Transnational Clothing Factories Return to Central America

The lower labor costs offered by China are no longer such, due to the 22% increase in the minimum wage for workers.

Tuesday, January 3, 2012

There are positive expectations for the maquila and textile sectors in Central America regarding the return of companies who had migrated to China because of the lower labor costs.

With the disappearance of this advantage, Central America is once again among the best options for multinationals, having as an advantage its proximity to the U.S., which reduces transportation costs and delivery times.

An article in Siglo21.com.gt reports that "The domestic textile industry will be the fabric supplier for the Adidas brand after the company announced the installation of a factory in El Salvador. According to the president of the Commission for Clothing and Textiles (Vestex) of the Guatemalan Association of Exporters (Agexport), Carlos Arias, the return of several companies to Central America is creating positive expectations for the sector, as it will mean an increase in the distribution of fabrics in neighboring countries. Arias said that the Adidas investment is important for the region, as Guatemala produces textiles which are used in sportswear made in El Salvador."



More on this topic

$400 Million Industrial Investment Announced

February 2019

The Korean company Sae-A Trading Co. Ltd., would build in Guatemala a high-tech industrial complex of chemical fiber, weaving and dyeing for the production of polyester yarns.

The Guatemalan Ministry of Economy (Mineco) reported that the project will be fully operational in three years and would be the only national supplier to sew, weave and dye within a single operation.

Chinese Interested in Guatemalan Textile Sector

April 2017

Within the framework of the Apparel Sourcing Show, a delegation of Chinese textile entrepreneurs will be visiting the country in May, to explore business opportunities in the sector.

The Apparel Sourcing Show event will be held from May 23 to 25 at the Grand Tikal Futura Hotel, and will bring together textile companies from the Central American region and from other countries.

JC Penney May Buy More from Central America

May 2012

The rising costs in China have caused companies like this north American firm to look once again towards the isthmus to buy their clothing.

Carlos Arias, president of the Committee on Textiles and Clothing (Vestex) of Guatemala, said during a forum at the latest Apparel Sourcing Show 2012, that JC Penney have indicated that their purchases from the isthmus will rise by 30%.

Asian Textiles Tariff-Free in U.S.

July 2009

A group of Democratic senators proposed a law to eliminate tariffs on textile products from 14 Asian countries.

Textile imports from those countries currently pay up to 28% when entering the United States.

Should the proposal be approved, a very likely scenario, the Central American countries would lose the trade advantage obtained with the U.S.

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