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Guatemala Provides Near-Sourcing Solution to US Apparel Companies

Lucia Palacios, marketing and promotion coordinator at Vestex, and Diego Diaz, New York-based trade commissioner for Guatemala

As China increasingly falls out of favor with foreign companies seeking more bang for their buck, smaller markets are positioning themselves as a low-cost, high-value solution for U.S. brands and retailers looking for a new source for apparel and textiles.

The Central American country of Guatemala—roughly the size of the state of Tennessee—is one such region.

And making an appearance for the first time during the winter edition of the International Apparel Sourcing Show at the Javits Convention Center in New York Jan. 24-26 is a Guatemala Pavilion featuring five exhibitors: Inversiones Casta, Manufacturas Del Sol, Nylontex, Startex and Tejidos Pralin.

Valued at $1.5 billion and accounting for roughly 19 percent of all non-traditional product exports (surpassing traditional shipments such as coffee and bananas), Guatemala’s textile and apparel industry is known for its prowess in producing performance fabrics and sportswear and its clients span Walmart and Target to Old Navy and Gap to Puma and Reebok, among others.

But Lucia Palacios, marketing and promotion coordinator for garment and textile association Vestex said the country’s 150 apparel manufacturers, 39 textile mills and 200-plus trims and services firms can handle small, specialized runs as easily as they churn out mass-produced goods, and she’s hoping the exhibiting companies can pique the interest of potential customers searching for near-sourcing opportunities in Central America.

New York-based trade commissioner Diego Diaz is confident that Guatemala can woo more business: “I have to visit a lot of clients around here and they appreciate the speed-to-market that we have compared to Asian countries,” he said, pointing out that 70 percent of the apparel sector’s foreign investment is Korean-affiliated. “[Our factories are] more flexible so they can easily accommodate whatever the client requests.”

Another draw: the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), which went into effect in Guatemala in 2006. According to government data, the U.S. is the country’s largest market, accounting for nearly 40 percent of trade.

Diaz added, “Turnaround is really good and people in the fashion business really appreciate this. For some U.S. companies, from the moment they place the order to when they receive it, it’s six weeks.”