Processing of agricultural, animal, and forestry products, mainly for export, and small-scale manufacture of consumer goods for local needs are of greatest importance. Most manufacturing is done in the Asunción area; some plants, however, are near the source of their respective raw materials. Import-substitution industries encouraged by the government include petroleum refining, foodstuffs, wood processing, and chemicals. The reexport of imported consumer goods to neighboring countries is a recent economic development. Maquila assembly operations began in 2000, with the export of leather car seats to France. Industry accounted for 26% of GDP in 2000.
Industries include two cement plants, at Vallemí and Itapucumi, and a Paraguayan-Brazilian steel mill at Villa Hayes. Food-processing plants include slaughterhouses; flour mills; sugar mills; oil mills producing cottonseed and peanut oils for domestic consumption, as well as castor, tung, cocoa, and palm oils for export; related industries that process the by-products of oil extraction; and mills that produce yerba maté. There are numerous sawmills. A considerable but decreasing number of hides are also produced for export. Although there is a considerable textile industry, imports still run high. Products for domestic consumption include pharmaceutical and chemical goods, finished wood and furniture, brick and tiles, cigars and cigarettes, candles, shoes, matches, soap, and small metal goods.