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"]
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"]
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.
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.
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.
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 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.
The Trans-Pacific agreement being negotiated by the U.S. could authorize Vietnam to get threads from China and export duty-free textiles to the North American nation.
The Ambassador of El Salvador in that country, Ruben Zamora, has already raised concerns with officials from the U.S. trade office (USTR). Zamora affirmed that representatives from textile companies have visited the U.S.
Textile exports to the United States reported at the end of 2011 an increase of 25%, with the largest exporter being Honduras, followed by El Salvador.
Marisa Mont, a technician at the Economic Integration Secretariat, outlined the results, "Recovery begins from 2010 and is growing exponentially. This demonstrates an upward trend and that clearly is going to continue, although it is probably not going to keep growing by 25%, but it is an uptrend.
Aggressive measures must be taken in marketing and attracting investment in order to exploit the possibilities opened by the DR-CAFTA and changes in the global market.
From Diario de Centro América:
The CAFTA-DR region has opportunities for growth
The clothing and textile sector of the country is ready to compete globally.
Opportunities in the region provided by the Free Trade Agreement between Central America, Dominican Republic and the U.S.
The rising costs in China have caused companies like this north American firm to look once again towards the isthmus to buy their clothing.
Carlos Arias, president of the Committee on Textiles and Clothing (Vestex) of Guatemala, said during a forum at the latest Apparel Sourcing Show 2012, that JC Penney have indicated that their purchases from the isthmus will rise by 30%.
The lower labor costs offered by China are no longer such, due to the 22% increase in the minimum wage for workers.
There are positive expectations for the maquila and textile sectors in Central America regarding the return of companies who had migrated to China because of the lower labor costs.
With the disappearance of this advantage, Central America is once again among the best options for multinationals, having as an advantage its proximity to the U.S., which reduces transportation costs and delivery times.
Guatemala's textile industry is changing from exporter of finished products to one that provides raw materials to manufacturers in other Central American countries.
The migration of maquila companies to Nicaragua, El Salvador and Honduras has generated an increased demand for industrial fabric and textile materials transforming the Guatemalan textile industry.
Generates business opportunities by linking supply and demand of goods and services between Central America and the rest of the world.
Organization that operates in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama
Phone: (506) 225 4786