Page 55 - New Cloth Market November 2022 Digital Edition

INTERNATIONAL BUSINESS PAGES

mala's trading partners, the main des- their apparel manufactures, which in companies; 36 textile and spinning
tinations for Guatemala's exports by turn are exported to the United States companies, and 87 firms providing
chapter are: as finished garments. supplies and machinery to the indus-
try in the country, totaling more than
Chapter 61: The United States has the The Textile and Apparel Sector in
500 companies linked to the sector.
largest share, with almost 90%, fol- Guatemala
lowed by countries such as Canada, The sector has one of the best inte-
The textile and apparel sector in Gua-
Mexico, Japan, and France, which ac- grated clusters in the Central Ameri-
temala has consolidated since the
count for 2% or less. These five mar- can region. The supply chain includes
1980s, when production was mainly
kets constitute 95.67% of total exports yarns, flat and knitted fabrics, embroi-
focused on domestic trade and trade
according to 2020 data. dery, screen printing, sublimation, ac-
with Central America. It then shifted
cessories, dyeing and special finish-
Chapter 62: In 2020, the main desti- towards a more export-oriented mod-
es, up to the final delivery of the prod-
nation for Guatemala's exports was the el, in which the creation of special pro-
uct. This allows the industry to be flex-
United States with a share of almost duction-export regimes played a key
ible and to have fast delivery capabili-
90%, followed by Canada, Germany, role.
ties. One of the great advantages of
France, and Switzerland with 1% or
Prior to 2005, the sector experienced the sector is its full package and quick
less of the share. The five main desti-
a boom due to the fact that, unlike package capabilities.
nation markets accounted for about
Asian countries, Central America had
92% of Guatemala's exports. Other advantages for the apparel and
little or no quota limitations for exports
textile industry in Guatemala are their
Chapter 52: Unlike the previous Chap- to the United States. This made the
sectoral organization, the integration of
ters, the main destination markets for region very attractive to establish maq-
the supply chain, the proximity to large
2020 were Latin American and Carib- uila factories, mainly with Korean cap-
international markets such as the U.S.
bean countries. El Salvador was the ital, until the Agreement on Textiles and
and Mexico, and the high concentra-
main destination, with a 38.59% share. Clothing (ATC), which eliminated the
tion of exports to the U.S. (almost 90%
On the other hand, the United States quota system as it had been known
in 2020).
accounted for 3.77% of the exports un- until then, became effective.
der this Chapter. The five main mar- The Asociación de la Industria de Ves-
A study by the International Centre for
kets have a combined share of tuario y Textiles (Association of the
Trade and Sustainable Development
92.06%. Apparel and Textile Industry of Guate-
(ICTSD) estimated that in 2010, 68%
mala–VESTEX in Spanish) is the en-
Chapter 58: The main destinations are of garment factories were installed with
tity that represents the private sector
Central American countries and Mexi- foreign direct investment, mostly from
and promotes the Apparel Sourcing
co. El Salvador ranks first with a Korea, which played a key role in the
Show, the only one in the apparel and
46.73% share, while the United States industry due to the transfer of knowl-
textile industry in Central America and
ranks fifth with 3.12%. Overall, in 2020, edge and technology.
the Caribbean. For more than 27 years
the first five countries had a 97.87%
As of the year 2022, the country is it has been the platform that brings
share.
generating new international invest- together international customers and
Chapter 60: According to data record- ments with capital from investors from apparel and supply companies, which
ed in 2020, the main export destina- Spain and from local entrepreneurs, as participate in networking activities,
tion for this product was Nicaragua with well as the interest of various global business roundtables, exhibitions and
a share of 66.65%, and in second investors (India, Sri Lanka, Taiwan, seminars related to the apparel and
place, El Salvador with a 32.80% share. Vietnam, Colombia, etc.) encouraged textile industry. The country's produc-
The other countries have a share of by “nearshoring” trends as a result of tion is diverse, the most common
less than 0.5%. The analysis concludes the process of resilience after the pan- items are cotton and synthetic fabric
that exports of raw material (yarn and demic and the push of North Ameri- tops, pants, and woven and knitted
fabric) to the Central American mar- can brands to generate greater produc- cotton shorts.
kets as their main destination are used tion capacity in Guatemala.
Guatemala has a strategic “nearshor-
by the apparel industries of these coun-
There is a combination of large com- ing” position due to its proximity to one
tries for products to be exported to the
panies in the sector focused on ex- of the main apparel and textile consum-
North American market.
ports, as well as medium- sized and er markets, the United States, which
Therefore, the conclusion is that Gua- small companies that are more domes- according to figures from the World
temala has an integrated export clus- tic-oriented. According to VESTEX Trade Organization, accounts for nearly
ter of both finished garments destined (2021), there are 202 apparel-manufac- 20% of the world's apparel and textile
for the United States and textile inputs turing companies; 197 clothing-acces- consumption. Another advantage are
destined for countries in the region for sory, finishing, and related-service the trade agreements that the country
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