for transactionsin which the shares have been quoted in the
respective stock market, in accordance with the following paragraph, or the book
value of the shares in accordance with the last quarterly report filed with the
Commission and the mentioned stock exchange. before the Offer, except if such
price is modified under the applicable criteria to relevant information, in
which case, the financial information to be considered must be the most recent
information available to the Company.

The price quoted on the stock exchange shall be calculated from the weighted
average price for the transactions which have been effected during the last
thirty days in which the shares of the Company have been quoted prior to the
date of the Offer and within a period not exceeding six months. If the number of
days where shares of the Company have been quoted during the six months period
previously mentioned is less than 30 days, then the actual number of days where
shares of the Company were quoted shall be considered. If during the mentioned
period there is not even one quotation, then the book value of the shares shall
apply.

If the Offer includes more than one Series of shares, the aforementioned
weighted average price shall be calculated for each Series to be cancelled,
considering as price for the Offer of all such Series, the highest resulting
average.

Within 5 business days before the Offer, the Board of Directors shall inform
about the opinion with respect to the fairness of the price of the Offer and
considering both, the minority shareholders interest, in order to comply with
the second paragraph of Article 16 of the Securities Market Law (Ley del Mercado
de Valores), and the Audit Committee opinion which if contrary to that of the
Board of Directors shall also be informed. In the event that the opinion by the
Board of Directors may generate conflict of interest then such opinion shall be
rendered together with an opinion from an Independent Expert (as such term is
defined in the "General Dispositions Applicable to Securities Issuers and
Additional Participants of the Stock Exchange" issued by Commission) to be
selected by the Audit Committee, provided that such independent opinion shall
particularly be rendered to protect the minority shareholders' interest.

The majority shareholders initially mentioned shall not be bound to make the
Offer if there is evidence that the vote of at least 95% of the stockholders
consent to the cancellation, through the appropriate Shareholders' Meeting
resolution, provided that the amount to offer to the Public Stockholders' Market
(Gran Publico Inversionista) (as such term is defined in the "General
Dispositions Applicable to Securities Issuers and Additional Participants of the
Stock Exchange" issued by Commission) as established herein, represents less
than 300,000 Investment Units (unidades de inversion). The previous cancellation
procedure shall also be conditioned to the execution of the trust initially
mentioned and to the release of the constitution of such trust through the
electronic

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system of information release authorized by the Commission to the stock public
market where the shares of the Company be negotiated..

The aforementioned procedure shall also be applied to the Ordinary Participation
Certificates (Certificados de Participacion Ordinarios) issued to represent
shares of the Company, as the case may be, and to any other kind of securities
or certificates representing 2 or more shares of one or more Series issued by
the Company.

Considering the actual and projected financial situation of the Company, the
shareholders bound to make the Offer, may request to Commission the use of
different basis to determine the price of the Offer, subject to the approval of
the Board of Directors, with the prior positive opinion by the Audit Committee.
The resolution shall mention the reason why such different basis to determine
the price of the Offer is considered fair, and shall also be filed with the
opinion by an Independent Expert (as such term is defined in the "General
Dispositions Applicable to Securities Issuers and Additional Participants of the
Stock Exchange" issued by Commission), provided that such independent opinion
shall particularly be rendered to determine if such alternate price is
consistent with Article 16 of the Securities Market Law (Ley del Mercado de
Valores).

ARTICLE ELEVEN. Provisional or definitive shares shall be represented by
certificates which must contain the text of Article Five of these bylaws and
which must fulfill the requirements of Article 125 of the General Law of
Commercial Companies and Article Fifteen of the Foreign Investments Law. Such
certificates may comprise one or more shares and shall be handwritten or
facsimile signed by the Chairman and any other member of the Board of Directors,
subject to the condition that in the case of facsimile, the handwritten
signatures be deposited in the appropriate Public Registry of Commerce. The
definitive certificates shall include coupons numbered in sequence; the
provisional certificates may or may not contain coupons. The definitive or
provisional certificate characteristics shall be determined by the Board of
Directors that may also determine on the issuance of new certificates for
substitution of those outstanding at the time of the resolution. The definitive
certificates shall be issued within 180 days from the day of incorporation or
the issuance or exchange resolution.

                                  CHAPTER THREE

                AS TO THE MANAGEMENT AND AUDITING OF THE COMPANY

ARTICLE TWELVE. The management of the Company shall be vested in the Board of
Directors comprised of such number of members as may be determined by the
Shareholders, which shall not be less than five nor more than twenty, subject to
the condition that at least 25% of such Directors shall be independent, and that
it may designate such alternate members as deemed appropriate. If designations
of alternate Directors are made the resolution shall determine which regular
Director will be substituted by each alternate Director and if an regular
independent member is to be substituted, then the alternate Director shall also
be independent. The mentioned substitution rules shall not apply for the
Chairman substitution that always shall be substituted by the Vice Chairman or
if unavailable, by the first regular member in accordance with the sequence of
designation. A Director shall be considered "independent" when such person is
not included among those mentioned in Article 14 Bis of the Securities Market
Law (Ley del Mercado de Valores).

Substitution shall take effect in case of any reason whereby any regular member
is not able to serve. The alternate member shall continue to hold office until
the end of the incapacity of the regular member or, until the Shareholders makes
a new designation, as the case may be.

In order to divulge the regular activities of the Board of Directors, the
alternate members shall receive the same information that the regular members
obtain from time to time.

The Board of Directors shall designate from amongst its members one to hold the
office of the Chairman of the Board of Directors, the Vice Chairman, the
Secretary and the

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Assistant Secretary of the Board of Directors, provided that the latter may or
may not be members of the Board of Directors.

The Director General and such other officers appointed by the Board of Directors
shall enjoy those powers which are granted to them in the act which designated
them. The individuals holding those titles may be shareholders, members of the
Board of Directors, members of other administrative bodies of the corporation,
or individuals from outside of the corporation.

The Chairman of the Board of Directors shall have those powers and duties which
are granted to him or her by law and by these by-laws and, in particular, he or
she shall have the duty of complying with, and causing compliance with, all laws
and these by-laws and the resolutions of the Shareholders and of the Board of
Directors.

ARTICLE THIRTEEN. In order to support and guaranty the proper adoption of
management resolutions in the areas of auditing, remuneration and planning and
finance, there shall be committees in each of such areas. The Shareholders or
the Board of Directors shall have the power to designate between three and seven
members of the Board of Directors to be part of the audit, remuneration and
finance and planning committees. The Shareholders or the Board of Directors
shall also designate the President of each such committees, provided that the
President and the majority of the Audit Committee members shall consist of
independent participants.

The Shareholders may additionally designate other members of the Board of
Directors or alternates of such Board to act as alternate members of the
mentioned committees for temporary or definitive absentees, with the powers that
the Shareholders deem appropriate to develop their functions. Any independent
member shall only be substituted by persons also independents.

The audit, remuneration and finance and planning committees shall act and adopt
any resolution by majority vote, provided that the President of each committee
shall have qualified vote in case of any equality of votes. The committees shall
have such powers specifically granted by the Shareholders and shall participate
in such studies, advisement, and additional matters submitted by the Board of
Directors in addition to the specific functions determined by the Shareholders'
Meeting, and in addition to the following general functions:

The remuneration committee shall recommend designations of Director General and
main officers of the Company; suggest evaluation criteria in accordance with the
general outlines of the Board of Directors; and analyze and submit to the Board
of Directors the structure and remuneration of the main officers.

The audit committee shall recommend to the Board of Directors the external
auditors of the Company and approve such additional services to the audit
functions that such external auditors may render from time to time; suggest the
terms and conditions of such auditors service; supervise the auditors work; act
as intermediate between the Board of Directors and the external auditors, and
guaranty the independence of said auditors; review the working plan,
communications and audit reports and inform its results to the Board of
Directors; submit to the Board of Directors the financial information basis,
review such financial information and its issuance process; contribute in the
determination of the general outline of the internal control system and evaluate
its effectiveness; support the Board of Directors in the evaluation and
coordination of the annual internal audit programs; coordinate the internal,
external and statutory auditing works; give opinion regarding related party
transactions mentioned to in Article Seventeenth section "O" of these by-laws
and recommend independent specialist as the committee may deem appropriate in
order to have additional opinion related to such transactions; give opinion to
any relevant change in the accounting criteria, practices and politics to the
financial statements of the Company; and verify the compliance of such statutes
and regulations applicable to the Company. The audit committee shall annually
render a report to the Board of Directors, which in turn shall be bound to
submit such report to the Annual Ordinary Shareholders' Meeting.

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The finance and planning committee shall be responsible of evaluate and, if
applicable, suggest the investment and financing policy of the Company; evaluate
and, if applicable, suggest the general outline for the strategic planning of
the Company; submit opinions as of the annual budget; review the adequate use
and implementation of the budget and the strategic plan; and identify risk
factors to the Company and evaluate the policy for its management.

The audit, remuneration and finance and planning committees shall inform to the
Board of Directors of its activities at least twice a year or at any other time
when any committee deems appropriate or becomes aware of any material acts or
facts to the Company.

The audit, remuneration and finance and planning committees shall not delegate
any of its powers to anyone, but may request advise from experts to resolve
adequately such matters submitted to the mentioned committees and, additionally,
the President of each committee, may invite such experts and officers involved
with the particular committee's activities that may participate without voting
power.

The Statutory Auditor must be duly invited to each committee meeting and may
participate in the discussions without voting power.

Any participant or member of the committees of auditing, remuneration and
planning and finance, shall inform of any conflict of interest to those of the
Company and shall not participate and vote in the resolution of the respective
matter.

ARTICLE FOURTEEN. The members of the Board of Directors and, as the case may be,
the members of the committees of auditing, remuneration and planning and finance
may or may not be shareholders of the Company, shall remain in office for one
year, may be reelected and their terms shall expire only when their successors
are appointed and take office.

ARTICLE FIFTEEN. Any shareholder or a minority group of shareholders, including
restricted voting power shareholders different from those mentioned to in
Article 113 of the General Law of Commercial Companies (Ley General de
Sociedades Mercantiles), or limited voting power shareholders referred in such
Article 113, who represents at least ten per cent of the capital stock of one or
more stock Series, shall have the right to appoint at least one regular and
alternate member of the Board of Directors. Any minority group of shareholders
representing at least ten percent of the capital stock, may also be entitled to
designate one Statutory Auditor. Those who exercise this right shall not
participate in the designation of the remaining members of the Board of
Directors or Statutory Auditors. The appointment of regular or alternate members
to the Board of Directors or of Statutory Auditor made by the minority
shareholders may only be revoked at the time when the rest of the members to the
Board of Directors and Statutory Auditors be also revoked.

The appointment of a member or members of the Board of Directors designated by
the minority shareholders shall only be revoked when the appointment of all of
the other members of the Board of Directors is also revoked.

ARTICLE SIXTEEN. The Board of Directors shall be legally installed if the
majority of all of its members is present and its resolutions shall be valid if
adopted by a majority of votes cast by the members present.

In the event of a tie, the President shall have the tie-breaking vote.

ARTICLE SEVENTEEN. The Board of Directors shall be responsible for the
management of all of the businesses of the Company and is invested with the
broadest powers for carrying out all of those transactions which may be
necessary and appropriate in accordance with the character and purposes of the
Company, with the exception of transactions for the acquisition or transfer of
shares or those transactions which; consist

<PAGE>

of the exercise of the right of withdrawal which pertains to the Company by
reason of its equity interest in companies with variable capital, in which, case
the; authorization of the Ordinary General Meeting of Shareholders shall be
required if, in one or more transactions which are simultaneous or successive,
any the following eventualities arise:

      1) The value of the acquisition of shares of another company, according to
the most recent statement of financial position of such company, exceeds twenty
per cent of the shareholders equity of this Company:

      2) The value of the sale of shares of another company, according to the
most recent statement of financial position of such company, exceeds twenty per
cent of the shareholders' equity of this Company; or

      3) The exercise of the right of withdrawal of companies with variable
capital represents a reimbursement of shares, the value of which, according to
the most recent statement of financial position of such company, exceeds twenty
per cent of the shareholders' equity of this Company.

      The Board of Directors shall have the following powers:

      a) To carry out all of those transactions which are inherent to the
purpose of the Company or which may be the direct or indirect consequence of
such purpose and to carry out administration and ownership acts.

      b) To represent the Company in judicial and administrative matters and
before all kinds of persons and authorities, with a general power for lawsuits
and collections as well as those general powers, and even those special powers,
which may require a special clause or power of attorney under the law; to
promote and withdraw from any kind of lawsuits, including the "amparo"
litigation; to make and answer depositions, to settle, to submit to arbitration,
to make accusations and to submit complaints in criminal matters and to assist
the Public Prosecutor in order to obtain compensation for damages caused by
punishable acts.

      c) To issue, sign and guarantee all kinds of negotiable instruments.

      d) Create or grant guaranties in the name of the corporation when deemed
appropriate by the obligations incurred by the Company or by third parties.

      e) Except for those powers specifically reserved to the Board of
Directors, delegate its powers to any committee or other intermediate
administrative body or to one or more members of the Board of Directors,
including, without limitation, for specific activities to be carried out,
indicating to those persons their powers and limitations, as the case may be.

      f) To grant general or special powers, whether in delegation or in
substitution of its powers (while retaining its powers, nevertheless), as well
as to revoke them, including those which may be required in order to submit
complaints or accusations in criminal matters and appoint and revoke officers as
necessary for the functioning of the Company, and to grant to them or revoke
those powers which it may deem necessary.

      g) To create Special Committees, indicating to them their powers;
provided, however, that such committees shall not function as intermediate
bodies of the Company.

      h) To appoint the Director General.

      i) To determine the manner in which the shares owned by the Company shall
be voted in the Ordinary and Extraordinary Meetings of Shareholders of companies
in which it is the holder of the majority of the shares, with the understanding
that the Board of Directors shall not delegate this power.

      In order to vote in favor any acquisition or sale of assets proposal by
and companies in which the Company is the beneficial owner of the majority of
the shares, the Board of Directors shall obtain the Shareholders approval, if
such acquisition or sale

<PAGE>

transaction or series of related transactions, exceeds the equivalent to 50%
(fifty percent) of the net worth of the company that propose to enter into such
transaction or series of related transactions, except those transactions to be
executed between the Company and those companies which majority shares are
directly or indirectly owned by the Company, or between those companies .

      j) To call Special or General Meetings of Shareholders and, to approve the
financial statements of the Company which must be submitted to the Ordinary
General Meeting of Shareholders.

      k) To enter into, amend and rescind agreements.

      l) To accept in the name of the corporation powers of attorney of Mexican
or foreign individuals or corporations.

      m) To open bank accounts and make withdrawals and deposits on such
accounts, to appoint the authorized individuals to use the corporate signature
and to make deposits in the above mentioned bank accounts, or to withdraw
deposits from them with the limits established by the Board of Directors.

      n) To subscribe, accept, endorse and in general, carry out all kinds of
acts with negotiable instruments under the terms of and within the scope
provided by Article 9 (Nine) of the General Law on Credit Transactions and
Negotiable Instruments.

      o) With the prior opinion of the Audit Committee, approve any transaction
out of the ordinary course of business of the Company that may be executed
between the Company and its shareholders, with persons being part of the
administration of the Company or with whom such persons have business or
familiar relations up to the second degree, including husbands and wives or
concubines, as the case may be. Any transaction for the sale or acquisition of
ten percent or more of the assets, the granting of guarantees for an amount
above thirty percent of the assets, or any different transaction which involves
more than one percent of the assets of the Company, shall be considered as a
transaction out of the ordinary course of business of the Company. It shall also
be an exclusive power of the Board of Directors to approve the same out of the
ordinary course of business transactions, as previously defined, that those
companies where the Company is in control of the majority of the shares try to
execute with any related party or person as described before. The powers
mentioned herein shall not be delegated and shall be exercise exclusively by the
Board of Directors.

      p) To resolve upon the temporary acquisition of the shares of the
corporation with charge on the shares repurchase reserve, as well as to their
placement with the public, provided that such power is not delegable.

      q) To designate those responsible persons for the acquisition and resale
of self-owned shares and to determine the general principles apply to such
transactions in accordance with Article Nine of this by-laws with relation to
Article 60 of the "General Dispositions Applicable to Securities Issuers and
Additional Participants of the Stock Exchange" issued by Commission.

      r) To designate and revoke the External Auditor and approve any relevant
change to the application of accounting criteria, politics and practices which
be used to elaborate Company's financial statements, with the prior opinion of
the Audit Committee.

      s) Such other as these By-laws, the General Meeting of Shareholders or the
law may confer to it.

ARTICLE EIGHTEEN. The Board of Directors shall meet, at least, once every three
months, and whenever a Meeting is called by the Chairman or by two members of
the Board of Directors. The Statutory Auditor must be called for all of the
sessions of the Board of Directors and, when attending such sessions, he shall
have the right to participate, but not to vote. The sessions of the Board of
Directors shall be held in any place, which the Board of Directors may agree to.


      The notices of meeting for such meetings must be sent to those who are to
attend, at least five days in advance of the date of the event and describe the
location, date and time for the meeting to be held.

      The Agenda of Meeting or a report on the subjects to be deliberated and
resolved must be sent with the notice of meeting, except such information which
disclose may result in any breach of contract or against the Company's benefit.

      Whenever a resolution of the Board of Directors is approved in lieu of
actual Meeting of the Board, such resolution shall have all legal consequences
when taken by unanimous vote, ratify by the members of the Board in writing.

ARTICLE NINETEEN. The powers and duties of the Secretary of the Board of
Directors shall be the following:

l. To serve in this capacity in the sessions of the Board of Directors and in
the General Meetings of Shareholders.

II. To keep the Company books required by law and such others as may be
necessary in accordance with these Bylaws which are not specifically assigned to
Borne other official or employee of the Company.

III. To formalize before a Notary the minutes of the Shareholders' Meetings and
of the sessions of the Board of Directors when its so directed and when it may
be, appropriate under law; to issue simple copies and certifications or extracts
from the minutes of the sessions of the Board and of the Meetings of
Shareholders, as well as of the items which appear in the books assigned to him,
authorizing them with his signature.

IV. Such other powers as these By-laws confer to him.

ARTICLE TWENTY. The president of the Board of Directors shall chair the sessions
thereof and, in his absence, such sessions shall be presided by the Vice
Chairman or such regular member of the Board of Directors in accordance with the
sequence of designation by the Shareholders. In the absence of the Secretary of
the Board of Directors, the Assistant Secretary or such other person, as the
member of the Board of Directors who chairs the session may designate, shall
serve as Secretary.

ARTICLE TWENTY-ONE. For each session of the Board of Directors, the Secretary
shall keep minutes which shall contain the matters deliberated and the
resolutions taken. Such minutes shall be entered in the respective Book of
Minutes and shall be signed by those who have served as president of the Board
of Directors and as Secretary for the particular session, as well as by the
Statutory Auditors, it they attend. In such Book, the unanimous resolutions
taken without actual reunion shall be included, with the certification by the
Secretary that each member has delivered the written ratification to the
Secretary's office.

ARTICLE TWENTY-TWO. In order to hold office, the members of the Board of
Directors and the members of the committees referred to in Article Thirteen of
these By-laws must guarantee performance of their duties in the terms determined
by the corporate body, which appoints them.
<PAGE>

                                  CHAPTER FOUR

                        AS TO THE AUDITING OF THE COMPANY

ARTICLE TWENTY-THREE. The auditing of the Company shall be the responsibility of
the Statutory Auditor or Auditors designated by the General Meeting of
Shareholders, and they may be shareholders or individuals from outside of the
Company. Such Meeting of Shareholders mar designate such Alternate Statutory
Auditors as it may deem appropriate, who shall commence performing their
functions in the sequence in which they were designated, in the event of the
absence of the Regular Statutory Auditors due to resignation or to the manifest
incapacity of the latter and who shall remain in office until such time as the
incapacity of the holder of the office ends or the Meeting of Shareholders makes
a new appointment, as the case may be.

Those shareholders with or without voting power, representing at least 10% of
the issued and outstanding capital stock may designate one Statutory Auditor,
provided that such designation shall only be revoked if the designation of the
rest of the Statutory Auditors is also revoked.

ARTICLE TWENTY-FOUR. The Statutory Auditor or Auditors shall remain in office
for one year and their term shall expire only when their successors are
appointed and taken office.

ARTICLE TWENTY-FIVE. The Statutory Auditors shall have those powers which are
granted to them by the General Law on commercial Companies (Ley General de
Sociedades Mercantiles).

ARTICLE TWENTY-SIX. In order to hold offices, the Statutory Auditors will
guarantee the performance of their duties in the terms determined by the
corporate body which appoints them.
<PAGE>

                                  CHAPTER FIVE

                AS TO THE FISCAL YEAR AND AS TO THE BALANCE SHEET

ARTICLE TWENTY-SEVEN. The fiscal year shall commence on January 1 and end on
December 31 of each year, unless the Extraordinary General Meeting of
Shareholder. resolves otherwise, in accordance with applicable law.

ARTICLE TWENTY-EIGHT. Upon the end of each fiscal year, the Board of Directors
shall prepare financial statements in accordance with Article 172 of the General
Law of Commercial Companies (Ley General de Sociedades Mercantiles), which
financial statements must be completed and delivered to the statutory Auditor or
Auditors at latest at the end of the third month following the close of their
fiscal year and, with respect to which, the Statutory Auditor or Auditors must
render their report under the terms of law.

With respect to said financial statements, the procedure utilized in preparing
them, shall be that provided by Article One Hundred and Seventy-Three to Article
One Hundred and Seventy-Seven of said law.
<PAGE>

                                   CHAPTER SIX

                       AS TO THE MEETINGS OF SHAREHOLDERS

ARTICLE TWENTY NINE. The General Meeting of Shareholders shall be held in
accordance with the provisions of the General Law of Commercial Companies (Lev
General de Sociedades Mercantiles), the respective notices of meeting having to
be published with indication of the place, date and time of day of the holding
of the meeting and or the subjects to be deliberated, in one of the newspapers
of general circulation in the corporate domicile, with advance notice of no leas
than fifteen calendar days.

The Ordinary or Extraordinary Shareholders' Meetings shall be called by the
Board of Directors, through the President or the Secretary of such body; it may
also be called by any Statutory Auditor or by those referred to in Articles 168,
184 and 185 of the General Law of Commercial Companies (Ley General de
Sociedades Mercantiles). Additionally those shareholders representing at least
10% of the issued and outstanding shares of the Company may also request a
Shareholders' Meeting to be called, under the terms of Article 184 of the
General Law of Commercial Companies (Ley General de Sociedades Mercantiles).

Since the date of publication of the notice for the meeting, the information to
be submitted to the shareholders in accordance with the agenda, shall be at the
disposition of the shareholders, in a free and immediate manner.

Meetings may be held without prior notice of meeting when the holders of all of
the issued and outstanding shares be present. If any resolution is adopted by
unanimous decision of all the shareholders with voting power, without actual
meeting, such resolutions shall be valid and have all its legal effects, as if
adopted in a regular shareholders meeting, provided that such resolutions are
ratified in writing by each shareholder.

The Meeting of Shareholders is the supreme body of the Company and its
resolutions or agreements shall bind all of the other bodies of the Company. The
Ordinary General Meetings of Shareholders shall be held on such date as
determined by the Board of Directors, in all events at least once a year within
the four months following the end of the preceding fiscal year and it shall
discuss the matters mentioned in Article 181 of the General Law of Commercial
Companies (Lev General de Sociedades Mercantiles). Such Meeting of Shareholders
must consider the report referred to in Article 172 of the General Law of
Commercial Corporations (Lev General de Sociedades Mercantiles) relating to the.
immediately preceding fiscal year of the Company or of those companies of which
the Company may be the majority shareholder when the value of the investment in
each one of them, according to the statement of financial position of the
Company pertaining to the close of the fiscal year, exceeds twenty per cent of
the shareholders' equity of this Company.

The Ordinary Shareholders' Meeting shall expressly resolve, for each fiscal
year, the maximum amount of funds to be used in the purchase of self-owned
shares as mentioned in Article Nine of this by-laws, provided that such funds
shall not exceed the net profits balance of the Company, including those
previously retained.

An Extraordinary General Meeting of Shareholders may be convened at any time in
order to deliberate on any of the matters permitted under Article 182 of the
General Law of Commercial Companies (Ley General de Sociedades Mercantiles).

In order for their deliberations and voting to be valid, it shall be necessary
that they satisfy those requirements which are set forth in said law. The
provisions of Article 189 to Article 194 of the General Law of Commercial
Companies (Ley General de Sociedades Mercantiles) shall be applicable to the
Meetings of Shareholders. ...

ARTICLE THIRTY. In order for the Shareholders to have the right to attend the
Meetings of Shareholders, they must deposit their shares in an institution for
the deposit of securities, or leaving them in the possession of the Secretary of
the Board of Directors at his office established at the domicile of the Company
or with any credit institution, either Mexican or Non-Mexican.
<PAGE>

The deposit of the shares with the Company or the delivery of the certificate of
deposit must be made before the day indicated for the Meeting of Shareholders,
with the anticipation mentioned in the notice to the meeting. Against the shares
deposited or the certificate of deposit, an admission card shall be issued for
the Meeting of Shareholders which shall state the number and class of shares
applicable to it, the name of the shareholder and the number of votes which
belong to him.

If the deposit is made with a credit institution, also at least two days in
advance of the day indicated for the meeting, the pertinent certification must
be submitted to the, Company, against which the admission card for the Meeting
of Shareholders shall be issued. The shares and certifications presented shall
be returned after the Meeting of Shareholders, in exchange for such receipt as
may have been issued.

Any shareholder representative may use the forms that the Company shall make
available in order to prove the faculties that has been delegated, those forms
to include the name of the Company and the agenda, with no inclusion of those
matters referred to in Articles 181 and 182 General Law of Commercial Companies
(Ley General de Sociedades Mercantiles) as general matters, and to have a broad
section to include shareholders' instructions to exercise the delegation. The
Company shall make available those forms within the same previous period
referred to in Article 173 of the General Law of Commercial Companies (Ley
General de Sociedades Mercantiles) in order to allow the shareholders have
enough time to execute and deliver such forms to the representative. The
Secretary shall confirm such availability and inform about it to the
Shareholders' Meeting with special reference of such information in the minutes
of the meeting.

ARTICLE THIRTY-ONE. The Meetings of Shareholders shall be chaired by the
president of the Board of Directors and, in the absence thereof, by such person
as mar be designated by the Meeting of Shareholders. The Secretary of the Board
of Directors shall serve as .the Secretary and, in his absence, such persons as
the president mar designate, shall serve as Secretary.

The president shall appoint such Inspector or Inspectors of Election as he may
deem appropriate in order to pass the pertinent attendance list.

Minutes shall be made of the Meeting of Shareholders, and they shall be signed
by such person chairing the meeting, by such person serving as Secretary, and by
the Statutory Auditor, in the event that he attends.

The copies, certifications or extracts from the minutes of the Meeting of
Shareholders as may be necessary to issue for any reason shall be authorized by
the Secretary of the Board of Directors.

Subject to Article 199 of the General Law of Commercial Companies (Ley General
de Sociedades Mercantiles), any shareholder or group of shareholders with at
least 10% of the represented voting power in any meeting, even when such power
is limited or restricted, may elect to postpone any resolution about any matter
where such shareholder believes there is not enough information available. Also
any shareholder or group of shareholders with at least 20% of the represented
voting power in any meeting, even when such power is limited or restricted, may
file a motion with the appropriate court in order to oppose any resolution where
such shareholder has voting power at the Shareholders' Meeting, provided that
such shareholders shall comply with Articles 201 and 202 of the General Law of
Commercial Companies (Ley General de Sociedades Mercantiles).
<PAGE>

                                 CHAPTER SEVEN '

                           AS TO THE FINANCIAL RESULTS

ARTICLE THIRTY-TWO. The net profits which are obtained in each fiscal year shall
be disposed of in the following manner:

1. 5% (five per cent) shall be devoted to the establishment of the legal reserve
until reaching the level of one fifth of the capital stock, and should it be
reduced under that level, it shall be reestablished in the same manner.

2. Any amount decided upon by the General Meeting of Shareholders shall be
separated in order to form one or more reserve funds or the stock repurchase
reserve.

3. with respect to the balance, if it exists, it shall be disposed of as the
Meeting of Shareholders may resolve.

                                  CHAPTER EIGHT

              AS TO THE DISSOLUTION AND LIQUIDATION OF THE COMPANY

ARTICLE THIRTY-THREE. The Company shall be dissolved in those cases provided for
in the General Law of Commercial Companies (Lev General de Sociedades
Mercantiles).

ARTICLE THIRTY-FOUR. Upon the dissolution of the Company, it shall be put into
liquidation, of which liquidation one or more receivers who shall be appointed
by the Meeting of Shareholders shall be newly placed in charge.

ARTICLE THIRTY-FIVE. With the exception of that provided for by the General
Meeting of shareholders, the receiver or receivers shall have those powers which
are attributed to them in Article Two Hundred and Forty-Two of the General Law
on Commercial Companies, and shall distribute the remainder among Shareholders
pursuant to Article One Hundred and Thirteen, Article Two Hundred and
Forty-Seven and Article Two Hundred and Forty-Eight of said law.