Vol II - Edition
III (April 2006)
 Central
America is changing... We need to stay updated with what is going on in this
region to be able to adapt and respond to the market as needed.
We will try our best to provide relevant information.
If you have a particular topic that you would like us to search and publish for
you, please send us an email:
tonymedina@threadandtrim.com
PCC Acquires
GlobeTec Precision Custom Coatings
 Precision
Custom Coatings LLC (PCC), a Totowa, N.J.-based manufacturer of nonwoven and
coated fabrics for apparel and industrial textile applications, has acquired
GlobeTec Inc., a North East, Md.-based manufacturer of needle
punched non woven
filtration products. GlobeTec has been renamed Precision Textiles, a division of
Precision Custom Coatings LLC.
PCC plans to expand activities at Precision Textiles’ mill to a continuous,
24-hours-a-day operation, more than tripling the mill’s workforce and doubling
its production capacity.
“This is an exciting strategic transaction that provides Precision Custom
Coatings with an enhanced ability to respond more rapidly to our customers’
needs as we are able to reduce production lead times, increase our manufacturing
throughput and expand our range of products,” said Scott Tesser, president.
RD-Cafta generará 100 mil empleos estima presidente de AHM
 ***
El mercado colombiano es muy fuerte y por eso
se vuelve favorable para que Honduras pueda hacer negocios con esa nación.
Tegucigalpa, Honduras.
(10 abril 2006) El presidente de la Asociación Hondureña de
Maquiladores (AHM) Jesús Canahuati, estimó este lunes que con la suscripción
del Tratado de Libre Comercio entre República Dominicana, Centroamérica y
Estados Unidos (RD-Cafta) se logrará generar 100 mil nuevos empleos en el país.
La entrada en vigencia de ese
acuerdo comercial permitirá al presidente Manuel Zelaya, cumplir con su
promesa de campaña de generar 100 mil fuentes de trabajo cada año de su
administración.
Para el empresario, el Tratado de
Libre Comercio (TLC) que se suscribirá dentro de poco tiempo con Colombia,
también beneficiará al país, pues contribuirá con la generación de esa
cantidad de nuevos puestos de trabajo.
Canahuati, opinó que el mercado
colombiano es muy fuerte y por eso se vuelve favorable para que Honduras pueda
hacer negocios con esa nación.
Refirió que el gobierno ratificó el
22 de febrero, el TLC con México, un país que tiene un mercado arriba de los
100 millones de habitantes, con un poder adquisitivo bastante bueno.
Por ello, dijo que con la apertura
de esos mercados se abren nuevas opciones para los productos hondureños y "nuestra
meta como sector privado es generar un mínimo de 100 mil empleos al año y en
se sentido, combatir el desempleo existe en el país".
Reiteró que "esos instrumentos de
apertura comercial lógicamente dan la pauta para que se puedan realizar nuevas
inversiones y nuestros productos puedan entrar a esos mercados de una manera
favorable". hondudiario.
US confirms 1 April as start date
Honduras and Nicaragua join El Salvador in CAFTA (Update)
31 March 2006
The US government Saturday confirmed
Honduras and Nicaragua have now joined CAFTA, the Central American Free Trade
Agreement. This eases previous concerns that the 1 April target date would be
pushed back to July. The US also confirms it is seeking to solve confusion over
duty free access for CAFTA products containing inputs from other countries
awaiting ratification.
Honduras and Nicaragua were confirmed
Saturday as having joined CAFTA, the Central American Free Trade Agreement.
Both countries had completed and
implemented necessary changes in their laws and regulations.
In a statement to press, US Trade
Representative, Rob Portman, confirmed 1 April as the date of entry into force.
He also confirmed that the US is to
continue working on other outstanding issues with the remaining countries and a
problem concerning duty free access.
CAFTA should have been simultaneously
introduced in the seven signatory countries, Costa Rica, the Dominican Republic,
El Salvador, Guatemala, Honduras, Nicaragua, and the US on 1 January.
Before Saturday, only El Salvador and
the US had so far done this which consequently saw El Salvador taken out of the
Caribbean Basin Trade Partnership Act (CBTPA).
Those other countries in the region
waiting to join CAFTA remained in the CBTPA.
No duty-free access
As a result, Salvadorian products
using inputs from these countries were not be eligible for duty-free access in
the US.
Washington has however agreed to a
process of duty refunds paid for imports from El Salvador using inputs from the
other five countries awaiting CAFTA ratification.
This will apply to all goods exported
from 1 January 2004 and companies have until 31 December 2006 to make an
application for the refund, or 90 days after the date of entry into force of a
particular country, whichever is the later.
However, this could be problematic
regarding Costa Rica as it is unclear as to if and when the country will see
CAFTA come into force.
Costa Rica's President Arias has
vowed to push CAFTA through but his National Liberation Party does not have a
majority in Congress.
The Dominican Republic is committed
to see CAFTA come into force on 1 July.
Meanwhile, Guatemala continues to
work on implementation and has agreed to modify at least 10 national laws in
order to meet US demands.
Inputs from outside the region
CITA (US inter-agency Committee for
the Implementation of Textile Agreements) has just released interim procedures
for considering requests under the commercial availability provision of CAFTA.
This means where sufficient inputs
from either the US or CAFTA members do not exist, applications can be made to
use inputs from outside the region.
Finished products would still need to
conform with specific Rules of Origin (RoO) however.
CAFTA attracting Asian investment
CAFTA's promise of duty-free textile
exports to the US market is being tapped into from Asian producers.
The Taiwanese Nien Hsing Textile
Company, the world's largest manufacturer of denim cloths, has announced it is
expanding its textile operations in Nicaragua.
The project is scheduled to
commence by the end of the year following total investment in the country so far
of US$117.65 million.
This will be at the expense of its
Mexican production where it will slash its current workforce from 1200 to just
700 and reduce current output.
Send your feedback to
Peter Harrison
Interim
Procedures for Considering Requests Under the Commercial Availability Provision
to the Dominican Republic-Central America-United States Free Trade Agreement
Supply Base Localization: A Different Look at Low-cost Country Sourcing
By David Morgenstern
Capturing the sourcing savings in a low-cost manufacturing strategy means
weighing the risks and understanding total cost.
[From Supply & Demand Chain
Executive,
February/March 2006] The trend to move manufacturing to low-cost regions is
becoming pervasive. Companies of all sizes in nearly every sector of business in
the United States and Europe are developing and implementing strategies not just
to source from low-cost regions but also to actually produce goods in those
countries. The reason is simple: low costs in high growth markets can create
significant competitive advantage. There is one area of cost reduction, however,
that has yet to be fully realized: ensuring that the supply base of a relocated
manufacturing operation has been optimally localized.
Supply base localization is often the
last of many operational aspects to be addressed when an overseas manufacturing
site is established. Many companies place higher priority on activities such as
greenfield-versus-brownfield investment analysis, hiring of local sales and
service teams, relocation of manufacturing assets and technical resources, and
the establishment of inbound and outbound logistics than they do on local
sourcing strategies. Unless local content requirements, punitive import tariffs
or logistics costs exist, it is very common for companies to maintain their
current supply base in high-cost regions and simply have their suppliers ship to
the new region, be it Mexico, China or Eastern Europe. While this is rarely
intended to be a permanent strategy, it often stays in place for many years,
essentially leaving a large savings opportunity on the table.
Weighing the Risks
In today's global economy, the
opportunity costs of maintaining status quo are substantial, and the reasons to
localize are compelling. First, a non-localized international inbound supply
chain (be it Wisconsin to Mexico, Wisconsin to Shanghai, or France to Slovakia)
creates a lead time and inventory cost burden on new manufacturing facilities.
Second, as quality gaps for most components have all but disappeared in low-cost
regions, a local supply base can deliver most components and inputs at a
significant cost advantage over competitors in higher-cost regions. And third, a
local supply base can grow from simply supplying the new facility in the
low-cost region to supplying facilities on a global basis under preferred terms
and conditions.
So why is it still common to find
global suppliers in low-cost regions when alternate sources of local supply
exist? In many cases, it's due to an “if it's not broken, why fix it” mentality.
There is both effort and risk in re-sourcing any component, especially when
internal resources, both technical and purchasing, may not exist or be fully
ramped up in a given low-cost region. So even if savings of over 25 percent can
be achieved, local manufacturing executives may not want yet one more task — and
a potentially disruptive issue — on their plate, when their existing inbound
supply chain is working well. Moreover, many companies simply lack purchasing
staff that can look at all categories of spend across the manufacturing
facility. While global commodity managers may be in place at corporate
headquarters, they are equally challenged to find local supply alternatives.
read more... |
