Thank you, Mr. Chair.
Let me begin by expressing my sincere gratitude for the invitation to appear today. We have tremendous respect for the work of your committee. In particular, we are excited to contribute to your examination of the Canada-Honduras economic growth and prosperity act.
My name is Peter Iliopoulos and I am the Senior Vice-President, Public and Corporate Affairs, at Gildan.
I would like to start by giving you a brief overview of Gildan's operations. Gildan was founded in 1984 by the Chamandy family and is a publicly-traded company on both the Toronto Stock Exchange and the New York Stock Exchange with its headquarters based in Montreal, Quebec.
The company employs over 34,000 people worldwide and distributes its products in over 30 countries. We pride ourselves on our ability to deliver a high-value quality product to our customers, leveraged against our leading social and environmental practices and Canadian corporate governance profile.
We are a vertically integrated apparel manufacturer with our manufacturing headquarters located in Honduras. Our manufacturing operations include facilities in Honduras, the Dominican Republic, and Nicaragua. We also recently acquired a small vertically integrated manufacturing facility in Bangladesh.
As part of our vertical integration business model, we also conduct yarn-spinning operations in the United States. We distribute our products in two primary markets, namely, the wholesale channel in Canada, the United States, and other international markets, and more recently, the retail channel in the United States. We sell T-shirts, sport shirts, and fleece products in the wholesale distribution channel. For the retail channel we have expanded our product line to include socks and underwear in order to provide a full product line offering.
With respect to our operations in Honduras, they first started in 2001 and they represent the most significant piece of our overall manufacturing production. We operate four textile manufacturing facilities, two integrated sock manufacturing facilities, four sewing facilities, and a screen-printing facility, which are responsible for producing active wear, hosiery, and underwear product. In total this represents a capital investment of over $700 million. We have over 24,000 employees in the country, which makes us the largest and most important private sector employer in the region.
We established our manufacturing operations in Honduras given its strategic location in servicing our primary market in the United States. Our experience has shown that there's a very skilled workforce in Honduras, resulting in the development of a strong decentralized local management team to run our operations in the country. In Honduras we can also leverage the CAFTA-DR trade agreement, which provides goods manufactured in Honduras and the Dominican Republic duty-free access into the U.S. market.
The negotiations for the Canada-Honduras free trade agreement were completed in the summer of 2011 and the subsequent signing of the agreement occurred in November 2013. Accordingly, we are now looking forward to the upcoming ratification of the agreement that, once implemented, will allow us to effectively service the Canadian retail market, particularly against competing Asian imports.
Our corporate social responsibility program, the Gildan genuine stewardship commitment, has been evolving for over a decade and is based on four core pillars: people, environment, community, and product. CSR represents a key component of our overall business values and strategy and we believe our practices position us as a leader in the apparel industry. Our social compliance program includes a strict code of conduct and ethics based on internationally recognized standards and encompasses a very thorough audit process that includes the conducting of both independent and third-party audits at each of our facilities on a regular basis.
In 2007 Gildan became the first vertically integrated apparel manufacturer to be accredited by the Fair Labor Association, which was a stepping stone to what is now our comprehensive and robust corporate social responsibility program. In addition, each of our sewing facilities has been certified by the Worldwide Responsible Accredited Production program.
Since 2009, Gildan has been annually recognized by Jantzi-Macleans as one of Canada's 50 best corporate citizens. Furthermore, in 2013 Gildan was included in the Dow Jones Sustainability World Index and is one of only two North American companies, as well as the only Canadian company, named to DJSI World under the textiles, apparel, and luxury goods sector. The annual DJSI review is based on a thorough analysis of corporate, economic, environmental, and social performance, which covers issues such as supply chain standards and labour practices, environmental management systems, corporate governance, and risk management.
Specifically, in Honduras, Gildan was awarded for six consecutive years the seal of the Foundation for Corporate Social Responsibility, which recognizes our high standards and strong commitment to CSR in the country.
The working conditions that we offer to our employees at our worldwide locations include competitive compensation significantly above the industry minimum wage; 24-hour access to on-site medical clinics, staffed with a team of 22 doctors and 37 nurses; free transportation to and from work; and subsidized meals. We are also currently in the process of implementing a best-in-class ergonomics program in collaboration with the Ergonomics Center of North Carolina, which we expect to complete in Honduras by the end of 2014 and subsequently at each of our other locations. Most recently, we inaugurated three schools for back health in Honduras, which was a first for our industry in the country.
Overall, the working conditions that we offer our employees, who represent our greatest asset and success factor, are of paramount importance to us. After almost 15 years in the region, we have undertaken numerous initiatives in order to contribute in a meaningful manner to our employees' well-being and their communities' well-being. The following are just a few examples.
Since 2003, Gildan has partnered with the Honduran ministry of education and the U.S. Agency for International Development to offer primary and secondary education to underprivileged regions in Honduras, which has also benefited 900 of our employees. In 2010, Gildan facilitated the opening of a drug store adjacent to our on-site medical clinics at our facilities in Honduras, which in 2013 alone, provided medicine to fill more than 57,000 prescriptions issued by our on-site doctors. In 2011, one of the nurses at our on-site medical clinics developed a workshop to benefit all pregnant employees, in which close to 500 employees have participated.
From an environmental perspective, we have a strict environmental policy, an environmental code of practice, and an environmental management system. Similar to our labour compliance program, we conduct regular environmental audits at each of our facilities. We also operate highly efficient biological waste water treatment systems as well as biomass steam generation facilities, to produce energy resulting in a significant reduction of our greenhouse gas emissions.
From a community perspective, our emphasis has been on partnering in the communities in which we operate, with a focus on youth education and humanitarian aid. As one example, in 2005, we spearheaded the development of an industry-wide initiative for the creation of a technical school in Honduras. To date, this represents an investment of over $1.6 million and has resulted in 7,000 students graduating from the school.
With respect to product sustainability, all Gildan-branded products are OEKO-TEX Standard 100 certified, thus assuring consumers that our products are safe and that no harmful chemicals or materials are found in their composition.
Unfortunately, due to our time constraints, I can only present a brief summary of Gildan and our CSR practices.
I would like to conclude by addressing the importance of the Canada-Honduras free trade agreement to Gildan and its operations in Canada. Once implemented, we, as a Canadian company, will be able to compete on a more level playing field in our home country, in particular against competing Asian imports, some of which already enjoy duty-free access into the Canadian market. More specifically, this agreement will provide us with the opportunity to seek entry into the Canadian retail market, which we have not yet penetrated up to this point. Today our sales into Canada account for only 3% of our total consolidated sales.
Our entry into the Canadian retail market will also benefit Canadian consumers, by providing them with a more competitive pricing option for apparel, hosiery, and underwear products. More importantly, the presence of our product in the Canadian retail marketplace will provide Canadian consumers with the option for a competitively priced, high-quality product that will be manufactured based on leading recognized standards in the area of corporate social responsibility and Canadian values.
In closing, we look forward to the ratification of this agreement and its subsequent implementation. We have been waiting for free trade between these two countries for over a decade, and accordingly, we do hope to see a rapid implementation.
I would like to once again thank the committee for this invitation, and I look forward to your questions.
Thank you. Merci.