Released on = June 2, 2007, 1:27 am

Press Release Author = Bharat Book Bureau

Industry = Marketing

Press Release Summary = 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

Press Release Body = 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.

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