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Nicaragua Lands us$100 Million
Denim Factory From Free-Trade
Pact
Chalk up a nearly us$100 million
investment in Nicaragua to this
month's launch of the U.S. free
trade agreement with the Central
American nation.
President Enrique Bolaños
announced Monday during a Miami
visit that a North
Carolina-based group will build
a massive, denim fabric mill in
his country, employing 750
people and helping strengthen
Central America's garment
industry to better compete
against China for U.S. sales.
Jeans sewn from cloth made in
the Nicaraguan mill are likely
to be shipped through South
Florida seaports en route to
U.S. stores. Apparel trade with
Latin America already accounts
for more than 10 percent of
cargo at South Florida seaports,
officials said.
Investing in one of the poorest
nations in Central America is
the Cone Denim division of
International Textile Group, the
venture formed in 2004 when
financier Wilbur Ross meshed the
assets of textile makers
Burlington Industries and Cone
Mills.
The Greensboro-based group plans
to open a denim mill in the
Managua area late next year with
a capacity to make 28 million
yards of denim yearly -- enough
for 22 million pairs of pants a
year, executives said.
The plant will be "the largest
building ever constructed in
Nicaragua," Trade Minister
Alejandro Arguello announced.
"The mill also will feed sewing
factories and related
businesses, creating another
8,000 to 10,000 jobs in the
country," Salvador Stadthagen,
Nicaragua's ambassador in
Washington, said in an
interview.
The investment comes as
Nicaragua and Honduras on April
1 officially implemented the
U.S. free trade agreement with
Central America known CAFTA. The
U.S. accord took effect with El
Salvador in March and is
expected to start with Guatemala
in 2007.
Costa Rica still has to ratify
the agreement.
The accord aims to help Central
America compete against China by
giving many of its products
duty-free entry to the United
States, while Chinese goods pay
duty.
Central American nations hope
proximity to the United States
also will give them an edge over
China in speed into marketplace,
especially to make fashion items
that have short sales cycles.
The nations now seek to lure
fabric mills to supply their
sewing factories so they don't
have to wait for imported cloth
to fill U.S. orders.
Nicaragua is a favored
destination for the clothing
industry because it has the
lowest wage rates among CAFTA
nations: about 50 cents an hour,
including fringe benefits,
compared with $1-plus in more
developed Costa Rica.
The nation of 5 million people
also has ample electricity for
factories
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