AEP wants Asian markets to be worth more than 100 million in ten years

Next Challenge Asia is the Associação Empresarial de Portugal (AEP) program that aims to help small and medium-sized national companies diversify markets and thus increase their competitiveness. With an eligible investment of almost one million euros, the project targets the markets of China, South Korea and Japan, which together account for 1.3% of total Portuguese exports. Luís Miguel Ribeiro, president of the association, believes that in ten years it will be possible to increase exports by more than 100 million euros.

“There is still a long way to go here, but if we managed to grow 1% a year we would be talking about 10%, which is a very significant increase for these markets, but a perfectly achievable target. even be able to be faster “, defends the person in charge.

A cumulative growth of 10% in these three markets over 10 years would mean approximately EUR 112 million. China, South Korea and Japan accounted for more than EUR 1,070 million in national exports in 2022, slightly less than last year when they amounted to more than EUR 1,144 million, accounting for 1.8% of the national total. But China’s covid-zero policy in 2022, which kept the market closed for most of the year, led to a drop in national exports to this destination of almost 8%, reducing the overall weight of the three markets up to 1.3%. Exports to Japan also decreased in 2022.

With an eligible investment of EUR 986 thousand, of which 85% is shared between Portugal 2020, Compete and Feder, the Next Challenge Asia project covers companies in the agri-food sector, the housing sector, water and energy infrastructure and building materials. It started in the middle of the pandemic, in June 2020, and will end in June this year, but the AEP assumes the stakes are to enforce. “In our next application to support the internationalization of companies, through the BOW – Business on the way program, we will continue to invest in these markets, with business actions and missions. Because the potential and opportunities that these countries represent can be enormous , but it is. It takes continuous and continuous work to make the results visible,” emphasizes Luís Miguel Ribeiro.

The project should have started with a study of prospecting and knowledge of the three markets and the respective international players, with a retail tour of specialized distributors in each of these lines, but the restrictions imposed by the pandemic forced to postpone this study , which is only done now. On the other hand, guides and digital tools were developed to better train Portuguese companies that want to approach these markets, and at the end of October last year, AEP brought about 30 Asian business people to Portugal who got to know the factories and potential partners of business. This year it is the turn of Portuguese entrepreneurs to present their products locally, with events in Tokyo, Seoul and Shanghai.

Arch Valadares and Vinhos Norte are two examples of the approximately 30 Portuguese companies involved in Next Challenge Asia who already have “multiple meetings” planned as part of their April visit to Korea and Japan.

Centuries-old Arch Valadares exports 60% of what it produces to more than 40 markets around the world, including South Korea and Vietnam, but it plans to expand its presence in Southeast Asia. Especially in Japan, where he looks for potential partners interested in setting up a joint venture. “Since sanitary ware is a commodity, we try to enter the medium and medium-high market, which appreciate the added value of the products,” explains David Iguaz, export director of the former Cerâmica de Valadares, which was declared bankrupt in 2012 and where it was reborn two years later by former company personnel.

And if it’s true that Japan is the world’s largest producer of high-quality sanitary ware, Arch Valadares has “a team of artisans capable of creating one-of-a-kind pieces from scratch” that could interest large groups. The intention is to create partnerships in a logic of “complementarity of offerings” and David Iguaz has already scheduled a series of meetings with potential interested parties in the business mission to Korea and Japan next month.

Vera Lima, one of the third-generation elements in Vinhos Norte’s management, explains that the company has defined South Korea and China as the strategic markets to address in the next two years, so participation in the AEP program was something natural. “It gives us the necessary framework and training to approach the market and puts us in contact with local players,” he emphasizes.

With a turnover of six million euros in 2022, Vinhos Norte’s exports represented 12%, of which 4% went to Japan, the “most important foreign market for the brand by value”, where it already has two importers. The visit that the AEP organized for Asian businessmen to Portugal is already bearing fruit. Vera Lima then went to Japan and met potential importers there. Samples have already been followed for South Korea. “Everything points to a great opportunity to enter the market,” he says.

In addition to participating in the mission organized by the AEP, the Vinhos Norte will be in Seoul in April, again in October, for a tasting organized by the Vinho Verde Commission.

Ilídia Pinto is a journalist for Dinheiro Vivo