Being on the Texas-Mexico border presents entrepreneurs with business opportunities not found elsewhere. From ropas usadas (used clothing traders), duty-free stores and customs brokerages to casas de cambio, foreign trade zones and dealers in used heavy duty machinery, numerous Valley companies are business that could function only on the border.
Two of the Valley’s international bridges are privately owned, providing income from tolls, parking and leases. Transmigrante expediters at the Free Trade Bridge prepare the necessary documents for vehicles and goods to pass through Mexico to Central America. Clustered around many bridges are manifesto offices which enable small Mexican shops to import American goods to their country along with Mexican travel insurance offices serving Americans heading to Mexico.
The most visible and colorful of border-only businesses may be the ropas usadas, which buy clothes from across Texas, sort them and resell them. More than 25 ropas usadas are clustered around the McAllen-Hidalgo International Bridge while Brownsville hosts numerous others.
Textile World, housed in what looks like an old cotton warehouse, is a recycling facility that has baling machines which wrap 100 pound (and larger) bales of rags and graded cothing.
Textile World buys from schools and organizations raising money through clothing drives. “Everyone has extras clothes in their closet,” said Jacob Lawaini, who has run the ropa usada business for 11 years. “We initiate the connection, they collect the clothing, and we send a truck to collect it.”
Each run brings at least four to five thousands pounds of clothing and Textile World is able to recycle 95 percent of that. The company sometime buys excess clothing from Goodwill and Salvation Army.
“We try to salvage the most we can. We do sorting and grading from first to third quality grades,” Lawaini said.
About 50 percent of the volume—everything is sold by the pound—is bought by wholesalers for flea markets and second hand shops or is destined for vintage shops in the U.S., Europe or Japan. Some goes into Textile World’s adjacent retail thrift shop. Mechanized scissors cut another 45 percent, unsuitable as clothing, into wiper rags for automotive shops and industries. Only an unrecyclable five percent ends in the garbage.
Surrounded by bins brimming with girls’ sweaters and baby clothes, Lawaini said recycling clothes helps groups raise money on one hand and on the other lets low income people stretch their clothing dollars.
“But it’s changing like any business. It used to be so much easier when people would just come across from Mexico and pick up bales.” Like every business, Textile World is on the lookout for new customers and has found an appropriate tool in the Internet to reach around the world.
Across the Valley in Hidalgo, Tres Hermanos is celebrating its 13th anniversary in a spacious, custom-built facility next to a cabbage field. Bales of brand-new clothing with tags still on them entice customers near the entrance to the popular ropa usada owned by Mina Thornton, profiled last year in Texas Monthly.
Tres Hermanos sources clothing from around the country and provides both mayoreo (wholesale, separated into categories such as work clothes, maternity, women’s blouses) and menudeo (retail on hangers) under one roof. Thornton moves over 300,000 pounds weekly, much of it going to Mexico and flea markets. Winter Texans are enthusiastic ropa usada shoppers, too, buying coats and clothing that they donate to needy families. Some RV parks stage fashion shows featuring recycled clothes.
Foreign exchange
Cuellar Casa de Cambio opened in Brownsville 10 years ago next door to several other money changers.
“People are used to coming this way if they go across the bridge. They come back because of customer service, the way we treat them,” said the owner.
During the recent holiday season, normally the busiest time of the year, paisanos returning to Mexico opted to carry much less cash than previous years, wary of lawlessness. Cuellar closed a second office due to decreased demand. Yet money exchanging balances out: some days more dollars are traded, and other days pesos predominate. Persons who change more than $1,000 in cash must present a photo ID, their Social Security Number and date of birth as required by the Texas Department of Banking.
Fewer Americans are going into Mexico to shop, but duty-free store customers do not have to cross fully into Mexico.
“They simply go to the turnaround past the middle of the bridge,” said Arturo Garza of RBT Duty-Free, which has duty-free stores at the bridges in Hidalgo, Pharr, Mission, Rio Grande City and Laredo. “Sales to American customers have remained steady. But most of our customers are from Mexico. They cross over to buy American liquors and cigarettes.”
Years ago, customs brokerages focused strictly on paperwork, compiling and checking the mountains of documents required to get the goods of one country into another country. That requires knowledge of the complex web of regulations, tariff issues, product classifications and valuations as well as collaborations with Mexican counterparts, the FDA and USDA.
The customs house Parker & Company expanded beyond that limited scope to vertically integrated services. Maquilas source their raw materials from around the world, explained manager Steve Muschenheim. The company saw the need to have warehouses on the border for their customers. Parker & Company added an in-house ocean freight forwarder.
“We became truckers because we had to get ocean freight coming in from China down to Brownsville. When a container arrived at the Port of Houston, it behooved us to pick it up with our own truck and driver, and clear customs at Houston, so we didn’t have to use a bonded carrier.”
Using a Brownsville-based truck driver also gave the freight line more time to unload.
“Business seems to be picking up since the first of the year. Manufacturers are now more diversified,” Muschenheim said.
From clothing to cash exchange, machinery to manifestos, a diversified range of products and services specifically for the border trade occupy an essential niche in the Valley economy.
For more of the February edition of Valley Business Report, pick up a copy on news stands now, or visit the “Current & Past Issues” tab on this Web site.