Inside Sae-A Trading

An interview with KM Kim, President, Sae-A Trading America. Sae-A Trading is the anchor tenant of Caracol Industrial Park.

Headquartered in South Korea, Sae-A Trading is a global clothing manufacturer and major supplier to American retailers. It has garment factories in China, the United States, Guatemala, Nicaragua, Indonesia, Vietnam, Cambodia, and most recently Haiti.

What made you decide to invest in Haiti? When did Sae-A first considered coming to Haiti?

In 2010, Sae-A decided to invest in Haiti because of its strategic advantages in the apparel industry and the opportunity to participate in the country’s post-earthquake renewal.

This decision was made after careful consideration of competitiveness, geographic proximity, trade preferences, manufacturing lead times, motivated labor force, supply chain opportunities, infrastructure and other stakeholder’s support to make our investment and commitment a success.

How was the collaboration with the Haitian Government?

The various government agencies of Haiti have been quite supportive so far.

Last October, Haitian President Michel Martelly presided at the ceremony for the Caracol Industrial Park, one of the largest and most modern in the Caribbean. He has been supportive of our project, and continuously asks us what his government can do to support us further.

We firmly believe that job creation and the cascading economic activity in the underdeveloped northern region will bring about beneficial change to the community. We hope the collaboration of Sae-A and Haitian Government will support and accelerate the recovery and rebuilding of a modern Haiti.

What are the projects that you are working on in Haiti right now?

Besides the first sewing factory which is nearly 100% operational as of this month (Dec 2012). We have begun construction of factory #2, which should be ready by June 2013. If all goes to plan, factory #3 will be ready by Dec 2013.

And, from our factory project, we are building a K-9 school in local Caracol that is scheduled to opening in Oct 2013.

What can we expect in the future from Sae-A's investments in Haiti?

This investment will create employment opportunities for approximately 20,000 workers upon the project’s completion. The success of this project will create a rare precedent for investment models in rebuilding the country.

Sae-A decided not only to establish the textile industry park in Haiti, but also to make a difference in Haitian education, helping to brighten the country’s future.

We are building a school for the local community near the Caracol Industrial Park, where our factories will be located. The USAID, IDB and Government of Haiti (GOH) are working with the Sae-A Foundation in Haiti on the school project. The Sae-A School is scheduled to open in 2013 October.

Sae-A’s industrial complex investment and school construction will serve as a dual-purpose model for creating jobs and improving the local educational infrastructure.

Also, Sae-A has sponsored a team of medical experts from Chonnam National University Hospital on August, in this year. The sending of this medical team is the latest of several community-oriented initiatives undertaken by Sae-A in Haiti, where the company has opened its latest production facility at the Caracol Industrial Park.

We provided medical services to over four thousand Haitians during 10 days in Caracol and Terrier Rouge. Services are being provided free of charge to any residents in the park vicinity.

We want to be successful as a company and we will be good corporate citizens as well.

What is Sae-A's experience so far operating in Haiti, and what are some of the challenges that you face in the country?

The experience so far has been very challenging in securing a sufficient workforce.

One of the biggest challenges has been with training the locals in the various affiliate needed to run a factory operation.

In addition, there are other challenges such as the expansion of direct flights to the United States (Miami etc), rapid/frequent transport routes by extending the Cap-Haitien (CAP) port, and improvement of the roads between PAP and CAP.

How many people do you currently employ in Haiti? How many are mid-level managers?

At the moment, there are 1,294 employees in S&H Global (as of December 21, 2012). There are approximately 60 mid-level managers with plan to increase the number in 2013.

Our policy of localization will ensure that Haitian jobs are not only in labor intensive operations, but also strong candidates will be trained for supervisory and managerial positions.

What are the brands that you manufacture in Haiti? Are you exporting only to the US?

Yes. 100% to the US market. We are currently working with and/or have plans to work with most of the major US retail brands.

Please tell us more about the vocational training that is/will be provided by Sae-A in Haiti.

Believing that investment in talent reaps great rewards, Sae-A donated 120 professional industrial quality sewing machine-table workstations and sewing supplies to the training institute set up and run by USAID (INDEPCO) in Trou du Nord and Caracol in June of 2012, which is committed to providing skill-building training to local community residents interested in pursuing employment opportunities. So far, over 365 graduates of Caracol training center have been hired at S&H Global and are working in the first sewing factory.

Within our factory, we also conduct vocational in-house training. New workers joining the factory are given two months of intensive hands-on training, which includes basic sewing skills, machine operation and maintenance, and garment conduction and production.

What is the average salary of your employees, and what are some of the benefits that you provide to them?

We pay according to the Haitian government's minimum wage laws and regulations, which include base pay, vacation bonus, company insurance, and other incentives.

What are your revenue and net profit projections for your first year of operation in Haiti?

We expect to be operating in the red for at least 3 years of operation until our productivity can be increased to levels that can compete with other western hemisphere countries of operation.

At the beginning stage, we are taking order and filling capacity on a season-by-season basis. So, until the end of the first year of operation it is difficult to accurately project the gross revenue from operations, especially with so many variables.