AGRIBUSINESS TRAVEL&TOURISM LIGHT MANUFACTURING SERVICE

Businesses Expanding in HondurasDespite Global Economic Downturn....................................................2

Honduras Exports to United StatesGrow by 18 Percent in 2008, Marking Stronger Trade Relationswith Largest Partner..............................................2 & 3

Honduran Entrepreneurs Seeking toAttract International AgribusinessInvestment by Creating “Agro Parks”....................................................4

Honduran Technical and AgriculturalSchools Provide Skilled Workers andResearch for Business Investors....................................................5

egional, international, and local tourists have been flocking to the Caribbean paradise of

Roatán and the northern coast of Honduras recently since hoteliers in the nation’s most

popular destination began offering summer discounts as low as 30 percent off normal rates.

As a result of the promotions, many hotels and resorts now have waiting lists of several weeks.

Epaminondas Marinakys, president of the National Chamber of Tourism of Honduras, credited the

campaign with returning Roatán occupancy rates to 90 percent and higher.

Samir Galindo, general manager of Anthony's Key Resort, said due to the energetic marketing

efforts of industry leaders and a new Honduran Minister of Tourism, bookings are much better today

than a month ago and things are “looking up.” The five-star diving resort, which the Galindo family

has owned and operated for nearly 40 years, also is attracting more business through its own

promotional packages.

Taca International Airlines participated in the campaign to promote Honduras regionally, reducing

its fares between the cities of San Pedro Sula and Tegucigalpa and Roatán by 30 percent through

August.

The international cruise lines, for whom Roatán is a popular spot on their Caribbean tours, have

continued to visit this largest of the Bay Islands. Their passengers continue to enjoy snorkeling and

scuba diving over the Mesoamerican coral reef; swimming, sailing, and kayaking in the clear aqua

waters; touring the island by moped, foot, or car; exploring nature parks, and shopping for regional

handicrafts and international products.

Tourists Flock to Caribbean Paradise of Roatán and Return to Copán as Honduras Destinations Offer Summer Discounts

Issue 2, Vol. 2

This material is distributed by Global Communicators, LLC, on behalf of FIDE Investment and Exports.

Additional information is available at the Department of Justice, Washington, DC.

Cruise ships are visiting Roatán regularly. Photo courtesy of Port of Roatán.

For past newsletters, go to:www.hondurasinfo.hn/invest/

Tourism continued on page3

espite the international economic crisis and declining

trade worldwide, Honduras continues to strengthen its trade

relationship with its biggest trading partner, the United States.

The U.S. Department of Commerce reports that from 2003 through

2008, exports of goods from Honduras to the United States grew at a

rate of 18 percent, rising from U.S. $ 3.313 billion to $ 4.041 billion.

The recent collapse of international trade in general and the fall in

consumption in the U.S. economy in particular has affected sustained

growth in exports from all countries, including Honduras. But an

analysis of its exports in the context of the U.S. global slowdown

reveals a more robust record for Honduras than for all other

economies in Central America and for the rest of the world. Indeed,

for the first five months of 2009, exports from Honduras to the United

States contracted significantly less than exports from other nations.

Moreover, while exports of goods to the United States from all other

countries fell by 32 percent from January through May 2009,

Honduran exports to the U.S. market declined by a comparatively

modest 20 percent. The strength of Honduras’ export economy

is demonstrated further by the fact that during the same period,

combined exports from Dominican Republic-Central America Free

Trade Agreement (DR-CAFTA) member countries – of which

Honduras is one – fell significantly, by 58 percent.

The portfolio of goods that Honduras exports to the United States

includes tilapia, palm oil, melons, coffee, tobacco, wood hangers,

textiles and apparel, electrical harnesses, electric cables, and

minerals. This array indicates an economy that once was primarily

agriculturally based but has begun the process of diversification.

PAGE 2

o meet increased market demand, FCI, a leading manufacturer of

connectors, is expanding its Honduran facility, located in an

industrial park near San Pedro Sula.

By the end of the year, FCI will have added another 48,437 square

feet to the plant, where it produces airbag connectors.

According to FCI, “The increasing use of electronics has made

interconnection solutions of prime importance over the past decade.

With the extensive use of passenger protection systems (airbags), the

installation of on-board multimedia systems and the development

of sophisticated anti-collision systems, connector technology is a key

priority for car manufacturers and their system suppliers that are

essential to the automotive industry.”

Headquartered in France, FCI recorded $1.84 billion in sales world-

wide in 2008, with 23 percent of its sales coming from the Americas.

Gildan Activewear, Inc., a leading international supplier of

activewear, recently completed a major addition to its factories in the

free trade zone where it operates outside San Pedro Sula, for a total

of more than 484,000 square feet.

Despite the weak market for activewear internationally, the Canadian-

based company continues to produce quality men’s socks at full

capacity at its Honduran textile and sewing facilities, where it employs

more than 10,000 workers.

On August 13, Gildan announced its worldwide net sales during the

third quarter of fiscal 2009 were $307.8 million.

Businesses Are Expanding in Honduras Despite Global Economic Downturn

Hondurans manufacture quality textiles and apparel for international customers.

Honduras Exports continued on page 3

Honduras Exports to United States Grow by 18 Percent in2008, Marking Stronger Trade Relations with Largest Partner

Most of Honduras’ exports to the United States pass through Puerto Cortes,its Megaport on the Atlantic

PAGE 3

HONDURAS EXPORTS TO THE U.S. 2003 – 2008 In Millions of Dollars

Source: U.S. Department of Commerce

Clearly, Honduras has maintained a competitive export position.

Among the factors contributing to its success are a young and

competitive workforce, proximity to the U.S. market, the availability of

good infrastructure to support production, and an incentive system

that allows Honduras to produce at very competitive costs high-

quality goods that are in demand in the United States. As a result,

even though the global economy has continued to falter in the past

year, Honduras has been able to improve its position as an exporter

of goods to its foremost trading partner from the position of 52 in 2008

to number 50 in 2009.

In spite of the current international economic crisis, Honduras remains

in perfect position to attract U.S. export-oriented investments.

Construction is progressing on schedule for Carnival Cruise Lines’

new $62 million Mahogany Bay-Roatán cruise center, which is

preparing to welcome its first cruise ship, the 2,124-passenger

Carnival Legend, on November 19. During its first year of operation,

Mahogany Bay – comprising two cruise ship piers; a welcome center

with shops, bars and restaurants; a transportation/car rental hub; an

excursion pier for water-based tours; and a pristine private beach –

expects more than 520,000 passengers to arrive on more than 200

cruise ship calls.

Just a few miles away, Royal Caribbean Cruises’ Town Center already

is fully operational, with a wide variety of shops and two restaurants

serving cruise ship passengers and other island visitors. While this

summer was somewhat slower than last year, Dawn Hyde, customer

service director of the Port of Roatán, says “things are picking up.”

Celebrity Cruises will visit the port for the first time this season, and

Norwegian Cruise Line’s new 4,200-passenger ship, Norwegian Epic,

will make its maiden visit to Roatán in June 2010.

National and regional tourism officials have launched a campaign to

entice more visitors to Copán Ruinas, the site of spectacular Mayan

ruins. The campaign primarily is aimed at the neighboring countries

of El Salvador and Guatemala.

Jose Raul Welchez, former director of the National Chamber of

Tourism and a Copán hotelier and tour operator, suggested that visits

to the UNESCO World Heritage Site of Copán are a logical extension

for travelers to Guatemala who are interested in the Maya’s rich

history and archeology.

He pointed out that the archeological park of Copán is operating as

usual, as are other popular attractions in this tranquil and beautiful

region, such as coffee plantations, nature parks, and the many stores

in the colorful village of Copán Ruinas. Tourists also can continue to

enjoy hikes, cave explorations, bird walks, horseback riding, river

kayaking, and visits to indigenous Mayan communities in the area on

their own or with professional guides.

Flavia Cueva, owner of the popular Hacienda San Lucas, a century-

old family coffee farm transformed into a bed and breakfast and spa

on a hillside overlooking the Mayan ruins, points out that the area

remains a safe and peaceful haven for tourists, whose patronage

is vital to the local economy. Tours, public transportation, border

crossings, electricity, telecommunications, security, and area hotels

and restaurants continue to operate normally.

Although summer visitors historically have favored beach vacations

over visits to more rural sites, inland tourism had dropped more than

usual this year. But the promotions appear to be working, and

Welchez says, “Currently if you visit Copán, you will find American,

European, Guatemalan, and Salvadoran tourists and also Hondurans

who have reacted very positively to the offers for this summer season.

The climate and environment are perfect for visiting.”

A new attraction for Copán visitors opened in August, an extraordinary

exhibit of photographs from the 1891-1900 archeological exploration

in the region by the Peabody Museum of Harvard University. The

photographs reveal new information about the first excavations of

Copán in the 19th century and the lives and culture of the local

residents, many of them of Mayan descent. The exhibition will be on

permanent display in the Copán Ruinas city hall.

Honduras Exports continued from page 2

Tourism continued from page 1

Anthony's Key Resort is offering summer promotions to attract more visitors.

PAGE 4

Honduran Entrepreneurs Seeking to Attract InternationalAgribusiness Investment by Creating “Agro Parks”

Coffee thrives in Honduras’ fertile soil and mild climate. Photos courtesy of Cafe Welchez.

esponding to the current global economic crisis, the private

sector in Honduras is promoting the formation of agribusiness

industrial parks that would help attract investment and generate

thousands of jobs in the production of sustainable agriculture in the

nation’s vast rural areas.

“Agro Park” proponents are drafting a bill to present to the Honduran

National Congress before October. Prospects for passage appear

excellent, given that the initiative would boost rural employment and

is supported by the president of the Congress.

According to Martin Chicas, vice president of the Honduras Private

Sector Association (ANDI), “The purpose of the law is to attract

investment in the agribusiness sector from companies that already

have the technologies, markets, and resources to invest in growing,

processing and exporting agricultural products.”

In the short-term, the act would create an economic platform for

agribusiness development throughout Honduras by creating an

infrastructure to support agricultural exports and encourage technol-

ogy transfer in such areas as agricultural production. By attracting

international investors who have expertise in global marketing and the

necessary financing, Agro Parks should foster the production,

processing, and export of agricultural products with high added value.

As new business “magnets,” the agribusiness parks will attract

investment, employment, production, and technology that will create

new revenue sources for rural municipalities seeking funds to improve

their drinking water, health facilities, and schools. Proponents also

expect some of the new businesses to engage in mutually beneficial

social responsibility projects in communities where the parks will

operate.

Entrepreneurs are prepared to begin creating Agro Industrial Parks as

soon as the proposed bill is passed. In the San Pedro Sula area,

Honduras’ agribusiness and industrial center, some existing industrial

parks could be expanded to offer agribusinesses a full package of

farming systems, including irrigation, fumigation, food processing and

packaging, Individually Quick Frozen (IQF) processing to ensure “just

picked” freshness, waste recycling, and other necessary services.

The agribusiness sector, which includes processed and raw agricul-

tural products, represents nearly 40 percent of the country's economy.

Honduras offers numerous advantages for developing agribusiness

products such as milk and dairy products, fruits and nuts, vegetables,

plants, roots, tubers, vegetable and animal fats and oils, and

aquaculture. Honduras is the most important producer of farm-raised

shrimp in Central America and the largest exporter of fresh farm-raised

tilapia to the United States.

Chicas said interested foreign businesses also will find domestic

partners willing to invest in fruits, vegetables, flowers, and biofuels on

land that currently is not in production.

According to a UN Food and Agricultural Organization (FAO) study,

the tropical climate of the country’s fertile northern coast is well suited

for bananas, sugar cane, palm oil, and tropical fruits, while the

tropical southern region, which experiences recurrent drought periods,

is oriented towards sugar cane, sorghum, melons, cattle, and

cultivated shrimp production. The more temperate mountainous

region in central Honduras has attracted coffee, wood, grains, and

cattle production. The climate throughout Honduras enables crops to

be grown year-round.

PAGE 5

The country offers agribusiness investors and producers such

structural advantages as:

- The opportunity to centralize operations to supply Central

American and North American markets at lower costs, through

regional production hubs;

- The ability to access the U.S. market with preferential logistic and

market access conditions due to Honduras’ participation in the

Dominican Republic-Central America Free Trade Agreement

(DR-CAFTA) and the Container Security Initiative (CSI);

- Faster access to the U.S. market through the best port infrastructure

in Central America, the deep-water Atlantic Megaport of Puerto Cortes;

and,

- Macroeconomic stability ensured through program stabilization and

economic development provided by the International Monetary Fund

(IMF), the U.S. Agency for International Development (USAID), debt

forgiveness programs, and the Millennium Challenge Corporation’s

program to promote economic and social development in Honduras.

Finally, Honduras is in perfect position, in the heart of Central

America and only two hours by air and 48 hours by freighter to the

nearest U.S. markets.

wo educational institutions that are important sources of

skilled workers for businesses in Honduras and resources for

international research are IPC, the Instituto Politéchnico

Centroamericano, and the Pan-American School of Agriculture, better

known as Zamorano University.

IPC students now are receiving hands-on training on an internal com-

bustion engine donated by Laeisz Group and Volvo. IPC Executive

Director Colin McLernon said the engine is helping IPC meet its

“strong commitment to develop a new generation of technicians to

support Honduras industry and development.” IPC graduates are

valued as employees because they receive hands-on training

combined with exposures to state-of-the-art technology and classroom

instruction from experienced teachers.

As it strives to become Central America’s leading technical

educational institution, the school, whose motto is “IPC Makes the

Difference,” has added a program to train multi-functional technicians

to solve problems in mechatronics. IPC also has opened the doors to

a new student residential hall, which enables the school for the first

time to provide housing and education on the same campus.

Scientists at Zamorano University are partnering with University of Illi-

nois scientists to assist Honduran children who need more iron in their

diets. Through the “Nutrigems” project, the scientists have

developed micronutrient supplements that Honduran teachers and

mothers are feeding children in rice. This low-cost “stealth nutrition”

provides the children with significant amounts of iron while disguising

the taste in rice. The project also is introducing the concept of global

nutrition to U of I students and providing them with the opportunity to

see how their laboratory research can benefit others.

Also on the nutritional front, Zamorano is housing a new regional

center for vegetable research and development. Funds came from

the World Vegetable Center, a non-profit, Taiwan-based research

institute that aims to alleviate poverty and malnutrition in the

developing world by increasing production and consumption of

vegetables. Zamorano students and researchers are participating in

the regional center’s programs to develop new varieties of vegetables

suitable for South America and to create new approaches to

improving the quality and variety of diets of people in the region.

To commemorate 25 years of women graduating from Zamorano,

in June, the university sponsored the First Latin American Women’s

Conference, which focused on forging strategies for professional

success. During the conference, Zamorano President Kenneth

Hoadley presented the first Women’s Leadership Scholarships to four

current Zamorano students. Women now make up one-third of the

student body, which numbered 1,100 at the beginning of the school

year.

One of Zamorano’s first female graduates heads the university’s col-

laborative project with the Inter-American Institute for Cooperation in

Agriculture to increase the quality and global competitiveness of 450

micro, small-, and medium-sized enterprises of Honduras engaged in

such areas as dairy, meats, breads, horticulture, and apiculture

(beekeeping). Zamorano is providing training and technical

assistance to the program, which will run until 2011.

Honduran Technical and Agricultural Schools Provide SkilledWorkers and Research for Business Investors

Honduran students are eating rice prepared with Nutrigems during school lunches.Copyright 2009 William Helferich, all rights reserved

Honduran Entrepreneurs continued from page 4