The National Council of Textile Organizations (NCTO,) in conjunction with regional textile industry associations, hosted Jose Fernandez, United States Under Secretary of State for Economic Growth, Energy and the Environment, at an industry roundtable in Tegucigalpa, Honduras last week.
The meeting brought together U.S. and Central American textile and apparel executives and investors to discuss trade policy priorities that support economic development in the region and bolster a co-production chain that supports more than 1 million textile and apparel workers.
NCTO noted that Fernandez’s comes at a critical time, when the global supply chain has struggled and demand for ethical and sustainable sourcing is growing, presenting new opportunities for significant growth and expansion to the Western Hemisphere and out of Asia.
Textile and apparel executives with a significant stake in this co-production partnership, as a result of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), in their roundtable discussion highlighted the need for policies that continue to support the onshoring and nearshoring of this critical supply chain, which has spurred significant job growth and economic development in the region and the United States.
“We sincerely appreciate Under Secretary Fernandez’s visit and discussion with textile and apparel companies…in Honduras, which underscores the Biden administration’s commitment to this critical manufacturing sector that has formed the backbone of economic development in Central America,” NCTO president and CEO Kim Glas said. “The U.S. textile industry has invested over $20 billion dollars in the U.S. and billions more in the hemisphere over the last decade to grow economic opportunities in the U.S. and in the region.”
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Large investments have been flowing into Central America predicated by CAFTA-DR and the co-production chain that facilitates $12.5 billion in two-way textile and apparel trade. U.S. textile companies have made billions of dollars in investments with historic investments being made this year. The most recent comes from Gastonia, N.C.-based Parkdale Mills, the largest U.S. producer of cotton spun yarn, which announced a $150 million investment in a new yarn spinning facility in Honduras in December and a substantial investment to support existing operations in Hillsville, Va., that will create and support 500 jobs in the two countries.
On the day of the event on March 17, ThinkHUGE (Honduras, USA, Guatemala, El Salvador) announced $340 million in textile investments in the region, in addition to $680 million of investments in renewable energy production to further sustain this critical supply chain. HUGE is a non-profit business association that represents a joint effort of private-sector job creators from all three Central American countries and their U.S. counterparts to drive job creation in these countries.
The goal of HUGE is to facilitate some $10 billion worth of investments to create 500,000 new direct jobs and 1.5 million indirect jobs in the four countries in five years. In its first year, HUGE has mobilized $1.9 billion in new investment to create an estimated 160,000 jobs.
These investments and others yet to come will be in areas such as new manufacturing facilities, competitive energy, US 5G technology, roads, ports, education and technology.
“Financing strategic projects that create multiple well-paid jobs is our priority,” said Camilo Atala, HUGE vice president and president of Grupo Financiero Ficohsa.
Jesús Canahuati, president of Elcatex and one of HUGE’s founding members, said “nearshoring and investments in automation projects in our region enable the development of sustainable supply chains, creating thousands of new jobs in the four countries.”
Elcatex has recently committed to investments in excess of $140 million toward expansion in yarn, textile and apparel operations. These investments alone represent 7,000 new direct jobs in the region.
HUGE founder member Intradeco Holdings through its subsidiary Central American Spinning Works, recently invested $100 million in a state-of-the-art ring spinning mill in Choloma, Honduras. The new facility began operations earlier this year. In El Salvador, Intradeco has installed another plant that will sustainably manufacture garments using 100 percent recycled yarns.
Guatemalan company Imperialtex has invested over $100 million in Central America, most recently in a new state-of-the-art yarn spinning mill that is due to begin operations later this year, and further expand its existing textile manufacturing and yarn spinning facilities. Imperialtex creates over 6,000 direct and indirect jobs throughout Guatemala and the other Northern Triangle countries, with specific emphasis in rural areas where opportunities can be difficult to find.
“In the midst of an ongoing global health crisis, the U.S. and Central American co-production chain continues to make sustainable investments that strengthen supply chain resilience, creates job opportunities and investment in the U.S. and the region, and mitigates the environmental and labor impact linked to Asian supply chains, as momentum grows for onshoring and nearshoring textile and apparel production,” Glas said. “This is an exciting time for the U.S. textile industry and that in the region, which is experiencing a strong rebound from Covid-19, as more public investments have been announced and will be announced throughout the year.”