Businessmen consider that 2018 will be a year with record sales for the country, as they projected exports of $1.724 million, a figure that would exceed 12% of what was reported in 2017.
Representatives of the Apparel and Textile Industry Association (Vestex) reported that they have recently reviewed the figures, and they estimate that this year the sector will have double-digit growth compared to 2017.
In the first quarter of the year, companies in the country imported $5 million worth of yarns and textile supplies, 15% more than what was purchased in the same period in 2017.
Figures from the Information System on the Textile and Textile Supplies Market in Honduras, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with the graph"]
In Honduras, the union of maquiladoras reported that in June 2018 jobs in the sector totaled 151,667, 4% more than those reported in December 2017.
During the first half of the year, the Honduran Maquila Association (AHM) recorded an increase of 6,072 jobs, rising from 145,595 at the end of 2017 to 151,667 at June 2018.
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.
29% of the companies that are dedicated to the design and confection of clothes are less than five years old, 18% between five and 20 years, 24% are more than twenty years old.
A report by the Ministry of Industry, Commerce and SMEs analyzes the characteristics of the clothing design and clothing industry in the Dominican Republic, and lists the opportunities in the sector, among which are the frequency of clothing purchases made by Dominican consumers, the obligatory nature of the use of certain garments in institutions due to workplace regulations, the need for school uniforms, the existence of government procurement programs and the influx of tourists, who are potential customers of typical Dominican products, clothing and accessories.
Salvadoran textile companies state that the costs of labor, security and delivery times have made the sector's operations more expensive.
The recentincrease in the minimum wageis one of the factors that has had a direct impact on the cost structure of Salvadoran textile companies. Added to this are logistical difficulties in customs offices, which have caused companies from neighboring countries to obtain contracts that were originally planned for El Salvador.
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"...
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 union of maquila companies estimates that this year exports will grow 10% compared to 2016, reaching $4.5 billion, driven by increased demand in the United States.
According to the Honduran Maquiladora Association (AHM), in 2016 exports of textiles and clothing were worth close to $4.1 billion, and this year it is hoped the figure will go up to $4.5 billion.
The new plant, which a Honduran and Salvadoran consortium have started building in Choloma, will have capacity to produce 200,000 tons of synthetic yarn per year.
In the construction and commissioning of the plant manufacturing synthetic yarn, the company Unitexa has invested $73 million and it is expected that it will start operating within one year.
The new rule of law to promote export and maquila activity includes requirements that companies must meet in order to qualify as Producers for the Clothing and Textiles industry.
On January 10 Government Agreement No. 3-2017 concerning amendments to Government Agreement No. 533-89 "Regulations of the Law on the Promotion and Development of Export and Maquila Activities" was published in the official newspaper.
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.
The textile sector claims that the high cost of electricity in the country has become a limiting factor to foreign investment.
The union of textile companies states that more foreign investment could reach the industry if the cost of electricity was not so high.According to Dean Garcia, executive director of the Nicaraguan Association of the Textile and Apparel Industry (Anitec),"... there could be benefits from the entry of textile companies and spinning mills setting up in Nicaragua and producing sufficient raw material for the industry that already exists in the country. "