Adidas Supplier Investing $5 Million in Nicaragua Factory

Adidas sportswear supplier Augusta Manufacturing is investing $5 million at its factory in Nicaragua to create 500 jobs by the end of the year and expects to employ 1,000 in 2012, according to ProNicaragua, the country's industrial development authority.

Augusta Manufacturing, established in the country’s free zone sector since November 2011, complied with the Adidas qualification requirements and is now manufacturing basketball shorts for this brand. Augusta Manufacturing is currently investing $5 million, creating 500 jobs by the end of the year and expects to employ 1,000 in 2012. In addition, the company also produces garments for brands such as Kenneth Cole, Quicksilver, Roxy, DKNY and Calvin Klein in other countries.

Nike, another leading U.S. sportswear brand, is also being produced in Nicaragua by New Holland Apparel, a U.S. company operating under the country’s free zone sector. New Holland Apparel has 10,000 square feet of industrial space and employs approximately 2,000 people. The company also supplies sportswear for renowned brands like Under Armour and Reebok.

According to Javier Chamorro Rubiales, executive director of PRONicaragua, the official investment promotion agency, one of the main benefits of Adidas and Nike choosing Nicaragua is the increase of the country’s exports. He however mentioned that “the most important benefit is the thousands of employment opportunities created for the population when one of these leading brands chooses Nicaragua to outsource their products”. Both these brands continue exploring Nicaragua with the purpose of further expanding their supplier base.

From January to September 2011, Nicaragua was the country in Central America with the highest growth in apparel exports (in volume) to the United States, compared to the same period last year. According to the Office of Textiles and Apparel (OTEXA) of the U.S. Commerce Department, during the aforementioned period Nicaraguan garment exports to the U.S. increased 20 percent in terms of volume and 37.3 percent in terms of value, reaching 314 square meter equivalents (SMEs) and $1 billion, respectively.