Portuguese textile companies in energy costs crisis

Some companies in Portugal’s textile sector have decided to close their operations for a few days because the energy cost overheads of remaining in operation has outstripped the cost of closure.

This is according to the president of the Textile and Garment Association of Portugal (ATP), Mário Jorge Machado who told Lusa: “Many companies have stopped production for a few days in the expectation that gas and electricity prices would eventually go down and that they could continue production”.
According to Mário Jorge Machado the increase in energy costs which have also made raw materials more expensive, is contributing towards a “very complicated situation” in the market.
“Companies decided to close for a few days because the overheads outstripped the losses from being closed,” he said.
“The situation has particularly affected spinning, weaving and finishing, and to a lesser extent apparel manufacturing which does not use up so much energy. The cost of raw materials has been an issue, but the increase in energy costs which are now 10 times higher, is worse”, he added.
Mário Jorge Machado points out, however, that he only knows of one company in the textile sector that took the decision to shut down permanently and that decision had been taken before war broke out in Ukraine.