Nicaragua to promote investment opportunities in New York
The summit will bring together high level representatives of the world’s most important brands in the footwear industry.
Managua, Nicaragua; July 21, 2017
A delegation from Nicaragua’s official investment promotion agency, PRONicaragua, will participate in the forthcoming edition of the “Footwear Sourcing Intelligence Summit”, an event organized by the Footwear Distributors and Retailers of America (FDRA). The summit will bring together high level representatives of the world’s most important brands in the footwear industry.
Gen. Álvaro Baltodano, Nicaragua’s Presidential Delegate for Investment, leads the Nicaraguan delegation taking part in the event. Nicaragua’s participation in the summit aims at promoting the competitive advantages the country offers compared to long-standing footwear manufacturing countries, for the development of footwear manufacturing projects.
Among the most valuable assets offered by Nicaragua are: the most competitive labor costs in the region with a salary of US$1.19 an hour within the Free Zone System. This is particularly favorable for the footwear industry, which requires labor-intensive processes. Likewise, the country’s proximity to the world’s largest markets, and access to over 1.5 billion people through Nicaragua’s Free Trade Agreements.
Nicaragua’s footwear industry is composed of medium and small enterprises (SME’s). Currently, there are roughly 1,650 businesses producing 10 million pairs of shoes a year, which generate US$50 million in revenues for Nicaragua annually.
Nonetheless, Nicaragua is moving towards an industrialized production model. In 2011, Tecshoes, a leading footwear manufacturing company based in Brazil, set up shop in Nicaragua, taking advantage of Nicaragua’s attractive free trade zone incentives. Tecshoes constitutes the only exporter of brand footwear in the country. The company is currently manufacturing for international brands such as Clarks (UK), Kate Spade, Michael Kors, and Under Armour. Tecshoes is a subsidiary of Aniger, one of Brazil’s most important footwear manufacturing groups.
Nicaragua’s main footwear export products are: footwear with outer soles of rubber, plastic, leather or composition leather and uppers of leather, and sport shoes with textile uppers (which are within the 6403 category). This is due to CAFTA benefits which represent a great advantage through the “single transformation”, which allows manufacturers to bring raw material from other countries, manufacture in Nicaragua, and export to the United States, free of duties. It is important to highlight that some of the footwear categories manufactured in Nicaragua would pay up to 37.5 percent of taxes if produced in Asia.
According to a study conducted by the FDRA in 2012, which recognized Nicaragua as a “rising star” in the world’s footwear industry, "the country is especially competitive for the production of women leather heels.”
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