Carlos Arias knows his place in the apparel supply chain. His Guatemalan company makes denim jeans for Banana Republic, Abercrombie & Fitch and other U.S. retailers that can’t wait for Asian factories to supply them with hot-selling styles.
“The responsiveness of a supply chain is critical,” said Arias, president of Guatemala City-based Denimatrix. “We’re three days from the U.S. market.”
Quick response and tariff preferences under the Central America Free Trade Agreement have helped Guatemalan apparel manufacturers keep their niche as U.S. suppliers, even as Asia retains market dominance.
Arias is proud of his company’s integrated production cycle, which takes Texas cotton and spins it into fabric that’s dyed, cut, washed and sewn into fashion jeans that are designed in-house.
He knows, however, that he can’t match the low costs and vast scale of Asian producers. During the first 11 months of 2009, China accounted for 36.9 percent of the value of U.S. textile and apparel imports, compared with 1.7 percent for Guatemala, a country of only 13 million people.
So Arias touts his company’s responsive service and supply chain agility. He said a retailer may test-market five styles, find one that sells, and contact Denimatrix for quick resupply, while placing a bigger order with an Asian manufacturer for later delivery.
“An important part of the business is where you can get it at the best price,” Arias said, “but another part of the business is where you can get it at what may not be the best price but is a competitive price with fantastic service.”
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