SAN PEDRO SULA, Honduras — Grupo Elcatex here will invest $500 million to build a new synthetics and stretch apparel factory, a new textiles industrial park and boost renewable energy capacity to feed future facilities, its president revealed to WWD.
The firm, which is at the heart of the “Honduras 2020” development plan to double the country’s textile exports in five years, will break ground on the new $120 million plant late this year with the goal of bringing it on stream in the second half of 2017, said Jesús Canahuati. He also represents private investors in the new development scheme, which Honduran President Juan Orlando Hernández predicts will cut poverty rates in half.
“In five years, we need to be the continent’s leader in maquila textiles manufacturing,” Hernández said at a press conference to inaugurate a new biomass power plant built by Elcatex. He said the nearby Puerto Cortes was being enlarged as part of a major initiative to expand other port, road, rail and airport infrastructure to modernize Honduras.
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The complex, dubbed San Juan Textiles, will produce 10 million to 12 million yards monthly of open-width synthetic and stretch fabrics including spandex to make activewear for Elcatex’s clients and other clothing brands operating in its Choloma textiles pole in San Pedro Sula, just off of the Caribbean Sea.
“Apart from activewear, we want to make knit leggings and other women’s stretch wear. Leggings are big right now; we want to target the Lululemon market,” Canahuati said.
San Juan will sell sell both fabric and finished apparel to mainly U.S. and European brands, though Mexican and other Latin American firms also could be interested.
Canahuati said he and San Juan’s two other owners — U.S. venture fund Camif and an unnamed Asian textiles firm — have begun negotiating with Lululemon, Macy’s and H&M to win new orders while Wal-Mart and Target are possible customers, as well.
Elcatex makes 120 million pieces of mainly T-shirts, fleece, underwear and polo shirts for clients including Hanes, J.C. Penney, Nordstrom and Sanmar.
San Juan will sit next to the new $150 million biomass plant that runs on a mixture of king grass, African palm, sugar cane and pine wood to generate 43 megawatts of power for the industrial pole. San Juan will run on thermic energy, a biomass plant by-product that will help slash dyeing and finishing energy costs by 20 percent and overall kilowatt per hour generation costs for it and third-party manufacturers to 11 cents from up to 15 cents an hour.
Grupo Elcatex hopes to invest several million dollars more to build new biomass generation plants and install solar panels in its other new San Juan Innovation Park, where it hopes to draw additional third-party manufacturers keen to win athletic and performance sportswear orders from the U.S. and Europe.
Apparel labels Vanity Fair, Hanes, Fruit of the Loom and Delta Apparel operate maquilas in Elcatex’s Choloma and nearby Villanueva’s four industrial parks which employ some 20,000 people. The idea is to get them and others to make clothing in the fledgling park, set to commence construction in August.
If all goes well, the 4-million-square-foot San Juan Innovation Park should have 30,000 to 40,000 workers, though some of these may also come from the auto-parts sector, which will also establish companies there. Though textiles is its main goal, the 2020 plan seeks to flesh out intermediate-manufacturing sectors as well as business services and tourism.
The expansion should help Grupo Elcatex’s revenues grow 30 percent annually to exceed $600 million in three years from $270 million currently. Synthetics will account for 30 percent of the $600 million to $700 million in projected exports by 2020. Textiles comprise 60 percent of the family-owned enterprise’s turnover while energy and real estate make up 40 percent, Canahuati said.
The firm should account for about 10 percent of the Honduras 2020 goal to triple apparel exports in five years to $7.4 billion and generate 200,000 jobs, Canahuati said. He estimated impoverished Honduras’ synthetics output will triple to 3.5 million kilos a month, making it the largest player in Central America in the category.