Guatemala is not only renowned for its rich cultural heritage and breathtaking landscapes but also for its vibrant and thriving textile industry. Woven into the fabric of the nation’s economy, the Guatemalan textile industry stands as a crucial pillar supporting the country’s economic stability and growth. In this blog post, we will delve into the multifaceted significance of the textile industry in Guatemala, exploring its historical roots, current economic impact, and potential for future development.

Historical roots of the Guatemalan textile industry

The textile industry in Guatemala has deep historical roots, dating back to ancient Mayan civilization. The Mayans were master weavers, utilizing intricate techniques and vibrant dyes to create textiles that were not only practical but also culturally significant. This legacy has endured through the centuries, with Guatemala’s modern textile industry paying homage to its indigenous roots while embracing contemporary production methods.

Economic contribution

The textile industry plays a pivotal role in Guatemala’s economy, contributing significantly to its GDP and providing employment opportunities for a substantial portion of the population. According to recent data, the textile and apparel sector accounts for a considerable share of Guatemala’s total exports, making it a crucial player in the country’s international trade landscape. This industry has become a major driver of economic growth, attracting foreign investment and fostering a robust manufacturing ecosystem.

Some of the predominant players in the Guatemalan textile industry include the following companies:

Gildan Activewear Inc.: Gildan is a well-known Canadian manufacturer of branded clothing, including T-shirts, sports shirts, and fleeces. It has a significant presence in Guatemala, with manufacturing facilities in the country.

Hanesbrands Inc.: Hanesbrands is a global company that manufactures a wide range of clothing and undergarment products. It has been involved in Guatemala’s textile industry, producing various apparel items.

Fruit of the Loom: Fruit of the Loom, a subsidiary of Berkshire Hathaway, is a major international brand specializing in the production of underwear and casual wear. They have manufacturing operations in Guatemala.

Loomcraft Textile & Design: Loomcraft is a Guatemala-based company specializing in the production of textiles and fabrics. They are known for their commitment to traditional weaving techniques and cultural preservation.

Textiles y Confecciones del Istmo (TCI): TCI is a Guatemalan textile company with a focus on the production of apparel and textiles. They have experience in manufacturing for both domestic and international markets.

Industrias Licras: This is another Guatemala-based textile company that specializes in the production of knit fabrics and garments. They cater to both local and international markets.

Maquila Lama: Maquila Lama is a textile and garment manufacturing company based in Guatemala. They offer services in the production of various apparel items.

Grupo M: Grupo M is a diversified group with interests in textiles and apparel manufacturing. They have operations in Guatemala and are involved in producing a wide range of textile products.

Employment generation

One of the most notable contributions of the Guatemalan textile industry is its role in employment generation. Guatemala’s textile factories employ a diverse workforce, ranging from skilled artisans preserving traditional weaving techniques to workers engaged in modern, high-tech manufacturing processes. The sector has become a lifeline for many Guatemalan families, offering job opportunities that support livelihoods and contribute to the overall well-being of communities.

Workers in the Guatemalan textile industry possess a diverse set of skills, reflecting the intricacies of traditional craftsmanship and the modern dynamics of global manufacturing. Proficiency in traditional weaving techniques passed down through generations, is crucial for artisans who contribute to the industry’s rich cultural tapestry. Additionally, technical skills in modern manufacturing processes, such as machine operation, quality control, and pattern cutting, are vital for those engaged in the production of textiles and garments. Given the industry’s increasing focus on sustainability, knowledge of environmentally friendly practices and materials is becoming a valuable asset. Strong attention to detail, creativity in design, and an understanding of market trends are essential for those involved in product development. Furthermore, communication and teamwork skills are valuable across the supply chain, from collaboration with international brands to coordination among local workers, ensuring the seamless operation of this multifaceted and globally connected industry.

Export revenue and trade balance

The textile industry serves as a key contributor to Guatemala’s export revenue, enhancing the nation’s trade balance. With a strong emphasis on producing high-quality garments, textiles, and accessories, Guatemala has carved a niche for itself in the global market. The country’s textile exports are in demand internationally, further solidifying its position as a reliable and competitive player in the global textile trade.

Integration into global supply chains

The Guatemalan textile industry has successfully integrated into global supply chains, collaborating with international brands and retailers. This integration not only boosts the industry’s reputation but also opens doors to expanded market access and increased export opportunities. As global consumers become more conscious of sustainable and ethically produced goods, Guatemala’s commitment to responsible manufacturing practices positions its textile industry for continued success.

Cultural preservation and heritage

Beyond its economic impact, the textile industry in Guatemala plays a crucial role in preserving the nation’s cultural heritage. Traditional weaving techniques passed down through generations, are still practiced today, ensuring that the vibrant patterns and designs that characterize Guatemalan textiles remain an integral part of the nation’s identity. This cultural preservation adds an extra layer of value to the Guatemalan textile industry, attracting tourists and fostering a sense of pride among the Guatemalan people.

The textile industry in Guatemala is far more than a manufacturing sector—it is a vital force driving economic development, employment, and cultural preservation. From its ancient Mayan roots to its current position as a global player in the textile trade, the Guatemalan textile industry stands as a testament to the nation’s resilience and adaptability. As the industry continues to evolve, embracing sustainability and innovation, it remains a cornerstone of Guatemala’s economic prosperity and a source of pride for its people.

In the heart of the Caribbean, the Dominican Republic has charted a route of economic development and competitiveness based on a firm commitment to logistics. As a vital link in its growth, the country has understood the importance of logistics and paved its path to success through concrete examples of local companies and the adoption of global trends.

The Evolution of Logistics in the Dominican Republic

The evolution of logistics in the Dominican Republic has been a story of adaptation and transformation over the decades. From its first steps as a basic transportation and storage process in previous decades to becoming an essential pillar of economic development in recent years, logistics has undergone a profound change.

In an increasingly interconnected world, the Dominican Republic has taken advantage of its strategic location and its commitment to innovation to forge a solid and constantly expanding logistics identity. The recent decade has marked a decisive turn, where logistics has gone from being an essential but underestimated activity to being the driving force of economic growth and national competitiveness.

Logistics Success Stories in the Dominican Republic

The Dominican Republic illustrates its commitment to logistics through business success stories that highlight the country’s transformation:

• DP World Caucedo: With investments in infrastructure and technology, this operating company of the Caucedo Multimodal Port has revolutionized logistics efficiency. Its modern and technologically advanced operations drive agility in the supply chain and distribution of goods.
• Ramos Group: A leader in retail and wholesale trade, the Ramos Group has used logistics as a springboard for its expansion. Its focus on inventory management and efficient distribution has strengthened its position in the market, ensuring quality service.
• DHL Express: DHL Express capitalizes on the growing demand for international shipping and courier services in the Dominican Republic. Its technological innovation and focus on customer service offer agile and reliable logistics solutions.
• Punta Caucedo Logistics Center: Strategically located, this logistics center attracts investments and strengthens the supply chain with value-added services such as storage and merchandise distribution.
• Dominican Airports Siglo XXI (AERODOM): AERODOM catalyzes the efficient movement of cargo and passengers in the Dominican Republic, consolidating the country as a regional connection point through investments in infrastructure and technology.

Trends Towards the Future and the Five Logistics Trends in 2023

Logistics in the Dominican Republic is not only following global trends but is also leading the transformation in the Latin America and Caribbean region:

• Automation and Technology: Warehouse automation will increase, using IoT (Internet of Things) to optimize inventory management and picking processes. Robotic warehouses are even being developed that feature 100% automated facilities that operate autonomously and uninterruptedly.
• Technology to offer a quality service: The use of Big Data, Artificial Intelligence, and machine learning allows us to detect errors in operations and make predictions about demand, offering an efficient and higher-quality service.
• Transparency in the supply chain: Blockchain technology allows a product to be tracked from its manufacturing to delivery to the end customer, guaranteeing its origin in sectors such as pharmaceuticals and food.
• Last mile: Development of centrally located micro warehouses, electric vehicles, drones, and robots to automate deliveries, improving customer satisfaction.
• Sustainability: Environmental awareness is on the rise, and initiatives are being worked on to reduce the environmental impact of the sector, such as route optimization, planning software, and eco-friendly delivery methods.

Demanded Professional Profiles

The growth of logistics in the Dominican Republic also leads to a growing demand for specialized professional profiles. Some of the most notable roles include:

• Logistics Technology Specialists: Professionals with experience in the implementation and management of automation systems, IoT, Big Data, and specific software solutions for logistics.
• Logistics Data Analysts: Experts in data analysis to optimize operations, predict demands, and make strategic decisions based on accurate information.
• Supply Chain Specialists: Professionals capable of efficiently managing the supply chain, from suppliers to distributors and customers, guaranteeing smooth operation.
• Sustainability Experts: Professionals committed to sustainable logistics practices, capable of implementing eco-friendly strategies and reducing environmental impact.
• Last Mile Professionals: Specialists in managing the final delivery stage, coordinating micro warehouses, electric vehicles, and innovative delivery systems.

Promising future

The Dominican Republic, with its strategic focus on logistics and notable success stories, is heading towards a prosperous future as a leading regional logistics center in the Caribbean. Its constant evolution, from its foundations to its current position, demonstrates the country’s determination to embrace innovation and lead logistics transformation in the region and beyond.

The Dominican Republic has been actively adapting to and embracing emerging trends in the logistics sector, positioning itself as a critical player in the regional and global economy. One notable aspect of the country’s commitment to staying current in logistics is its strategic investments in modern infrastructure. The Dominican government has consistently poured resources into enhancing transportation networks, including ports, airports, and roadways, to facilitate the efficient movement of goods. Moreover, integrating advanced technologies, such as GPS tracking systems and digital inventory management, has streamlined the supply chain processes. The Dominican Republic has also fostered a business-friendly environment, attracting international logistics companies and fostering partnerships with established players in the industry. Furthermore, the country has recognized the importance of sustainability in logistics, promoting eco-friendly practices and green initiatives to minimize the environmental impact of transportation and distribution. Through a combination of infrastructure development, technological integration, and a focus on sustainability, the Dominican Republic continues to stay ahead of the curve in the ever-evolving landscape of the logistics sector.

The Peruvian Ministry of Foreign Affairs considers the challenges and opportunities of the regional integration mechanism.

In 12 years, the Pacific Alliance became the eighth world economy and the sixth exporting power. The member countries represent 42.9% of the GDP of Latin America and the Caribbean and 57.4% of trade in the region.

The Pacific Alliance meets regional challenges

This mechanism, which integrates Peru (in the Pro Tempore Presidency), Chile, Colombia, and Mexico, aims to achieve more significant development, growth, and competitiveness of these economies, thus constituting an agenda with more than 30 technical work groups in areas such as education, work, social inclusion, fishing, aquaculture, among others.

The Pacific Alliance seeks to respond to the regional agenda’s new challenges, such as environmental sustainability through the responsible management of plastics, inclusive economic development led by women, and adaptation to the technological era through the construction of a Regional Digital Market.

Pacific Alliance facing economic crises

The Vice Minister of Foreign Affairs, Ignacio Higueras Hare,  recently explained that some of the common challenges faced by the countries of the Pacific Alliance were, for example, the impact of the COVID-19 crisis, for which adopted actions aimed at promoting the reactivation of the tourism sector, strengthening the digital capabilities of teachers and promoting policies in favor of occupational mental health with support from the Pacific Alliance Cooperation Fund.

Also, given the natural disasters to which these nations are exposed, in 2018, the World Bank approved the first regional catastrophe bond for earthquake risk management, becoming the largest catastrophe bond transaction of the World Bank, with 1.36 million dollars.

Opportunities for the member countries

Because the bloc promotes conditions for more significant commercial activity through the Additional Protocol, the Alliance’s free trade agreement, a tariff reduction of 98% was achieved, being very close to consolidating a Free Trade Zone.

The signing of the Free Trade Agreement between the Pacific Alliance and Singapore must add to this. Such was the effect that Peru became the first country in the bloc to ratify the agreement.

The Pacific Alliance also encourages commercial and investment opportunities, with more than ten editions of the ‘Business Macro Roundtable’ and the ‘Investment Opportunities Forum.’

“Currently, given the need to promote economic reactivation, the Pro Tempore Presidency of Peru has the strengthening and internationalization of micro, small, and medium-sized enterprises (MSMEs) among its priorities. These companies are the main sources of employment in the country. To this end, work is being done on a public-private roadmap with the contribution of the Business Council of the Pacific Alliance and the technical assistance of the Inter-American Development Bank,” added Ignacio Higueras Hare.

Jobs for youth

Through the ‘Vacation and Work Program,’ young people from the four countries can travel to see these nations and, at the same time, obtain permits for temporary paid activities.

Likewise, to promote labor mobility in the member countries of the bloc, the Pacific Alliance, with the support of the European Union, is implementing the homologation of labor skills certifications.

Recently, at the VIII Youth Meeting of the Pacific Alliance, a job fair was held in which numerous companies from the four countries offered 4,500 direct job opportunities to young people from Peru, Chile, Colombia, and Mexico.

Peruvian exports have had great success

According to figures from the Ministry of Foreign Trade and Tourism (2023), Peruvian exports to the member countries of the Pacific Alliance increased by 13% since 2011, reaching approximately 3.9 billion dollars in 2022. This is due to the participation of more than 3,000 companies, of which more than 50% were micro, small and medium-sized enterprises ( MSMEs ).

The figures mentioned above show that the export increase in the non-mining energy sector was 48.7% since 2011. Likewise, more than 500 products have increased their exports since the beginning of the Pacific Alliance. For example, avocado and paprika have increased 11-fold.

New challenges for the Pacific Alliance

Now, the bloc has a critical challenge: to increase intra-Alliance trade, which remains between 6 and 7%. For this reason, the Strategic Vision for 2030 of the Pacific Alliance aims to double the trade between the four countries.

“To contribute to this objective, the Pro Tempore Presidency of Peru is promoting workshops for the use of the Additional Protocol, disseminating the advantages that it offers to various economic actors, as well as the possibility of modernizing the Protocol, incorporating actors such as trade, SMEs and components of productive chains,” revealed the Vice Minister of Foreign Affairs.

Considerable private investment

According to data from Proinversión (2023), an increase in private investment is reported from the launch of the Pacific Alliance to the present, highlighting the case of Chile, which registered a growth in investment in Peru of 157%, and Mexico and Colombia, whose investments in the Peruvian nation grew 27% and 20% respectively. This is based on 2011 figures in contrast to those reported in 2022.

Regarding investment items in Peru as a capital contribution, Chile concentrates higher figures in the Communications (US$ 1,613 billion) and Finance (US$ 1,061 billion) sectors; Colombia focuses on the Industrial (US$517 billion) and Energy (US$494 billion) sectors; and Mexico in Communications (US$ 407 billion).

The regional bloc is advancing in this matter through the Council of Finance Ministers of the Alliance, which brings together the ministries of Economy of the four countries and is also led by Peru. The group develops issues of financial integration, tax treatment, investment in infrastructure, and catastrophic risk management.

Tourism in the Pacific Alliance countries

Ignacio Higueras Hare also highlighted the growth of the flow of tourists to Peru from the countries of the Pacific Alliance. Currently, Chile represents the first source of tourists to Peru, Colombia the fourth, and Mexico the ninth worldwide.

Since 2011, the flow of tourists from the member countries has been increasing progressively. It has tripled in the case of Mexico and doubled in the case of Colombia from 2019 to before the COVID-19 pandemic.

“We have the important challenge of recovering the flow of tourists after the pandemic. In this framework, joint tourism promotion actions were carried out during the Pro Tempore Presidency of Peru, such as the First Sustainable Tourism Business Meeting held in a virtual format on August 9, 16, and 17. Additionally, the First Investment Attraction Seminar for Tourism was held on September 5 in Santiago de Chile, where the ‘Treasure of the World’ video was launched. In it, the Pacific Alliance countries invite international travelers to spread the tourist wealth of the four member countries,” he indicated.

Peru is a promoter of the trade union

Peru was the great promoter of the Pacific Alliance through the Lima Declaration of April 28, 2011, which gave rise to the organization. This bloc was a commitment to “open regionalism,” an integration initiative that promoted the liberalization of goods, services, capital, and people among its partners without opposing each State’s opening towards the world, thus stimulating participation in global markets.

The history of the Pacific Alliance showed a vital degree of pragmatism that allowed this integration process to advance. Thus, since its creation, it was agreed that this bloc does not have a General Secretariat but rather a Pro Tempore Presidency that is transferred among its members.

The interest created by the Pacific Alliance since its inception led many countries to apply for Alliance Observer status. To date, a total of 63 countries are observers.

Likewise, this integration bloc has attracted the interest of States that aspire to become full members. In this sense, Panama signed the Lima Declaration of 2011. It participated in various summits, as did Costa Rica, a country that signed the Paranal Declaration in 2012 and began an accession process that was paralyzed in 2014. Now that the Central American nation has resumed its interest in being part of the Pacific Alliance, the Pro Tempore Presidency of Peru will seek to bring about its integration.

The Paraguayan export maquiladora industry continues with its positive trajectory: its exports are almost double those of last year, and its purchases of inputs for production have increased by 75%.

The jobs generated by the 227 manufacturing plants in the sector already exceed pre-pandemic levels, according to data provided by the Ministry of Industry and Commerce.

The maquiladora industry is an asset to Paraguay’s economy

Since its inception, the Paraguayan export maquiladora industry has proven to be a valuable tool to support the development of Paraguay’s national economy. Currently, more than 220 manufacturing plants operate under the country’s maquiladora regime, generating jobs for thousands of Paraguayans and substantial income for the country.

It is essential to mention that the maquila regime produces goods and provides services, offering preferential conditions to investors to increase their competitiveness considerably.

Since it entered into force in 2003, the importance of the Paraguayan export maquiladora industry has grown year after year, and exports under this regime have experienced an increase compared to the total exported by the country.

In 2003, the maquiladora regime represented only 0.3% of the country’s total exports, and in 2021, this figure reached 7.7%, thus confirming the measurable growth of this sector.

The accumulated export of the Paraguayan maquiladora industry at the end of last August 2023 was USD 561 million, and it is expected to reach a record level of export under this regime by the end of the year, reaching approximately USD 850 million to USD 900 million. This figure would represent around 8% of the total value exported by Paraguay.

The figure registered in the eighth month of this year represents an increase of 90% compared to the same period last year, which was USD 295 million, according to the National Council of Maquiladora Export Industries (CNIME) statistical report.

Likewise, exports in August alone total goods shipped by the Paraguayan export maquiladora industry reached USD 67 million. This represents a growth of 43% compared to 2020 and 34% compared to 2019.

Regarding the destinations of goods shipped abroad by the Paraguayan export maquiladora industry, 90% were sent to countries of the Southern Common Market (Mercosur). Specifically, Brazil’s participation represents 79%, followed by Argentina (with 9%) and Chile (2.9%). Likewise, the United States participates in 2.7%, Uruguay at 2.4%, and Ecuador at 0.8%.

87% of exports are concentrated in five items: auto parts, clothing and textiles, aluminum and its manufactures, food products and plastics and its manufactures.

In the auto parts sector, exports this year amounted to USD 155.9 million, with this item having a 28% share. For their part, clothing and textiles were exported for USD 98.9 million; aluminum and its manufactures for USD 84.7 million; food products for USD 79.8 million; and plastics and their manufactures, for USD 67.4 million.

Other sectors that also work under the Paraguayan export maquiladora regime are pharmaceutical products, pet food, various manufacturing, leather, footwear and their components, tobacco, wood,  and metallurgical products.

Import of inputs for the Paraguayan export maquiladora industry

Regarding the import of inputs for the production of goods, this figure has increased by 75% compared to the January-August period of last year.

As of August 2023, purchases of inputs for use in Paraguay’s maquiladora industry had already reached USD 360 million, a figure much higher than last year, which reached USD 206 million, and that of 2019, which was USD 266 million.

In August alone, input purchases were worth USD 42 million, registering a growth of 69% compared to the same month in the last year (2022), which was USD 25 million.

With these results, the trade balance of the Paraguayan export maquiladora industry registers a surplus of USD 201 million. It represents an improvement of 89% compared to the same months of the previous year.

Employment in the maquiladora industry

Regarding employment, there has been a significant recovery. In this sense, in Paraguay, 227 maquiladora manufacturing firms generate 21,261 jobs, of which 92% (19,4560) are dedicated exclusively to products for export.

It is worth mentioning that this sector was also hit hard in recent years due to the COVID-19 pandemic, and as of April 2020, the number of people employed had been reduced to 15,153.

However, the number of people employed in Paraguay’s maquiladoras has already returned to the same levels recorded in previous years and has even exceeded them. The employment generated by the Paraguayan export maquiladora industry is mainly concentrated in sectors that require high levels of worker skill.

A sector with a lot of growth potential

Francisco Ruíz Díaz, Executive Secretary of the CNIME, said that the positive activity that this sector is experiencing is due to several factors, such as a favorable international scenario, a greater number of maquiladora companies, and the macroeconomic stability that Paraguay enjoys.

Ruíz Díaz also highlighted the excellent and rapid recovery that the sector has had. “We thought that the recovery would take a little longer, perhaps in two years,” he said, highlighting that the figures currently being registered are significantly above historical levels.

The future growth of the Paraguayan export maquiladora industry holds profound significance for the country’s economy, encompassing multifaceted benefits that extend across various sectors. At its core, the maquiladora industry has emerged as a linchpin for economic development, catalyzing increased employment, foreign exchange earnings, and overall industrial progress. As the global economy becomes increasingly interconnected, Paraguay’s strategic positioning within the maquiladora landscape provides a gateway to international markets, fostering trade relationships and attracting foreign direct investment.