WASHINGTON — Production capacity is the biggest hurdle facing Haitian apparel companies looking to capitalize on a rollout of garment-sector projects.
It has been nine months since a devastating earthquake crippled Haiti and imperiled the burgeoning success of its apparel industry. Since this summer, two South Korean apparel companies have signed memorandums stating their intentions to invest in two separate industrial parks in Haiti, anchored by apparel and textile factories. In August, the U.S. Agency for International Development opened the Haiti Apparel Center, a facility focused on training skilled workers. TC2, a Cary, N.C.-based textile research facility, was subcontracted to handle the training and has already turned out classes of graduates.
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The challenge for Haiti’s apparel industry is to have factory capacity and trained workers online at the same time, said Georges Sassine, president of the Association of Industries of Haiti, which represents the country’s manufacturers.
“We’re working on two lines at the same time, hoping they meet at the same corner,” Sassine said. “You wouldn’t want new factories to have to spend much time and equipment on training people.”
Incentives put in place to encourage apparel companies to place production in Haiti have been so successful that the 29 factories that are already up and running have turned orders away, Sassine said. In May, President Obama signed into law the Haitian Economic Lift Program, or HELP, which significantly increases the amount of Haitian-made apparel allowed to enter the U.S. duty free. Haiti has had duty free access to the U.S. since 2006 under the Haitian Hemispheric Opportunity through Partnership Encouragement Act, or HOPE.
To help create more capacity, the U.S. State Department, the Inter-American Development Bank and the International Finance Corporation, the private sector arm of the World Bank, announced a partnership in late September with South Korean apparel firm Sae-A to build an industrial park north of Port-au-Prince that is expected to create 10,000 new jobs. Sae-A manufactures clothing for Wal-Mart, Target, Gap, Banana Republic and Levi’s. The estimated cost of the project is $10 million to $25 million, an IFC spokeswoman said.
In August, a memorandum was signed by the Haitian government, the Inter-American Development Bank and the State Department with another South Korean firm, Hansoil Textile Ltd., for a second industrial park in the northern part of Haiti. Three additional Korean garment manufacturers are also close to completing private deals to build their own factories in Haiti, Sassine said.
The Haiti Apparel Center is also looking at expanding its training efforts to focus on helping the Haitian industry shift to full package production, said Mike Fralix, president and chief executive officer of TC2. Haitian companies do mostly contract work assembling garments using fabric and inputs manufactured elsewhere, he said. To really grow, it needs to offer brands a soup-to-nuts solution.