Guatemala's apparel industry lost 38,000 jobs or roughly 35% of its workforce last year - worse than a prior 20,000 estimate - as China continued to eat away business from key markets in the US.

The industry saw 58 apparel producers close shop, leaving 13,327 people out of work.

Other industry restructurings prompted an additional 24,673 dismissals, an official for Guatemalan Apparel and Textile Industry Commission (VESTEX) said.

Local apparel concern Koramsa (which manufactures for Levis and GAP) was the poster child of the industry's woes, dismissing 3,500 workers to streamline its business, the official noted.

Guatemala lives from clothing exports to the US, but after China's quotas were lifted last year, Chinese businesses and other Asian producers have taken over the world's biggest market, elbowing Guatemalan producers to the side.

Last year, the industry reported a 5% revenue decline to €1.6bn, hurt by falling US exports, the official confirmed.

However, to fight the Chinese, many producers have successfully expanded into the fashion market, helping boost the industry's profits 17% to €620m last year, the official said.

By Ivan Castano