City’s Panama hat makers report strong sales and expect more growth ahead

Aug 8, 2016 | 1 comment

Following several lean years, Cuenca’s Panama hat makers say that local and international sales remain strong in 2016, continuing a trend that began in 2014. Several companies report that they are ramping up production.

Panama hats at the Ortega in Cuenca.

Panama hats at Homero Ortega in Cuenca.

Homero Ortega, the city’s oldest and largest manufacturer of Panama hats, or sobreros de paja toquilla, says sales were up 25% in 2015. Ortega says most the sales increase comes from Europe, with France and Germany being the top markets.

Alicia Ortega, president of Ortega, said that Panama hats remain in vogue in Europe. “There is a strong fashion trend toward the hats that we hope to see continue,” she says. Alicia is part of the third generation of Ortegas to run the company that started operations almost 100 years ago. She says the company exports hats to 28 countries.

Besides France and Germany, other top Panama markets are Italy, Spain, Panama, Mexico, and the U.S.

Hat makers say the sales would be even greater if it were not for “false Panamas” produced in China. “They have flooded the market and many people don’t want to pay for a real hat,” says Paul Munzón, manager of PAMAR & Cia. He said that sales in Brazil, traditionally the strongest Latin American market, have declined due the Chinese imports. “The hats are made from plastic and paper and are full of chemicals. They are not healthy and they hurt our sales,” he said.

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Panama hats are made from toquilla palm straw grown in coastal regions of Ecuador. The hat-making trade started in Montecristi, where the toquilla palm grows and, although some of the trade remains in the area, most of the weaving and manufacturing moved to the highlands more than 100 years ago. Today, most of the weaving is done in Sígsig, Azogues, Biblián, Ricaurte, Chordeleg and Gualaceo, then sold to finishers and exporters in Cuenca. Until the 1960s, Panama hat manufacturing was Cuenca’s main source of employment.

Several hat manufacturers are complaining to customs officials about shipping delays and damage to hats that are inspected before shipment. They say they are in discussions with the National Customs Service of Ecuador (SENAE) to improve the process.

“Customs opens sealed packages to inspect shipments but they are careless with hats,” says Alicia Ortega. “When customers receive the shipments they often report damage. We hope the problems can be resolved soon.”

Although Panamas are made in several Ecuadorian communities, Cuenca hat makers are the country’s top exporters.

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