Portugal textile firms rush to make medical supplies, fear for own future

By Victoria Waldersee

By Victoria Waldersee

LISBON, March 27 (Reuters) - Textile producers in Portugal are rallying to stitch urgently-needed medical supplies for the battle against coronavirus in Portugal and further afield even as the firms worry about their future if the pandemic-induced economic slump continues.

The sector, concentrated in Portugal's north where coronavirus cases are highest, wove its way out of the country's 2010-14 economic and debt crisis by boosting exports, supplying primarily to European retailers.

The Bank of Portugal estimated on Thursday the country's total exports would shrink by 12-19% this year.

As orders are delayed or cancelled, hundreds of firms with time on their hands are providing supplies like bedsheets, towels and gowns to Portuguese hospitals for free, with the first deliveries dropped off this week, according to the Portuguese Textile Association (ATP).

"There's a collective need in Europe, and we want to show solidarity," Cesar Araujo, CEO of textile manufacturer Calvalex, told Reuters. Calvalex and four other firms have put all their resources towards producing medical supplies.

"We're all worried about the future. This virus is a disaster. But we've got to unite, and we're trying to set an example," he said.

The consortium, totalling 6,000 workers, is selling supplies at cost price to European clients and supplying Portuguese hospitals at 50% discount or for free.

As for the much-needed protective masks, firms are limited by a lack of raw materials, usually supplied from Asia, and technical know-how.

CITEVE, a product-testing and certification centre for the textile sector, warned on Thursday that people were using masks that did not follow technical standards and presented danger to wearers.

The centre set up a lab to verify production of masks and identify raw materials sourced locally that could do the job. It is preparing guidelines for Portuguese companies eager to kickstart mask production.

"We shouldn't be depending on masks from China, imported through Ethiopian Airways, here in Porto," Prime Minister Antonio Costa said during a visit to the centre on Friday.

Portugal has reported 4,268 confirmed cases of the illness so far, with 76 deaths.

The government provided a 1.3 billion euro ($1.44 billion) credit line for the textiles industry, which employs 138,000 people, as well as financial support to cover social security contributions of workers whose jobs have been temporarily suspended.

Despite these measures, a survey of 195 firms by the ATP published on Thursday showed six in 10 still expect a drop in turnover of over 50% in April, with the same proportion suspending at least part of their workforce indefinitely.

"A large percentage of firms will close or reduce their activity, most probably beyond April," the ATP's executive director, Ana Dinis, told Reuters. ($1 = 0.9033 euros) (Reporting by Victoria Waldersee Editing by Andrei Khalip and Frances Kerry)