MEXICO CITY — David Ha, a colorful Korean executive running a $350 million maquila operation in Central America, plans to expand his TexOps activewear factory in El Salvador and enter new production ventures in Honduras and Haiti.
If the strategy succeeds, revenues from his more than 15 factories making products for U.S. athletic brands could hit $500 million by 2020, according to sources.
Ha, 54, won the “Best Friend of El Salvador” accolade in November for his social and altruistic contributions to the impoverished nation, according to a Congress statement.
The distinction turned the textiles mogul, who sports a K-pop pink hairdo and has an admittedly flamboyant style, into a media sensation, also because he cheekily calls his company the “Google of textiles” by claiming it fosters a tech-driven and socially conscious corporate culture.
“We have a lot of creative people working in the company,” said Ha, when asked about why he dyes his hair pink, which camp appearance at one time prompted a bank to deny him funding. “If I don’t push the envelope, we won’t create whatever we have to or innovate.”
Ha boasted that TexOps — which manufactures 150,000 garments weekly for the likes of Dick’s Academy, REI and Castelli — has made heavy tech investments to develop a highly integrated supply chain to deliver full-package orders as fast as three days (from order to shipment).
“We want to be like the Google of textiles, to process information and refine our knowledge,” Ha boasted. “Every time we develop a style, fabric or silhouette, we are consolidating all that information,” enabling TexOps to suggest product samples and styles to customers as opposed to just waiting for them to order.
Last year Ha invested $1 million in new heat-transfer machines from Itali’s Monti and other software to streamline production. That, coupled with rising clothing orders from a strengthening U.S. economy, should help sales leap 15 percent to more than $90 million in 2017, he predicted. That is up from a 10 percent expected decline last year when orders tumbled amid uncertainty surrounding the elections and President-elect Donald Trump’s threats to cancel the Trans-Pacific Partnership.
“Due to the TPP, all the retailers were reallocating production to Asia, but now that it didn’t pass, and because of Trump’s pressure on China, orders are going to come back” to Central America, Ha predicted, adding that pressure to tighten inventories will also drive near-sourcing business from the U.S.
To prepare, TexOps will enlarge its production facilities to boost output by 20 percent in 2017 to around 180,000 garments weekly, Ha said, adding that he also hopes to receive new, fast-fashion orders from J.C. Penney Co. Inc., which is carrying out due diligence on his factory to possibly source there.
Ha also hopes to accommodate growing sales for his private-label brand, Where It to the Heart, or W.I.T.H., which sells on Amazon and at sportswear retailers like Paragon. Plans to launch an unnamed, higher-end brand in coming months with prices up $300 at retail are also under way, he added.
Priced at $80 to $110, W.I.T.H. targets 25- to 45-year-old women and is an “edgier and more fashionable Lululemon,” Ha claimed, adding it was first to introduce reversible leggings with diverse patterns and fringes as well as bras with powermesh fabric.
W.I.T.H., which employs 40 graphic artists and a Los Angeles design team, expects sales to jump 50 percent to $3 million this year and by a similar amount in 2017, according to Ha.
With business and entrepreneurship bachelor’s degrees from California State University in Los Angeles, Ha said his 1,500-strong TexOps factory (which he owns 70-30 with business partner Juan Zighelboim) is the crown jewel of his textiles empire, which also includes Apple Tree in El Salvador and Nicotex in Nicaragua. Ha declined to provide more details about the other 14 sites, but said they mostly make cotton T-shirts, pants and sweaters for Delta Apparel, Bela, Lucky Jeans and True Religion. Because sales from those mills are expected to be flat or rise only slightly this year, Ha is focusing on growing its more profitable synthetics operation via TexOps.
Ha also just invested an undisclosed sum in a fledgling, $70 million new polyester extrusion plant in Honduras alongside textiles mogul Jesús Canahuati, who is leading the country’s 2020 development plan to lift synthetic fibers output. The new site near San Pedro Sula will make 2,000 metric tons of synthetic yarn a month, according to Ha.
The entrepreneur, who also made fortune by buying and restructuring failed maquilas, also plans to set up a textiles sublimation facility in Haiti next year that will be more than 200,000 square feet and will employ 100 people. The site will be built in partnership with Dominican Republic’s Grupo M and Brandix in the Codevi Industrial Park, spared from Hurricane Matthew’s devastation.
Coupled with TexOps’ expansion, and an expected gradual increase in U.S. orders, Ha’s revenues from textiles (he also has coffee plantations) should increase 15 percent annually to hit roughly $500 million in three years, when he intends to employ 9,000 workers versus the 7,000 currently, said a source close to his affairs.
Ha’s plans are being timed to profit from El Salvador’s new, 15-year textiles and apparel growth strategy seeking to turn it into a high-performance sportswear and synthetic fabrics producer.
Unlike Mexico – whose apparel sector could suffer from Trump’s threats to rewrite the North American Free Trade Agreement – El Salvador and Central America will benefit from Trump, Ha predicted.
“Trump is the best thing that could happen to this region,” he said, adding that the Central American Free Trade Agreement is expected to remain in place, maintaining the region’s competitive momentum.
TexOps will continue to lead labor improvements in Central America, he vowed, where Korean firms have a tarnished image. Ha stressed TexOps’ workers receive higher compensation than rivals through productivity incentives. “My labor force is my greatest asset, not my machines or buildings,” Ha said. “I invest in them, offer them English courses and even MBAs.”
The firm also has soccer leagues and even a massage room, he boasted.
Back to his style: Ha said he enjoys wearing Lululemon Lab’s “forward-looking men’s wear” and Kit and Ace, which has “very comfortable streetwear.”
But when he is not toiling in the Salvadoran tropics, he likes to wear a Dolce & Gabbana suit and spray on his favorite fragrance, Tom Ford, he concluded.