CBI Sourcing Show Draws Top Crowds, West Coast Firms

GUATEMALA CITY—The 10th annual run of the CBI Apparel Sourcing Show in Guatemala City drew its highest attendance ever with more than 3,000 visitors stopping by during the May 16–18 run of the show.

“This was far and away the most successful show we have ever hosted,” said Carlos Arias Bouscayrol, president of Comision—VESTEX, the apparel division of the Association of Exporters of Non-Traditional Products (AGEXPRONT).

This year marked the first run of the show since the implementation of the Caribbean Basin Initiative (CBI), which eliminates duties on goods imported from Caribbean countries provided they are made from U.S. yarn and U.S. fabric.

Last year, the show drew 2,257 visitors, according to the organizers. More than 50 percent of the show’s attendees came from outside the country this year, Arias added, noting that trade members came from the United States, Canada, Mexico, Colombia, Brazil, the Dominican Republic, Uruguay, Taiwan, Korea, Hong Kong and other countries within Central America.

Guatemala’s acting president, Juan Francisco Reyas, was on hand at the opening ceremonies.

“We know that no country can make headway unless it accepts that it is part of the world,” Reyas said through an interpreter. “If you do not become part of the world you become stranded. United we represent the present and future progress and benefit for each of you and each of the people of Guatemala.”

Guatemala’s apparel production generates $400 million per year for the country and accounts for 100,000 jobs. There are 521 companies in Guatemala’s apparel and textile industry, including 254 sewing operations, 27 textile mills and 240 accessories services, said Marcio Cuevas, president of AGEXPRONT.

The country’s largest export partners are the U.S., Canada, Mexico and Germany, Cuevas said.

This year’s run of the sourcing show drew more than 150 exhibitors taking up 202 booths, an increase from 172 booths at the show last year. The exhibitors included a number of U.S. exhibitors and a handful of California companies including Long Beach, Calif.-based textile mills Texollini; Vernon, Calif.-based textile mill Kronfli Spundale Mills Inc.; Gardena, Calif.-based sweater mill L & J Knitting Co. Inc.; and contractors Los Angeles-based California Rain and Hawthorne, Calif.-based E&J Textile Group Inc.Attendees included representatives from San Francisco-based Gap, Plano, Texas-based J.C. Penney; Vernon, Calif.-based Rampage Clothing; Cincinnati-based Victoria Secret; Hong Kong-based Li & Fong and several companies from Central America.

The show also included a matchmaking service that paired manufacturers and retailers with 56 regional contractors. The show’s organizers announced that 748 business meetings were held during the two days of matchmaking.

Textile Unlimited Corp. was one of the companies participating in the matchmaking sessions. The company, a division of E&J Textile Group, set up a second sewing facility in Nicaragua last February, according to Charles Carroll, president of the company. Textile Unlimited manufactures men’s and women’s tops in knits such as jersey, French terry and fleece. Carroll explained that the advantage of operating the two factories was being able to shift production between domestic and Central American factories, depending on cost and the delivery window.

“If the customer is price sensitive we can send it to Nicaragua,” he said. “However if you don’t have the time to wait, you can use the facility in Hawthorne.”

Carroll said he worked with several New York-based companies, although he said he met with a few companies from Texas, Arizona, Colombia and Guatemala.

“On the second day we met quite a few customers who have potential for us including garments and fabric,” he said.

“I didn’t expect to be meeting this many people although we’ll have to wait for the results.”

The organizers of the show were particularly helpful, Carroll said, noting that on the first day, during a lull in matchmaking appointments on the opening day, organizers scheduled additional meetings for the company.

L.A. Companies Make CBI Contacts

This was the second time Texollini attended the show, according to Pamela Wong, vice president of sales for the textile mill. Texollini was exhibiting as part of the DuPont Lycra pavillion of textile companies that work with the Wilmington, Del.-based fiber manufacturer. The company has a representative in El Salvador, Jorge Giron Hilleprandt, who covers the Central American market. Wong said they met with many of their existing customers, with whom they had made appointments prior to the show.

Kronfli was also part of the DuPont Lycra pavillion. Representatives for the mill said they decided to attend the show only days before the event and did not have time to make appointments, but by the second day Angelo Tepedino, division manager for the performance fabrics division, and Mitra Kilburn, textile engineer, said they were pleased with the turnout.

“It’s a worthwhile show,” said Tepedino. “This seems to be the future. That’s where the [U.S.] government wants us to be.”

The two said many people who dropped by the booth seemed to be able to meet the company’s minimum orders, although Kilburn added that most people were looking for basic fabrics.

Kilburn said when she asked some of the visitors why they wanted to buy fabric from U.S. mills several said it was because of the quality and that some Central American mills had difficulty dyeing and finishing the goods. Some visitors were looking for fabrics that met the requirements for duty free status under the CBI and asked whether Kronfli used U.S. yarn, Kilburn explained to potential customers that the company can get yarn from “wherever you want.”

The potential benefits of the CBI legislation was the topic of one seminar held during the show, and compared the benefits of producing in Central America versus producing in Mexico and Asia.

The seminar included a panel of experts such as Ron Shulman, president of Sourcing for Limited; Carlos Gonzales Guatemala’s vice ministro de integration; Erick Sterkel from AGEXPRONT and DuPont’s director of global sourcing Qaizar Hassonjee. The seminar was moderated by Julia Hughes, president of the International Development Systems Inc. (IDS).

“Before the passage of [CBI], the focus was on how well the CBI region was doing compared to Mexico,” Hughes said. “This year we think it’s important to take an even broader look.”

The CBI region is the largest supplier of apparel to the U.S. market, Hughes said, noting that 77 percent of the production is done under the 807 program or assembly production. Hughes said a growing number of Guatemalan companies are offering full package production.

Shulman’s presentation included a comparison of the cost and delivery windows for typical Limited items such as stretch woven pants or knit tops made using either domestic or imported fabric (or yarn) and then produced domestically versus Guatemala, Hong Kong or Mexico.

The price for a garment manufactured in Guatemala has not always been the lowest, but as Shulman pointed out, speed to market is equally critical to business.

“I strongly believe that Guatemala and the fashion retail business can have a win-win relationship provided we can take the time to determine what it takes to win,” he said.

DuPont’s Hassonjee stressed his company’s ability to assist in sourcing, training and matchmaking manufacturers and suppliers within the CBI region as a good example for companies who are looking to take advantage of CBI.

Texollini took a similar tack, distributing computer disks and small conversion charts at the show to help customers calculate the CBI price for goods. The company produced the disks in conjunction with a series of free seminars they co-hosted with DuPont in Guatemala and in El Salvador earlier in the month, according to Eyal Ron, vice president of operations for Texollini.

Ron said both seminars were well attended drawing about 75 people in each location.

Ron said the mill has also courted customers looking for package production by forming partnerships with local contractors and suppliers.

“It helps if they see you as not just a fabric mill but someone who can form alliances, said Wong. “It gives us an advantage.”

But some of the visitors to the show said they were already aware of the benefits of doing business in the region.

Larry Hansel, president of junior manufacturer Rampage Clothing, was at the show with members of his design staff. Rampage staffers typically attend the sourcing show, Hansel said, adding that he’s been manufacturing in Guatemala for about eight years through the company’s office in Guatemala City.

“Mexico has burned me out—I’ve got Mexico fatigue,” he said, adding that he has found his contractors in Mexico inconsistently meet required delivery times, but his Guatemala contractors meet deliveries and “the quality is as good as L.A.”

But Hansel noted “you have to have a competent staff” in place in Guatemala.

Logistics is also an issue for any manufacturer considering producing in Guatemala, Hansel added.

“You have to have your act together and understand freight or you’ll get killed,” he said, but added, “I think Guatemala is a good alternative to Mexico.”