Seoul-based global garment manufacturer Hansae Co., Ltd. and multinational company GK Global have recently entered a significant strategic partnership aimed at expanding fabric sourcing and production in Central America. The collaboration between these two industry leaders is set to enhance their competitiveness in the region and foster mutual growth in the medium to long term.

The partnership was formalized with the signing of a memorandum of understanding (MOU) on July 13 between Hansae and Northern Textiles, a subsidiary of GK Global located in Honduras. The MOU signing ceremony was attended by key stakeholders, including Hansae’s president Kim Kyung and Arshad Amdani, CEO of Northern Textiles, who expressed their commitment to this strategic alliance in the Central American market.

Within the terms of the MOU, Hansae has outlined plans to expand its fabric sourcing and production activities in Central America starting from 2023. By capitalizing on the advantages of nearshoring, the company aims to provide apparel to major U.S. retailers such as Target, Gap Inc., Walmart and Kohl’s, boasting considerably shortened lead times. This strategic move aligns with Hansae’s objective of responding promptly to the evolving needs of its customers and providing real speed to market.

Northern Textiles, a state-of-the-art textile facility established in February 2023, specializes in manufacturing innovative and sustainable premium knitwear, loungewear and activewear fabrics. As a fully vertically integrated company, it covers the entire supply chain from spinning and knitting to dyeing and finishing, catering to the circular knit fabrics market with a focus on traceability, sustainability, innovation and responsibility. With an impressive annual production capacity of around 52 million pounds, Northern Textiles operates 200 knitting machines.

The partnership with Northern Textiles follows Hansae’s prior MOU signing in May with Willbes Dominica for a synthetic mill in the Dominican Republic, demonstrating the company’s unwavering commitment to vertical production in the CAFTA-DR region. During the ongoing construction of its largest Central American undertaking, the Michatoya project, Hansae remains dedicated to strengthening its presence in the region through strategic collaborations and investments. While Hansae’s largest production plant is currently located in Asia, the company acknowledges the importance of investing in Central America to establish a robust and diversified supply chain. The manufacturer has a global presence encompassing 22 corporations and 10 offices across nine countries.

As nearshoring picks up, Honduras is a popular choice for U.S. labels. In 2022, Honduras was the top Central American exporter to the United States, according to OTEXA data. U.S. Vice President Kamala Harris launched a call-to-action for American businesses to create economic opportunity in the Northern Triangle of Central America that includes Honduras, which has encouraged more sourcing in the region.

GK Global, a private multinational enterprise with operations in the textiles, real estate, technology, agriculture and lifestyle sectors, has investments in nine countries worldwide. Driven by a pioneering spirit and a commitment to sustainability, GK Global aims to generate positive and lasting change, improving the quality of life at local, national and global levels.

The strategic partnership between Hansae and GK Global signifies a pivotal step towards strengthening fabric sourcing and production in Central America, ultimately benefiting the apparel industry and the customers that Hansae serves.