ICPT: A tribute to industry’s captain

In Essential Business’s forthcoming Issue 20, which will be out from the beginning of April, we provide an extensive coverage to the outgoing President of the Portuguese Industrial Confederation (CIP), António Saraiva who has led that business organisation for 11 years.

António Saraiva, who we have interviewed in the past for the magazine, has devoted much of his professional life to the service, promotion, and wellbeing of Portugal’s industrial sector as a whole, and always been the voice of common sense when it comes to the difficult and often thorny question of industrial labour relations.

It is therefore why we are pleased to announce that this respected captain of industry, who has always navigated an often difficult path between the choppy waters of what is sustainable for Portuguese companies to pay their workforces, while encouraging Portugal’s companies to work together in clusters in order to compete in overseas markets, will be the honoured guest at a tribute dinner hosted by the International Club of Portugal (ICPT) on April 13 at the Sheraton Lisboa & Spa.

António Saraiva recognises that while Portuguese exports overseas are at an all-time high (+21%) on 2021, and this has been the fruit of many promotional campaigns at overseas trade fairs and trade & industry missions, the combined efforts of the many sectoral associations that come under the umbrella of the CIP, and the drive and dynamism of Portugal’s overseas export and investment promotion agency aicep Portugal Global, there is still more to do.

Portugal is a small country of just 10 million people. It never had a serious industrial revolution like its larger European counterparts, let alone an agrarian one. Over 80% of its companies are small and medium-size, and that leaves Portugal with two choices: organise into clusters to gain scale overseas; and focus on niche markets where this is not possible.

One thing is for sure, and António Saraiva has alluded to this several times — virtually all of the newcomers to the European Union which hailed from the former Warsaw Pact and Soviet Union countries have overtaken Portugal in terms of output and productivity; Romania looks like the next.

Of course, they have been receiving the lion’s share of EU development funding — something Portugal once received back in the 1990s. The question is how have they been using their funds; and how well spent were Portugal’s funds back in the day?

Did Portuguese companies work together to modernise their structures, make them more agile, and form cooperative clusters thirty years ago when it was necessary? Now they are, but so much time has been wasted and opportunities lost.

It is something that António Saraiva recognised all those years ago, and has worked tirelessly towards achieving. He didn’t need a crystal ball to see how things would pan out. And his predictions were largely right.

What was interesting, however, was the chat I had with a person who I shared a table with at this week’s ICPT luncheon whose guest speaker was the Mayor of Figueira da Foz, seasoned politician, and one-time Prime Minster of Portugal, Pedro Santana Lopes about whom we will hear more on Monday in Essential Business.

I don’t know who the gentleman was, I should have taken his card, but he pointed out something that is also a truth.

Portugal, as is known, produces quality work at very competitive prices, but it never really succeeded in creating its own brands. It seems to always provide great quality clothing, car parts, industrial parts and the like for larger, famous and established international brands overseas for which it takes little credit or recognition, and suffers the indignation of having to be dictated to by these larger industrial brands the price THEY are willing to pay under threat of these multinational companies taking their business elsewhere, usually Eastern Europe or the Far East.

Then there is another issue. We keep hearing about TAP, Efacec and any number of ‘scared cow’ companies that the Government (read tax payers) have had to support over the years with huge amounts of life support money. (That includes some banks as well)

And we also hear our taxes in Portugal are too high. There seemed no limit to how far successive governments were prepared to continue pouring tax money into these diseased companies and now, thank god, they are being sold.

But the question is why did these governments waste so much cash? Part of the answer, I fear (and I was enlightened to this by my table companion) is that perhaps the State is so awash with small company suppliers which never got their acts together all those years ago when EU funds were pouring in, to modernise, reform and learn to stand on their own two feet in a competitive world.

Instead, taking advantage of Portugal’s almost perverse political party affiliated ‘contracts for the boys’ system, which has never been based on merit, many of these smaller companies failed to reform and internationalise. In short, they rely on State handouts, contracts awarded through party affiliation, and senior management positions in companies they are not qualified, at times, to run.

Of course, there is always the excuse of capital. “Portugal does not have capital” I hear time and time again. And it’s true.

So let us hope, this time, that the former oil Tsar put in charge of the €16Bn package of EU funds distributes them on merit to companies that actually have a plan; and not to prop up companies that in any normal circumstances (in the US for example) would have gone to the wall long ago.