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.
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.
The maquila industry and the Honduran government have agreed on an innovative formula that enables funding of $90 million to be used to install a fifth turbine at El Cajon dam.
The government and industry have agreed to work together in favor of the economy. With an investment of $90 million for the maquila industry a fifth turbine will start operating at El Cajon dam, which will increase its generation capacity by 75MW.
In Honduras there are plans to develop free zones to attract companies from El Salvador who have shown their fears about the business climate in the country.
Several Salvadoran companies have shown fear over the FMLN party winning the presidential election for the second time. Aware of the concerns of Salvadorans regarding the business climate in the Central American nation, Hondurans are working on attracting those companies.
Companies from the sector are consolidating their operations in plants in order to improve production efficiency.
The President of the Honduran Maquila Association, Daniel Facussé, announced that the purpose of the relocation is to become more competitive, following a system already used in other companies in different sectors.
Moreover he added that "the aim is not to have plants scattered all over, but rather to have them all in one place, because it is much more economical for production"
The National Investment Council has been created, an entity composed of representatives from the public and private sector and which aims to improve the competitiveness of Honduras.
A series of policies implemented by the new government to encourage the private sector, including the creation of the National Investment Council (CNI by its initials in Spanish) is made up of representatives from the public and business sector.
The 8% increase in minimum wages in this sector will be effective from 1 January 2014.
"We are pleased that the people who are working in the maquila sector will receive in the month of January the respective increase, which will be eight percent and which has been agreed with the labor unions," said Daniel Facussé, president of the Association Maquila Companies of Honduras.
The Honduran maquiladora industry is increasingly benefiting from the agreement which stimulates and protects Canadian investments coming into the country.
This industry has shown great optimism after the approval of the trade agreement. "We will have several advantages," says Daniel Facussé, president of the Honduran Maquila Association (AHM).
Extending the deadline for the end of the validity of the law does not meet businesses need for certainty regarding the permanence of a system which is considered successful.
Congress has approved the extension until December 31, 2013 of the term of the Employment Paid By Hours Act which would have ended in two months.
This law was created in 2010 and its duration was originally 36 months meaning that it would have come to an end in November, however, the National Congress of Honduras gave its approval for it to remain in force for another month.
The maquila sector projects a 10% increase in exports, totaling $3.3 billion, compared to 2011.
Daniel Facussé, President of the Maquiiladores Association of Honduras (AMH), told press, "... this year a ten percent increase is being reported due to exports of textiles and labor for services, something which is growing including inside the country’s own firms. "
In the past two years, 16 maquila companies have left the country, leaving 10,000 people out of work.
The president of the Honduran Maquila Association (AHM) Daniel Facussé, addressed the issue at the time of the announcement of the closure of Adidas and Nike’s manufacturing plants in Honduras and transfer of operations to Nicaragua.
"According to Facussé, Nicaragua and El Salvador are between 38 to 50 percent cheaper than Honduras", reported Proceso Digital.
Layoffs in the textile industry have been announced after projections of a 10% decline in its exports.
The industry is feeling the impact of the economic recession with a decline in orders from its main market, the U.S., said the president of the Honduran Maquila Association, Daniel Facussé.
An article in Proceso.hn reports that, "according to Facussé, several assembly plants have been forced to make redundancies and others are calling for discontinuations.
Lack of administrative processes, investment and efficient controls are putting the port's "safe harbor" status, provided by the U.S, in jeopardy.
The issue is a concern to the Honduran Maquila Association (AHM), and its president Daniel Facussé said the loss of certification would cause major economic damage to the country by delaying the entry of merchandise.
The relative merits of Nicaragua in safety, productivity and the low cost of labor are posing a serious threat to the textile industry in Honduras.
As noted in an article in Laprensa.hn, the Association of Textile Producers of Honduras, said that "an average of 16 textile factories have migrated from the country and have settled in Nicaragua and El Salvador."
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