173 companies operating in 48 industrial parks using the free zone format, in three years increased the total number of square meters used by 33%.
An estimated $300 million has been invested between January and November 2015 by companies operating under the free zone incentive scheme, which are focused on the textile industry mainly in the manufacture of harnesses, production of tobacco and more recently, services such as call centers.
In Nicaragua a proposal has been made to create a training center to improve the labor performance in free zones and attract more foreign investment to the sector.
In order to improve employees skills and increase the productivity and competitiveness of enterprises, the National Commission of Free Zones (CNZF) is proposing the creation of a textile school, where ongoing training on production techniques would be provided for the sector.
A bill that is being analyzed by the U.S. Congress aims to reduce the level of tariff preference to only 6% of imports from Nicaraguan textile factories.
Although the possibility exists of an extension of the current Tariff Preference Level (TPL) until 2015, American congressmen have proposed that the benefit be granted only on cotton pants, which represent the lowest proportion of Nicaraguan textile exports to the United States.
With a record $2.207 billion in exports last year in 2012, the nation aims to continue growing its free zone regime, both in terms of the number of companies and volume of exports.
Beyond having obtained these successful figures, the aim is to attract more businesses and diversify economic activities. Within these objectives, the installation of the U.S.
After exporting 120 million cigars in 2012, Nicaraguan tobacco companies aim to reach 150 million units in sales in 2013.
If the sale goal is achieved, Nicaragua will have positioned itself as the leading exporter of cigars, removing the Dominican Republic from the top position.
An article in Lavozdelsandinismo.com reports that Fredman Torrez, a member of the Association of Nicaraguan Cigar Makers, said that "in 2011 102 million units were sold abroad, in 2012 120 million were exported and this year its is predicted that 150 million cigars will be sold abroad. "
The U.S. company Millknit Industries is to produce fabrics for the maquiladora industry, beginning operations in the first quarter of 2013.
Operating in the industrial park Las Mercedes, the textile company will begin operations between January and February 2013, informed the technical secretary of the National Commission of Free Zones (CNZF), Alvaro Baltodano.
Millknit Industries will begin operations in early 2013, producing fabrics for clothing companies established in the free zones.
Following the closure of Core Denim in 2009, Nicaragua has had no cloth production, which is a disadvantage for the clothing sector, which has to import its raw materials.
Laprensa.com reports that "Millknit will operate in the industrial park Las Mercedes, Managua, it is funded with North American capital and the initial investment is for $25 million, according to the National Free Zone Commission (CNZF). The initial projections for jobs is 270 positions."
European investors are to acquire the Cone Denim Plant in Nicaragua, which has been closed for 3 years and could reopen in late 2012.
"It is a fact that this year the Cone Denim plant will be reopened. We're just waiting for the (purchase) negotiations to be completed," confirmed Dean Garcia, executive director of the Nicaraguan Association of Textile and Apparel Companies (Anitec), according to Laprensa.com.ni.
The growth is reflected in the steady growth in employment in production firms operating under the regime, which together exceed 100 thousand jobs.
The number of employees in factories in free zones reached 103,000 people in March, a record for the sector in Nicaragua, said Alvaro Baltodano, President of the National Free Zone Commission, CNZF. There are 68,019 employees in the textile sector alone.
The textile company, a subsidiary of International Textile Group, which invested $100 million in its plant in Nicaragua, now has three interested parties; meanwhile there are still plans to reopen its operations.
The U.S. textile company Core Denim, belonging to the International Textile Group (ITG), could resume operations in Nicaragua which were suspended in March 2009, informed the government, although there is still a chance that the company will be sold, which would imply a reassessment of these plans.
Exports from companies in the free zone in Nicaragua grew by 44% in the first four months of the year.
The Technical Secretary of the National Commission of Free Zones, Alvaro Baltodano announced projected exports of $1,750 million by the end of this year, of which the textile sector would provide $1,350 million.
"According to official data published by the Central Bank of Nicaragua (BCN), free zone exports, up to April, came to $530.4 million, compared $367.9 million in the same period last year."
During the course of the year, the U.S. textile company will restart operations in the country.
The start-up would initially create 700 new jobs.
"The secretary of the National Free Zone Commission (CNZF), Alvaro Baltodano, and executive director of the Nicaraguan Association of Textiles and Apparel (Anitec), Dean Garcia, confirmed to the press that the reopening of the company is underway and will become official in the coming weeks,” according to an article at Laprensa.com.ni.
The arrival of new textile plants, the expansion of three plants and the reopening of another were announced by the textile sector.
With an investment of $ 50 to $ 60 million, the National Commission of Free Zones (CNZF) is negotiating the installation of a new textile factory with a foreign capital group.
Dean García Foster, executive director of the Nicaraguan Association of Textiles and Apparel (Anitec), said three textile companies have confirmed their expansion plans, which involves an estimated investment of $ 20 million.
Istmo Textil Nicaragua has launched a new textile manufacturing facility where it expects to employ 2,500 people.
The investment means that the company, backed by Korean capital, will look to achieve exports worth $120 million in 2010 and will employ a total of 5,000 workers.
Álvaro Baltodano, technical secretary for Nicaragua's free trade zone committee said that, "the South Korean investors expect to be able to increase the number of people employed to 7,000 next year and export $150 million worth of textiles," according to Laprensa.com.
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