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).
Factors such as production costs and labor, as well as security and economic stability seem to be more relevant to the textile companies that choose the country than tariff benefits.
The expiry on December 31 of the Tariff Preference Level (TPL) with the United States has not impacted the textile industry, as initially expected at least so far. According to the Nicaraguan Association of Textile and Apparel Industry (Anitec), the country still has attractive conditions for foreign investment in this sector.
The Korean textile SAE-A Spinning SRL has started producing yarns and fabrics in the manufacturing plant built in the industrial area of Coris, in Cartago.
Although construction of the new textile plant, which required an investment of $35 million was announced in June 2014, it is just now starting operations.
The Costa Rican Coalition for Development Initiatives (CINDE), told Nacion.com that "...
The manufacturer of synthetic fabrics Pettenati plans to invest $13 million to increase its production capacity by 25%.
The textile company Pettenati has announced that it is completing the process of purchasing new equipment in order to increase its production capacity this year and meet growing demand which has been reported in recent years. This investment complements the recent expansion of its industrial plant located on the highway between San Salvador and Santa Ana.
Between January and October foreign sales in the sector amounted to $1.281 billion, 5.9% more than the $1.21 billion generated in the same period in 2013.
From a statement issued by the Nicaraguan agency for promoting and exporting (PRO-NICARAGUA):
Nicaragua is the second country in the framework of DR-CAFTA with the highest percentage of exports of textiles in 2014.
Textile companies operating in free zones are preparing adjustments such as reductions in production lines in order adapt supplies in the event of the loss of tariff preference level, or TPL.
Although the timeframe for the expiration of the Tarriff Preference Level system with the United States is December 31, several companies are already starting to take steps to adjust their production in anticipation of the agreement not being renewed.
The guild is analyzing looking for new markets to buy raw materials for the manufacture of textiles, if the US does not renew the tariff preferences.
The Tariff Preference Level (TPL) expires on December 31 and if it is not renewed the Nicaraguan textile industry will be looking for new suppliers such as India, China and Chile, which have lower supply than in the United States.
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. "
Cartex Manufacturing, a subsidiary of Hanes Brands employing 1,250 people in the manufacture of boxer shorts, has announced the consolidation of its production in Vietnam.
The company announced that in order to "optimize" the flow of production, the operation will move to Vietnam, "... since the fabric suppliers are in China, which means a reduction in production costs."
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.
The possibility that the United States will not renew tariff preferences for Nicaraguan textiles at the end of the year is forcing the industry to prepare changes to their production schedule.
Although there is a possibility that the United States will grant an extension of the benefits of the Tariff Preference Level (TPL), if they are not renewed, starting January 1st, 2015 the Nicaraguan textile sector may no longer sell to United States products made from raw materials from countries that are not part of DR-CAFTA.
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 Korean company SAE-A-Spinning has indicated that the plant where cotton thread will be produced is already under construction in the province of Cartago.
From a press release by the Costa Rican Coalition for Development Initiatives (CINDE):
San José, Costa Rica June 17, 2014.
SAE-A SPINNING SRL, a subsidiary of SAE-A TRADING CO., LTD., and the Costa Rican Coalition for Development Initiatives (CINDE), today confirmed publicly that the company originating from South Korea, will open a new plant for manufacturing yarns in Cartago with an investment of over U.S. $50 million and which will generate 200 new direct jobs.
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.
Gildan Activewear has confirmed an investment in a new manufacturing plant in the north of the country in order to take advantage of Costa Rican quotas for textile entering the U.S. market.
In the second quarter report to shareholders 2014, Gildan Activewear confirmed today in Montreal that it will make its next investment in Guanacaste, Costa Rica, installing a modern textile manufacturing plant.