Portugal Exporters Invest in Product
July 9, 2007,
Widening global competition from Asia roiled Portuguese manufacturers in 2006, but the country's leading companies adjusted by taking cost out of their operations, focusing on innovation, and hewing to higher-end goods.
"We all know the companies we can sell to in the U.S.," said Anabela David, export manager, Almeida & Filhos.
This bedding manufacturer, which used to send up to 90% of its exports to the United States, faced global competition by restructuring four years ago, dropping its U.S. agent and hiring others in England, Scandinavia, Spain, and France. The vertical mill also began focusing on specialty yarns and created a better-end brand for the European market: High Concept.
"We can't sell small [U.S.] accounts," David said. "Our concept is to consolidate the accounts that we have, and we are thinking of opening a warehouse."
For Lameirinho, which still does 50% of its business with the United States, R&D has been key to keeping a foothold.
"People make the difference — having the knowledge, the equipment, the research. We must be in the front line," said Paulo Coelho Lima, administrator and board member.
Lameirinho is researching fibers that enhance wellness and improve the skin. "The new generation of buyers in the U.S. is more open to new things," said Silvia Correia, marketing and design manager. "More and more, customers want surprises, not just fabric, but a whole concept."
Texteis Domingos Almeida is producing aromatized bed linens and ionic therapy sheeting. The company also emphasizes design. "We have a team developing, developing, developing," said Sofia Ferrao, marketing manager. "What we try to offer the American client is quality and right-time delivery."
Lasa — which manufactures bedding, towels, robes, and table linens — is thinking of opening a U.S. office to broaden its presence. It already operates offices in France, the U.K., Germany, Italy, and Spain, some staffed with local design departments.
In terms of U.S. partnerships or joint ventures, "We're not looking for a producer; we're looking for a distributor," said Sandra Duarte, export department. "What Lasa brings is dimension. We are a solid company with good product capacity."
Mundotextil has strong roots in the U.S.: its Bianca USA division. The towel manufacturer is also a rarity in Portugal for having a partnership in Pakistan.
"We outsource only the basic solid color programs," said Maria Antonia Alves, marketing. "We assure the programs standards, we assure the shipments."
But the company's core business remains better quality goods with fiber innovations. For the U.S. market, much of the business has shifted to jacquard constructions, she said, although some customers are starting to come back for higher quality solid color.
Still, the deflated value of the dollar against the Euro has made business difficult for all Portuguese manufacturers.
"It's not a matter of giving up on the market," said Sandra Tolma Cunha, associate manager of Pereira da Cunha, which does one third of its business in the States. "The U.S. wants the quality but they aren't willing to pay." This matelasse and window panel maker has begun exploring Russia and smaller accounts elsewhere. "Our main business is bulk orders, but we can do a 10-piece minimum," she said.
Colchas S. Domingos, Portugal's largest matelasse manufacturer, is working to solidify core business before it will look to expand its U.S. reach, said Conceicao Gomes, sales manager.
"China and Pakistan can't do matelasse the way Portugal can. It's an issue of the weaving," she said. "We're looking for someone established in the U.S. market who can distribute for us." THe company is also developing accessory lines, such as bed skirts, to expand its offerings, she said.
Luxury bath rug manufacturer Sorema has added coordinated bath accessories and shower curtains to its line. The debut is in Europe, Mexico, and the U.K. Sorema hopes to bring it into the U.S. market as well, said Ricardo Relvas, marketing manager.
"Increasing the business in the U.S. involves product development and design," he said. "Of course, the great threat in the U.S. is Asian competition, but we don't present the same product. We are making rugs with silk, cashmere, linen, and crystal [embellishments]."
Sorema is also looking to open a market in China — as is Texteis Penedo, a vertical manufacturer of bedding table linens and upholstery. In the U.S., Penedo is taking on small accounts "because you never know who one day might be the next Pottery Barn," said Cristina Moreira, director.
Texteis Penedo sees rising production costs in Asia as a positive. "Even their prices are growing on bed linen. They must come forward on pricing, rather than us going back," Moreira said.
TOP MANUFACTURERS: PORTUGAL
|Company Name, Highlights||2006 exports to U.S.|
|Developing fibers that promote wellness and enhance skin care.|
|2. Almeida & Filhos||32|
|Focusing on specialty yarns, exploring hospitality.|
|Entered an agreement with Portuguese towel maker Neiper to distribute in U.S.|
|Producing zero-twist modal and bamboo to freshen the towel category.|
|5. Colchas S. Domingos||12|
|Developing new product lines.|
|6. Texteis Penedo||10|
|Seeing greater interest in organics and eco-friendly products.|
|Looking to partner with a U.S. distributor.|
|8. Texteis Domingos Almeida||8|
|Producing ionic therapy bed linens.|
|Readying a luxury brand for China.|
|10. Pereira da Cunha||3|
|Focusing on better catalog business in U.S.|
|Expanding business in moderate goods.|
|Source: HTT research|