Leading Brazilian denim exporter Santista Textil has announced plans to build production mills in Mexico or Central America to gain tariff-free access to the United States market.

The company, jointly controlled by apparel maker Sao Paulo Alpargatas SA and energy and construction group Grupo Camargo Correa, currently exports about 80 per cent of its total output to the US.

"We are evaluating possible countries for investment, given bilateral accords," Santista president Herbert Schmid said.

"The import quotas are not going to change in the next seven years at least, and Brazil is losing the race with countries like Chile and Mexico."

Santista operates a mill in Chile that recently received investments of US$5 million to produce high quality fabrics and to construct a thread mill.