Canadian textile giant Gildan Activewear has announced that it will move its Mexico operations to countries where it can take advantage of cheaper production costs.
The move will cost 1,700 jobs in Mexico.
The company will relocate its manufacturing to cheaper production centers in Central America and the Caribbean. It is also building a large complex in Bangladesh to meet demand for the Chinese and European markets.
“Upon analyzing our future cost structure, we feel that we can lower costs significantly by limiting our facilities,” CEO Glenn Chamandy told analysts.
Mexico has seen its competitive manufacturing capacity eroded after a series of threats from U.S. President Donald Trump, the Bloomberg news agency reported.
However, Mexico has made a strong effort to focus on more sophisticated operations in recent years, becoming an important production center for the automotive industry and attracting investment in the aviation sector.
Based in Montreal, Gildan Activewear created a global textile production chain that includes everything from thread to ready-to-wear clothing, which allowed it to compete with other industry giants like Fruit of the Loom and Hanes.
The company’s two facilities in Mexico came with its acquisition of Alstyle Apparel, a U.S. company that, like Gildan, sold personalized shirts and sweaters.
The company currently sees growing opportunities in the private brands market, as retailers look for their own proprietary brands, according to experts.
Source: El Financiero (sp)