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Haitian Industry Coming Back Slowly

Factories work to get back into production.

A worker looks over the devastation at the Palm Apparel T-shirt factory in Haiti.

Apparel manufacturers in Haiti are rushing to get operating again in the face of significant challenges for workers and supply chains.

This story first appeared in the January 29, 2010 issue of WWD.  Subscribe Today.

The apparel industry in Haiti was a mainstay of the country’s economy, accounting for two-thirds of exports and nearly 10 percent of gross domestic product. As the country struggles to recover from the devastating Jan. 12 earthquake, the garment sector will be an important tool in helping it get back on its feet.

Most factories operating in and around Port-au-Prince escaped the earthquake and its aftershocks with little damage, said Georges Sassine, president of the Association of Industries of Haiti, which represents the country’s manufacturers. He predicts apparel production will be fully back online by the end of February.

However, the industry faces some daunting hurdles, including getting safety certifications for all factory buildings, even those without visible damage, so production can begin in earnest. Starting Thursday, engineers from the U.S. and France began visiting factories with Haiti’s Minister of Public Works to start the certification process, Sassine said.

Prior to the quake, 28 apparel and textile companies operated in Haiti. They employed 28,000 workers at last count, Sassine said. In one of the largest tragedies caused by the earthquake, the Palm Apparel factory, which manufactured T-shirts for companies such as Gildan Activewear Inc., collapsed, killing an estimated 500 workers.

Four other factories, including Sassine’s, sustained damages that will take about a month to fix. At least six factories that initially shut down their production have resumed operations, and one denim factory near the border with the Dominican Republic was unaffected by the quake, Sassine said. He is worried companies who worked with contractors in Haiti will be forced to make business decisions that will pull production out of the country.

Gildan implemented a contingency plan to replace production lost in Haiti after the earthquake by moving it to facilities in the Dominican Republic and Central America, said Laurence Sellyn, executive vice president, chief financial officer and administrative officer for Gildan.

“We continue to be committed to our long-term presence in Haiti, and we are pleased our contractors are advising us they’re able to start up more quickly than we originally anticipated in the circumstances,” Sellyn said.

The devastation faced by Haitian workers is also a challenge. Sassine said increasing numbers of workers have returned to work in the factories, but it’s hard to predict the long-term effects, as many were forced to leave the capital city to find shelter or check on their families. As early as Monday, attendance at the factories able to resume production was at 30 percent, and that number climbed to 60 percent by the middle of the week, he said.

“Every day, more and more are returning,” Sassine said. “If we reach 80 percent [attendance] we will consider ourselves very lucky.”

Mobile meal trucks supplied by the Dominican Republic helped some factories feed workers two meals a day, Sassine said, but shelter remains challenging. Sassine said he was working to get 25,000 to 50,000 tents from the U.S. Agency for International Development to offer shelter to workers who returned to the factories.

U.S. companies are working to gather information and get production going, as well.

Gildan employs 40 people in Haiti to oversee social responsibility compliance and quality control at its contract factories, Sellyn said. The company is working with its employees to meet their needs and established a staging area in the Dominican Republic to provide food and water to employees of Gildan and its contractors.

A spokeswoman for Gap Inc. said the company’s two contractors in Haiti were up and running, including one inside the earthquake zone. Initially the factory had shut down due to some minimal damage, she said, but the company was able to come back online relatively quickly.

“Gap sources a limited amount of product in Haiti, and we’re committed to continuing to do business there,” the spokeswoman said. “We’re working directly with our vendors to make sure things are resumed as quickly as humanly possible.”

Hanesbrands Inc. said at least partial production had resumed at all three of its T-shirt sewing contractors. Hanes also said it set up an operation in the Dominican Republic to provide food, water and other aid for its workers. Hanes said it expected production in Haiti to return to pre-earthquake levels by mid-February.

“We are very thankful that our major contract partners have the wherewithal to resume production, providing critical jobs for employees who are seeking to recover from the aftermath of the earthquake,” said Gerald Evans, president of international business and global supply chain for Hanesbrands.

According to sources in Haiti and in the U.S., the Dominican Republic opened use of its port to companies to ship goods. The seaport in Port-au-Prince was badly damaged in the disaster, but partial operations started this week, according to some reports.

Before the disaster, Haiti, the poorest country in the Western Hemisphere with 80 percent of its population living below the poverty line, was poised to emerge as a success story for international trade proponents. Following the extension of duty free apparel benefits to the country under the Haitian Hemispheric Opportunity through Partnership Encouragement Act, or HOPE, in 2006 and its successor, HOPE II, in 2008, the country’s apparel manufacturing garment sector had grown significantly.

In the first 11 months of 2009, apparel and textile imports to the U.S. from Haiti grew 24.3 percent to $468 million. On a volume basis, imports to the U.S. advanced 6.8 percent to 217.1 million square meter equivalents.