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Why Hanesbrands is Investing $7.5 Million to Ramp up Sourcing in El Salvador

Hanesbrands recently announced that it would spend $7.5 million to expand its existing fabric and clothing operations in El Salvador at a time when Central America is getting more attention as it flies under the radar of a bubbling tariff war.

As part of the expansion—driven largely by increased demand, particularly for its Champion brand—the American clothing basics company said it will increase production at its facility in San Juan Opico, La Libertad, where it’s already producing fabric, socks, stockings and dyeing finished garments. The focus for the expansion will largely be on fabric, and the factory will go from producing 1.9 million pounds of fabric per week, to roughly 2.3 million pounds per week.

Hanesbrands, already one of the top three biggest employers in El Salvador, will add another 200 jobs to the upward of 10,000 it has already generated in the country with this latest expansion.

Dollars designated for the growth will also go toward adding 80 new sock knitting machines and tapping into the dyeing plant for finished garments Hanesbrands inaugurated last year in preparation for expansion needs. The new dyeing operation will allow Hanesbrands to offer more “vintage-feel” fabric and clothing.

“The expansion project that will be anchored in the company’s textile plant consists of incorporating new machinery, training and technology to carry out a process of dyeing finished garments, which will allow Hanes to diversify in its production scheme and make its way in new markets that are demanding this type of fabric,” Hanesbrands Central America VP of operations René Villarreal, said. “HanesBrands has been carrying out a series of strategic acquisitions over the past three years, which allow it to enter new markets or strengthen its position. This investment is another link in this vision.”

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For Villarreal, El Salvador’s appeal extends beyond its lack of new and impending tariffs.

“El Salvador is a very attractive place to invest and maintain our operations,” Villarreal said. So far, HanesBrands has invested more than $640 million in the country, expanding capacity, training locals, and adding a biomass plant to supply its operations with renewable energy. “Hanes operates also in El Salvador, a water treatment plant that is among the best throughout the world, where there is only one comparable in China.”

What’s more, according to Villarreal, the country’s proximity to the United States means it’s highly competitive on delivery times, plus its workers are known for producing quality product. El Salvador’s full package offering also means it can better withstand the challenges of the international market, which more may take note of as global trade relations deteriorate.

“The companies that are suppliers of Hanes in El Salvador have contributed to the country’s economy with around $95 million, so the strategic importance of the company is relevant,” Villarreal said. “All of these characteristics give us a greater advantage in terms of low costs, compliance and the ability to maintain our manufacturing processes at scale in an efficient, transparent way, and with high ethical standards.”