Mon Apr 17, 2006
By Jane Sutton
MIAMI April 17 (Reuters) - International Textile Group, a fabric company controlled by U.S. billionaire Wilbur Ross, said on Monday it will build a $100 million denim plant in Nicaragua an investment valued at roughly 2 percent of the country's gross domestic product.
ITG's Cone Denim unit signed an agreement with the Nicaraguan government to build a fabric mill projected to employ 750 people and produce 28 million yards of denim a year.
The 600,000-square-foot (54,000-square-metre) plant will be built in the Jorge Bolanos Abaunza Textile Park in the Nicaraguan capital Managua and is scheduled to open in late 2007, Ross told a news conference in Miami. The plant will be the largest building ever built in and represents an investment equal to 2 percent of the nation's annual gross domestic product, Nicaraguan government officials said.
Turnaround specialist Ross has made a fortune buying up struggling companies, consolidating and revamping them and selling them at a hefty profit. He formed International Textile Group in 2004 by merging the assets of Burlington Industries and Cone Mills, two fabric companies brought down by competition from low-cost imports.
Ross was an early and avid supporter of CAFTA, the U.S.-Central America Free Trade Agreement that lifts trade barriers between the United States, Central America and the Dominican Republic. The trade pact narrowly squeaked through the U.S. Congress last year and took effect in on April 1. Ross said the Nicaraguan plant would not displace production at Cone Denim's only remaining mill, the century-old White Oak plant in North Carolina that specializes in high-end denim.
He said ITG customers, who buy fabric from the Nicaraguan mill, were expected to build or expand clothing assembly plants nearby. "There will be cutting and assembly, but not by us," Ross said. "The cutting and sewing people will be owned by separate companies, our traditional customers."
ITG's clients include well-known American brands such as Gap and Levi Strauss. Neither Ross nor Cone Denim President John Bakane would say which companies had committed to expanding in Nicaragua. ITG and Nicaraguan government officials said the anticipated expansion in apparel assembly, as well as increased cotton farming to support the plant, would add more than 8,000 jobs in Nicaragua, which is one of the poorest nations in the Western Hemisphere.
All of this is aimed at creating jobs and that's the only cure for poverty," Nicaraguan President Enrique Bolanos said at the Miami news conference. ITG is already one of the largest denim manufacturers in Mexico and has plants or joint ventures in India, Turkey and Vietnam. It is also building a Cone Denim plant and a Burlington home furnishing plant in .
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