Investing in Portugal Textile and Clothing Industry 2013

Content

Portugal

Textile & Clothing Industry

aicep Portugal Global 2

PORTUGAL IS A BUSINESS OPPORTUNITY

Why choose Portugal?

Strategic location

Portugal is the European nearest country to the U.S. 3-hour distance between Brazil and Russia. Same time as UK and Ireland.

Attractive Consumer Market Portugal Iberian Market

10,6 51

European Market

494

Portuguese Speaking countries

220

Great and privilege economic relations between Portugal and Brazil, Angola and Mozambique. Daily flights to major European cities.

Million Inhabitants

Why choose Portugal?

Qualified Workforce Flexible labour lawHigh-standard educationWide availabilityPartnerships with world-class US institutions

Portugal has a highly skilled and educated workforce. Portugal ranks on Top within the EU countries in number of PhDs per 1,000 inhabitants.

71,7% 71,7% 71

40% of students in tertiary education are enrolled in engineering, sciences and health. The increase rate in the last 3 years is about 30%. 42% At least 1 language

23% At least 2 languages

6% At least 3 languages

Portuguese are known for commitment to work which places us below the EU average regarding working days lost per year.

43,6 11,3

Working Days Lost (per 1.000 employees – EIRO, 20052009)

Language skills: English, French and Spanish are the most spoken languages. English is universally taught from 1st grade.

Why choose Portugal?

Competitive Costs

Portugal is still cost competitive according to international recognized sources. There was a decrease of -1,2% in hourly labour costs in 2012 Q1 (Euro 27 rose by +2,0%). In terms of real estate – industrial space - and within 53 countries/cities worldwide, Portugal/Lisbon is the 8th less expensive location. Portugal also has one of the lowest monthly minimum wage in Europe (485€).

12,4

11,4

4,0

+1,5 3,4

1,5

100

87

-1,2

Electricity

Natural Gas

Labour Cost Index

Cost of Living

(Prices for industries in €/100kWh – Eurostat 2012 S1)

(Prices for industries, in €/GJ – Eurostat 2012 S1)

(Year-on-year rate of change – Eurostat 2012 Q1)

(HFC 2011 - Eurostat)

Why choose Portugal?

Technological Infrastructures

0,72

0,38

FULLY DIGITALIZED Telecom Prices Euro/10 min call Eurostat 2010

The percentage of fiber connections in total broadband is already 6% for Portugal, ahead of countries such as Netherlands, Finland, France, Spain, Italy, Poland, Austria Germany or Belgium.

Telecommunications have been a major priority in Portugal. The country has now 95% coverage of broadband infrastructures. The net increase in the broadband penetration growth for Portugal is above the OECD average (Dec 2010).

The Internet is also well developed. Portugal is a United Nations case study in terms of e-Government and its availability of public services on-line.

Why choose Portugal?

Office Space available

Portugal offers a dynamic real estate market. High quality space, well designed and energy efficiency oriented has boomed and rent prices are competitive comparing the other European countries.

Office space

Industrial space 123,5

915 439

79,2 290

Occupancy cost, in €/sqm/year, C&W2013

52,2

Portugal is ahead of countries such as France and Spain in terms o cost. The figures are shown for Lisbon. If we considered Porto area, prices can lower 25%.

Occupancy cost, in €/sqm/year, C&W2011

Why choose Portugal?

Business friendly environment

MULTI-CULTURAL

EASE OF DOING BUSINESS

 

‡ Major public services are on-line; ‡ Portugal is considered by the United Nations, a case study in eGovernment; ‡ Average time to set up a firm is less than 1-hour

Portugal is very open to foreign cultures: the availability of international schools, the safety record and quality of life attract expatriates. As a result Portugal is ranked #2 in the Migrant Integration Policy Index 2011. “Portugal is unique in attracting young graduates and executives.” Carlos Brazão, Cisco Portugal

Why choose Portugal?

Incentives & Grants

FISCAL GRANTS - Corporate tax credit of up to 20% of the investment; - Exemption of local taxes; - Exemption of stamp duty; - Tax incentives for R&D (SIFIDE II). - Income tax: flat tax rate for expatriates of 20% for a 10 years period.

JOB CREATION Internships (Unemployed/ handicapped people) – monthly support for 12 months (80% to 100% depending on nr of employees) Exemption (for 36 months) of social contributions - Young (first job) or long term unemployed people (> 12 months) - Permanent labor contracts only; - Not cumulative with Social Security Refund Social Security Refund - Long term (more than 6 months) unemployed people (young or over 45) - 75% to 100 % of monthly social contribution - Limit between € 175 and € 200

- Maximum duration: 18 months; - Net increase in total employment; Applies to a maximum of 20 employees. - Cumulative with Estímulo 2013 incentive “Estímulo 2013” Initiative - Unemployed for more than 3 or 6 months - Support: 50% to 60% of monthly wage - Limit: between €419,33 and €544,98 - Maximum duration between 6 and 18 months - Net increase in total employment - Cumulative with Social Security Refund and Social Contribution Exemptions

A detailed incentives offer can be prepared for a specific investment and business plan.

They chose us MANUFACTURING

SERVICES

“

Our decision is a result of the recognition of the hospitality and the commitment of the Portuguese Government, of the multilingual skills of the local population as well as its professionalism and ability, and proven success in innovation areas.” Chris Dedicoat, Senior Vice-President for Europe, Cisco

”

“

One of our main strategic lines was always to shorten distances with the academic world and to bet in strong innovation, investigation and development in Portugal thus taking advantage of the Portuguese engineer’s excellence. João Picoto, Chairman of Nokia Siemens Networks Portugal

”

Why choose Portugal?

The Textile and Clothing Industry

Luís Buchinho

Felipe Oliveira Baptista

Fátima Lopes

Textile and Clothing Industry The Textile and Clothing Industry is one of the most important industries in the Portuguese economy.

It represents: 9% of the Portuguese Total Exports; 20% of the manufacturing Industry’s Employment; 8% of the Manufacturing Industry’s Turnover;

Guimarães

Famalicão

Braga

8% of the Manufacturing Industry’s Production. Covilhã Porto

Portugal has around 13,300* companies working in all sub sectors of textile and clothing industry; some of them are vertical units, but the majority are small and medium-sized enterprises, all well-known for their flexibility and quick response, expertise and innovation. The textile and clothing companies are mainly placed in the north of Portugal (Porto, Braga, Guimarães, Famalicão), but there are also some companies located in Covilhã (East of Portugal) working with wool products (from yarns to clothes). * 6.900 individual firms and 6.400 societies

Textile and Clothing Industry

Portuguese Sector Performance

2006

2007

2008

2009

2010

2011

2012

Production (million €)

6,608

6,660

6,132

5,123

5,631

5,102

4,905

Turnover (million €)

6,827

6,895

6,358

5,349

5,829

6,075

5,774

Exports (million €)

4,218

4,352

4,088

3,501

3,844

4,152

4,128

Imports (million €)

3,289

3,417

3,295

3,038

3,424

3,388

3,046

180,379

176,226

168,117

148,059

138,124

133,100

127,976

Employment

Source: INE ATP Forecast

Textile and Clothing Industry Textile and Clothing Industry Exports Value 1.000€

Description

NC 50

Silk

51

Wool

52

Cotton

53

Other vegetable textile fibers

54

Man-made filaments

55

2011

2012

Evolution

727

845

16.3%

62,276

64,904

4.2%

174,510

144,356

-17.3%

4,120

5,422

31.6%

67,904

66,982

-1.4%

Man-made staple filaments

257,637

222,381

-13.7%

56

Wadding, felt and nonwovens

203,763

211,339

3.7%

57

Carpets and other floor coverings

62,466

67,195

7.6%

58

Special woven fabrics

78,569

77,269

-1.7%

59

Impregnated fabrics

151,808

175,096

15.3%

60

Knitted or crocheted fabrics

113,110

113,234

0.1%

61

Knitted or crocheted apparel and accessories

1,608,032

1,595,945

-0.8%

62

Woven apparel and accessories

839,921

874,984

4.2%

63

Other made-up textile articles

527,246

508,421

-3.6%

4,152,089

4,128,374

5.8%

TOTAL

Source: INE

Textile and Clothing Industry Textile and Clothing Industry Exports Main Clients 73 -13.5%

TOTAL 4,128 M€ -0.6% (¨ 2011/2012)

69 10.8% 362 6.1%

USA 183 M€ 17.6% (¨ 2011/2012)

98 -0.9%

ANGOLA 79 M€ 25.3% (¨ 2011/2012)

373 -8.6%

554

OUTSIDE EU27 704 M€ 4.3% (¨ 2011/2012) EU 27 3,424 M€ -1.5% (¨ 2011/2012)

140 -6.6% %

-4.3% 208 1,289 3.2%

-16.0%

Textile and Clothing Industry Labour costs Minimum wages Job Position

Monthly (€)

Production Manager

864,50

Warehouse Coordinator

747,50

Quality Control Operator

651,50

Stamping Press Operator

492,00

Tailors, Dressmakers and Custom sewers

490,00

Machine setters, Operators, and tenders

488,00

Unstill Operator

486,50

Source: Sector agreement published, Boletim do Trabalho e Emprego, nº3 22/01/2011

Some Key Players/Exporters

Some Key Players/Exporters

Textile and Clothing Industry Industry Associations Textile and Clothing Association of Portugal http://www.atp.pt/

National Clothing Association http://www.anivec.com/

Fashion Cluster Portugal

Portuguese Wool Textile Association http://www.anil.pt/en.html

www.polodamoda.pt/

R&D and Training CITEVE – Textile and Clothing Technology Center http://www.citeve.pt/

CeNTI -Centre for Nanotechnology and Smart Materials http://www.centi.pt/

MODATEX – Textile and Clothing Vocational Training Centre http://www.modatex.pt/ CENIT – Centro de Inteligência Têxtil http://www.portugaltextil.com

Textile and Clothing Industry Events PORTUGAL FASHION http://www.portugalfashion.com

MODTISSIMO Trade Show http://www.modtissimo.com htt // dti i

Location OPORTO ALFÂNDEGA BUILDING CONGRESS AND EXHIBITION CENTER ADDRESS: R. NOVA DA ALFÂNDEGA - PORTO

aicep Portugal Global

aicep Portugal Global

Who are we?

Mission

Values

We are a Business Development Agency, focused on the development of a competitive business environment that contributes to the international expansion of the Portuguese Economy.

Increasing the country’s competitiveness, promoting large private investment and fostering the internationalization of Portuguese companies. Focus on clients. We serve our clients in accordance to their requirements through various solutions and long-term relationships. Selectiveness. We direct our activity towards projects and markets that make a better contribution to company competitiveness and the sustainability of the Portuguese economy. Excellence. We seek to exceed expectations by means of a rigorous approach, effectiveness, enthusiasm and a willingness to innovate.

About Us

aicep Portugal Global: how can we help you?

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PreInvestment

Incentives Negotiation

Settling In

After Care

Single point of contact in all phases: preinvestment, incentives negotiation, settling in and after care Promoting a direct negotiation with companies, through which a tailored approach to incentives may be applied in order to define a global package that fully satisfies the investor's needs

Dynamic approach focused on the client or investor

Government business entity, flexible, free of charges and streamlined services

www.portugalglobal.pt