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Innovation and differentiated product are key to maintaining Mundotêxtil’s success. 2021 meant the return in force to business after 2 years profoundly marked by the pandemic. However, and against all odds, the current year will be particularly difficult as a result of the increase of production costs alongside inflation, a poisoned gift.
ow did business go in 2021?
It was an incredible year: we reached an income of 55 million euros, representing approximately 44% of growth when compared to the previous year. Mundotêxtil’s exports represent 98% of our income and 25% of the volume of Portuguese Felt Exports. That’s the reason why it was a good year.
How do you explain these numbers which, you may agree or not, are surprising?
They aren’t surprising because they are the result of hard work. There was an increase in the demand for the type of product we manufacture – highly due to the pandemic and the fact that people were more at home, which led to a change in the type of consumption. Only major brands or the ones which had digital tools developed and a good distribution network managed to increase sales in 2020 and take off in 2021.
Do you think 2022 will be the downside, as consumption may return to fashion and clothing?
2022 will bring a combination of factors. It won’t be an easy year at any levels. However, I hope there isn’t a sharp decline in consumption. There will probably be some stagnation, also related to the inflation and production costs which are completely out of control.
Which were your best markets?
Around 70% of our products are exported to Europe. In Europe our clients are in France, United Kingdom and in the traditional Spanish market.
Spain hasn’t been a good market for some products.
It has been a good one for us. It is a stable, mature market and our customer portfolio has been loyal for many years. Denmark and Sweden increased a lot. Outside Europe we highlight Israel which started to become an important market for us in 2019. They decreased purchases in 2020 but increased again in 2021.
Doesn’t North America attract you?
Yes, it does, as well as Mexico where we have some sales. Latin America, on the other hand, is completely stagnated. After Europe the United States are the biggest market we have.
Which of these markets reserves the biggest growing ability?
The United States, of course. It is a market that knows the Portuguese product very well and that absorbs it very well. At least in our area it is considered a quality product. It is a huge market with a high purchasing power. When there are price increases they are the first ones to accept them – and the ones who don’t fear passing this increase to the final customer. In Europe there is a bigger reluctance of doing this transfer.
Which other export markets can become a priority?
Mundotêxtil exports to 46 countries. There isn’t much margin for expansion. We can eventually increase our market share in some countries but we have a comfortable position in most ones.
What is the dimension of Mundotêxtil’s installed capacity? Are there buyers from other companies?
Mundotêxtil is made up of 596 people. We have a logistic distribution centre 5km away from our factory and we have several participated companies abroad – Germany, Spain, United States an Mozambique – cotton farming and yarn production.
Is it the company related to the programme Cotton made in Africa?
Exactly, MCM (Mozambique Cotton Manufactories) is a partnership with Crispim Abreu which already employs 300 people. It is located a 20-minute drive away from Maputo in former Riopele
Is the number of Mundotêxtil’s staff stabilized?
In 2021 it grew to 40-50 workers after decreasing in 2019 and having remained stable in 2020.
In 2018 you invested 18 million euros. What is your investment policy?
The year of 2018 was the last one in which we made a great investment in terms of machinery. From 2018 to 2021 we invested over 12 million euros and we are now concluding a project of more than 2,5 million – investing in modernization. The machines have a long life-span but there are technological challenges that we must keep up with. We are concluding an investment in yarn dyeing and in changing the factory layout. The pandemic also helped to look inside and understand where we could increase efficiency and productivity.
2022 represents the return to presential fairs. Is it important for Mundotêxtil?
It is. Even for our commercial and product development teams it is essential to contact with clients. This doesn´t mean contact hasn’t been established – as we export for 46 countries we can’t go everywhere every year. We have created contact tools to tackle the lack of physical contact. However, we don’t feel the markets through the internet, we don’t understand what people wear or what they want if we aren’t in the places.
How did you observe the way in which the Portuguese Textile Sector has responded to the pandemic?
One of the things that characterizes us as people, as a country, is the ability to adapt and textile accompanies that capacity. We must bear in mind that companies need to have foundations: a confusing transition will not bear fruit. Solid, capitalized companies with a strong technological component that value labour force have responded. These companies have managed to adapt more easily.
How about the way the government found to help companies, what comment would you like to make?
We are lucky as more than half of our income comes from permanent programmes on an annual or biannual base – so we knew we would have production. The government responded as it could. The payment of the lay-off was very important – mainly in the textile the treasury needs to be long: 9 months may go from the purchase of the raw material until the invoicing. I have no bad remarks to do.
Is the RRP (Recovery and Resilience Plan) a lost opportunity?
It is a unique opportunity. I understand it is important to channel funds to structural reforms that the State needs to do. But in order to have better salaries and reduce unemployment one needs to strengthen companies. If one loses the current opportunity for digitalization, decarburization, resilience of social issues in a conjugated strategy between the public and the private one will lose the unique opportunity to leverage the country.
In which way are the increase in the cost of raw materials, transports and energies impacting Mundotêxtil?
It is a great impact. The current energy cost is a nightmare – the price of gas increased more than 300%. Cotton is at historically high levels – there are lots of people earning money in the commodities market.
Which is more important: the label “made in Portugal” or “made in Europe”?
I believe “made in Portugal” is very important nowadays. It prevails over “made in Europe”, at least in this type of product. Probably it is different in clothing.
41 years old, administrator and commercial director at Mundotêxtil, where she has worked since 2011. She has a Degree in Law by the University of Coimbra and had a Law Office in Vizela before moving to the company led by her father. She says she “had no idea how the company worked as family life had always been separated from the progress of the company”, a detail which seems to have helped in the leadership she shares with her father and her sister.
Facing the increase in production costs do Portuguese textiles, and specifically home-textiles, face the risk of losing competitiveness?
It is crucial to draw plans to minimize the expectable negative impact. It may involve an acceleration of the energetic transition, the optimization of productive processes, the increase of productivity and efficiency and, of course, an increase of the sale price.
In what ways have the well-being and the appreciation of human resources reflected in Mundotêxtil’s performance?
Our compromise has long been centred on those who are a part of us. Fostering the growth of our teams and promoting a healthy environment are a priority in our day-to-day, which is obviously reflected in the connection the teams have among themselves and the company.
What is the importance of the relation with the R&D centres, namely with UM, in the development of Mundotêxtil?
Partnerships are the most efficient way for a company to adapt to changes and propel innovation. The support of partners that share the same strategic vision and are pioneers in their performance areas is essential. The University of Minho is, without any doubt, a strategic partner of Mundotêxtil which has contributed greatly to the culture of innovation we have been developing and fostering.
What is the future strategy of Mundotêxtil considering the binomial innovation and sustainability?
Sustainability and innovation go hand in hand. It is impossible to accelerate the rhythm of change and transform the current business model making it circular without including innovation in this equation.