Mexico has to compete with Central America to woo US buyers

Mexico has to compete with Central America to woo US buyers

Mexico's textiles industry, Latin America´s second largest, could create 1m jobs if a battery of measures to boost the industry's competitiveness and raise US exports is introduced, according to Rodolfo Garcia Muriel, president of leading textiles lobby Canaintex.

The industry hopes the government will take heed of its new initiative to curb the country's soaring counterfeits trade (which accounts for 70% of sales), dubbed "Zero tolerance."

"We are going to step up our contraband fighting initiatives and deepen our collaboration with the government to continue to chase and capture illegal importers," a Canaintex spokesman told just-style.

Currently, the industry employs some 500,000 workers. Garcia´s hope is that the count will reach 1m in the medium term. He said Asia's rising wages are popping open a "window of opportunity" for Mexico to win new sourcing contracts from US and European apparel brands eager to shift production out of Asia.

Miguel Angel Andreu, director of the Insituto Textil, an industry think tank, said the 1m target was overly optimistic but that the industry could generate significantly more jobs if US producers hire Mexican full-package producers that can delivery quickly.

"Right now US companies want to cut costs, so Mexico is a great alternative as we are located just three days away from the country," Andreu noted.

More investment needed
The industry, however, must work harder to improve its sales pitch to US buyers. More investment is needed to improve quality and design and train workers to meet the "quick response" needs of US brands.

To this end, the industry recently launched a worker training programme called Mi Taller (My Workshop) through which it hopes to bolster the workforce's talent and ability to make more innovative and higher-end products for US customers.

Mexico already has to compete with Central America to woo US buyers. The region has recently raised headlines as an optimal destination for US manufacturers interested in benefiting from the DR-CAFTA free trade agreement, and the industry there is scrambling to win American business.

Mexico's answer to Central America is Mexico Fits, a plan to promote its textiles and apparel capabilities with US customers. As part of Mexico Fits, the country's leading full-package firms will be present at this year's Magic Show, Canaintex sources said.

Garcia said it is also crucial to provide more financing for producers at a time when cotton prices continue their upswing.

Mexico should also increase its cotton production to become self-sufficient as the country has the potential to make 2m packs a year and it only makes 600,000 now, Garcia pointed out.

This year, the industry is bracing for slower growth as the US curtails imports amid an uncertain economic recovery. Overall revenues should increase 4-5% from a 6% hike last year, as local demand falls in a weaker Mexican economy.

Observers expect textile exports to increase 20% in 2011, compared with a rise of 40% in 2010 when US demand climbed amid hopes of an economic recovery.