Venezuelas textile and apparel industry has lost 350 firms and 350,000 jobs over the past four years

Venezuela's textile and apparel industry has lost 350 firms and 350,000 jobs over the past four years

Venezuela's Telares Maracai and Dominican Republic's Grupo M are eyeing a joint venture to produce denim and jeanswear for the latter's US clients.

"We want to enter into a joint production agreement by 2018," says Ruby Bautista, marketing director of Maracai's denim arm Jeantex. "Right now, Grupo M is giving us in-house advice on how to run our new jeans factory" to scale up export production.

Bautista said Telares Maracai will likely own 80% of the joint venture, and Grupo M the remaining 20%. "They are going to give us the know-how but the investment will be ours," she adds.

Her comments come as Venezuela's apparel industry is largely bankrupt, with manufacturers scrambling to bolster exports to offset a contraction in the country's economy of up to 15% last year and its worst political crisis in history.

As surging inflation and unemployment choke consumption, Maracai's domestic sales will likely fall this year – though not as much as the industry's overall projected 15-20% drop – due to a rush to ramp up exports, according to Bautista.

"This year, Maracai hopes to export around $60m worth of denim and jeanswear, up from $50m in 2016," she says, helped by a new $30m jeans factory to provide full-package services to foreign customers. The site is run by Maracai's Cofmar unit, and is expected to churn out 350,00 denim jeans a year.

"By adding the finished garment to the fabric, we hope to provide more value and increase our exports to $100m" in the medium term, Bautista explains.

Maracai, which alongside Palos Grandes is one of the two remaining large Venezuelan fabric suppliers, makes 20m metres of fabric annually. Jeantex and Cofmar apart, it also runs warp knit, poplin, twill and drill maker El Emporium de las Telas, or Fabrics Emporium.

Working with Grupo M, which recently struck big production ventures with Honduras's Elcatex, Maracai hopes to sell garments to Lacoste, Tommy Hilfiger and Nautica, according to Bautista.

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The Caracas firm also has plans to step up sales to Ecuador and negotiate new contracts with Colombia, Mexico and Central America, she adds.

Other firms are speeding up foreign sales after the Venezuelan government recently relaxed export restrictions, providing a breather from steep dollar curbs hindering raw-material imports.

"There is no specific regulation, cap or limit," says Raul Lopez, economic development secretary of Venezuela's Miranda State, referring to the operation by Cencoex, the National Center for International Trade in charge of disbursing dollars.

"The Cencoex official will give you whatever or how much they want on any given day," Lopez notes, often stripping many firms of dollars.

Venezuela's textiles and apparel industry has been halved since President Nicolas Maduro took office four years ago, with 350 firms and 350,000 jobs lost, according to Lopez.

"We have become less competitive against Colombia or Peru and our companies are very indebted."

Huge investments are needed to modernise Hugo Chavez-era mills to produce denim, flannel, dress shirts or swimsuits, in which Lopez says Venezuela has know-how.

A Venezuela government spokesman did not return calls for comment.