The following research report contains market research, analysis, statistics and business intelligence relating to research on Textile And Apparel Haiti.

Order the 2008 Edition of this report now by adding this item to your cart or for faster service call us at 212-398-5505 to speak to a customer service representative.

ABSTRACT
The prolonged political crisis in Haiti, during the past three years, has had a negative impact on the economy causing the slowdown of activities. The Gross Domestic Product (GDP) growth went from 3.1% in 1998 to 2.3% and 1.2% respectively in 1999 and 2000. During the fiscal year 1999-2000, the Gross Domestic Product increased by 1.2% compared to the previous one. During the second half of the 90's (1995-1999), the average GDP growth rate was 2.14%. Public deficits have increased as a result of the crisis, which has maintained the pressure on the exchange rate market. The monetary authorities had to maintain a restrictive policy in order to control the inflationary pressures.

The assembly sector's performance has been remarkable during the past five years. In fact, after the embargo in 1991, particularly after the restoration of democracy with the return of President Jean-Bertrand Aristide in 1994, sector output has grown steadily and, as of December 2001, was running at about 80% of 1990 production. The exports of the Haitian Textile and Apparel sector showed an increase of more than 16% in 2000 compared to year 1999 and they are estimated at US$260.0 million. Sector analysis has show that despite operational and structural constraints, the industry can contribute to strong performance, and still offers potential yields to investors. A. MARKET OVERVIEW
The Textile and Apparel Sector is currently the leader in the Haitian Assembly sector with the operations of 46 companies, representing 56% of the total (83 companies). The industrial arts and crafts sector ranks second with 9 companies, followed by the electronics sector with 8 companies, representing about 11% and 10% respectively. The remaining sectors represent less than 21 percent of total output.
According to the "Institut Haitien de Statistique et d'Informatique"(IHSI), the agency that collects and publishes statistical information about the Haitian social and economic life, the Textile and Apparel sector is a very labor intensive sector. This sector uses about 70% of the total assembly sector employment. The advantages of Haitian manual labor are related to both the relatively low cost of labor and the demonstrated quality and efficiency of production.
The majority of the Textile and Apparel companies are contractors to US businesses. In fact, this sector dedicates 85% of its spending to the purchase of raw materials from overseas, especially from the United States. This branch is thus characterized by certain dependence on and by an important consumption of imported products. These factors represent opportunities for US companies who manufacture and export raw material inputs for these types of businesses.
Market Trends
The Textile Apparel Industry is influenced by four (4) major trends:

1.Steady Growth

The goods assembled in Haiti are shipped almost exclusively to the United States, due to proximity of the United States, and the considerable options for shipping and air transport between the United States and Haiti. Small quantities are shipped to Bangladesh and Taiwan. Based on the steady growth trends since 1997 exhibited by Haiti's Textile and Apparel exports, it is estimated that total exports for the sector would reach US$ 260 million for 2001. Haitian exports expanded from US$ 138 million in 1997 to 218.5 and 248.7 million dollars in 1998 and 1999, representing a 58% and 80% increase respectively compared to the year 1997. For the year 2000, Haiti's Textile and Apparel exports were valued around US$250.9 million. Growth in the US economy is cited as one factor supporting the expansion of Haitian textile and apparel assembly sector trade. However, the apparent slowdown of the US economy is expected to have some negative effect on Haitian exports.
Table 1. Textile and Apparel Sector Exports values
Country 1997 1998 1999
2000 2001 (e)

Haiti 138.0 218.5
248.7 250.0 260.0

Source: Haitian Manufacturers' Association (ADIH)

Table 2 Haiti Imports of Apparel from the US in million dollars

Country 1999 2000 Jan-May 2001

Haiti 86.1 126.8
42.0

Source: IHSI (Haitian Institute of Statistics)

2.Good work environment and production principle

The Haitian Industrial Association (ADIH) has elaborated its code of conduct complying with most of international working standard. Also Haiti's assembly sector, according to its association (ADIH), is one of the most proactive in the region in terms of work ethics. In fact, ADIH has endorsed the WRAP (World Responsibility of Apparel Production Principle) and is currently working with international agencies in order to improve the working environment in textile and apparel factories.

3.Infrastructure

The Haitian Textile and Apparel sector is hampered by poor infrastructure, namely insufficient electric power. Because the operations in this industry are energy intensive, frequent power outage undermines the production process and forces businesses to invest in expensive alternative power generation equipment in order to sustain production schedules. Public investment funds allocated to improving power production and distribution structures have brought about small gains, which are not sufficient to adequately address current demand. The gap between electric power supply and demand is predicted to become wider, which could make that sector less competitive.
4. Investment Opportunities
Public perception and concern regarding political instability and increasing security problems is likely to continue. Haiti's political difficulties have resulted in a suspension of funding for major infrastructure rehabilitation by most international and bilateral donors. Lack of capital spending for infrastructure enhancement which would improve the competitive posture of the assembly sector, retards opportunities for investment and expansion. However, recently interest by potential investors from the Dominican Republic and other Caribbean nations, could serve to revitalize this sector, leading to increased employment and higher production. Without this element of potential investment, the The Textile assembly sector will have a lesser buying power in terms of purchasing raw materials -- leading to lower productivity, particularly in the face of continued depreciation in the value of the Haitian gourde. Wages should remain the same but more contracts will be needed in order to keep the same growth rates.

Import Market

The United States is Haiti Ôs largest trading partner. In the assembly sector, particularly in the Textile and Apparel sector, the slightest fluctuation in the US performance has a direct impact on the activities in the Haitian economy, which can change according to the seasonal demands of the US.

Table 3 below shows some of the principal product of the Textile and Apparel industry that are imported by the US in millions of us dollars.
%Change
HS Category Description 1998
1999 2000 99/00

6109 T-Shirt, Singlet 85.8
123.9 115.9 6.5
6110 Sweater, pullover 10.4
14.5 24.4 68.1
6108 Women/Girl Slips, PJ 27.9
22.7 21.5 -5.4
6203 Suits, Ensembles 19.3
18.4 16.4 -12.2
6104 Women/Girl Suits 9.3
8.8 14.1 58.4
6105 Men/Boys Shirts 11.8
12.1 11.2 -6.9
6207 Men/Boy Undersh. .7
5.6 7.9 42.5
6204 Women/Girl Suits 1.5
1.5 2.1 50.8
6103 Men/Boy Suits 2.5
4.8 1.9 -60.8

Source: U.S. Department of Commerce, Census Bureau

ITable 4 Evolution of the Haitian Exchange rate (%)

1995 1996 1997 1998
1999 2000 2001(p)
14.31 16.08 16.27
16.45 16.71 19.62 23.75
Source: Haitian National Bank (BRH)

Table 5 Evolution ofthe Inflation rate
28.44 20.72 16.24
12.77 8.12 11.42 17.00
Source: Haitian Statistical Institute (IHSI)
B. COMPETITION
The Haitian Assembly Sector is well known for excellent labor, which is reputed to demonstrated high productivity coupled with a low error rate. As such, Haiti's labor in this sector continues to provide a significant element in Haiti's competitive profile. Another positive element in Haiti's competitive posture in this sector is its proximity to the US market which can facilitate faster delivery.
Haitian Textile companies usually use back-to-back as a commercial practice. First, they get the contract order from their client. Then they use this contract to get a loan from the bank. The companies use these loans to pay for the raw materials.
Due to increase pressure from the United States to work with companies using good working ethics, Haitian companies are starting now to invest more of their own money on human resources, including improved safety and quality of life factors on the factory floor.
Under the CBPTA, it is expected that increased competition will come not only from Central America but also from Africa. In order for Haitian companies to compete they must be able to offer a full package solution. A full package solution is when manufacturers coordinate everything from garment design to fabric and trim sourcing to CMT (cut, make and trim) and packaging. ADIH is currently working with business owners on this issue.
Successful businesses use these competitive factors to their advantages in offering cheaper prices and rapid delivery. But they also improve their working conditions in order to help gain more US clients. Some of them are currently using the WISE method for improving their working environments. Others hire better supervisors and managers in order to ensure a smoother flow of production in their plants.

The Textile assembly industry is dominated by companies like Multi-Assembly, Alpha General Assembly, Megatex SA, Caribbean Contractors SA, Gilanex Manufacturing Sa.

The Textile assembly industry does not produce for the local market.
Sales Prospects
The assembly industry in Haiti is currently comprised of 83 companies with operations in various sub-sectors. Seven sub-sectors have been identified along with other production units with uneven output patterns since 1996. The Textile and Apparel assembly industry accounts for more than forty companies. It is the largest sub sector in the assembly industry. The following products are considered very important to the Textile assembly sector. The Table 6 below shows the major products exported to Haiti from the United States:
(US $ Millions)
Description Jan-May 2001 (p) Jan-Dec 2000 Jan-Dec 1999

Men/Boys Suits, Ensembles (not knitted) 5.3
16.1 18.4
Bras, Girdles, Garters, etc. 2.7
8.2 9.1
Men/Boys Undershirts, (not knitted) 2.6.
7.95 5.6
Women/Girls' Slips, etc. 1.2
3.6 5.2
Women/Girls Suits, Ensembles (not knitted) .72
2.2 1.5
Garments of Felt/or Fabric Impregnated .64
1.97 2.8

Source: U.S. Department of Commerce
The majority of Textile assembly companies are contractors to American businesses. A survey of 26 HAS firms shows that 33% of companies operate on the basis of contracts with a single foreign contracting company. The majority of HAS companies are contractors to few foreign firms based mostly in one country. This tends to add to the vulnerability of the sector from perception shifts in the U.S. Haitian companies would benefit from having a wider variety of suppliers for these specific products
On May 18, 2000, President Clinton signed into law the Trade and Development Act of 2000. This measure includes the U.S.- Caribbean Basin Trade Partnership Act of 2000 (CBTPA) and the Africa Growth and Opportunity Act of 2000 (AGOA) as well as other important provisions. The CBTPA will expand previous CBIprograms by extending preferential tariff treatment to textile and apparel products assembled from U.S. fabric that have been excluded from the program. This will encourage additional U.S. exports of cotton and yarn thus helping Haitian companies benefit from lower import taxes coming from the United States. One can expect also additional competition coming from African companies.
The Dominican Republic private sector has submitted a proposition in 2000 to create a fund, the Hispaniola International Fund with the US and the Haitian government. This fund swaps Haitian and Dominican debts towards the United States into investments. It will foster investments in the Dominican Republic as well as Haiti. The fund will invest in the establishment of free trade zones along the common border of the two countries, which will include Textile industries. Several Textile industry owners are actually working with the Haitian government to support the fund. C. MARKET ACCESS

Customs Regulations

This is a of documentation that is required by the Haitian government. This information can also be found in the US Department of Commerce Country Commercial Guide for Haiti.

For imports, the documentation requested by customs includes:
- The bill of lading signed by the captain or his delegate.
The bill of lading must include:
- The name of the vessel (sea freight); the identification number (air freight);
- The name of the shipping company;
- The ports of origin;
- The ports of destination;
- The complete manifest of the cargo and the volume on which the freight calculation was based;
- The nature of the merchandise (not necessary if the merchandise is in bulk);

- The import permit (import license depending on the product category).
- The original invoice for the goods.

For export the documentation requested by customs includes:
- Export permit from the Ministry of Commerce.
Tariff Rates

Most commodities imported from abroad into Haiti are subject to payment of customs duties and other taxes. The value of imported goods, either FOB or CIF, is converted into Haitian Gourdes at the prevailing daily rate, prior to the application of duties and taxes. All duties and taxes are payable to the Haitian Customs Administration. Any cargo vessel (sea, air) coming to Haiti, loaded or unloaded, must present to Haitian Customs upon arrival a bill of lading in four originals signed by the captain. Customs valuation is based on:
a) The cost of the goods
- Original invoice from the country of origin.
- If customs will not accept the invoice, blue book value will be used to set the price (this is almost always the case for cars, trucks, and other vehicles).
b) Insurance cost
- Varies according to insurance company; customs generally accepts the cost.
c) Freight cost - including port charges
- Varies according to shipping company; customs generally accepts the cost.

Import Taxes
There are about four fees and taxes levied on commodities concerning the textile industry to Haiti. These include:

- Verification Fee: 4% of FOB value of imports
- Acompte: a newly established tax. A deposit of 2% on CIF value of imported goods and deductible from the income tax.

Importers who are current on payment of income tax pay 1% on CIF value of imported goods.
- Value-Added Tax (VAT): 10% of ex-customs value of imported goods. The ex-customs value is calculated by adding the CIF value to the amounts charged for verification fees and customs duties. VAT is not applied to raw materials for assembly to be re-exported.
- CFGDCT: the Contribution to Management Funds for Territory Collectivities which is applied at the rate of 2% on all imports except petroleum products, pharmaceuticals, parcel posts, food products, agricultural inputs and paper.
DIRECT IMPORT COSTS TEMPLATE (Example)

Base Price 25,000.00
Freight (15%) 3,750.00
C&F 28,750.00

Insurance (1.6% of C&F) 460.00
CIF 29,210.00
Duty (5%) 1,460.50
Verification (4% of FOB) 1,000.00
Installments (2%) 584.20
32,254.20

TCA (VAT) (10%) 3,225.42
35,479.62

CFGDCT (2%) 709.59
Ports costs (5%) 1,773.98
Freight Forwarding (2% of CIF) 584.20
Bank Charges (1.5% of FOB) 375.00

Landed Cost 38,922.39

DISCLAIMER
Information in this report relies on sources including Government Publications, Opinions of industry experts and other public sources. Infomat can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof. All prices subject to change without notice.

$3500 USD
For the 2008 Edition

Published: 2006 August
Market: Mens Womens Childrens
Region: Haiti
Industry: Textiles
Pages: 45
Delivery: 7-12 Business Days
SKU: infre0000276