Hanebrands will no longer be making its men’s underwear in Costa Rican subsidiary Cartex as of November 7, instead moving operations to Vietnam where the company already has a presence. The exit will put 1,250 employees out of work.
After 40 years in the country, Hanes will pack up its plants in an effort to cut costs and optimize the flow of production since the company will be closer to its Chinese fabric suppliers.
According to Costa Rica’s Nacion, Hanes COO Mauritius Brenes said the decision was strictly business related and has nothing to do with the quality of its soon-to-be defunct manufacturing operations there.
Although the company will no longer have a presence in Costa Rica, it still has operations in El Salvador, Honduras, Mexico and the Dominican Republic.
Rodolfo Molina, president of the Costa Rican Textile Chamber (Cateco) said the news should not come as a surprise because Costa Rica has ceased to be an attractive sourcing solution owed to its higher labor costs and increasing energy prices.
In the past 10 years, Costa Rica’s textile industry has lost 12,000 jobs as more manufacturers close up shop, and the country is currently operating just 60 companies employing 8,000 workers, Nacion reported Molina as saying.
Cartex had been manufacturing mostly men’s boxers, but also produces women’s underwear, socks, shirts and sportswear. Hanes did not say where in Vietnam the cutting and sewing operations would be relocated.