Developing e-commerce strategies and raising the final value of the products are some of the goals that the trade union of medium-term textile companies aims to achieve.
The Vision 2030 plan by the Chamber of Textile, Clothing and Free Trade Zones of El Salvador (Camtex), has ten goals that the industry aims to achieve in order to raise competitiveness and the development of the activity in the future.
The Textile Industry Association reported a reduction of almost $17 million in value exported in the first quarter of the year, compared to the same period in the previous year.
Figures from the Chamber of Textile, Apparel and Free Trade Zones (Camtex) indicate that exports from January to April totaled $816 million, down from $833 million exported in the same period in 2016.
In the first five months, sales abroad totaled $2,354 million, led by garments and textile manufactures and other food industry products.
From a statement issued by the Central Reserve Bank:
El Salvador exported US $2,353.7 million, up by US $82.5 million in the same period in 2016, equivalent to a year-on-year growth of 3.6%, the Central Reserve Bank reported.Among the economic sectors with the greatest growth in sales abroad are: agricultural goods, which increased by 7.9% in May 2017; Commerce, Restaurants and Hotels with an increase of 13.1% and the manufacturing industry, with 3.5%.
In the first four months, sales abroad totaled $1.854 billion, led by garments and textiles, sugar, machinery, electrical and plastic materials.
From a report by the Central Bank:
Salvadoran exports to the rest of the world amounted to US $1.8534 billion as of April 2017, increasing by US $66.9 million (3.7% more) compared to the same month in the previous year, the Central Reserve Bank reported.Among the sectors that increased their sales abroad is the agricultural sector, which grew by 5% and the manufacturing industry (3.7% more), with a significant participation of products such as sugar and clothing, which together contributed US $97.5 million during this period.
In 2016, the value of imported yarns and textile raw materials in the region amounted to $328 million, equivalent to 89 thousand tons, 6% more than the volume purchased in 2015.
Figures from the information system on the Central American Market for Yarns and Textiles materials, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption="Clic para interactuar con la gráfica"]
The Salvadoran union has stated that excessive bureaucracy and high production costs are the main factors that could be encouraging some textile mills to reduce operations in the country.
José Antonio Escobar, president of the Chamber of the Textile Industry, Clothing and Free Zones of El Salvador (Camtex) told Elsalvador.com that one of the companies that has shut down part of its operations, to transfer them to another country, is Fruit of the Loom.Escobar said"...'In the plant owned by Fruit of the Loom in the industrial park American Park, where a thousand people work, the company will make a reduction of about 850 positions'."
The spanish company that manufactures textiles for hotels and hospitals, Resuinsa, has announced the opening in Costa Rica of a distribution center for the region.
Resuinsa announced that from its logistics center in Costa Rica it will distribute its products to Nicaragua, Honduras and El Salvador, as well as supplying the local market.The company manufactures and supplies textiles to hotel chains, hospitals and nursing homes.
This is good news for Central American textile manufacturers. We will have to wait and see what other protectionist measures will be implemented by President Trump.
The possibility that the United States buys textiles from Vietnam at lower prices than those paid by textile manufacturers in Central America seems to have now disappeared, however, in order to measure the true impact of the Trump protectionist policy on trade between US business and the region we will have to wait to see what other decisions on international trade deals are take by the new administration.
If the United States withdraws from the Transpacific Agreement, there will be less risk of competition from Asian countries for the Central American textile industry.
If the US does eventually abandon the Trans-Pacific Partnership Agreement (TPP), as promised by President-elect Donald Trump, the Central American textile industry could benefit from the elimination of the possibility that the US, its main market, will buy textiles from Vietnam at lower prices.Since the start of negotiations for the TPP, the Central American textile industry has tried to negotiate bilaterally with the US in order to minimize the negative effects that the TPP could have on the industry in the region.
In the agreement between the region and South Korea the rule of origin for Salvadoran Textiles was recognized, which will prevent the importation of fabrics to later be used in the manufacture of garments in El Salvador.
The Salvadoran government managed to include in the agreement the recognition by South Korea of a rule of origin for textiles, in order to protect the entire chain in a country where virtually all of the raw materials for the manufacture of garments are produced, with the exception of cotton.
A report by the Business Intelligence Unit at CentralAmericaData.com notes that in 2015 Central American countries imported $318 million worth of yarns, filaments and textiles, led by El Salvador with $157 million.
El Salvador was the main importer of synthetic filaments, strips and materials similar to synthetic textiles last year, according to data on the Textiles and Raw Materials Market compiled by the Business Intelligence Unit at CentralAmericaData.com.
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. "
Coffee, textiles, clothing accessories and leather are some of the products that have opportunities for being sold in the European country.
In addition to traditional products such as coffee, textiles, leather and accessories, representatives of the Franco-Nicaraguan Chamber of Commerce identified opportunities in the French market for other non-traditional export products such as chia.In 2015 the country exported $32 million worth to the European country and imported goods worth $110 million, according to central bank figures.
Salvadoran industrialists are being invited to sign up to business meetings with four Costa Rican companies on July 20 and 21.
The Costa Rican Foreign Trade Promotion Office (PROCOMER) and the Chamber of Commerce of Industries in El Salvador is inviting participation in this trade mission, and is coordinating business meetings with Costa Rican companies to be held in San Salvador on July 20 and 21.