Profile Of The Maquila Apparel Industry In Honduras

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Profile of the Maquila Apparel Industry in Honduras
In 2002 Honduras exported 121.1 mn garments, making it the largest supplier of clothing in Central America. The country is also the third largest foreign supplier to the USA, after China and Mexico. In November 2003 the maquila sector comprised about 176 manufacturing companies, most of which are members of Asociación Hondureña de Maquiladores (AHM). The sector began to boom in the late 1980s following implementation of the US Caribbean Basin Initiative (CBI) and passage of the Honduran Export Processing Zone Law, which provides incentives to national and foreign investors. One important recent development has been a significant increase in added value. This reflects the gradual transformation of Honduran companies from 807 manufacture—involving the assembly of US components—to full package operations, where the manufacturer receives detailed specifications from the buyer and is then responsible for acquiring the inputs and coordinating all parts of the production process. Honduras is well equipped with suppliers of apparel components and accessories, ...
... and fabric production is growing rapidly. The transformation into full package production is important to the survival of Honduran firms after December 31, 2004, when quotas restricting global textile and apparel trade are due to be eliminated. From 2005 the quota-free access enjoyed by Honduran garment manufacturers in the US market—upon which they depend for 90% of their output—will cease to be a competitive advantage. Honduran manufacturers should, however, gain from the Central America Free Trade Agreement (CAFTA) which will enable them to use Mexican materials without losing preferential access to the US market.
Table of Contents
Summary
Introduction
Asociación Hondureña de Maquiladores (AHM)
Increasing national added value
The textile industry in Honduras
Foreign-owned companies
Textile companies financed mostly using Honduran capital
Employment and Salaries
Employment levels
Education
Wages
Unions
Labour regulations
Labour conditions
AHM's Code of Conduct
Allegations of abuses
Towards Full Package
Sewing threads
Zippers
Labels
Other accessories
Screen printing
Services
Investment in Machinery
CAD-CAM systems
Machinery for the apparel industry
International Trade
Free trade arrangements with the USA
Logistics
Exports
Overview of Honduras's textile and garment exporters
Legislation relating to export processing zones
Main export products
Price competitiveness
Imports
Imports of fabric
Foreign Investment
Export processing zones
Private industrial parks
Crime
Future Prospects
Weaknesses
Strengths
Contact Information
List of tables
Table 1: Central American countries: comparative economic indicators, 2002
Table 2: Honduras: annual economic indicators, 1998-2002
Table 3: Honduras: trends in the relative importance of the maquila industry in the national economy, 1989-2002
Table 4: Honduras: development of the maquila industry, 1990-2002
Table 5: Honduras: development of fabric production, 1998-2002
Table 6: Honduras: employment in the maquiladora industry, 1994-2003
Table 7: Minimum wages in selected apparel producing countries, August 2002
Table 8: Honduras: minimum wage levels in the maquila industry, 1999-2002
Table 9: Honduras: relative importance of Honduras as a supplier to the US apparel market, 1994, 1998 and 2003
Table 10: Honduras: development of apparel exports to the USA, 1989-2003
Table 11: USA: leading garment supplying countries and regions, 2002
Table 12: Honduras: overview of textile and garment exporters, 2003
Table 13: Honduras: structure of garment exports by product, 1989 and 2002
Table 14: Honduras: yarn imports from the USA, 1997-2003
Table 15: Honduras: share of investment in the maquila industry by country of origin, 2002
Table 16: Honduras: trends in numbers of enterprises, employees and exports in the free zones, 1999-2001
Table 17: Honduras: incentives applicable to investors in Honduras
Table 18: Honduras: list of Honduran and foreign investors in the maquiladora sector, 2002
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