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Textile Factory Owners Pin Their Hope on HOPE II

PORT-AU-PRINCE – Surveying the vast empty plot of land from his pier on the city’s waterfront on a recent morning, Fritz Mevs talked passionately about his plans for Port-au-Prince’s newest industrial park. The West Indies Free Zone, is Mevs’ field of dreams, and he believes that if he builds it, they will come. They, in this case are textile factories.

After years of decline, Haiti’s manufacturing sector is starting to rebound thanks in large part, business leaders say, to a new law signed by U.S. Congress in 2008.

HOPE II, as the trade act is known, came into effect last September. It expanded duty exemptions provided by a 2007 agreement, thereby giving Haitian textile exports unparalleled access to the coveted U.S. market for a period of 10 years.

Since the first bill came into effect on January 1, 2007, the value of Haitian apparel exports to the U.S. under the HOPE act grew from $13.64 million in 2007, to $74.98 million in 2008. In the first six months of this year alone, apparel exports reached $60 million according to the U.S. Department of Commerce.

That increased demand has led to the creation of half a dozen new companies, and the expansion of others according to Gregor Avril, the executive director of the Haitian Association of Industry which represents all 25 textile companies operating in the country. Meanwhile, as of the end of August, 13,000 new manufacturing jobs had been created.

In a bid to capitalize on Haiti’s new trade advantage, President Preval set up a commission that includes key government ministries, unions and company owners. An important part of the commission’s strategy is luring foreign investment.

Two weeks ago, a delegation of Brazilian apparel company owners toured Haiti’s textile factories and visited sites where industrial parks are planned. That group was joined later in the week by some 200 foreign investors as part of a two-day conference organized by the Inter-american Development Bank which was presided by UN Special Envoy Bill Clinton.

At the Karibe Hotel and Convention Center in Port-au-Prince, potential investors from foreign companies including industry giants Gap and Levi Strauss, attended power point lectures that highlighted Haiti’s two biggest competitive advantages; its newfound access to the U.S. market and its labor force which was touted as hard working and the cheapest in the region.

In spite of these advantages, textile company owners and foreign investors alike say there remain significant challenges to doing business in Haiti.

The Shodecosa industrial park sits alongside a sooty stretch of national highway 1 that rumbles with the sound of trucks. Across the street a maze of shacks spreads out to the sea, around a quarter of a million people live there in Cite Soleil. Many of them lured to the city in the 1980s by factory jobs which vanished in the 1990s.

Shodecosa was once filled with companies making clothes for export. One of its factories supplied the Major League Baseball with its balls, others made jeans and leather goods. Today, 90 percent of the space is used for storage, mostly food, by international aid agencies according to the park’s owners.

But in one corner of the park, a textile company has held on. Island Apparel is one of the only clothing makers from the heyday of manufacturing in Haiti in the 1980s that is still operating in the country.

Bullet holes in the factory walls attest to 20 years of political turmoil that drove most textile companies out of Haiti and saw manufacturing jobs plummet from around 100,000 to 12,000 a couple of years ago.

Spread out across five vast red roofed cement buildings that look like airplane hangars, 1,200 workers sit under neon lights, tracing, cutting and sowing industrial uniforms for export to the U.S. and Canada.

For Ansaldi, HOPE’s impact has been important though in some respects modest – it’s allowed them to weather the economic storm that has circled the globe in the past year.

His customers have shut down operations in different countries, but “because of HOPE’s benefits, we were kind of the last one on the chopping block,” Ansaldi said.

Island Apparel’s sales are down 30 percent over the past year, “but we’d be down a lot more if it wasn’t for HOPE II,” said Ansaldi.

Earlier this year, the company laid of 600 employees, but orders have begun to pick up and Ansaldi expects to hire them all back. Now his sights are set on expansion. But he faces several important challenges.

“We don’t have any water,” said Ansaldi. “We have a hookup to the (water utility), we are down there begging them to give us water.” So the company has to buy it from trucks which Ansaldi says is very expensive.

Meanwhile electricity costs recently doubled to 35 cents a kilowatt hour, “which is crazy,” according to Ansaldi. And with only two industrial parks serving Port-au-Prince, space is in short supply.

The owners of Shodecosa industrial park, WIN Group, which is controlled by the Mevs family, are looking to capitalize on the need for improved infrastructure and the demand for space by building a 1.2 million square foot industrial park across the road.

On a recent morning, builders were working on the first factory buildings going up at the southern edge of the site, while to the north, earth movers were filling in land along the edge of the sea.

The $45 million project got underway in May with the help of a $9 million investment by the Soros Foundation. Fritz Mevs, WIN Group’s president said the new park is uniquely situated to address the infrastructural hurdles holding back growth.

A new highway is being built alongside the park. The WIN Group owns the pier around which the park is being built, as well as the large fuel storage facility on the western side of the park and nearby wells. Across the street from the park, Mevs pointed to a public electrical plant which will supply power.

And 15 centimeters to the east – the width of the cement wall, lies Cite Soleil, home to vast numbers of unemployed people hungry for jobs. Mevs says he plans to set aside 80 percent of the hoped for 25,000 to 31,000 jobs for Cite Soleil residents.

Whether or not those jobs will lift large numbers of Haitians out of poverty is another question.

Last month the government ratified a new minimum wage law which went into effect on October 1. The debate over salaries was a contentious one and led to sometimes violent demonstrations by university students and civil society organizations in the streets of Port-au-Prince this summer.

Paul Chery, the Secretary General of the Confederation of Haitian Workers, Haiti’s largest labor union, said a 2004 study by the ministry of social affairs recommended the minimum wage, which was then at $1.50, be raised to $5 per day.

Given the fragility of the Haitian economy, Chery said the unions proposed that the minimum wage be increased to $3. The private sector offered less.

“The salaries were never reasonable,” said Chery “but the cost of life was very low. If you got 15 gourdes (the minimum wage), you could buy a chicken for 10 or 12 gourdes.” Today, said Chery, for a worker to buy a chicken would cost nearly double the daily minimum wage.

But with 70 percent of the population not formally employed, Chery said most Haitians’ chief concern is simply finding work.

On a recent morning, Chelot Fequiere, 25, stood outside the Island Apparel factory where he’s worked for the past two years as a floor helper. Fequiere lives across the highway in Cite Soleil. He said his minimum wage salary wasn’t enough to support his wife and three-year-old daughter.

He pointed to his callused hands, the result, he said, of working from the age of six hammering out metal sculptures which he used to sell with his father to American tourists on the Champs de Mars. “Life is easier,” he said of his new occupation, and with so many around him struggling without any work, he said he was just glad he has a job.

Haitian Times

Haitian Times

The Haitian Times was founded in 1999 as a weekly English language newspaper based in Brooklyn, NY.The newspaper is widely regarded as the most authoritative voice for Haitian Diaspora.
Haitian Times
May. 05, 2012

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