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Still waters run deep – Portugal

Still waters run deep – Portugal

Bloomberg : Portugal’s 1,500 shoe factories have increased the value of their exports by 50 percent since 2009.

Nowadays we don’t hear much good news about the market or maybe it’s just our habit not to lean out. However Portugese market is doing well as Businessoffashion says :

“In Portugal, the historic regions of Guimarães, Oporto and Alcanena have significantly grown their exports of leather shoes and accessories. In fact, from 2006 to 2013, the local leather shoe industry has increased exports by 213 percent, from 36,510,000 pairs to 114,387,000 pairs”.

Unexpectedly this market has grown and got 3.8% of the global leather trade which makes it exception in recent times. Why?

First of all the quality is becoming more and more important in leather industry. Portugal produces shoes that doesn’t differ from Italian or French products. Alcanena shoemakers realized the importance of this factor years ago and bet on high performance or even handicraft. They invested in very precise tools such as high-speed waterjet cutters which helps factories being more flexible and deliver multiple styles to luxury designers. Moreover Portugese prices are 20-30 percent lower than Italian.

Secondly Portugese leather became interesting because of many delayed deliveries from China. Many European shoemakers turned away from chinese factories after years. Shipment was delayed very often, fexibility touched the ground and the quality wasn’t stable. On the other hand Portugal can provide small lot, various colors and deliver your leather shortly. Quick-access to raw materials also makes it more competitive. Portugal get raw hides or high-quality italian chemicals in 3 days when China must wait for it up to 1 month.

What about the price? Portugese producers are smart, many of them buy stocks allover the world to reduce the final product cost. Moreover businessoffashion says:

„the cost of Portuguese skilled labour remains one of the lowest in Europe”.

Combined with good training and new machinery it creates big competitive advantage.

In fact well maintaned tannery with modern machinery can reduce the production cost by 20 percent. „If we only take a closer look at water consumption, chemistry use and waste management, we realize that it can lower the tannery cost and open new opportunities.” says Antonio Gastao asked about his success.

It’s not only about financial investments – there is much knowledge behind and as always – run of luck.

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