Identifier
Created
Classification
Origin
07SANSALVADOR1844
2007-09-12 22:39:00
UNCLASSIFIED
Embassy San Salvador
Cable title:
CAFTA-DR EARLY SUCCESS STORIES: SERVICES & MANUFACTURING
how-toVZCZCXRO5873 RR RUEHLMC DE RUEHSN #1844/01 2552239 ZNR UUUUU ZZH R 122239Z SEP 07 FM AMEMBASSY SAN SALVADOR TO RUEHC/SECSTATE WASHDC 7808 INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE RUCPDOC/USDOC WASHDC RUEATRS/DEPT OF TREASURY WASHINGTON DC RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC RUEHRC/USDA FAS WASHDC
UNCLAS SECTION 01 OF 02 SAN SALVADOR 001844
SIPDIS
STATE PASS USAID/LAC
STATE ALSO PASS USTR
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN
3134/ITA/USFCS/OIO/WH/PKESHISHIAN/BARTHUR
SIPDIS
E.O. 12958: N/A
TAGS: ECON ETRD EINV ES
SUBJECT: CAFTA-DR EARLY SUCCESS STORIES: SERVICES & MANUFACTURING
REF: A. SAN SALVADOR 1779 B. SAN SALVADOR 1484
Summary
-------
UNCLAS SECTION 01 OF 02 SAN SALVADOR 001844
SIPDIS
STATE PASS USAID/LAC
STATE ALSO PASS USTR
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN
3134/ITA/USFCS/OIO/WH/PKESHISHIAN/BARTHUR
SIPDIS
E.O. 12958: N/A
TAGS: ECON ETRD EINV ES
SUBJECT: CAFTA-DR EARLY SUCCESS STORIES: SERVICES & MANUFACTURING
REF: A. SAN SALVADOR 1779 B. SAN SALVADOR 1484
Summary
--------------
1. CAFTA-DR has shown very positive results in El Salvador during
its first year of implementation. In the services sector, an
innovative, USAID-supported health firm has started exporting
medical services. Software and logistics firms have also expanded,
with new investments generating 645 jobs. Similarly, firms in the
manufacturing sector have seen a significant boost in exports and
received more than $58 million in new investments, creating more
than 3,300 new jobs. Reftel A reported successes in the textile
sector and septel will describe increases in handicrafts and food
and beverage sectors. End Summary.
HEALTH & MEDICAL SERVICES
--------------
2. El Salvador is now exporting medical services through the Export
Chamber of Medical Services, EXPORTSALUD, which includes over 200
doctors and dentists. Through EXPORTSALUD, a patient is able to
contact a medical professional in El Salvador from the U.S. by
telephone or the Internet.
3. EXPORTSALUD's important target market is Salvadorans living
abroad, but they also want to reach the U.S. and Canadian market.
Similar to Costa Rica, they plan to target "baby boomers," who may
not have enough money to cover their medical expenditures and are
looking abroad for treatment.
4. EXPORTSALUD established strategic business alliances with
airlines and local hotels to facilitate tourism packages in
conjunction with medical visits. It also established an alliance
with the international bank HSBC, which recently acquired Banco
Salvadoreno, to provide financing up to $5,000 for Salvadoran
residents in the United States who require medical services.
5. USAID supported EXPORTSAULD with $65,000 for training in
marketing, business plans, and website development. Their website
address is www.exportsalud.org.
SOFTWARE
--------------
6. U.S. software developer Enterprise Database Corp (U.S.) invested
$600,000, creating 25 direct and 50 indirect jobs.
A French software developer, Central American Software Services,
invested $250,000, creating 30 direct and 60 indirect jobs.
LOGISTICS AND TRANSPORTATION SERVICES
--------------
7. U.S. firm Crowley Logistics invested $300,000 thousand in a
"Business Processing Office" for outsourcing administrative
services. They created 60 direct jobs and 120 indirect jobs.
DHL/Cormar expanded its local operations, investing in a
distribution center and creating 100 direct and 200 indirect jobs.
Aviotechnology plans to offer aeronautical component repair services
to foreign markets.
MANUFACTURING
--------------
8. Arnecom, a Mexican-Japanese automobile wiring harnesses firm, has
invested $15 million and generated 650 direct jobs since 2006. They
supply Chrysler, Ford, Nissan, Isuzu, Mazda, Mitsubishi, Subaru, and
Toyota assembly plants in Mexico and the U.S. During the first year
of CAFTA-DR, Arnecom exported around $4.7 million to the U.S.
(reftel B). The firm plans to triple its industrial floor in the
western city of Santa Ana and hire around 3,000 additional persons,
mostly women, within two and a half years.
9. Local towel producer Hilasal currently exports 30% of its
production to the U.S. and credits CAFTA-DR with helping compensate
for increased Chinese competition. During the first year of
CAFTA-DR, towel exports to the U.S., mainly from Hilasal, grew by
36% to $9.6 million (reftel B).
10. Pharmaceutical company Laboratorios VIJOSA will start exporting
to the U.S. by October 2007. Currently, they export 35% of
production, but by entering the U.S. market they project to increase
exports by at least 40% during 2008.
SAN SALVAD 00001844 002 OF 002
11. Exports from balsam producer J. Raul Rivera increased by 55%
during 2006. Company vice president Jose Rivera stated that
CAFTA-DR has improved the commercialization of their product, and
they expect to increase exports to the U.S. by 15% during 2007.
12. Torogoz, which produces copper, bronze, nickel, silver and
gold-plated sculptures and decorating products, expects to achieve
40% export growth during 2007. Recently, the company won Salvadoran
Exporters Corporation's (COEXPORT) "Exporting Innovation" prize.
According to design manager, Maria Eugenia de Panameno, they have
created a line of decorating tiles specifically for the U.S. market.
13. Consorcio Internacional, a division of Procesadora de Acero El
Salvador (PROACES),is exporting 15% of its total exports to the
U.S. They export cold steel flat laminated sheets and plan to expand
sales by 5 percent in 2008, generating 100 new jobs.
14. A Brazilian shoe producer invested $2 million in November 2006,
creating 200 direct and 400 indirect jobs.
15. AVX Corporation, a U.S. and Japanese electronic components
manufacturing company, invested an additional $40 million, creating
600 direct and 1,200 indirect jobs.
16. UNIVERSAL, a joint U.S.-Costa Rican Motorola repair center,
invested $1.6 million in August 2006, creating 140 direct and 280
indirect jobs. It repairs around 1,500 phones per week. According to
the National Investment Promotion Agency, PROESA, they plan to
establish a phone assembling plant in El Salvador. They were
previously located in Panama but said that efficiency is higher in
El Salvador.
COMMENT
--------------
17. Clearly, CAFTA-DR, along with a stable government, sustainable
economic policies and an aggressive investment campaign by the GOES
have stimulated investment, job creation and export opportunities in
El Salvador. Notably, the investors are not just U.S. and
Salvadoran companies, but also investors from Brazil, Costa Rica,
France, Japan, Mexico and elsewhere. Septel will provide examples
of business expansions and jobs creation in the handicrafts and food
and beverage sectors.
Butler
SIPDIS
STATE PASS USAID/LAC
STATE ALSO PASS USTR
USDOC FOR 4332/ITA/MAC/WH/MSIEGELMAN
3134/ITA/USFCS/OIO/WH/PKESHISHIAN/BARTHUR
SIPDIS
E.O. 12958: N/A
TAGS: ECON ETRD EINV ES
SUBJECT: CAFTA-DR EARLY SUCCESS STORIES: SERVICES & MANUFACTURING
REF: A. SAN SALVADOR 1779 B. SAN SALVADOR 1484
Summary
--------------
1. CAFTA-DR has shown very positive results in El Salvador during
its first year of implementation. In the services sector, an
innovative, USAID-supported health firm has started exporting
medical services. Software and logistics firms have also expanded,
with new investments generating 645 jobs. Similarly, firms in the
manufacturing sector have seen a significant boost in exports and
received more than $58 million in new investments, creating more
than 3,300 new jobs. Reftel A reported successes in the textile
sector and septel will describe increases in handicrafts and food
and beverage sectors. End Summary.
HEALTH & MEDICAL SERVICES
--------------
2. El Salvador is now exporting medical services through the Export
Chamber of Medical Services, EXPORTSALUD, which includes over 200
doctors and dentists. Through EXPORTSALUD, a patient is able to
contact a medical professional in El Salvador from the U.S. by
telephone or the Internet.
3. EXPORTSALUD's important target market is Salvadorans living
abroad, but they also want to reach the U.S. and Canadian market.
Similar to Costa Rica, they plan to target "baby boomers," who may
not have enough money to cover their medical expenditures and are
looking abroad for treatment.
4. EXPORTSALUD established strategic business alliances with
airlines and local hotels to facilitate tourism packages in
conjunction with medical visits. It also established an alliance
with the international bank HSBC, which recently acquired Banco
Salvadoreno, to provide financing up to $5,000 for Salvadoran
residents in the United States who require medical services.
5. USAID supported EXPORTSAULD with $65,000 for training in
marketing, business plans, and website development. Their website
address is www.exportsalud.org.
SOFTWARE
--------------
6. U.S. software developer Enterprise Database Corp (U.S.) invested
$600,000, creating 25 direct and 50 indirect jobs.
A French software developer, Central American Software Services,
invested $250,000, creating 30 direct and 60 indirect jobs.
LOGISTICS AND TRANSPORTATION SERVICES
--------------
7. U.S. firm Crowley Logistics invested $300,000 thousand in a
"Business Processing Office" for outsourcing administrative
services. They created 60 direct jobs and 120 indirect jobs.
DHL/Cormar expanded its local operations, investing in a
distribution center and creating 100 direct and 200 indirect jobs.
Aviotechnology plans to offer aeronautical component repair services
to foreign markets.
MANUFACTURING
--------------
8. Arnecom, a Mexican-Japanese automobile wiring harnesses firm, has
invested $15 million and generated 650 direct jobs since 2006. They
supply Chrysler, Ford, Nissan, Isuzu, Mazda, Mitsubishi, Subaru, and
Toyota assembly plants in Mexico and the U.S. During the first year
of CAFTA-DR, Arnecom exported around $4.7 million to the U.S.
(reftel B). The firm plans to triple its industrial floor in the
western city of Santa Ana and hire around 3,000 additional persons,
mostly women, within two and a half years.
9. Local towel producer Hilasal currently exports 30% of its
production to the U.S. and credits CAFTA-DR with helping compensate
for increased Chinese competition. During the first year of
CAFTA-DR, towel exports to the U.S., mainly from Hilasal, grew by
36% to $9.6 million (reftel B).
10. Pharmaceutical company Laboratorios VIJOSA will start exporting
to the U.S. by October 2007. Currently, they export 35% of
production, but by entering the U.S. market they project to increase
exports by at least 40% during 2008.
SAN SALVAD 00001844 002 OF 002
11. Exports from balsam producer J. Raul Rivera increased by 55%
during 2006. Company vice president Jose Rivera stated that
CAFTA-DR has improved the commercialization of their product, and
they expect to increase exports to the U.S. by 15% during 2007.
12. Torogoz, which produces copper, bronze, nickel, silver and
gold-plated sculptures and decorating products, expects to achieve
40% export growth during 2007. Recently, the company won Salvadoran
Exporters Corporation's (COEXPORT) "Exporting Innovation" prize.
According to design manager, Maria Eugenia de Panameno, they have
created a line of decorating tiles specifically for the U.S. market.
13. Consorcio Internacional, a division of Procesadora de Acero El
Salvador (PROACES),is exporting 15% of its total exports to the
U.S. They export cold steel flat laminated sheets and plan to expand
sales by 5 percent in 2008, generating 100 new jobs.
14. A Brazilian shoe producer invested $2 million in November 2006,
creating 200 direct and 400 indirect jobs.
15. AVX Corporation, a U.S. and Japanese electronic components
manufacturing company, invested an additional $40 million, creating
600 direct and 1,200 indirect jobs.
16. UNIVERSAL, a joint U.S.-Costa Rican Motorola repair center,
invested $1.6 million in August 2006, creating 140 direct and 280
indirect jobs. It repairs around 1,500 phones per week. According to
the National Investment Promotion Agency, PROESA, they plan to
establish a phone assembling plant in El Salvador. They were
previously located in Panama but said that efficiency is higher in
El Salvador.
COMMENT
--------------
17. Clearly, CAFTA-DR, along with a stable government, sustainable
economic policies and an aggressive investment campaign by the GOES
have stimulated investment, job creation and export opportunities in
El Salvador. Notably, the investors are not just U.S. and
Salvadoran companies, but also investors from Brazil, Costa Rica,
France, Japan, Mexico and elsewhere. Septel will provide examples
of business expansions and jobs creation in the handicrafts and food
and beverage sectors.
Butler