Before the process of reopening the economy, the garment and textile export sector operated with 15 thousand workers, but with the elimination of some restrictions, the activity of the companies increased and now employs 45 thousand people.
A meeting is being convened for the textile and clothing industry on March 16 in El Salvador, where the overall situation in the sector will be discussed.
From a statement issued by Proesa:
El Salvador is preparing for the third edition of the Forum of Textiles and Apparel (FOROTEX) 2016, a space where high-level international speakers present trends and strategies for competing in international markets.
Despite the challenges facing the Central American textile industry with the coming into force of the TPP and Asian competition, projections are that there will be growth of 8% in 2016.
The main reason is the decision of the US government to extend for ten years the tariff advantages enjoyed by Nicaraguan exports to the northern country, supporting them against the entry into force of the Trans-Pacific Economic Partnership Agreement (TPP).
With the hope of getting exemptions reinstated, maquila sector union representatives are calling on a thousand companies to avoid the payment of the income tax until the exemptions are reactivated.
The Superintendency of Tax Administration (SAT) confirmed in early January that both administrators and users of free zones and maquilas (by decree 65-89 and 29-89 respectively) must pay income tax (ISR) for the fiscal year 2016.
The guild is once again insisting on the urgency of the government passing the law which grants tax incentives to the maquila industry so that they can remain competitive in the global market.
Once the Investment and Employment Decree 4644 is approved, there would come into effect "... Tax incentives for the maquila industry, with terms of exemptions from income tax up to 15 years for taking up residence in the capital and 25 for those in the departments."
The implementation of lean manufacturing systems reduces from two hours to five minutes the time it takes to make a garment.
This system, introduced in the textile fair Apparel Sourcing Show 2014, in Guatemala, unifies in a set sequence the "value" steps of the manufacturing process, completely eliminating "waste" steps resulting in higher productivity and resource optimization so that the number of operators needed to make a garment is only nine instead of fifty.
In Guatemala, in order to meet WTO requirements, exemptions will be eliminated gradually, and instead economic benefits will be awarded.
The exemptions are to be applied to sectors such as maquila industry, through Law 29-89, and the Free Zones Act.
"In order to meet a requirement of the WTO, the exemptions will be eliminated gradually, but economic benefits will be granted in order to keep the country attractive for investments", said Pavel Centeno, Minister of Finance.
Korean owned SAE International has announced it plans to close one its five factories in Guatemala due to a mix of poor sales to the USA and high Guatemalan labor costs.
The country's Economy Minister, Luis Velázquez, announced the closure of the plant saying that the company will be opening a new factory in Haiti where it will look to hire 20,000 people.
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.
After a big drop in 2009, sales abroad have seen a 17.6% increase in the first half of 2010.
According to information from Vestex, the Guatemalan association of textile and apparel manufacturers, in the first six months of this year the sector's exports totaled $705.2 million, 17.6% higher than the $599.6 million exported in the same period of 2009.
Guatemala’s textile industry has been practically reborn with the U.S. economic recovery.
As Guatemalan apparel businesses export 90% of their production to the U.S., they were strongly affected by that country’s economic crisis. Machinery was stopped and massive layoffs ensued. Exports fell 21% to just $1.1 billion.
Today’s outlook is far more promising, as apparel companies report that 100% of their production capacity up to June is already sold. In 2010, exports could close around $1.6 billion.
After nine months of consecutive decreases, textile exports finally reversed the trend, increasing 2.48% in October.
In October, sales to the U.S. summed $102 million, 2.48% more than the same month of 2008, according to data from Vestex, the Textile and Apparel Commision.
Sigloxxi.com reports: "Alejandro Ceballos, Vestex President, says the increase is due to 'the start of a recovery process in the U.S.
The Guatemalan clothing label manufacturer will invest $500.000 in machinery and equipment, and will hire an additional 50 to 80 employees.
This investment by 'Accesorios Textiles' (Actex), is geared to serve an agreement signed with textile company Denimatrix. For it, Actex will produce identification labels for Denimatrix's jean production.
"Sergio de la Torre, Actex president, explained that each jean needs 3-4 labels.
Denimatrix announced an alliance with "Accesorios Textiles" (Textile Accesories), the country's largest label producer.
'Accesorios Textiles' will supply labels for Denimatrix's jeans. The latter, formerly known as Koramsa, manufactures 120.000 jeans each week, for renowned brands such as Abercrombie & Fitch, Banana Republic, GAP, Rock & Republic and Buckle.