Textile sector calls for simplified lay-off

Over half of Portugal’s textile sector is temporarily shutting down production because of spiralling energy costs.

And according to the sector’s association, scores of companies will face bankruptcy if simplified lay-off mechanisms are not introduced by the government.
“The sector is very resilient, companies are surviving as best as they can, but if this situation (of high energy costs) continues for many more weeks, I am unfortunately convinced that companies will become insolvent if they are not helped, and neither do they have the mechanisms to enable them to adjust to the situation”, the President of the Portuguese Textile Association (ATP) told Lusa.
According to Mário Jorge Machado, the association only knows of one case where a textile company actually shut down, but “around 50%-70% of textile companies are currently carrying out temporary shutdowns, some for some days of the week to try and mitigate the effects of rising energy prices”.
“Companies are operating fewer days per month in the hope that the prices of gas will go down, because companies are making losses every day operating at the current prices. The fewer days they work, the less overheads they have,” he added.
The head of the ATP pointed out that energy prices had already been going up before the war in Ukraine.
“The increase in natural gas by over 500% had been happening since November. Once the war started there were days when the price jumped to 1,500%, other days 1,000%, and others still to 700%-800%. We are referring to amounts that are absolutely scandalous”.