Portugal, the tourists' favourite, is throwing off its relaxed image. Its economic growth rate is still outstripping the average EU rate, despite a business downturn, and its textile businesses are investing megabucks to catch the US market. And the strategy is definitely paying off, says Sonia Roberts.

The continued progress of the Portuguese textile industry in its pursuit of a pole position in the European manufacturing and exporting league is underlined by statistics recently released by ICEP (the Portuguese commerce and tourism bureau).

The most recent survey shows the Portuguese contribution to the total EU output of textiles and clothing at 4.3 per cent, putting Portugal in seventh place and gaining ground with each season.

Last year's sales, worth more than l,695bn euros, were 5.5 per cent up on 1998 and all the indications are that 2000 will be an even better year for Portuguese producers, said ICEP.

Typical of the optimistic attitudes now prevailing in many sectors of the Portuguese textile industry is the prediction of Rui Cardso, a director of the two-year-old Beirala Lanificios group, that having achieved sales in more than 100m escudos in its first year of operation and 2,100m last year, this year's figure will be "at least" 3000m.

"And we set up our company at a time when everyone said the Portuguese industry was in a state of crisis," says Cardso.

At the moment, however, some sections of the Portuguese fashion industry are faring better than others, with fabrics and knitted garments the most important export sector. And within these fields woollens are doing better than either cotton or synthetic fibre.

At the moment Germany remains Portugal's best customer - l7 per cent of all EU exports went to Germany, with Spain in second place at l5 per cent and the UK third at l3 per cent.

Exports outside the EU remain a major preoccupation for the Portuguese industry however, encouraging more and more fabric producers to make regular appearances at internationally attended trade fairs, such as Premiere Vision.

And one third of Portuguese producers of both clothing and textiles are already active exporters despite the fact that, in contrast with other European nations, the Portuguese fashion industry still consists largely of small- to medium-sized family firms, making companies like Nova Penteacao with its staff of 700, modern factory space covering 45,000 sq m and a l999 turnover of more than 27.5m euros the exception rather than the rule.

Founded in l935 and recently converted to PLC status, Nova Penteacao is unusual in the portion of its exports which are sold outside the EU, mainly to the USA and Hong Kong, where it has built its reputation on its expert handling of branded man-made fibres, particularly Tactel and Tencel.

Branding has always been important to Sampaio Ferreira, who long since established its own Ribalene trademark and who regards itself as "one of Europe's market leaders in the production of polyester/viscose fabrics."

Over the past eighteen months, however, this century old company has been busily realigning its marketing strategy. "We are looking to offer a more sophisticated fabric range both in terms of technical construction and design," the company says. It has also pinpointed affluent 25 to 40-year-olds as its ultimate target market.

To achieve this aim, it is currently spending the equivalent of $4m on upgrading its weaving, dyeing and finishing departments.

Nor is this kind of investment any longer unusual for a Portuguese producer For instance Fitecom claims that 80 per cent of the equipment currently in use at its plant is less than four years old, while the mill itself is a modern building less than a year old.

With 200 employees, Fiandeira counts itself as a middle ranking producer and in an industry which prides itself on its longevity - many still active manufacturers can trace their roots back to the l8th century or even beyond - Fiandeira is also an exception in being less than 30-years-old, having started life in l973 as a yarn supplier producing acrylics for other companies to knit or weave.

It quickly added cloth production to its facilities however, this time concentrating on the polyester wool blends for the menswear trade that remain one of its specialities. Eighty five per cent of the company's output is currently exported, last year clocking up sales worth $16,220,000.

Another Portuguese fabric producer who is a regular Premiere Vision participant and who will be at the autumn 2000 show in October, is Fabrica Textil Riopele. The company began life in the mid-l920s as a cotton weaver, but has long since become a fully vertically integrated fabric producer, now moving increasingly into performance fabrics for the sportswear and workwear markets as well as servicing the fashion market.

Portugal is putting itself on the textile exports map and has its sights firmly set on the EU and US markets

Still a family business, Riopele is currently engaged in implementing an environmental management system in line with international standard ISQ 14001

At Velpor, specialists in the production of faux furs, pile fabrics and velvets, a greener approach to every aspect of production has become integral to management policies. Velpor, which is now linked to the German V Gierlings group, believes its environmentally friendly approach to manufacturing and finishing has been an important factor in winning it its present 20 per cent share of the European pile fabrics market.

State of the art finishing facilities are also seen as essential to maximising sales into the international market by Portugese print specialists Adalberto, while at Sociedade Textil de Baiona a radical overhaul of all production facilities, weaving, dyeing and printing, is now in progress and due for completion in time for the celebrations that will mark the 50th anniversary of the company's foundation in November this year.

Says company spokesman Joao Manuel Magalhaes: "The aim of the improvement programme is obviously to give all our customers better service, particularly those in the USA, which is a very important market for us. But more than that, as we move into our second half century of trading, we want to be able to offer customers 'new generation' fabrics using new fibre blends that will meet the challenges of tomorrow as well as today."

By Sonia Roberts

Economic growth in Portugal
Between 1986 and 1999 the Portuguese economy grew by 3.4 per cent per annum, compared with 2.4 per cent for the EU. The economy expanded very rapidly in the second half of the 80s following entry into the then European Community.
Real GDP growth averaged five per cent per annum in 1986-90, compared with 3.3 per cent for the EU as a whole, and was the highest in the EU and second highest in the OECD during that period. Growth slowed to 1.7 per cent during 1991-95 in response to a deteriorating European business cycle, but still exceeded the EU average of 1.5 per cent.

Portugal pulled ahead in subsequent years, and growth of 3.5 per cent in 1996-99 was above the EU average of 2.2 per cent. Heavy investment spending on several major infrastructure projects and strong export growth were the principal driving forces behind the long expansionary period.
Portugal is in its seventh year of economic expansion, but growth began to decelerate in the latter part of 1998 as the economy lost momentum due to a cooling of the investment boom. While real GDP growth fell back to 3.1 per cent in 1999, somewhat faster growth, in the range of 3.3-3.6 per cent, is anticipated for 2000 and 2001. Private consumption, spurred by relatively low interest rates, continues to be buoyant.

Projections by various international agencies and the Portuguese government show that Portugal's growth will continue to outpace the EU average at least through 2001.
From www.portugal.org, the official Portuguese website