Portugal’s PRODUTECH R3 – a shining example of manufacturing cluster cooperation
Text: Chris Graeme Photos: PRODUTECH
International and Portuguese delegates at a summit focused on Portugal’s Production Technologies Cluster learnt how a successful partnership between high-tech companies, manufacturing enterprises and research and development establishments had led to 50 innovative technology applications being successfully tested on Portuguese production lines.
The potential on value added, improving efficiencies, production, quality, agility, and flexibility while cutting energy and production costs is considerable.
The PRODUTECH R3 2025 summit was the high point of a week dedicated to Portugal’s Production Technologies Cluster of the same name, which also included a technical-scientific conference and on-site visits to some of the companies and factories that comprise the consortium.
The conference brought together around 300 delegates and guests discussing the role of innovation and production technologies in defining the industrial future of Portugal and Europe.
Representatives from Portugal Metal (The Portuguese Association of Metallurgy, Metalworking and Related Industries – AIMMAP), PRODUTECH – a Portuguese production technologies cluster -, Colep Packaging – the company heading the PRODUTECH R3 consortium – , Orgalim (the voice of Europe’s technology industries), Manufacture ETF (The European Technology Fund), and the European Parliament voiced the strategic importance of industrial innovation in a rapidly transforming world.
Technology as a driver for economic development
Highlighted was the key role that technology has as a driver for economic development and the challenges and opportunities that industry in the EU faces. The challenges were high energy costs and reliance on external energy sources, geopolitical tensions in Europe and the Middle East, a competitiveness lag with China, India, and the Far East, particularly in high-tech sectors, EU over- regulation, fragmented R&D funding, high labour costs, and a lack of skilled staff and management in SMEs, the latter being a particular problem in Portugal.
The week-long event and summit also served to showcase the results of the work developed by the EU-funded PRODUTECH mobilising agenda involving 108 partners and €168 million of investment resulting in the development of more than 50 innovative technologies.
The summit was opened by Rafael Campos Pereira, the Vice-President of AIMMAP (Portugal Metals), an association that represents over 1,500 companies and showcases the strength and contribution of the metalworking sector in Portugal.
Last year Portugal’s metals industry enjoyed a healthy export turnover of €23.492Bn, although it was down 2.4% on the record €24.017Bn (+4%) the previous year.
Portugal – a metals export champion
Since 2019 Portugal has emerged as a metals export champion in steel, aluminium and copper precisely because its metallurgical companies have successfully been able to transfer technological know-how, cooperating as a sector cluster with R&D institutions and tech companies, and because its companies have shown an ability to innovate and adapt to global demand.
PRODUTECH, Campos Pereira explained, was created by AIMMAP, INES TEC, CATIM and a vast number of companies, universities, and technology centres with the intention of catalysing, modernising, and stimulating the various segments of production technology to support the overall modernisation of Portugal’s industry and economy.
“One very striking characteristic that sets this cluster apart from others created in Portugal is that we wanted to combine the sector’s strategic and technological needs and harness Portugal’s technology R&D ecosystem to find customised solutions. From the start we involved the various stakeholders to provide maximum leverage of what was possible to help modernise our industry,” he said.
“The mobilising agenda PRODUTECH R3 is just one of the projects developed by PRODUTECH over time, a benchmark project which is the most important but not the only one aimed at modernising our industry and making it more competitive”, he added.
Creating and attracting value
Paulo Sousa, the CEO of Colep Portugal – a Porto-based metal and plastic packaging company leading the consortium integrating five of the technology innovations in one of its assembly line processes in a pilot project – said: “On the one hand we’re creating value, and on the other we’re attracting value.
“The companies, universities and research and development entities involved have developed technology projects that can be commercialised on national and international markets while the various companies demonstrating this technology will also gain value for their own companies,” he said.
Paulo Sousa stressed that the agenda was all about gaining competitiveness in international markets for the companies developing and implementing the technologies, reducing contextual costs both in Portugal and the EU.
The company manager admitted that bringing 108 companies together in terms of managing them and getting them to cooperate had been “a tall order” but the project had been a resounding success.
Europe’s competitive crisis
Within the wider European Union context, Ulrich Adam, Managing Director of Orgalim – a Brussels-based European trade association representing the interests of technology industries, including mechanical engineering, electrical engineering, electronics, and ICT – discussed the pressures that European industry is facing in terms of competitiveness and massive structural challenges, including of a policy regulatory nature. He also highlighted what EU manufacturing needed to do to stay ahead of the game regarding the US and China.
“In a nutshell, Europe is facing a competitiveness crisis, with annual growth rates in 2024 at 0.7% in the euro area and 0.8% in the EU compared to 4.5% in China and 2.2% in the US. Clearly something is wrong.”
Things were worse for Europe’s technology industries with a combined downturn of 4.8% across the metal technology, mechanical engineering, and electronics and ICT sectors.
And so far, the outlook for this year isn’t much better, with Orgalim’s Economics and Statistics working group predicting a further -0.5% contraction in real turnover, with knock-on effects on employment which is forecast to shrink by 0.9%.
Among the problems that Ulrich Adam highlighted were high energy costs and over-regulation which were holding back European industries.
“Europe pays around two to three times what the US does for electricity, and between 2019 and 2024 it introduced much more regulation.
“If that isn’t bad enough, we don’t know how and when we will settle with the Americans over the tariffs dispute,” he said, warning that Europe was unlikely to end up with the 0 for 0 tariffs deal that it had enjoyed in the past. Moreover, a comparable situation exits with China over continued trade wars, unfair competition, and tariffs.
Portugal, he said, was looking more positive in terms of economic growth, but overall, in the European heartland there were “stagnant economies with no signs of growth.”
To compete globally, Europe needed to electrify. Low-carbon, low-cost, independent energy sources for Europe were key to boosting competitiveness and achieving the aims of the Green and Clean Industrial Deals.
“We need speed, ambition, and openness to the outside world. We must settle with the US and China, ratify the MERCOSUL accord with Latin America and secure a free trade deal (FTA) with India.
“All these FTAs are taking too long. MERCOSUL has been in the making for 25 years and needs accelerating. We also need to get the simplification agenda agreed on reducing regulation,” he added.
And warned: “It’s a critical moment for Europe’s industry right now, and if we want to shape our competitiveness the time is now and we need to do this in Brussels and across the European Union.”
Portugal’s PRODUTECH R3 concept “works”
The CEO of PRODUTECH, JPM Indústria and Grupo JPM, Miguel Almeida Henriques outlined how production technologies could be leveraged for economic development.
He believed that the concept developed by PRODUTECH should be incentivised and promoted elsewhere because “we have shown that it works.”
“PRODUTECH R3 is more than just a project; it is an event. It has been particularly important in terms of cooperation between scientific and technological entities and companies in Portugal because we haven’t exactly had an exemplary track record in this respect,” he admitted.
Yet the project had succeeded in creating a “virtuous triangle” which combined technology development companies and manufacturing companies that will use these developments, and entities within the technology and scientific systems.
“This triangle will, if it is effectively marketed, boost production and bring added value that will be absolutely fantastic in bringing sustainable production,” he said, adding that it focused on know-how, efficient working methods, and equipment groupings to combine raw materials, energy and information into products with value added in an effective, efficient, sustainable, agile and flexible way.
America’s unjustified tariffs
Industry and Innovation in a Europe in Transformation was the theme chosen by Euro MP (Industry, Research and Energy), João Cotrim de Figueiredo, who also led Portugal’s Iniciativa Liberal party or IL which supports a free market economy and industrial development in line with Portugal’s competitive advantages – a skilled and multilingual workforce, strong technological infrastructures and competitive costs for quality products compared to other Western European countries.
Talking via video link from Brussels, the entrepreneur addressed the problem of unfair competition and the EU allowing manufactured equipment from non-EU countries (China and the US) being put on the market at more favourable rates than equivalent goods produced within the union.
The EU considers US tariffs on imports of steel and aluminium and derivative products unjustified and damaging, risking economic harm to both sides while the Commission has suspended all reciprocal measures until July 14
The politician admitted that “after a four-month suspension on US tariffs of 25% we are just a week away from the end of the 90-day suspension and we don’t know what will come out of it. This asymmetrical treatment between the export of raw materials and manufactured goods exists and is extremely damaging.”
Europe under pressure from China
The event’s keynote speaker, Maurizio Gattiglio, chair of the European Institute of Innovation and Technology’s (EIT) advisory board – EIT is a public-private partnership, co-funded by the European Union – said it was clear that research and innovation were the main drivers of productivity and people’s wellbeing, and that innovation would be critical for financing Europe’s welfare states.
In a nod to the Draghi report based on forecasts from the European Commission in 2004, he said the report was “not exactly correct” and that innovation has had a significant role in accelerating Europe’s industry in recent years. “However, today we cannot say that Europe is in a strong position compared to the US and China.
“The work that China has done over the past decade is really incredible in reducing its dependency on foreign technology and is leading in some areas,” such as AI, 5G and 6G infrastructure, blockchain, solar energy and electric vehicles, he said.
China was filing many more PCT patents than Europe which had taken a much too conservative approach to innovation.
It was clear that manufacturing was crucial for Europe’s prosperity because it represents 32 million jobs as the largest employer sector in Europe after consumer products.
Gattiglio warned that the contribution of European manufacturing to GDP has been in decline for many years. In the 1980s it represented 25% of GDP. – the same as China’s today – but was now down to 14%.
“We are clearly under pressure from China. By 2050 India will double its manufacturing share of GDP from 7-15% while Europe’s will decrease from 15% to 9% and this is clearly something serious that we must face,” he said.
US manufacturing is also in bad shape, falling from 25% of GDP in the 1950s to 10% today with a goal to increase it by at least 15%.
“In Europe we must have a strategic long-term vision and invest in human resources. There needs to be more collaboration between sectors and companies, and we must fix the disconnect between governments and industry” concluded Maurizio Gattiglio who after the conference noted that Portugal’s PRODUTECH R3 initiative was certainly a shining example of the way to proceed.
