GUATEMALA CITY — Guatemala’s textile industry is betting exports will rise 6 percent to $1.6 billion this year, helped by rising U.S. demand for its staple knitwear and other apparel, a top official said on the fringes of the 24th annual Apparel Trade Show, which began here Monday.
The increase compares with a meager 1 percent expansion to $1.5 billion in 2014 when the Central American nation suffered from slumping demand from the U.S., where it sells 95 percent of its products.
“We are seeing a very good trade increase as of April and many brands are starting to look at Guatemala,” Luis Oscar Estrada, general manager of top trade lobby Vestex, told WWD during the launch of the three-day conference, which was expected to draw 4,000 visitors form 17 countries. “We hope to export 36 million more garments.”
During the breakfast inauguration, which saw the presence of embattled President Otto Perez Molina (60,000 people demonstrated Saturday to demand his resignation over tax corruption charges), Economy Minister Sergio de la Torre said Guatemalan energy prices have fallen 33 percent, making it a more attractive manufacturing destination.
As demand from the U.S., Europe and other key trading partners increases, leading knitwear manufacturers such as Indiana Knitwear, Sae-A and Hansai are boosting capacity. At the same time, U.S. brands such as Old Navy, Target, Wal-Mart and Kohl’s are stepping up orders, Estrada said.
Threatened by cut-throat competition from Vietnam, China and other Asian countries, Guatemala is rushing to produce more value-added apparel, which now accounts for roughly 40 percent of output valued at $4 a square meter on average, Estrada said. Because international brands meet local clothing demand, the industry’s turnover stems entirely from export markets.
Guatemala has improved its sportswear, wool suits and fashionable jeans expertise, Estrada said.
The Apparel Show, which drew 70 large buyers compared to 40 last year, featured a speech by Dan Phuong Dong, president of Vietnam’s Textile and Apparel Industry Association, on the country’s success story in winning U.S. market share.
While many viewed the event as ironic (Vietnam has stolen a lot of Guatemala and Central America’s U.S. market share), Vestex’s marketing director Lucia Palacios said: “To the contrary. We want to hear how Vietnam has been able to achieve so much,” adding, “We want to use their insights to form our own growth template which we hope the new government [Guatemala has general elections in September] will support.”
Estrada said many international firms are increasingly interested in Guatemala, with companies such as Eddie Bauer scouting new sourcing opportunities in the fair’s early hours.
“Many companies are looking at Guatemala, not just because of proximity to the U.S but also because we have high quality and a more specialized needle” than other Central American countries and even Mexico, he stated.