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Hope for Haiti; Cummins Increasing Asian Presence; UAE’s First Vehicle Plant; Powering Up

A proposed massive industrial park in beleaguered, low-wage Haiti is being viewed as a major step in the recovery of the Caribbean nation, which in January marked the one-year anniversary of a devastating earthquake.

The Haitian government, the U.S. State Department, the Inter-American Development Bank (IDB) and Korean multinational textile manufacturer Sae-A Trading Co. have agreed to support the creation of a textile and garment manufacturing park in northern Haiti. Sae-A Trading, headquartered in Seoul, is expected to be the first of several manufacturing firms to locate in the park, which will be built at the site of a former sisal plantation. Sae-A says it will eventually employ 20,000 workers at the North Industrial Park, which covers more than 600 acres (243 hectares). The park is located between the northern cities of Cap Haitien and Ouanaminthe. The garment jobs will pay about $2,400 annually, nearly four times Haiti’s per-capita GDP of $640.

Investment banking firm Taylor-DeJongh is advising the Haiti government on the park’s development, including defining the commercial structure, negotiating with tenants and promoting the park to potential tenants.

“By the first quarter of 2012, the gate will be opened and the first shells will be available to tenants,” says John Sachs, a director with Taylor-DeJongh. Sae-A will occupy a third of the park in a phased-in investment, Sachs says. The remainder will be occupied by three to 10 additional tenants, he says. Estimates place the park’s eventual employment at 50,000 to 65,000, in an area where most people depend on subsistence farming.

More Than Apparel

“Some other investors are in discussions with the government,” Sachs says. “It will be a truly mixed-use park, not necessarily dedicated to garment manufacturing. There could be some other types of light manufacturing.”

Haitian authorities are in talks with two other Korean firms as well as with companies from the United States, Brazil and Switzerland in various industrial sectors that have expressed interest in the park. Sachs says the Haitian government reached out to many of the largest garment manufacturers in the world, including companies in China, Korea and Brazil.

“They approached these manufacturers to say Haiti is back in business, is developing a world-class industrial park and has a skilled work force,” Sachs says. “They got positive responses from quite a few, and Sae-A was one of the first movers.”

Sae-A Trading will be the first company to produce apparel made from textiles manufactured in Haiti. The company will commit US$78 million for facility development, machinery and equipment. It will occupy 124 acres (50 hectares) and employ 20,000 Haitian workers in compliance with International Labor Organization standards. Founded in 1986, Sae-A Trading, a major supplier to U.S. retailers such as Wal-Mart, Target, Gap and Levi’s, also operates factories in Vietnam, China, Indonesia and Nicaragua.

Through grants made to Haiti, the IDB will support the construction of the industrial park’s buildings, internal roads, electricity and water distribution networks and water treatment plant. The U.S. government will underwrite the construction of a power generating facility to supply the park and its surrounding area, as well as a housing program for the park’s workers.

Haiti’s apparel industry reached its zenith in the early 1990s when it employed an estimated 100,000 workers. That number is now about 28,000. The value of Haitian apparel exports to the U.S. ($512 million) was approximately 10 percent of Haiti’s GDP in 2009, constituting approximately 90 percent of the country’s exports, according to the U.S. State Dept. Sae-A’s investment of $78 million doubles the amount of foreign direct investment that Haiti received during 2009.