June 24, 2021

Brexit awakens the appetite of Spanish exporters for Portugal | Companies

Brexit awakens the appetite of Spanish exporters for Portugal | Companies

Since the British citizens bet on the yes in the Brexit referendum, held in June 2016, Portugal has picked up the UK witness to be the third largest trading partner in Spain worldwide, second only to Germany and France, which absorb 26% of total Spanish goods exports . The sorpasso to the United Kingdom was definitively consolidated in 2017 and the gap has been maintained in 2018.

Spanish exports to Portugal exceeded for the first time in history the 20,000 million euros in 2017 and they supposed 7.2% of total sales of goods to other countries. On the other hand, exports to the United Kingdom fell to 18,740 million, returning to 2015 levels, with a percentage of 6.7% of the total. Between January and September 2018, Portuguese and Spanish exports remained at similar percentages. Luis Moura, economic and commercial counselor of the Embassy of Portugal in Spain and general director of the Agency for Investment and Foreign Trade of Portugal (Aicep), stresses Five days the intensity of commercial exchanges. "In 2017, 16,000 Spanish companies exported goods and services to Portugal and 6,700 Portuguese companies exported to Spain. In the latter case they were 1,200 more than the previous year, which represents an increase of 20%. In fact, Spain sells more to Portugal than to Latin America as a whole, "he stresses.

Spain already sells more to Portugal than to all Latin American countries

The reason that justifies the exponential progress of Spanish sales to Portugal is the unstoppable growth of the two most important sectors for Spanish exports (capital goods and automotive), since between the two they add a third of sales of goods to others countries A report prepared by the Agency for Investment and Foreign Trade of Portugal (AICEP), the office in charge of promoting foreign investment and exports to Portugal, highlights the strong growth registered by both sectors in the neighboring country. Specifically highlights the positive outlook for the automotive sector, which will go from producing 175,000 to 350,000 units produced between 2017 to 2020, and the emerging moment of the components industry, which would have attracted many Spanish companies. "Leading companies in the automotive sector such as Mercedes-Benz, BMW, Volvo, Audi and Ferrari Portugal has chosen as the place of production of its automotive parts, "the report emphasizes, which highlights that there are more than 400 companies producing components in Portugal, including the Spanish companies Gestamp, Ficosa and Grupo Antolín.

The other major sector that supports the growing commercial relations between both countries is that of capital goods. In the case of Spain, it is the one that contributes most to exports (19.7% of the total) and to imports (20.6%). In this second section, Portugal plays a prominent role. "The Portuguese industry is the third producer in Europe of plastic injection molds ranks 3rd in Europe and 8th worldwide. Spain is the first customer and the pieces serve to supply the plastic, chemical, paper industry and especially the automotive industry. "The statistical information shows that the main industry served by the Portuguese molds is the automotive industry, which has gone from covering 14% of total production in the early 90s to 82% in 2016," says Moura.

The good tone of the commercial relations has also been transferred to the field of investment. At the end of 2017 there were 2,040 Spanish companies active in Portugal, according to the Hispanic-Portuguese Chamber of Commerce. A figure that will have gone up in 2018, as Moura points out, largely due to the appetite of companies to enter the Portuguese real estate market. In fact, the neighboring country is where the largest number of Spanish subsidiaries abroad is located, with 13% of the total.

A very significant part of this movement has occurred in the agri-food sector, with a strong presence of Spanish companies. The Aicep report highlights the strong presence of Spanish companies on Portuguese soil. Among them, the case of Campofrío, acquired in 2015 in its entirety by the Mexican group Sigma Alimentos, and which started its activity in 1999 with the purchase of Fricarnes and whose main acquisition was closed in 2009 with the purchase of Nobre, founded in 1918.

Other examples of companies that have opted for Portugal to produce are Europastry, which produces frozen masses; Ebro Foods that counts in Portugal with Arrozeiras Mundiarroz, or the Siro group that after the merger with Cerealto has production units in Portugal. Especially significant is Damm's investment in Portugal, since it supposed the first international incursion of the business giant. In 2009, it was awarded the assets of the plant that the lima Cintra brewery had in the town of Santarém, located 80 kilometers north of Lisbon, for 15.5 million euros. The acquisition of the asset served to consolidate the industrial project and the growth plans to produce white brands for supermarkets.

A renewables boom similar to that in Spain

Energy mix. The growth that renewable energies have experienced in Portugal has led him to be a net exporter of energy. The latest Eurostat data places it as the third European country that uses the most electricity generated from renewable sources. In 2017, the production of renewables over the total reached 42% and in March 2018 there was a historic milestone: for the first time in 40 years, Portugal produced more energy than it needed thanks to the pull of renewables.

Foreign investment. The growth expectations of renewables has aroused the appetite of foreign investors, especially in wind energy. The Danish Vestas created in Oporto an industrial design center or the German Enercón (the fifth largest provider of wind turbines in the world) has a production plant for wind generators, blades and towers in Viana do Castelo.

Spanish firms. The most relevant presence is Acciona, whose portfolio of assets in Portugal reaches 19 wind farms, which in turn account for 119.7 megawatts of power (MW). To these infrastructures it is necessary to join a photovoltaic plant of 45.8 MW. The last award corresponds to the supply contract to a glass container factory in Marinha Grande for 18 months.


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