Costa Rica Coffee Guide

Mexicans to Fill Taiwanese Vacancy in Textile Sector

September 12, 2008

MANAGUA Several Mexican companies have plans to make multimillion-dollar investments in Nicaragua s textile industry, suggesting the sector is beginning to bounce back after Taiwanese clothes manufacturing giant Nien Hsing announced it would close operations earlier this year.

The National Commission of Free-Trade Zones (CNZF) has recently approved bids by Mexican textile companies C&C Apparel, C&C Industries and C&C Mercedes to take over the operations of Taiwanese Textile giant Nien Hsing, which scaled back its operations in Nicaragua earlier this year.

The Mexicans will be absorbing Nien Hsing operations. They will be operating in some of the factories left behind, said Margarita Talavera, investment promotion director for ProNicaragua. She added that the Taiwanese company will likely hold on to one of its main textile operations, but is closing the rest.

The Free-Trade Zone Commission also announced in a statement that the Mexican textile company GD Maquilador de Nicaragua will invest $3.3 million over three years in its operations in Nicaragua, which will be used to- export some $10 million a year from its plant in north Managua.

The company is expected to create more than 700 direct jobs with its washing, ironing, quality inspection and packing services.

The Mexican dress clothing company Ala Tex Nicaragua will begin operations with a $4.3 million investment over two years, creating 200 direct jobs. Ala Tex Nicaragua will be the first company in Esteli to receive the CNZF s tax exemptions for free-trade zone companies.

The Panamanian group Merlet, which has operations throughout Central America and in the United States, will also start making dress clothes under the brand Tropical Apparel with a $3.1 million investment that will create 1,000 jobs over three years at the company s plant east of Managua.

Nien Hsing has closed two of its seven plants in Nicaragua and has laid off 2,500 workers, according to Taiwanese ambassador in Managua Jaime Wu. The pullout is due to economic reasons, particularly a decrease in demand in the United States, though Nien Hsing was engaged in an ongoinglabor dispute with fired union members and its pullout came as the Ortega government raised minimum wage standards by more than 30 percent over two years (NT, April 8).

Nien Hsing is one of eight Taiwanese businesses that have about $250 million invested in Nicaragua s free-trade zones.

Blake Schmidt

 

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