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March 18, 2022

Northern Triangle textile sector sees $340m in investments

Fresh textile investments in the Northern Triangle worth US$340m have been announced by ThinkHUGE, the non-profit business and investment council representing Honduras, the US, Guatemala and El Salvador.

By Hannah Abdulla

The announcement was made as part of a visit by the US Under Secretary of State, Jose Fernandez to Tegucigalpa where he met with job creators of the HUGE (Honduras, USA, Guatemala, El Salvador) Business and Investment Council representing the Northern Triangle.

Investors from the US and Northern Triangle region met with the Under Secretary to discuss nearshoring, workforce development, textile and apparel industry growth, trade policy, energy reform, financial inclusion, and engagement with civil society.

Jesús Canahuati, president of Elcatex and one of HUGE’s Founding members described the opportunity stating that “nearshoring and investments in automation projects in the region enable the development of sustainable supply chains, creating thousands of new jobs in the four countries.”

Elcatex has recently committed to investments in excess of $140m, towards expansion in yarn, textile and apparel operations. These investments alone represent 7,000 new direct jobs in the region.

Similar to Elcatex, Intradeco Holdings through its subsidiary Central American Spinning Works, has invested heavily recently, with a direct investment of $100m in a state-of-the-art ring spinning mill in Choloma, Honduras. The new facility began operations in early 2022.

Simultaneously, in El Salvador, Intradeco has installed another plant that will sustainably manufacture garments using 100% recycled yarns. Further, the company will expand its solar energy generation capacity to 30 MW by the third quarter of 2022.

Felix Siman, Intradeco Chairman said: “Through these investments, our company is helping to create an additional 1,000 high-quality jobs in the US, El Salvador, and Honduras, while contributing to the region’s environmental sustainability objectives.”

Guatemalan company Imperialtex has invested over $100m in Central America, most recently in a new state-of-the-art yarn spinning mill that is due to begin operations later this year, and further expand its existing textile manufacturing and yarn spinning facilities. Imperialtex creates over 6,000 direct and indirect jobs throughout Guatemala and the other Northern Triangle countries, with specific emphasis in rural areas.

And The Hidrovolcan Group, which generates electricity using renewable sources including solar, hydro, and geothermal is implementing the $680m “El Tornillito” hydro project which will be the largest private investment in green energy in Honduras. It will produce 200 MW of electricity in Northern Honduras and open a large fertile area for agriculture and significantly reduce the risk of flooding in the area devastated by hurricanes Eta and Iota in November 2020.

The National Council of Textile Organisations (NCTO) said the Under Secretary’s visit with leading apparel and textile manufacturing companies in the US and across the region comes at a critical time, when the global supply chain has broken down and demand for ethical and sustainable sourcing is growing, presenting new opportunities for significant growth and expansion to the Western Hemisphere and out of Asia.

Hundreds of millions of dollars of investments have been flowing into Central America, predicated on the US CAFTA-DR agreement and the co-production chain that facilitates $12.5bn in two-way textile and apparel trade.

NCTO President and CEO Kim Glas said, “We sincerely appreciate Under-Secretary Fernandez’s visit and discussion with textile and apparel companies today in Honduras, which underscores the Biden administration’s commitment to this critical manufacturing sector that has formed the backbone of economic development in Central America. The US textile industry has invested over $20bn dollars in the US and billions more in the hemisphere over the last decade to grow economic opportunities in the U.S. and in the region.

“In the midst of an ongoing global health crisis, the US and Central American co-production chain continue to make sustainable investments that strengthen supply chain resilience; creates job opportunities and investment in the US and the region; and mitigates the environmental and labour impact linked to Asian supply chains, as momentum grows for onshoring and nearshoring textile and apparel production.”

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