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.
The manufacturing industry, including maquilas, accounted for 96% of total exports, and closed with an annual growth rate of almost 4%, equivalent to $130 million.
From a statement issued by the Central Reserve Bank:
Exports of goods from El Salvador amounted to US $3.5596 billion between January and July 2018, higher by US $124.5 million compared to the same period in 2017, the Central Reserve Bank reported.
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 business associations of both countries started working on a joint plan to solve a problem that has been causing them damage for the last six years.
Representatives from the Chamber of Commerce, Industries and Agriculture of Panama (Cciap) and members of the Chamber of Commerce of Bogotá, initiated talks to develop a joint plan to end the conflict that has affected them since 2012.
The sector's union says that the strategy focused on producing fabrics and yarns for export is already paying off, and they intend to continue in order to become the region's main supplier.
According to the Chamber of the Textile, Clothing and Free Trade Zone (Camtex), exports of raw materials from El Salvador have grown considerably in the last two years, as between 2016 and 2017 sales increased from $60,000 to $1.2 million.
A little more than a month after the Panamanian government decided to raise import tariffs on various products as a measure of retaliation against the South American country, representatives from both governments reaffirmed their positions at a WTO hearing.
The outcome of the hearing will be announced by the WTO between August and September, according to the rules that govern the agency.
According to the textile industry union, half of the $2.6 billion exported in 2017 corresponded to pullover sweaters, cotton t-shirts, cotton briefs, synthetic fiber t-shirts and synthetic socks.
The Chamber of Textile, Clothing and Free Trade Zones of El Salvador (Camtex) reported that in 2017 the sector exported $2.617 million worth of clothes, $95 million more than was reported in 2016, which is equivalent to an interannual increase of 3.8%.
The textile guild has stated that 2017 closed with $2.6 billion in exports and an increase of almost 4%, and for this year it plans to achieve similar growth.
The Chamber of the Textile, Clothing and Free Trade Zone (Camtex) exported $2.617 billion during the past year, $95 million more than the value of exports registered in the previous year.
In 2017 exports totaled $5,760 million, 6% more than in 2017, and sales of clothing and sugar were the ones that accounted for most of the increase.
Sales in the Central American region, including Panama, constituted the second largest destination for Salvadoran exports, amounting to $2.403 billion, also registering an increase of 6% compared to 2016.
After having recorded a slight fall in 2017, companies in the free trade zone regime of Nicaragua plan to achieve a 5% growth in their exports this year.
One of the engines of growth that is expected to be achieved in 2018 is investments and reinvestmentson the part of existing companies that are anticipated for this year. According to free zone entrepreneurs, between $300 million and $400 million could be invested.
Salvadoran textile companies state that the costs of labor, security and delivery times have made the sector's operations more expensive.
The recentincrease in the minimum wageis one of the factors that has had a direct impact on the cost structure of Salvadoran textile companies. Added to this are logistical difficulties in customs offices, which have caused companies from neighboring countries to obtain contracts that were originally planned for El Salvador.
The Textile Industry Association reported a reduction of almost $17 million in value exported in the first quarter of the year, compared to the same period in the previous year.
Figures from the Chamber of Textile, Apparel and Free Trade Zones (Camtex) indicate that exports from January to April totaled $816 million, down from $833 million exported in the same period in 2016.
Companies from Hong Kong and Taiwan could be interested in setting up a synthetic and manufacturing plant in the country.
The information was provided by representatives of the Apparel and Textile Commission (Vestex) at Agexport, who explained that in the case of the company from Taiwan, its interest is in establishing a manufacturing plant and supplying the US market.The other company, from Taiwan, could be interested in installing "... a manufacturing plant for synthetic products, and the countries that they are investigating are Guatemala and Haiti."
Companies in the Asian country are looking to provide Guatemalan textile workers with accessories, threads and synthetic fabrics with finishes.
Textile companies in Guatemala envisage the possibility of generating more value in their supply chain with products that can be provided by Chinese companies that specialize in accessories and other necessary inputs for the textile production chain.
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"]
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