In recent years, the sector in Guatemala has lost nearly 30,000 jobs, because the high costs resulting from having one of the highest minimum wages in the region, makes it more profitable only to export raw materials, rather than making them in the country.
Vestex figures show that in recent years several jobs have been lost in the sector, given that between 2006 and 2018 the industry lost a considerable number of jobs, going from 82,109 to 53,636 places, equivalent to a 35% decrease.
In the first quarter of the year, imports of yarns and textile supplies in Central America totaled $127 million, registering a 10% drop compared to the same period in 2017.
Figures from the Information System on the Textiles and Textile Supplies Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
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.
High potential for online shopping in China has brought up opportunities for segments such as bathing suits, where 60% are imported products.
From a statement issued by PROCOMER:
Japan is one of the main entry points to the Asian region and is also a fashion leader, an industry worth approximately $110,000 million. According to a report by ProColombia, Japan imports more than 60% of its swimsuits and it was also found that consumers pay higher prices for these products, making it an attractive market to service.
At the end of 2014 320 assembly plants were in operation, of which 42% were American, 36% founded on Honduran capital and 22% from other countries.
From the summary of a report by the Central Bank of Honduras "Goods for processing and related activities 2014 and perspectives for 2015/2016"
Operating under the Free Zones regime companies that carry out processing activities, commonly known as maquila, showed a significant increase in 2014 (11.8% in the Gross Value Added, VAB1) because of a stable international environment influenced by strengthening demand mainly outside of the US market which showed economic growth of 2.4%, resulting in an increased demand for goods for domestic production (approximately 76.0% of the exports of the maquila from Honduras went to that country).
The maquila industry approves of the government's decision to apply for formal admission into the agreement, which would improve conditions for textile companies competing with countries like Vietnam.
The Honduran Maquila Association (AHM) is one of the unions in the country which is most interested in being part of the trade union agreement, because the United States is the main destination for its production, and where textiles also come from countries that are already part of the agreement, such as Vietnam.
Peruvian negotiators have asked Honduran maquila companies to use thread from the South American country at the same time as demanding that the agreement not contain exclusions.
The United States is the largest supplier of yarn for used by the Honduran textile industry and at the same time is the largest buyer of its production. In the context of negotiations, Peru is calling for more flexibility so that Honduras can the raw material not only from the US but also from the South American country.
Nicaraguan businessmen have proposed that Central America as a whole operates a preferential tariff treatment in the US for imports of textiles in the region.
After trying to negotiate, through several formats, tariff preference levels (TPL), so far unsuccessfully, textile entrepreneurs are now appealing to the union of the region to address the issue with the US once again.
80% of the volume exported by the Honduran maquila sector in the first half of 2014 corresponds to textiles, 15% to harnesses, and the remaining 5% to other goods.
A report by the Central Bank of Honduras (BCH) specifies that when comparing the figure for the first half of this year with the same period of 2013, "... A slight increase of $8.2 million is observed. "
Textile entrepreneurs anticipate an increase in Canadian investment once the trade agreement with this country takes effect on October 1st, 2014.
Daniel Facussé, president of the Honduran Maquila Association reported that "... representatives of three Canadian companies visited the country and showed interest in investing in maquila and buying sportswear.
In March this year, the textile and manufacturing industries, including the manufacturers of wire harnesses and garments, grew by 3% compared to the same period in 2013.
A report by the Office of Textiles and Apparel (OTEXA), at the International Trade Administration of the United States, details the recent performance of the maquila industry in Honduras and locates the country as the fourth largest producer of fabrics in the world.
Hanes Brands is investing $2.2 million in a new plant for making garments in its facilities in the north of the country.
The operations manager Manuel Castillo, told Laprensa.hn that the investment is for "... a new plant called H2, which we started in January this year. It is an investment of $2.2 million including equipment for making clothes, sewing machines, molding garments and cutting."
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.
The private sector and the government are developing a plan to maintain competitiveness and minimize the effect of the zero tariff entry of textiles to the U.S. market from Vietnam.
The program being worked on is called 'Total Occupancy of Industrial Parks'. The plan involves reducing the cost of electricity in the maquila parks, developing a project for generation which will devote its production to industrial parks and offer "in the case of new projects, a discounted rate (per kilowatt)".
In the remainder of the year Nicaragua will only take advantage of 30% of the eight million pieces of textiles that the EU has assigned it, meaning that sales will be worth just $2 million.
Dean Garcia, executive director of the Nicaraguan Association of the Textile and Apparel Industry, explained that with one quarter of the year left it will be difficult for Nicaraguan firms to find new European customers.