Closures in Guatemala's Industry

Lack of security and high energy and logistical costs have caused the closure of 150 industrial companies in the past 5 years.

Monday, August 10, 2009

127 maquila operations have closed since 2005, firing 60.000 people. Pharmaceutics company Sanofi-Aventis sold its assets in Setember 2007, Avon did the same by the end of 2008, and more recently Kellog's announced its decision of closing its industrial operations in the country.

This worrying trend, dubbed "deindustrialization" by some analists, is caused by high logistics, energy and security costs, in addition to cheaper labor in other countries.

"Each day, more and more companies are evaluating moving to other countries like Mexico or Costa Rica. We have been dormant in economic policies, while other nations, like Peru, have attracted investments with public-private participation laws", remarked Lisardo Bolaños, analyst for the Center for Economic Investigations, in a news article in El Periódico newspaper.

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