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New US-Honduras Initiative to Boost Central American Nearshoring

North Carolina educational institutions are joining forces with a key Honduran university to educate and train thousands of students for the next-generation textile workforce to meet a rising tide of nearshoring and onshoring in Honduras, Central America and the United States.

With backing from the U.S. State Department, North Carolina State University, Gaston College and Catawba Valley Community College signed a Memorandum of Understanding (MOU) with Honduran-based Central American Technological University (UNITEC) Monday at a signing ceremony at Gaston College in Dallas, N.C.

“U.S. companies are making significant investments in developing co-production facilities that will create jobs in both the United States and Central America, which advances U.S. government efforts to create economic opportunity in the region,” a State Department spokesperson said. “This agreement will strengthen supply chain security and integration, providing benefits for producers and consumers across the Western Hemisphere. The U.S. government will continue to maintain and build upon these successes by working together with other governments and the private sector to solidify and expand these productive relationships. We all benefit when we cooperate and facilitate strong, mutually beneficial public-private partnerships.”

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The initiative will launch a series of educational workforce development programs, ranging from training and certificate programs to undergraduate and graduate degrees, in textile-related areas of study. The partnership comes at a defining moment for the U.S., Honduras and Central America, which are seeing historical levels of investment in textile and apparel production stemming from a global supply chain crisis that has driven a significant shift in sourcing out of Asia to the U.S. and the region.

Nearly $1 billion of textile and apparel investment is anticipated in the U.S. and Central America this year, according to the National Council of Textile Organizations (NCTO). Current growth projections indicate a need for more than 10,000 new skilled workers in the textile industry in Honduras alone over the next five years.

The U.S. and this region are inextricably linked through a textile and apparel co-production chain under the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) that has generated $12.6 billion in annual two-way trade in the sector and supports 1 million workers in the U.S. and the region.

North Carolina plays a central role in this co-production chain. It is the second largest state for textile employment nationally with more than 36,000 workers, and the state’s $2.7 billion in textile-related exports leads the nation. The Northern Triangle, including Honduras, is a major export destination for U.S. yarns and fabrics that come back as finished items under the U.S.-CAFTA-DR trade agreement.

In addition to participating in the signing ceremony and an industry roundtable, Jose W. Fernandez, under secretary of state for economic growth, energy and the environment; Jennifer Knight, deputy assistant secretary for textiles, consumer goods and materials at the U.S. Department of Commerce, and Hector Zelaya, private secretary to Honduran President Xiomara Castro, toured two of Gildan’s yarn-spinning facilities in Salisbury, N.C. Gildan is an apparel manufacturer that has invested over $700 million since 2013 across its network of yarn-spinning facilities in the United States.

Andy Warlick, Chairman and CEO Parkdale Mills, addresses the signing ceremony.

“The MOU signed today is a win on so many levels,” said David Hinks, dean of the Wilson College of Textiles at North Carolina State University. “Firstly, it is a win for U.S. textile manufacturers who operate in both the U.S. and Central America as they build more resilient and economically and environmentally sustainable supply chains. Secondly, it’s a win for the Wilson College of Textiles and NC State in advancing its land-grant mission to support economic prosperity and provide transformative opportunities for people of all ages in North Carolina and beyond in collaboration with our community college partners and now UNITEC in Honduras.”

“Together we will train the next generation of textile workers, leaders and academics in this critical production chain,” Hinks added. “These workforce programs will have a ripple effect throughout Central America, the region and the United States, spurring job growth and more investment, and not just in textiles and apparel. Hundreds of our industry partners that work with our college closely are looking to re-engineer their supply chains out of China to the United States and Central America. This new partnership will provide a near seamless educational and training pathway to building an even stronger textile and apparel co-production chain between the U.S. and CAFTA-DR countries, which collectively supports 1.1 million workers.”

Dr. Marlon Brevé-Reyes, UNITEC rector, said by signing this academic MOU, “we bring education and industry together between two economies with a strong history of success in the textile industry.”

“The United States is very supportive of the academic partnership announced here today, which will lead to increased opportunities in co-production and will benefit both the United States and Central America,” Fernandez said. “Investment in workforce and adherence to strong labor standards and good labor practices are essential to creating sustainable and resilient supply chains.”

Knight called the MOU a “window of opportunity” for “the innovations that U.S. and Central American textile and apparel companies create to reduce environmental impact and increase transparency across their supply chains can set them apart from global competitors.”

Kim Glas, president and CEO of NCTO, said the partnership demonstrates the critical need for education and training programs for the next generation of academics and textile employees to meet head-on the global sourcing shift that has been driving production out of Asia to Honduras, the entire CAFTA-DR region and the United States.

“Collaboration on this scale will support our critical co-production chain in the CAFTA-DR region and further enhance investments for the years to come,” Glas said. “U.S. and Honduran government support for this private sector collaboration is crucial…It’s important these efforts are supported and funded in order to help expand growth opportunities in the U.S. and Central American textile and apparel production efforts.”