Nextil Makes Bold Move into U.S. Market with Full Vertical Integration in Guatemala

Nextil takes a further step in its strategic shift towards the North American market. The company has announced that its subsidiary Nextil Elastic Fabrics, based in Guatemala, received on December 30th a favorable resolution from the country’s Ministry of Economy formally expanding its activities under the export promotion regime regulated by Decree 29-89.

Decree 29-89, in force since the late 1980s, establishes tax incentives for export-oriented industrial activities. As the company explains in a press release, this framework allows, among other benefits, “ exemption from certain indirect taxes and income tax, in accordance with the applicable regulations”.

This new move by Nextil is part of its strategic plan to strengthen its business and operations in the North American country following the trade agreement that Guatemala and the US signed on November 14th. The Central American country has become a key hub for US industry and the Spanish industrial giant wants to play a leading role.

Until now, Nextil’s activity in Guatemala was focused on industrial textile production, with weaving, dyeing, finishing, printing and dyeing operations. The expansion makes it possible to incorporate “the new activities of production of clothing, textile articles and accessories, which have recently begun to be carried out”, thus extending the scope of the tax regime to the whole of its value chain.

Nextil advances in the complete vertical integration of its industrial model in Guatemala and strategically positions itself to expand its business in the United States

With this decision, the group moves forward with the complete vertical integration of its industrial model in Guatemala. In the company’s own words, the move facilitates “the integration of all its activities within the advantageous regulatory and tax framework in force”, while strengthening its value proposition for international customers, especially in the United States.

Nextil expects to gain operational, logistical and tax efficiencies with this expansion, in addition to responding to the demand of new customers who require integrated production. The company emphasizes that this configuration will allow both “the incorporation of new customers” and “the expansion of the volumes and programs currently developed”, consolidating Guatemala as a strategic axis of its industrial growth.