MIAMI — International Textile Group's Cone Denim unit is breaking new ground in Central America.
ITG chairman Wilbur Ross and Nicaraguan President Enrique Bolanos Geyer revealed here Monday plans for the company's Cone Denim operation to build a new denim facility in Nicaragua's Jorge Bolaños Abaunza Textile Park in Managua.
Ross called the occasion a special day not only for the company but for himself.
"During a trip to Central America in May 2004, we said we'd build a plant," said Ross, but this was contingent upon passage of the Central American Free Trade Agreement. "The passage of CAFTA was tough and slow, and it only passed by a slim margin."
Honduras and Nicaragua earlier this month joined the U.S. and El Salvador in enacting the treaty, which provides for duty-free trade in apparel and textiles. The pact still needs to be implemented by Guatemala and the Dominican Republic, and ratified by Costa Rica.
Slated to be completed in late 2007, the more than 600,000-square-foot vertical plant will produce 28 million yards of denim annually, according to Ross. The new facility will employ 750 workers, while further boosting the local economy with 8,000 to 10,000 support positions.
"Our friends tell us it will be the largest structure built there," said Ross of the proposed $100 million investment.
Geyer described the agreement as "a great leap forward." He said about 100,000 acres would be devoted to the venture, enough space to allow for the planting of cotton.
"It's important that ITG, the second-largest business of its kind, make such an investment in Nicaragua," said Geyer. "The whole plan is aimed at creating jobs, which is the only cure for poverty."
Alejandro Arguello, minister of development, industry and trade, said in a statement that the investment equals 2 percent of Nicaragua's total annual gross domestic product. The country's GDP was estimated to be $5.03 billion in 2005, according to the CIA World Factbook.
Ross said factors such as a solid workforce, a good transportation system and an energetic public that solicited the agreement attracted ITG to Nicaragua. Other than CAFTA's duty-free benefits, he said no other incentives influenced the company's decision.
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