At a time when concerns about clouds on the horizon from the war in Ukraine and its impact on inflation are mounting, tanneries and parts companies returned satisfied from Milan, where they participated in Lineapelle. The return of Asian customers and an influx of visitors “larger than usual” gave new life to the sector, which operates upstream from the footwear industry and depends on it for its success.
35 Portuguese companies attended Lineapelle, the most important international trade fair for leather, accessories and parts for shoes. Multicouro, from São João da Madeira, was one of them, with Rudolfo Andrade pointing out that the company is “very good” and that, thanks to new customers and the increase in sales, the company’s turnover is already about 20% higher than the pre-pandemic period.
However, the rise in inflation and the consequent fall in household incomes are a cause for “concern” for this official, as 95% of Multicouro’s turnover is destined for shoe companies. “The balance of the fair is very positive, especially due to the return of some customers who had not come since February 2020, as is the case with Asian customers. So far there has been no drop in demand or interest in seeing new collections , but the main topic of discussion is instability, war, decline in purchasing power and what this may affect demand in the short term,” he says.
Pedro Castro, CEO of Aloft, a Vila do Conde company specializing in the production of soles for technical footwear, shares the positive sentiment. “The general opinion is that it already looked like one of those old-fashioned fairs. There were a lot of people showing up and discussing orders. All with smiles on their faces, a sign that the mood overall was very positive,” he says.
In the case of Aloft, and precisely because it specializes in technical soles, many of which are subject to demanding certifications, the business model is not so direct, they are long-term contracts, which can be ten or fifteen years. This makes the company significantly immune to the more immediate situation. Yet the presence at the fair was fruitful. “We have managed to materialize themes that have been waiting for completion for a long time, which just proves that the physical is always the physical,” he guarantees.
2021 was an “exceptional year” for Aloft with 11 million euros in turnover, and it promises to break that record, with growth expected to be around 10%. But Pedro Castro admits that some troubling signs are beginning to emerge. “Fearing a shortage of raw materials or production capacity, many customers took on higher intermediate stocks than usual, which created a perfect storm. Many customers were left with inflated growth forecast models and are now revising and adjusting demand,” explains the entrepreneur. Which points to a stabilization in 2023.
return of brands
“I don’t think we will have a withdrawal. Portugal asserted itself during this period with many German and French customers, who had gone to the Maghreb and Asia 15 years ago and no longer knew where Portugal was, returning And Portugal managed this demand from big brands like Geox or Timberland very well, because we maintained strong relationships with the customers who were already here and forced new customers to draw up a two- or three-year plan and better organize our production capacity,” defends Pedro Castro . Whoever believes that, thanks to the “know-how and added value” that the industry can offer today, these customers “cannot leave so easily”.
With a sales growth of about 30% in 2022, as a result of entering new markets, such as Australia, Italy or Canada, Atlanta, from Felgueiras, has guaranteed orders that cannot be delivered until January of the following year. The growing demand for “more complex” and mid-price products is an asset in a business segment where energy has a significant weight in production. The company, which operates 24 hours a day, has installed solar panels, for an investment of half a million euros, and plans to “provide the surrounding community with the energy it does not use on weekends”, a claim that was not met. . “It is nonsense to throw energy away,” laments Paulo Ribeiro. It is also investing around three million euros in refurbishing some of its older equipment.
About Lineapelle, the Atlanta representative makes a “very positive verdict” about its presence at the fair. “It exceeded our expectations. We had a greater influx of visitors than usual. It was an excellent opportunity to establish new commercial contacts, make our products known, in permanent adaptation, innovative and increasingly sustainable, to meet market trends and visitors’ concerns” , says Paulo Ribeiro. He believes that the dynamic environment of the event “has also translated the good phase that the footwear sector is going through, with many companies, good production, good product and large export volume”.
The impact of inflation is also a concern for the Portuguese Tanneries Association, given its effect on household income. “Contrary to what happened during the pandemic, where people managed to significantly maintain their income with the layoffs, income is now being eroded by inflation,” said Gonçalo Santos, admitting the industry fears “a crisis”. people will not have enough income” to channel to non-essential goods such as shoes or leather goods, the tannery’s main customers.
The journalist traveled at the invitation of APICCAPS
Source: DN
