Inversion Y Desarrollo Con Luis Velasquez 006. Industria De Vestuario Y Textiles En Guatemala

Welcome to Investment and Development, Guatemala continues on the road of competitiveness to continue increasing their exports and in generating more development for all the Guatemalans, in this context, the textile industry, and of clothing, it plays an important role, generating hundreds of job openings in the different areas of the country. Recently we have seen that the strategic plan has been actualized of the clothing commission and textiles that is supposed to keep increasing the competitiveness of all the enterprises and keep on generating more exports. To know more about this issue of economic benefits and the benefits of development of the generation of the Gross National Product, of the generation of currency into the country, we are here today with Lic. Carlos Arias, who is a member of the commission of the industry of clothing and textiles. Welcome Carlos to this program, were we will try to talk about all those strengths and benefits that it generates for Guatemala, the great industry of textiles and clothing. Thank you very much Luis, we are very happy to participate, we believe in this industry and in the potential of our country and we thank the opportunity to be able to share the experiences of our industry. Thank you Carlos for sharing. When did the industry of textiles in Guatemala begin, what were its origins? In Guatemala, there has been an industry of clothing and textiles for a lot of years. . 22 00:01:45,140 --> 00:01:50,543 First of all, local consumption for a long time. The market of exports opens at the beginning of the 80´s when the benefit CBI Caribbean Business Iniciative was made by President Reagan, in those years it begins. And it is then that a major development starts in this sector and I imagine that not only in Guatemala, but also in the area of the Caribbean. Correct, the initiative of the Caribbean Basin of the letters CBI , allowed assembling products in the region to be sent back to the United States, which was not only a benefit for Guatemala, but also for the whole Basin. In generating job openings, How many positions are we talking about of the direct and indirect job openings, and how many people and families are being reached in general? Well, we are currently considering the industry, as the industry dedicated to textiles and clothing, but also all the enterprises that help us with the issue of accessories and services, for example the subject about threads, of buttons, tags, logistic services, if we see it from this point of view, our industry has around 150,000 jobs in all the industry as one and of course a very high number of associated families that cuould be multiply itself times 5, so we´re talking about 750,000 people approximately, in that sensem there is a concept that is called entrepeneur clusters, the famous clusters. We have understood that your sector has begun several years ago, an important effort. What does this concept of clusters consist of? What benefits take this country and in what phase are there in these moments? Well, we did start several years ago with the issue of clusters, we consider that serving the customers in international markets mainly like the United States and Europe, require of labor done by several enterprises together, an export pair of pants needs cloth, threads, of confection, of laundry, needs accessories like zippers and buttons, at the end we acknowledged the success of the industry depended of our ability to work together, to join the companies that are interested in doing a strategic plan as a sector, presenting our clients, because the importance is the confidence in the market, that the system of clusters works and thanks to God, they have strongly supported us, and this cluster, gives us a lot of pride, let´s say it is the best established and the most united in Central America. This is precisely what we want to do with the Apparel Source Show that is ending today. Very important, how successful this Apparel Source Show is. In what level are we internationally, if we could give a score to this event that brings together suppliers and producers of different countries in the world? Well, this is version number 17 of the show, for 17 years we have been able to make it the only show at an international level, recognized by the clients and the industry and it is one of the few shows from the whole American level, including the north and south and Central America that has had that longevity. There are more than 2,000 people who visit us, we have buyers, producers, people from Central America and the Caribbean, we also had a very important meeting of the Central AMerican council and of the Dominican Republic clothing and textiles that took place here in Guatemala, so we have become a magnet of the surrounding industry of the Americas and the world in Guatemala. Very important role that Guatemala is playing in the industry of clothing and textiles, we want more success cases like this, to repeat themselves throughout the country. What role does the government play, the different ministeries, what types of support are being facilitated so that these industries develop? For us, it is very important the role that the government plays, we are and industry that requires an infrastructure, requires clear rules, requires a committment of the government to be exporters, we have had the support of the government for a lot of years, we hope to continue having it, President Colom inaugurated the Apparel Source Show in a very positive way, the comments have been very positive on behalf of our visitors with respect and love that the president has for the industry and we think we are going to count with the support of the government to move forward. Very important, I understand that the majority of companies which have been associated with you, are located mainly in the metropolitan area. What do you have to do and what are you doing to take this type of companies in the interior of the country and like there is a lot of development in the metropolitan area can be taken to the interior, too? This is a very important point, it is something that has worried us a lot of years, because it is very centralized in the city of Guatemala, other countries of the region, have legal frameworks that allow a dispersion of the country, which is earier and we hope that the conditions for it to happen are given, this country requires jobs in all part, in the interior of the republic, the conditions that are given for this are very important, investing in infrastructures of highways, transportation, electricity, and what we hope is to work with the government to find the formula to take this industry to more parts of the country. This is important, to take development to every place of the nation. Interesting topic that we are developing in Investment and Development of the industry of clothing and textiles. Let´s go to a cut and then we continue. The industry of clothing and textiles in Guatemala, generates around US$ 1,400 Millions in exports a year. We continue with Investment and Development and the issue of the industry of clothing and textiles. We talked a moment ago, about the relevance of taking development into the country and it is important to accelerate Those plans on behalf of the private sector, on behalf of the government sector, too, so that more job openings are generated in the rural area of the country and that there is more development. In that context, Guatemala has signed, around 2 years ago, the Treaty of Free Commerce with the United States, really, what are the direct benefits that this industry brings? How does it really help? What is the current situation? The Treaty of Free Commerce with the United States was a very important tool, that our industry needed, particularly, because it allows access to textiles converted into clothing, from it´s confection and creation in the Guatemalan industry and in the region. Before we needed to buy textiles from the United States, for example, to be able to enter the American market without paying taxes. Nowadays, you can buy and do those textiles in the region, in Guatemala, What gives us national added value and it allows us to take these products to the market without taxes, that is the most important part of the treaty. Now it has context. What helps the competitiveness of the sector? As we can see in an international environment, broader with the boost of China, of Thailand, of Honduras, our central American brothers, as well as our Dominican brothers. How do we see Guatemala in this great context? There is a very important advantage, that Guatemala has, there are several, but the proximity of Guatemala with the United States, allows us to be with the correct product, in the proper time in the American market, this is something that China, Bangladesh, India and the rest of the eastern countries can´t do, they will never have the proximity that we have, another thing is that this industry 135 00:10:24,516 --> 00:10:28,185 has developed and we have nowadays more develoment of the product, we have the ability to create new products, to help our clients to take the correct product to the stores, that velocity is very important for us. In this competitiveness, we recognize that we will never be cheaper than China, but if you take the proper product in the right time, the benefit for the client is very big, and that gives us a huge competitiveness. How are we with the human resource, the efficiency, the subject of payment per productiveness, that will motivate people to earn more, and that will also give more to the general benefit of the industry? As an industry, we are very fortunate, because the human resource that our country has, is extraordinary, the efficiency, the creativity, the work ethic that we have in Guatemala is acknowledged internationally and I think it is the greatest strength that our industry has, definitely the issue of recognizing payment per productiveness, or to seek payment per hour, labor flexibilization, that's the global trend 00:11:41,110 --> 00:11:44,920 and that is the challenge for Guatemala, to find the best mechanisms that will allow us to be flexible, because when the time comes, our clients have different needs in different moments of the year, and our flexibility to increase or decrease is important for this industry, so labor flexibilization has been something that we have been trying to seek, and it will really allow us to be a very competitive region, and a country that can stand out in this issue. 159 00:12:11,517 --> 00:12:14,977 These elements that you have mentioned, help companies to improve their competitiveness and therefore, all the people improve their incomes, and also obtain better results in their different activities in the companies. Definitely, I believe that we forget that in countries as the United States, where many of our Guatemalan brothers work in 2 or 3 different jobs, then this flexibilization allows great incomes, a different way of seeing the world, we think that taking advantage of this human talent that we have and finding creative formulas to make it work, makes us very efficient and it allows us to satisfy our clients. I would like to know, what else are you doing to improve the added value, the topic of the whole package, doing something like what´s happening in Colombia, for example: having their own designs, their fashions, and not only to be thinking in the United States´ market, but also to think about the local market. It is true that Guatemala is a very small country compared with Colombia, a market of 12 millions, a market of 47 millions, but if we think of the Central American region and the Caribbean, then we are thinking about a 49 million market. How are those steps being taken? Definitely, it is important to diversify markets, in the industry, we are very focused on the United States, but nevertheless, there are great local opportunities and also in other parts of the world, there are companies in our sector that are already very good to sell locally, they even have stores that are promoting their products directly with the consumer, but there are also great opportunities in Europe. A great agreement negotiation with Europe is coming, and it has been very important, and something that has been used very little and that some companies of clothing and textiles do a great job on, is selling to Mexico, particularly the textile area, where great advances have been made, diversifying will be important because it takes the risk away from us and it allows us to move on. How does VESTEX support its associates and very particularly this small and medium companies which are doing a very important effort in improving their quality, their productiveness, their efficiency, and that are a very important element in the present and the future of economic and social development in Guatemala? VESTEX has been a leader association in Central America, its main role is to support the companies, so that they can be successful in the international markets. Much of what VESTEX does, is to help understand the market, help to understand the national regulation, help to create the necessary training to support the industry, we have an industry that promotes a lot, that presents in different world forums, the capacities of Guatemala, that manages a directory of all the factories, all the affiliated companies, and that communicates very well in different associations. We think that what VESTEX should do is to take the Guatemalan flag very high and give the companies the opportunity, the exporters the opportunity of having access to the markets, then a very important role is played by VESTEX and we hope it will be like this for many years. A facilitator role that benefits its associates, to increase competitiveness, to generate exports, more National Gross Product and more job openings, interesting topic. Let´s go to a cut and then we will continue with Investment and Development. The Industry of Clothing and Textiles in Guatemala generates more than 150 thousand jobs among its different areas, confection factories, Industrial Textiles, Accessories and Services companies. We continue with Investment and Development and the issue of the industry of clothing and textiles. We were talking a while ago, about the great economic benefits, but it is also important to talk about the social benefit. Companies are good when they generate utilities, but they are also very good when they generate job openings and take a lot of benefits for their employees and their communities, in the topic of conduct code, which is very important. I understand that VESTEX, many years ago established a code that really shares with its associates and that helps their companies to really take the human element as a very important factor the most important factor of the success they have today. Definitely, our industry is a a great business of people where we are interested in human development, we are interested in our people wanting to continue in our companies, the training that is given, will be lost, when a person doesn´t feel that he will find in our companies the success they´re looking for. For us, the conduct code in VESTEX was very important, because we serve big brands, of great stores that require the highest level of committment regarding human subject, this conduct code has fundamental principles that were adopted afterwards by our own clients and we pass permanent auditing of labor conditions in our industry. We believe in human factor, we believe in development and we believe in achievement, we believe that law has to be accomplished, that we must completely follow it, and that prosperous labor relations are based on mutual respect and in the viability to give the employees and environment that will allow them to move on. This conduct code has helped the exports increase What is the extent of the exports in the year 2007? For example. In value FOB, it has increased to more or less $1.4 billions or its equivalent of US $1,400 millions. It is a very important number. How does the subject of auditing that these providers have abroad or these clients, they make sure that you are achieving with that issue of human resource, I know that audits are being done frequently. What is the general mechanism in the current situation? Each one of our clients reserves their right to visit the factories that work for that brand, without letting them know, they don´t let them know in advance and what they do is a physical revision of the buildings, another thing is to speak with the people and ask them about the conditions and some revisions of records of the company are also donewa, to ensure that things are being done according to the law. I would like to extend in the issue of Corporate Social Responsibility, about the different benefits that are given to the enployees of this industry, for example: In some, I know there is transportation, food, in others there are dentists, there are doctors, there is a series of benefits, a kind of supermarkets, also to have economy scales, which is an important factor so that the people importante obtain a lot of the benefits. Definitely, our industry has been very creative in generating additional benefits to the ones that the law gives, as a way to retain our employees, to compete, because we really are in an open market of work, too. You mentioned the topic of transportation, food, clinics, there are also communitary drugstores, community stores, there are companies that try to pay the food for the people, other companies give food at a very reasonable price. Really, if you want to be creative in the way that our employees last in our companies, the intention is that with more well trained , that feels well working in our companies, in this way we can be successful and of course we would like to attract better people to Guatemala. In the issue of the environment, how are these regulations? What is the current situation? What processes are being implemented to obtain some certifications? Well the environment issue, is a topic that becomes more important every day, for our clients in the international markets, its very important. All the iniciatives that have to de with recycling, with conserving energy, with taking care with water, taking care of resources is very important. We see that in our industrya lot of cotton is used, there already exist companies that are dedicated to picking up leftovers and waste, converting them afterwards, in feminine pads, air filters, We think that for our industry it will be more important every day, water treatment plants for laundries, for the textile companies,in all this the industry has been a pioneer and has always tried to comply with environmental regulations and for our clients it is very important that our companies do this. Finally, How could we indicate the challenges that you have as a sector, the challenges of your associates, the challenges that we have as a country so that Guatemala can keep growing and is able to reach leadership number 1 in the Central American region and the Caribbean and above all take advantage of these strengths that have indicated over the conversation and that it can also compete with China, Thailand, India, with all the big ones worldwide and that they don´t only think about the market in United States, but also like you clearly explained, the regional market and also take advantage of these opportunities in Europe and other countries? The key is to change, to be willing and open to change to transform our business models, or to listening to our clients, to accept new challenges and new ways of making business, to be clear always that rules can change, they evolve, we have to be creative, we have to get the product to the most innovative market, the correct one. The challenge is big because we are in a very globalized industry, compete against almost all the other countries in the world, so that in the end it is the Guatemalan creativity which makes us stand out, the ability to find new niche markets getting close to the correct clients and providing value, the more value we provide, we will become leaders, we think and we are confident that the clothing and textile industry in Guatemala, has what´s necessary to stand out. What percentage do you expect to sustainably grow in the following 5 years? How much in the generation of additional job openings could we be talking about and also in the number of exports to have an idea of what really represents the current industry and of what it could represent in the following 2, 3, 5 and why not 10 years to think about it in a long term? It is important to recognize that this year we have a particular challenge which is an economic recession in our biggest market which is the United States, but I think that if there can be a growth, in fact we are noticing it, because the competitivity in Central America is improving, that a lot of our client that went to China and that went to Asian countries believing that they were going to find only good things, they have noticed that the market is much more competitive and a lot of clients are coming back, We hope to obtain moderate growth in the following 2 years and according to Europe , opens up to us and our abilities to serve different models of businesses increase, we can get to be one of the most influential job openings of the country and one of the sectors that more sells in exports of the country. Interesting, the case of the clothing and textile industry, surely in another opportunity we can deepen in some of the other issues that are also important, thank you very much for sharing with us Carlos, We would also like to thank our audience, national and international, who are watching us, through the different cable stations of Central American TV in the United States and in www.guatevision.com. Telling you that Industry of clothing and textiles in Guatemala is a process of change like you have indicated, that it is evolving, it is planning not only for a short term, but also for the medium and long term and what´s better than today that they are generating those 150 thousand job openings in a direct form, that we can say that there will be many thousands more, you have also mentioned that they generate US$1,400 Million in exports and that we can have much more, that this economical development can continue but above all, that it gets to the majority of Guatemalans, that there is human development with better opportunities and that everyone can hope for a better quality of life. We´ll see you next week in an interesting program as the one of today. in investment and Development.