Brazilian denim maker picks Edinburg for new factory

EDINBURG - A Brazilian denim manufacturer is pegged to start up here in 2010.

Sao Paulo-based Santana Textiles' move to open a new factory in Edinburg should create at least 800 jobs, officials said Wednesday.

They say Santana Textiles will invest between $170 million and $180 million in the factory and provide hundreds of well-paying jobs in the Hidalgo County seat.

Gov. Rick Perry and company officials made the announcement at the University of Texas-Pan American. Local politicians are calling it one of the most important economic projects in the city's 100-year history.

"If you're going to manufacture denim, you might as well do it in a place where there is more denim than anywhere else - the state of Texas," Perry said.

The new plant will make Santana Textiles the largest manufacturer in Edinburg and one of the biggest in the Rio Grande Valley. The average wage at the company will be around $26,500 a year, Perry said.

The city of Edinburg and state of Texas have been working on plans for the factory since the beginning of the year after learning of the company through the Edinburg Economic Development Corp.'s Monterrey office.

Edinburg is set to donate a 23-acre tract of land at the North Edinburg Industry Park near Expressway 281 and Ramseyer Road for the project and provide utility and infrastructure work.

And the state is expected to chip in $1.65 million through the Texas Enterprise Fund, a job creation account, to help build the 300,000-square foot facility.

The plant is expected to open in January 2010.

Inside, workers will help turn Texas cotton into denim to be sent to manufacturers throughout the region. Company leaders say they plan to hire local workers and managers.

The Edinburg factory will be the first U.S. location for Santana Textile, which is a major denim producer in South America. The company operates four manufacturing plants in Brazil and plants in Argentina and Mexico.

"We were looking to expand somewhere with strong free trade," said Raimundo Delfino Neto, owner and president of the company, which hopes to add more factories in the United States.

The company doesn't do any business with U.S. companies right now, but is working with firms here, he said.

Santana isn't the first textile company to locate in the Rio Grande Valley. Companies such as Levi Straus, Haggar and Williamson-Dickie Manufacturing Co. have all closed plants in the Rio Grande Valley since 1997, cutting nearly 3,500 jobs.

Most of the United States' labor-intensive textile jobs moved to Mexico or China during the last 15 years, where workers are cheaper. Most of the world's textile operations are now centered in China and India.

However, Santana thinks it can be successful here because its plans are to target the North American denim market, Delfino said. He also said a plant in the United States could save costs on commodities such as energy and cotton.

Local cotton producers hope the new textile plant will boost the local industry, although they are surprised at the announcement after years in which textile plants moved out of the country.

"It's good news for us down here," said Buddy Ross, who runs the Ross Gin in Mercedes.

North America

Free trade