European investors are to acquire the Cone Denim Plant in Nicaragua, which has been closed for 3 years and could reopen in late 2012.
"It is a fact that this year the Cone Denim plant will be reopened. We're just waiting for the (purchase) negotiations to be completed," confirmed Dean Garcia, executive director of the Nicaraguan Association of Textile and Apparel Companies (Anitec), according to Laprensa.com.ni.
The growth is reflected in the steady growth in employment in production firms operating under the regime, which together exceed 100 thousand jobs.
The number of employees in factories in free zones reached 103,000 people in March, a record for the sector in Nicaragua, said Alvaro Baltodano, President of the National Free Zone Commission, CNZF. There are 68,019 employees in the textile sector alone.
The textile company, a subsidiary of International Textile Group, which invested $100 million in its plant in Nicaragua, now has three interested parties; meanwhile there are still plans to reopen its operations.
The U.S. textile company Core Denim, belonging to the International Textile Group (ITG), could resume operations in Nicaragua which were suspended in March 2009, informed the government, although there is still a chance that the company will be sold, which would imply a reassessment of these plans.
Two companies will install production plants, one for solar panels and one for cardboard boxes.
The trade agreement signed in 2008 has boosted Taiwanese investments in Nicaragua and created closer diplomatic and commercial ties between both nations.
So far, Taiwan has invested more than $135 million in the Central American country, particularly in the free zones.
Exports from companies in the free zone in Nicaragua grew by 44% in the first four months of the year.
The Technical Secretary of the National Commission of Free Zones, Alvaro Baltodano announced projected exports of $1,750 million by the end of this year, of which the textile sector would provide $1,350 million.
"According to official data published by the Central Bank of Nicaragua (BCN), free zone exports, up to April, came to $530.4 million, compared $367.9 million in the same period last year."
The Taiwanese company, Speed Tech, has confirmed plans to install a solar panel factory with an investment of $10 million.
The announcement was made by the presidential delegate for investment, Alvaro Baltodano, who said: "They, after the exchange (the talks) confirmed the decision to invest in Nicaragua and we hope that in August when a very important investment meeting, organized by Pro Nicaragua, will be held in Nicaragua, these investors will come and we hope that Taiwan officially announces (the plans) there. "
The multinational Cargill will invest these resources over a period of five years.
With a view to strengthening domestic production and further development of the national poultry and animal feed business, Cargill will inject capital into companies operating in the country.
For the Nicaraguan government, the investment by Cargill will help boost economic activity and also reflect the buoyant business climate prevailing in the country.
Authorities expect free zone exports to reach $1.7000 million in 2011, 13% more than in 2010.
Alvaro Baltodano, executive director of the Free Zone Corporation, added that they have experienced sustained growth since 2009.
Regarding new investments, he added that they expect foreign companies to invest around $1.000 million in 2011, especially in infrastructure, energy and communications.
During the course of the year, the U.S. textile company will restart operations in the country.
The start-up would initially create 700 new jobs.
"The secretary of the National Free Zone Commission (CNZF), Alvaro Baltodano, and executive director of the Nicaraguan Association of Textiles and Apparel (Anitec), Dean Garcia, confirmed to the press that the reopening of the company is underway and will become official in the coming weeks,” according to an article at Laprensa.com.ni.
The arrival of new textile plants, the expansion of three plants and the reopening of another were announced by the textile sector.
With an investment of $ 50 to $ 60 million, the National Commission of Free Zones (CNZF) is negotiating the installation of a new textile factory with a foreign capital group.
Dean García Foster, executive director of the Nicaraguan Association of Textiles and Apparel (Anitec), said three textile companies have confirmed their expansion plans, which involves an estimated investment of $ 20 million.
Over the last three months the cost of fabrics has increased 30% in Nicaragua, due to increases in the international price of cotton.
Álvaro Baltodano, secretary of the Free Zones Commission (CNZF), explained that Nicaragua's textile mills are already paying higher prices for this raw material, a situation which complicates a sector already in problems due to the slow growth of the U.S.
Istmo Textil Nicaragua has launched a new textile manufacturing facility where it expects to employ 2,500 people.
The investment means that the company, backed by Korean capital, will look to achieve exports worth $120 million in 2010 and will employ a total of 5,000 workers.
Álvaro Baltodano, technical secretary for Nicaragua's free trade zone committee said that, "the South Korean investors expect to be able to increase the number of people employed to 7,000 next year and export $150 million worth of textiles," according to Laprensa.com.
The office will be in charge of developing investments in Central America and coordinating the arrival of companies interested in investing.
The creation of the office forms part of a strategic plan designed to attract foreign capital to the region.
"The presidential delegate for the promotion of investments in Nicaragua, Álvaro Baltodano, stated that the idea is to research all the strategic regional areas that can be optimized in order to attract more investment," reports Laprensa.com.ni.