As of Thursday, June 19, 2014
With an eye on taking advantage of the free-trade agreement between Central America and the United States, a large South Korean apparel and textile company is building a $50 million thread mill in Costa Rica.
Sae-A Spinning, a subsidiary of Sae-A Trading Co., is investing more than $50 million to build a mill in Coris de Cartago that will employ some 200 people. The announcement was made by the Costa Rican Investment Promotion Agency, which has been working to bring more textile and apparel ventures to the Central American country.
Currently under construction, the plant will produce cotton thread using the latest technology and automated processes. The thread will be exported primarily to Central American countries where Sae-A has manufacturing facilities.
In Guatemala, Sae-A has several large sewing factories employing thousands of workers who make T-shirts for mass merchandisers such as Target and Walmart Stores Inc.
It also has manufacturing facilities in Nicaragua and Haiti as well as Cambodia and Indonesia.
Kwang Ho Yoo, president of Sae-A Spinning, said the investment is being made with a long-term vision and plan of growing the venture’s operations in the area over the next 30 years.
“If we achieve the yields and success expected, we will even consider exploring opportunities for a second investment to complement the one we are announcing,” he said in a statement. “Thanks to the country’s good business climate and the commercial advantages of DR-CAFTA [the Dominican Republic–Central America Free Trade Agreement], we trust this plant will be a milestone collaborating in building deeper relations of friendship between Costa Rica and South Korea.”
The announcement of a new thread mill comes on the heels of Gildan Activewear announcing it is setting up a textile manufacturing plant in Costa Rica. The plant will be in Guanacaste, which is strategically located near Gildan’s other plants in Nicaragua. Gildan, based in Montreal, Canada, exports a large portion of its products—such as T-shirts, sweatpants and socks—from Central America to the United States and Canada.