Home / Knowledge / News / Apparel/Garments / Nicaragua positioned to excel in apparel production
Nicaragua positioned to excel in apparel production
05
Jul '11
Official Investment Promotion Agency of Nicaragua (PRONicaragua) says that Nicaragua is once again attracting the attention of international apparel producers as a key factor has caught their eye: the country's cost competitiveness. Nicaragua was found to be the single most competitive option for sourcing numerous apparel products, not just in this hemisphere, but also compared to China, Vietnam and Bangladesh, according to the study titled “Benchmarking the Competitiveness of Nicaragua's Apparel Industry”, conducted by the prestigious consulting firm O'Rourke Group Partners. Here are the main reasons underlying the country's success in the industry:

Free trade agreements (FTA) such as the DR-CAFTA and its complementary trade benefits, in force since 2006, have allowed Nicaragua duty-free access to the U.S. market and therefore helped position the country as a major global cost competitor in several product categories. It is due to this advantage that by 2010, Nicaragua ranked as the 12th largest worldwide apparel supplier to the U.S. in volume, thus becoming an important player in the global textile and apparel industry.

Furthermore, cost competitiveness on a global basis has shifted significantly since 2010, due to unprecedented increases in the price of raw cotton fiber, which in turn have narrowed price gaps between Asia and countries in the Western Hemisphere. When comparing basic denim jeans production costs (LDP), China experienced a 27 percent increase between June 2010 and February 2011, while Nicaragua increased only by 15 percent during the same period. Although China's production costs for basic denim jeans in June 2010 were 3 percent lower than production costs in Nicaragua, by February 2011 Nicaragua's costs were 6 percent lower than China.

In turn, Nicaragua's government recently announced the beginning of a cotton production pilot project in the second semester of 2011, which will significantly foster the sustainable development of Nicaragua's textile sector by supplying local raw materials. The project will also contribute to the vertical integration of the industry and the strengthening of the country's value chain.

Particularly, having the most competitive labor costs in Central America constitutes a key decision factor for companies looking to establish labor-intensive operations. The country's 2.8 million labor force is known to be flexible, with excellent working habits, a fast learning curve and low absenteeism and attrition rates. Also, Asian competitors such as Vietnam and Bangladesh, have not only increased labor costs but still present low labor productivity, which in turn “negates or narrows the gap in overall apparel competitiveness compared to Nicaragua”, according to the study. On the other hand, Chinese labor costs increases ranged from 18 percent to 24 percent during 2010.

Nicaragua also has an excellent track record in providing speed-to-market garment sampling and production supply, which is a determinant in decreasing overall production costs. Nicaragua's lead time, including regional fabric acquisition, averages from 52 to 60 days, but can be as short as 42 days or even two weeks when fabric is on-site.


Must ReadView All

Textiles | On 18th Aug 2017

Turkey imposes temporary duty on POY from 7 countries

Turkish ministry of economy has announced imposition of provisional...

Textiles | On 18th Aug 2017

GST return filing deadline for transitional credit

For businesses who want to avail the transitional input tax credit...

Apparel/Garments | On 18th Aug 2017

AEPC wants clarity on minimum wages for garment sector

The Apparel Export Promotion Council (AEPC) has urged the Indian...

Interviews View All

Luke Otten
Wigwam Mills Inc

Wigwam aims to recycle discarded yarn that doesn’t make it through the...

Rashi Menda
Zapyle

Every fifth sale we make on Zapyle is a repeat purchase

Victor Chao
Esmetex

‘In future, clothing boundary lines will become increasingly blurred.’

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

August 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
66.7%
No
16.7%
Skip
16.7%

Total Votes: 30

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
43.3%
No
36.7%
Skip
20.0%

Total Votes: 30

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
83.3%
No
6.7%
Skip
10.0%

Total Votes: 30

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
60.0%
No
10.0%
Skip
30.0%

Total Votes: 30


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search