Following the spread of the virus globally and the suspension of some production in China, several garment companies in the region have reported increases in their orders.
The spread of the epidemic has stopped much of the economic activity of the Asian giant, which is the largest exporter of textiles in the world. This situation has forced buyers to look for alternatives.
The sector's union says that the strategy focused on producing fabrics and yarns for export is already paying off, and they intend to continue in order to become the region's main supplier.
According to the Chamber of the Textile, Clothing and Free Trade Zone (Camtex), exports of raw materials from El Salvador have grown considerably in the last two years, as between 2016 and 2017 sales increased from $60,000 to $1.2 million.
According to the textile industry union, half of the $2.6 billion exported in 2017 corresponded to pullover sweaters, cotton t-shirts, cotton briefs, synthetic fiber t-shirts and synthetic socks.
The Chamber of Textile, Clothing and Free Trade Zones of El Salvador (Camtex) reported that in 2017 the sector exported $2.617 million worth of clothes, $95 million more than was reported in 2016, which is equivalent to an interannual increase of 3.8%.
The textile guild has stated that 2017 closed with $2.6 billion in exports and an increase of almost 4%, and for this year it plans to achieve similar growth.
The Chamber of the Textile, Clothing and Free Trade Zone (Camtex) exported $2.617 billion during the past year, $95 million more than the value of exports registered in the previous year.
Salvadoran textile companies report that between January and October exports of textiles and clothing grew by 3%, but the maquila sector went down by almost 9% compared to the same period in 2016.
Patricia Figueroa, executive director of the Chamber of the Textile, Clothing and Free Trade Zone (Camtex), explained to Laprensagrafica.com that"...
To compensate for the loss of market which is expected once the Transpacific Agreement takes effect, the textile industry intends to resume FTA negotiations with the northern country.
A free trade agreement with Canada would allow the exporting textile companies to enter a market with high potential, since according to theexecutive director of Camtex, Patricia Figueroa, the country imports more than $14,000 million a year in textiles products and confection of synthetics such and towels, carpets, curtains and tablecloths. "
In the first eight months of the year maquila exports reported an increase in volume of 22.3% and 10.9% in value.
Data from the Central Reserve Bank shows that total exports reached $822.4 million up to August 2011.
"The executive director of the Chamber of the Textiles, Clothing and Free Zones (CAMTEX), Patricia Figueroa, said exports this year have already surpassed the levels recorded in 2008, which was considered to be an excellent year for the sector.
There is a growing demand for textiles and clothes manufacturing, but a new Law on Free Zones is needed in order to bring fresh investments to this sector.
The World Trade Organization (WTO) has determined, after two extensions, the country should, in 2015, replace the law that has been in force since 1998, which grants tax benefits such as a total and permanent exemption from taxes, among others.
A change in the incentives for foreign investment is needed in order to remain competitive in respect to other countries in the region.
The modernization of the law on free zones, which countries like Costa Rica reshaped in 2005, for the purpose of improving incentives to attract foreign companies is still in process in El Salvador.
The discussion to reform the law goes back to earlier this year, when the private sector, represented mainly by the textile sector, which accounts for 75% of companies operating under the free zone regime, began reviewing the law with the government .
In 2010 the sector reported revenues of $ 1.793 million compared to $ 1.422 million in 2009.
Patricia Figueroa, director of the Chamber of Textile Apparel (CAMTEX), said they hope to continue growing in 2011 despite the increase in prices in raw materials, including cotton.
"Recently, CAMTEX noted that the increase in the price of key raw materials and inputs for production could not be completely absorbed by the companies.
The textile and apparel sector is expected to close the year with a 25% increase in exports.
Patricia Figueroa, executive director of the Chamber of the Textile, Clothing and Free Zones of El Salvador (CAMTEX), praised the strength of the sector, which despite lack of investments and reduction of staff, has succeeded in increasing exports.
Laprensagrafica.com reports, "Moreover, the industry says they hope to achieve an agreement with the Government to amend the Free Zones Law, but without altering the benefits which encouraged them to invest in the country, as the Organization World Trade Organization (WTO) stated that it should be removed by December 31st, 2015.”
Organized by the Chamber of Textile Industry in El Salvador, the event will be held on October 8th at the Crowne Plaza Hotel.
The first regional textile and clothing forum with discuss challenges facing the region against Asia´s accelerated growth in Asia.
Emilio Herrera, chief executive of the Salvadoran Chamber of Textiles and Apparel (CAMTEX) released some figures in an interview with ElSalvador.com "...
Such is the desire of Salvadoran textile businessmen, who hope to transform the country into a more attractive destination for foreign investment.
CAMTEX, the Textile and Apparel Chamber, explained they are having talks with the government to draft a new law which complies with WTO requisites (World Trade Organization).
The objective “is to have a law that makes the country more competitive, not like the one we have now”, stated Patricia Figueroa, head of Camtex.
Orders are increasing as the United States, main destination for Salvadoran textile exports, begins to recover.
Patricia Figueroa, executive director of CAMTEX (Textile and Free Zone Chamber of El Salvador), commented that an increase in U.S. orders has allowed company Fruit of the Loom to reactivate its Montecristo facility.
Figueroa told Laprensagrafica.com: "We expect to see this recovery translate into larger export volumes for the first quarter of 2010 ... we are confident that once the market fully recovers, orders will increase even more".