What's New

Latest Situation of Guatemala's Textile and Garment Industry
Kind: ICD What's New  Organization: Department of International Cooperation  Publish Date: 2022-09-29 09:00
As the global supply chain shifts from its hub in mainland China toward neighboring Southeast Asia, manufacturers are initiating "nearshoring" by moving factories to countries in proximity and with lower production costs, as well as increasing their inventory levels to endure logistic slowdowns.

The same goes for U.S. apparel firm owners, as they move factories into the more efficient and cost-competitive Guatemala. Under U.S. trade commitments of the CAFTA-DR, which guarantees Guatemalan-made yarn, fabric and apparel can enter the U.S. free of duty, coupled with major alleviation of global port congestion and year-on-year declining of U.S. apparel imports from mainland China, Guatemalan apparel manufacturers seek to benefit from exploiting redirection of orders.

According to VESTEX, there are currently 201 garment processing plants, 192 cutting and fabric processing factories, 36 spinning mills, and 97 textile machinery distributors in Guatemala, with the majority of the garment processing plants owned by Korean investors. A total of 75% of garments produced in Guatemala are exported to the U.S., with the next biggest export markets being Central America (mainly to Nicaragua for sewing), Mexico and Canada.

The main Guatemalan garment exports by category are: cotton pullovers, cotton men's shorts, cotton women's tops, cotton knitwear, man-made fiber men's shirts, cotton T-shirts, man-made fiber pullovers, etc. Guatemala's major garment production centers are located in the cities of Mixco (33%), Guatemala City (27%), Villa Nueva (20%), San Pedro Sacatepequez (7%) and Amatitlan (7%).

In recent years, Guatemalan garment manufacturers have sought to keep abreast of the latest developments in technology and innovation, including introducing advanced technology in recycling of leftover fabrics and PET bottles into yarn, to increase production capacity, reduce costs and develop new business opportunities.

Sources: Bureau of Foreign Trade, MOEA; U.S. International Trade Administration

Update: 2020-04-23
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