Production of Textiles in Mexico

Most analysts predicted that Mexico's textile industry would take a severe blow when trade quotas were eliminated in 2005. Instead, the country has maintained essentially the same volume of exports to the United States as it maintained prior to the expiration of the trade quota agreement. While Mexico's textile industry overall has seen a decline since the quota was eliminated, the country has managed to hold its own by taking advantage of the market demand for high-value garments in the United States. At present, Mexico offers many economic incentives for investors who wish to take advantage of this market. Three main companies dominate the actual production of textiles, but the production of high-end garments is a field that is still wide open. Akra, Invista, and Cydsa have forced more than 380 Mexican textile companies out of business within the past four years (Barday, 2005), and it is apparent that investors in the Mexican textile industry will benefit mostly from sales that are a result of production of finished fashion garments, rather than from attempting to compete with these three textile giants. Although the term 'textile industry' normally refers to the production of textiles, for the purposes of this paper, whenever the words 'textiles' or 'textile industry' occurs, the reader will understand that the term is referring to that portion of the textile industry which deals with the production of high-value garments, unless otherwise differentiated.

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an important feature of textile companies. Since in the 1990s consumers have been spending less on clothing, and the features considered most desirable are a variety of sizes, colors, and designs (Nordss, 2004). It is apparent that if Mexico is to meet the standards of the high quality, high fashion market, the industry will need to be more adaptable. High quality, high fashion markets are characterized by flexibility, and if the garment industry is to aid the Mexican economy, accommodations will have to be made. In addition, modern technology, and well-paid employees and designers characterize the high fashion market. It is clear that the Mexican industry will have to make adjustments. The two sectors of the garment industry (textiles and clothing) are increasingly integrated through supply chains that also involve distribution and sales activities. Large retailers such as Wal-Mart now dictate to a large extent the types of textiles and clothing produced, which places additional demands for flexibility on textile companies (Nordss, 2004). High-volume retailers such as Wal-Mart have developed their own generic brands and often control the styles that are produced by textile exporters (Nordss, 2004). These consolidations ha

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