Portuguese Market Faces Familiar Concerns

Michele SanFilippo, Staff Staff, September 20, 2004

Lisbon — Between the high euro of the last 18 months and increasing raw material costs, it becomes clear that European countries such as Portugal, site of the new In'Nova show, are facing issues similar to those plaguing the U.S. textiles market.

"The market here gets more competitive every day because of imports. Raw materials are very high — up 30 to 40 percent — and this affects everything," said Joao Paulo Sampaio, administrator of Texteis Evaristo Sampaio, a Portuguese vertical producer of blankets, bedspreads and throws.

According to Duarte Relvas, export manager for Sorema -- a luxury bath mat manufacturer looking to set up offices in Paris and New York -- the textiles industry in Portugal has been more sheltered than that of the United States.

"The instability of the U.S. dollar has been a problem, but we are not going to stop selling to the U.S. market, where we have been for 10 years. We want to grow our business with the U.S., which is currently 15 percent of sales," he added. "The euro is high and the dollar has been low, so this means we have to watch our margins and prices somewhat."

Relvas said there is a trend toward better quality goods in Portugal, because the country doesn't sell based on price. "The American textiles market has more dimension to it and can handle volume; it's a small market here in Portugal," he said. All of the companies Sorema works with in the United States have stayed on board and have been increasing their orders, Relvas added.

According to Fatima Vila Maior, exhibitions director for the Feira Internacional de Lisboa, the U.S. market is still virgin territory and, because the dollar is so low, it makes product prices much higher.

"It's hard to break into this market. Quality becomes very important to Portugal," said Maior. "We have to position ourselves as suppliers of different products, quality goods, design and innovation. The United States is an important market to us because of the number of stores and consumers, plus the speed of bringing products to market. You have to be very persistent to work in the U.S."

Jose Pedro Campos, executive director of Vista Alegre, a well-known Portuguese porcelain and crystal manufacturer, said, "In order to sell to the U.S., you have to have a brand, and in order to have a brand, you need to spend millions of dollars."

The United States is the company's second biggest market followed by Europe. Vista Alegre has a New Jersey office along with a network of more than 20 sales reps.

Angela Simaes, a commercial representative for Crispim Abreu & Cia, said, "We continue to work with the American market but not on the same level as before Sept. 11. We are still working with a handful of smaller retailers who are more concerned with value, but lost a big customer who started going direct to Asian countries for price reasons."

Simaes said 20 percent of the company's business is with American retailers.

She continued, "Portuguese companies are feeling the pressure of global competition from countries like China, but we think there will always be a place for our home textile products because we focus on quality, design and innovation." Siames stressed the importance of promoting easy-care items.

One of Portugal's largest textiles mills, Antonio Almeida e Filhos, exports 35 percent of its products to the United States. The company's export manager, Sofia Miguel, said that with most Asian goods, the quality is not the same, products are not without problems, and it can take up to six months for products to arrive.

"We are trying to diversify with different fibers that are more high tech, such as filifine in towels, which dries four times faster, and dri-release technology, as well as produce easy-care products," she said. "We have to keep designing and coming out with new lines to stay one or two steps ahead of China."

Antonio Alberto Santos, a commercial executive with Bordalima, agreed. "We have to have products that are different and better than what you could find from China. We can't stop working and give up. We have to keep trying to improve our products."

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