Most midsized plants of 300-400 employees closed, and in 2007, Haitis apparel industry had fewer than 20 firms and only about 15,000 to 18,000 employees. There is only a handful of apparel companies that are doing relatively well most of them based out of the capital Port-au-Prince, such as Multi-tex, the Apaid Group, and Sohacosa, which have been producing garments for U.S. and Canadian apparel companies for several years. Despite the contraction of Haitis apparel sector, the number of workers involved in production increased by 28 percent during 2004-2006 and by 15 percent in January-June 2007 over the same period in 2006. The Haitian garment industry mainly supplies mass-produced commodity knit products with simple stitching work such as t-shirts and sweatshirts, although woven products (e.g., pants, shirts, and suits) account for about 20 percent of total apparel output. Limited capital resources and the high cost of funds in Haiti also constrain apparel production. Interest rates for long-term loans reportedly exceed 30 percent, compared with rates averaging 11 to 12 percent in the rest of the Caribbean and just over 6 percent in Asia. The government of Haiti reportedly is establishing a loan-guarantee fund for Haitian factory owners who have closed their operations but want to reopen their facilities to take advantage of the HHOPE Act. In addition, the lack of managerial expertise in apparel manufacturing in Haiti has also reportedly hampered production efficiency and quality control. Many small Haitian apparel manufacturers are struggling, as buyers increasingly seek full-package programs that require fabric-cutting machines and high-tech equipment to track complex inventories and tasks. Astralis Corporation, a consortium of Haitian companies established in 2006, and the Haitian-owned Apaid Group have begun offering full-package programs. Haitian firms that produce in small volumes usually lack the money, technical know-how, and managerial skills needed for full-package production. This is also difficult to achieve for Haitian producers because they lack the economies of scale and domestic access to the raw materials needed to produce yarns and fabrics in commercial quantities. The yarns and fabrics used in Haitis apparel production, which are imported mainly from the United States, are often priced higher than inputs produced in Asia. In 2007, though exports from China and Hong Kong to Haiti of yarns and fabrics made from manmade staple fibers grew almost nine-fold. Historically, the largest category by far of Haitian textile and apparel imports consisted of knit apparel pieces; however, Haitian imports in this category decreased sharply from $147 million in 2005 to $31 million in 2007. This decline likely reflected an increase in fabric produced and cut in the Dominican Republic which was then shipped to Haiti for further process. Haitis total exports of knit and woven apparel increased 16 percent during 2005-2007, and the United States was the destination for 91 to 94 percent of such exports during this period. The EU, Canada, Mexico, and Australia accounted for the rest of exports. The European Union (EU) surpassed Canada in 2006 and became the second largest destination for Haitian apparel exports after the United States. Exports to the EU, which grew 243 percent during 2005-2007, were comprised largely of knit t-shirts, tank tops, and similar garments; the EU market for such items has been growing steadily. Knit garments like sweatshirts, pullovers, and similar garments were the most significant export items from Haiti to all markets. A few U.S. apparel producers and retailers such as Hanesbrands, Russell, and Target, along with a Canadian apparel producer, Gildan, began importing apparel from Haiti to diversify their sourcing, especially as production costs rose in neighboring Caribbean and Central American countries. Because of Haitis limited water supply and underdeveloped infrastructure, its apparel sector lacks washing and finishing operations. Apparel sewn in Haiti is sent to the Dominican Republic for washing and finishing and then shipped back to Haiti before being exported to the United States in order to benefit from the HHOPE (Haitian Hemispheric Opportunity through Partnership Encouragement) Act. The available electricity is insufficient to run apparel manufacturing operations and further hinders Haitian apparel production. Haitian manufacturers need to invest in generators. The costs to purchase and maintain generators and fuel reportedly reduce their competitiveness in international markets.