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Garment

Haiti: The fastest growing exporter to the US market

Sector Overview

Haiti and the Global Textile Market

Despite Asian countries' dominance of the textile market, particularly China, Vietnam, India, Indonesia and Bangladesh, in 2009 Haiti ranked 21st in the list of textile exporters to the United States (U.S.), with total exports valued at USD 500 million, thanks to the HOPE II/HELP Act offered by the United States Government.

In the knit sector (T-shirt ...) Haiti's performance is increasingly encouraging for the local industry. Between 2006 and 2008, Haiti was the fifth largest exporter to the U.S.; since 2009, the country has shared with Honduras the rank of world's second-largest exporter, with the highest growth rate (36.5%) of the sector in 2011. 

Besides Hanes and Gildan which are leaders of the world's knit market, companies such as Vanity Fair Brands, Dominican Knits Inc., The Gap Inc., Cintas Corporation and Kmart Corporation, now represent 59.73% of the production of fabrics valued at approximately 300,000 dozens per month. Other  companies such as Williamson Dickies Apparel and Val d'Or are also looking at the possibility of producing in Haiti.

To enable the local textile industry to double and even triple its production, the Haitian Government is investing in modern infrastructures by creating a new state-of-the-art industrial park respecting all of the industry's rules, in the town of Caracol located in the Northeastern region of the country.

Built on 246 hectares, with an investment of around USD 300 million financed by the IDB and the U.S. Government, the Industrial Park of Caracol is strategically located 17.7 miles away from Cap Haitien's International Port, and will be the largest and most modern industrial park in the Western Caribbean and Latin America.

The Korean company SAE-A has signed an agreement with the Haitian government committing to provide 20,000 direct jobs, and investing nearly USD 80 million over 5 years in a fabric mill and a dyeing plant among others. SAE-A is Caracol Industrial Park's anchor tenant, and will start operations in September 2012.

Sector Strengths

A Global competitive industry

  • Haiti is the fastest growing garment exporterto the US. Exports increased 16.3% in the period Jan-Sept 2011 compared to the same period in 2010 while China's decreased 3.9%. 
  • Haiti is the 5th largest supplier to the U.S. of knit T-shirts, singlets, and tank tops (HTS 6109), measured by the total value of imports in 2006-2009.

U.S. Imports of Haitian Apparel, 1989-2009

Source: U.S. Department of Commerce. International Trade Administration. Office of Textiles and Apparel. http://otexa.ita.doc.gov/

  • Hope II allows access through the Dominican Republic export of garments.
  • New Haiti apparel Center provides training for professionals to help meet the need for skilled workers in Haiti's garment industry.
  • Duty- free access to the U.S. market, thanks to HOPE II and the Caribbean Basin Initiative. Easy access to overseas markets, both to procure raw materials and to sell final goods.
  • Lowest labor costs in the region and plentiful supply with low levels of personnel absenteeism (2%) and turnover (4% per annum).

Cost Comparison Matrix

Cost Category Notes Unit Haiti Dominican Republic Mexico India China Pakistan Bangladesh Cambodia
Labor Cost   U.S.$/
hour
0.48 0.90 1.86 0.83 1.44 0.55 0.32 0.33
Hours Worked Without overtime Normal
hrs/
operator/
day
8 8 8 8 8 8 8 8
  Without overtime Normal
hrs/
operator/
week
48 44 44 48 48 49 48 42
  National holidays Days/
year
16 13 14 17 11 18 10 25
  Without overtime, per year (less holidays + assumed
10 days vacation)
Hours/
year/
worker
2,288 2,104 2,096 2,280 2,328 2,324 2,336 1,960
Electricity Cost to industry U.S.$/
KwH
0.96 0.14 0.15 0.086 0.065 0.071 0.053 0.17
Building Cost of industrial space construc-
tion
U.S.$/
square
meter
160 220 250 140 97 150 120 130
Transport From
factory
to source
port
U.S.$/
40-ft
container
0 0 800 400 470 300 250 600
  From
source
port
to Miami/
Long
Beach
U.S.$/
40-ft
container
800 800 0 2,100 1,800 2,000 1,900 1,900
Duty payable U.S.
import duty,
Chinos (using
Asian fabric)
% 0 16.6* 16.6* 16.6 16.6 16.6 16.6 16.6
  U.S.
import duty,
T-shirts (using
Asian fabric)
% 0 16.5* 16.5* 16.5 16.5 16.5 16.5 16.5
Taxation Corporate
tax on
profits
% 0 N/A 35 33.66 25 35 35 20
  Sales tax %           15    
  Value-added
tax
% 0 0 0 12.5 17 15 15 10

NOTE: * Duties payable upon import are zero-rated if made from American, Mexican, or Dominican fabric.
SOURCE: Werner International, validated against Werner and international databases

  • Visible, serviceable, and reliable relations with U.S. retail buyers.
  • Customs and Border Protection (ELVIS), and good levels of on-time delivery.
  • Proximity of factories in Port-au-Prince to the port, and efficient trade facilitation through the port.
  • The Better Work Haiti program helps to ensure that the "Made in Haiti" label complies with U.S. consumers standards.

How CFI can assist you:

The garment sector in Haiti has great potential for growth and great potential for investment. CFI can assist investors in learning more about opportunities in the garment sector. CFI acts like a hub to cross-reference agencies and entities in order to provide business and legal information to investors. CFI provides help to investors by facilitating site selection or enterprise installation, choice of professional's advisors, site visits, follow-up of the project until achievement (aftercare).

For more Information

Contact Our Expert
Naed Jasmin
Legal Officer
Language: French - English
Tel: 509 2514 57 93 - 509 3448 44 65
E-mail: naedjasmin@cfihaiti.net
Contact the following institution
CTMO-HOPE Commission in charge for the implementation of the Hope Act.
Name: Georges Sassine
Position: Executive Director
Language: French – English
Tel: 509 3 750 23 23
Mail: georges@agtextilesb1.com