The sector expects to close the year with a decline in the value of exports due to low international prices, but with an increase of about 10% in total production.
Textile entrepreneurs estimate that they may end the year withclose to the planned target of 500 million square meters of production, but below the $1.5 billion in export value.
Millknit Industries will begin operations in early 2013, producing fabrics for clothing companies established in the free zones.
Following the closure of Core Denim in 2009, Nicaragua has had no cloth production, which is a disadvantage for the clothing sector, which has to import its raw materials.
Laprensa.com reports that "Millknit will operate in the industrial park Las Mercedes, Managua, it is funded with North American capital and the initial investment is for $25 million, according to the National Free Zone Commission (CNZF). The initial projections for jobs is 270 positions."
Between January and May sales grew by 25% compared to the same period in 2010.
The rise in sales to the U.S. was higher than to countries like El Salvador, Honduras and Guatemala, which increased by 19%, 17% and 13% respectively in the same period.
With the 25% increase, Nicaraguan exports went up from $381.1 million to $476.7 million. This increase in production is confirmation of a growth trend that has been seen for several months.
The record price achieved for cotton would increase operating costs for enterprises in 2011.
The contract for December delivery closed at $ 1.2463 a pound on Friday, versus $ 1.1971 the previous week, according to Dean Garcia, director of the Nicaraguan Association of Textile Industry. In the last three months the price has increased by 56%.
"For Nicaragua's textile sector it could mean 'stagnation' of sales, so we should be analyzing strategies to confront the situation," Laprensa.com.ni reported.
The sector expects to create 6.000 jobs this year, as well as increased orders from international markets.
Dean García is the president of the Nicaraguan Textile Industry Association (Anitec). He identifies two key elements in this recovery: improvement in the U.S. economy and new markets like the European Union and Canada.
"When asked about new investments, García assured that 11 projects could become a reality this year.