At the end of a sustained period of expansion – which adds up to ten consecutive years – the textile and clothing industry moves confidently towards the immediate future’s challenges, and the majority of the decision makers believes the industry has what it takes to overcome the problems on the horizon.
António Freitas de Sousa
Ten years of record-breaking production and sales – boosted by internationalization – led to a structure that few thought possible for the textile and clothing industry (TCI) a decade ago. This structure, however, is about to face a concerning conjuncture, mostly coming from the outside, precisely the core geography for the TCI. Understanding the sector’s level of resilience has become, for that reason, a pressing matter.
The predicaments are mostly external: Brexit; the trade war between China and the US – pushing the EU and other trade blocs to the difficult task of having to defend against the collateral damage; the demands of the green economy (where the TCI is front and centre); and the stagnant consumption rates in some of Portugal’s top exporting markets (Spain, France and the UK) – the industry is bringing the heavy artillery.
Besides the businesses financial strength, the sector achieved, over the course of ten years of investment, an enviable position within the market, along with peers from other countries. The TCI has projected itself as leader in innovation – namely in the all-important tertiary sector –, design and circular economy, combining business, academy and a tight restraint in costs, which has turned it into a crisis proof sector.
António Amorim, chief executive at CITEVE, is confident about the TCI’s ability to persevere: “we have been through a huge crisis, which strengthened the sector. The companies that weren’t ready fell along the way, and the ones who remained became bolder and more dynamic. Companies have learned the need to diversify and focus on added value”.
For António Amorim, on the horizon there’s “no drama. On the contrary: the textile industry will become increasingly innovative and technological and therefore more prepared to face competitor markets. I don’t foresee any major issues – even with the economic slowdown, which inevitably leads to a decrease in consumption”.
Paulo Melo, ATP’s chairman, states that “the excellent work done by the industry in the past ten years will continue. Adapting new technologies to consumer patterns, and building upon this knowledge has and will continue to safeguard the businesses against any adversity”.
Although he cautions that “a different type of work, more demanding, will have to be carried out.
For ATP’s chairman, there is one more challenge left to consider: “the industry 4.0 and the digitalization”. In this field, it’s important for the entrepreneurs to have the government’s support: “any kind of support is welcome, as long as it doesn’t take forever: extended periods of time are nefarious for the industry”.
José Alberto Robalo, ANIL’s chairman, a staunch advocate of industry as the cornerstone of development, also couldn’t help stressing this notion. “The textile industry has reached a standard that we should be proud of, but it must go through a reindustrialization, linked to automation and supported by a vast investment. I am concerned because support has been scarce”. For a long time now, the chairman of the wool company has been raising these issues: “the subsidies for reindustrialization have been few or non-existent. I have been saying this for a while”. “As a highly innovative and exporting industry, we should have far greater support for reindustrialization”, considers José Alberto Robalo, also revealing that he has “complained about this situation, but unfortunately it fell on deaf ears”.
José points out for yet another matter at hand: “we’re missing a brand. We have a very small market, which is an obstacle for the creation of an international brand. It’s hard to stand out, but there were plenty of places people said we would never reach, and yet we got there. I think we will make it”.
For those in the industry, the word of the day is ‘resilience’ – aware that the growth in past years is the best insurance for the difficulties coming ahead in the short and medium-term.
Mário Jorge Machado, of Estampados Adalberto, confirms that “with the establishment of the ‘online’ as a business model, proximity is an important factor. Product innovation and design are also necessary, which means that structurally the TCI, with all its accrued know-how, has a head-start to become a significant player in the European market”.
Mário Jorge Machado recalls, nevertheless, that the industry “cannot raise its costs much: when politicians raise salaries they fail to understand the damaging consequences for the exporting industries, on the long-term” – given the competition with countries where those costs are negligible.
Ana Silva, Tintex’s administrator, claims that “depending on the segments where companies position themselves, things are different: in the medium/high range there might be some contraction – some behaviours and numbers lead us to believe the next years will be quieter in terms of growth”, symbolizing a breaking point in the trend of recent years.
“In the fashion ranks, those placing their competitiveness on the price will definitely feel the effects, because there are countries, namely Turkey, that have become very strong with their currency devaluation. Growth will be slow, but continuous and relentless: we have an international recognition that will not simply fade away”, she adds.
For Artur Soutinho, from Moretextile, “there are structural conditions that remain unaltered, be it location, proximity, response capability, service, which are and will always be very important for the core markets – Europe, USA and Canada. The know-how is a very positive aspect too, transversal to several generations and impossible to measure. Yet, it exists”.
This way, “we will keep being competitive over the next years”, but the CEO doesn’t discard the existence of “structural conditions that may make the next years harder, namely regarding the UK, Spain, France and Italy. The instability of these cases makes me think Europe will not grow at the rate of previous years, which will necessarily interfere with our business”.
A fear certainly shared by Black Spider: “We’re not expecting a contraction, although our company is somewhat exposed to tough markets”. The company sits on both sides of the most notorious border in Europe: the one that (doesn’t) separate Northern Ireland from the Republic of Ireland, states Marco Costa, the company’s financial director.