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Mário Jorge Machado, President of ATP, was on Porto Canal’s Economia Real programme on TV, on Monday 13th May to discuss if ‘There is a crisis in Portuguese industry’. The number of insolvencies has risen and the textile and fashion sector has been pointed out as the main contributor to the 14 per cent increase. The association president explained the difficult situation of the companies and emphasised that ‘we are gaining market share in Europe’.
‘The textile and clothing industry is an industrial sector that in recent months has suffered because of the wars,” he said. He went on to explain that ‘Europeans’ savings have been increasing. In other words, we’re spending less than in 2019,’ while the United States has increased its expenditure by 30 per cent.
Confronted with the 8.4% drop in exports, Mário Jorge Machado said that the figures reflect ‘consumer behaviour’. And he also added that imports in Europe have also fallen and ITV ‘is better positioned than before’, with the selling of products with increasingly higher added value.
According to the president of the Textile and Clothing Association of Portugal, there are two types of situations that generate the current insolvencies: ‘there are companies that are heavily indebted and have problems, and there are closures due to market adjustments, where other products are in demand. The companies that are working and competing on price are starting to be left out,’ he warned.
On the first point, he added that ‘the support provided under the pandemic was crucial’ to the survival of companies, but it was based on loans, which is why several companies are currently paying off these debts. Given the context of war, this has complicated the situation because orders have slowed down. ‘In the end, whoever survives will be better off: we predict that the sector will end the decade with fewer people, as a result of technological developments, but we also predict a turnover of 10 billion euros.’
When asked about the fact that 20% of the unemployed registered in job centres are from this industry, Mário Jorge Machado stressed that the textile sector is one of the industries that hires the most: ‘it employs around 130,000 people’. ‘If during the pandemic there was a shortage of people for such high demand, today we are going through a phase of lower demand. We are looking forward to resolving the issues of the crisis at European level,’ he said. He also emphasised that ‘the textile and clothing sector has enormous growth potential’.
On a final note, and referring to ATP as a member of CIP – Confederação Empresarial de Portugal (Portuguese Business Confederation), Mário Jorge Machado said that ‘demand in industry is complicated’. The businessman also emphasised once again the difficulty of being an entrepreneur in Portugal: ‘the legislation is contrary to initiative, there are many constraints on companies’.
He closed the programme on a high note by saying that ‘people are a company’s main asset, it is with them that we are able to serve our customers, so dismissal is our last resort,’’ he said.