Global Country Report

On

Portugal

Submitted By:

Manish Institute Of Management

Visnagar

PORTUGAL CHEMICAL INDUSTRY

INTRODUCTION

Portugal, with its long Atlantic coast, lies on the western side of the Iberian Peninsula. The River Tagus

divides the more mountainous north from the lower, undulating terrain to the south. In 1974, a bloodless

military coup overthrew a long-standing conservative dictatorship. A constituent assembly was elected in

1975 and the armed forces withdrew from politics thereafter. Portugal then began a substantial program

of economic modernization and accompanying social change. Membership of the EU has helped underpin

this process.

Official name: - republic of Portugal

Capital “- Lisbon

Population: - 10.1 million

Currency: - euro

Official language: - Portuguese

-Date of independence, or formation date: 1139

-Date when current borders were established: 1640

-National day: June 10

-Vehicle country identifying code: P

-Time zone (hours plus or minus from GMT): 0

-International telephone dialing code: +351

-Internet country identifying code: .pt

EXECUTIVE SUMMARY

The main content of the general information is the general information of country. It contains the details

of the country like Demographic, Geographic, Economy, Legal, Per Capita Income etc, of the Portugal or

where is it located. It also includes the information like the form of the Chemical Industry like where and

which basis it is running. Where is its factor affecting and various strategies etc. It also contains the

detailed information about industry chart, social responsibility and future plans are included in this

general information.

Study of the Chemical Industry in Portugal, its origin and history, also understanding the production

process of the different products, collection of raw material, management of the company and financial

highlight of the Industry. After completion of Industrial Study we gate lots of practical knowledge about

the Global Economic Condition.

This Chemical Industry deals with the people working in the Green Environment. In these point there are

many other various sub points like selection process, Environment protection policy, Society benefits and

services. Saving tree appraisal, incentive, Improve Country Green Environment, and development etc.

The purpose of business is to create customers. Marketing is the essence of all business creation of

customer’s needs and organization the business to meet their needs. The pricy policy is the marketing

department with defensive manner to save environment.

PEST ANALYSIS

Political – Legal Environment:-

Political-legal environment is an important factor particularly in a mixed economy like ours, and affects

the working of business organizations significantly. Political-legal environment of a country includes the

following elements:

• Political system such as political processes, political organizations-political parties and their

ideologies, political stability, and extent of bureaucratic delays and redtapism;

• Defense and foreign policies like defense expenditure, maintenance of external relationships with

other countries, defining most favored countries from business point of view, etc.; and

• Legal rules of the game of business-their formulation, implementation, efficiency, and

effectiveness.

• Political-legal environment of a country can be bifurcated into two parts depending on the nature

of their impact on business organizations:

a. Promoting environment and

b. Regulatory environment.

A. Promoting Environment Promoting environment of political-legal aspect of business includes the stimulation of business through

the provisions of’ various facilities and incentives, protecting home markets from the invasion of foreign

competitors, taking direct role of promoting business organizations, and purchasing from business

organizations. Government has provided all these in Portugal economic system. It has involved itself in

providing various facilities in the form of infrastructure - transport, electricity, banking and finance,

postal and telecommunication, etc. helping to promote,

• promotion of business organizations in public and joint sectors;

• provisions of concessions and benefits of various types for industries located in specified areas;

and so on.

Though many features of these have changed over the period of time, they have contributed a lot to the

development of industries in Portugal.

b. Regulatory Environment

Regulatory environment is just opposite to promoting environment; it puts certain restrictions on the

operations of business organizations. However, these restrictions are not of arbitrary nature but are based

on the nature of a social system. In a social system, there is no freedom without clearly defined area of

freedom. In fact, this is a very old story reaching down through the history of mankind: there is no

freedom without laws.

In Portugal context, regulatory environment consists of the factors related to the regulation of business

operations of organizations by prescribing their freedom to operate in certain areas of business and the

practices that they are required to follow in conducting their business. These have been prescribed by

legislative measures in the form of various laws and policy formulation from time to time.

Though many changes have taken place in India’s regulatory environment, major regulations in force are

as follows: -

1. Control through industrial policies and licensing,

2. Control of monopolies and restrictive trade practices,

3. Control through Foreign Exchange Management Act,

4. Control on import and export,

5. Control over foreign operations, collaboration, and joint ventures,

6. Control over distribution and pricing of certain -goods,

7. Control to protect consumer interest,

8. Control over environmental pollution, and

9. Control of procedural matters through the Companies Act.

All these controls are exercised within the framework of the Constitution of Portugal which has

provisions to put control over the arbitrary actions of the government. In analyzing political-legal

environment, an organization may put the following questions:

• How does the political system influence the business?

• What are the approaches of the government towards business? Are they restrictive or facilitating?

• What are facilities and incentives offered by the government?

• What are the legal restrictions in entering a particular industry segment either because of

licensing requirement or it being reserved to a specific sector such as public sector or small scale

sector?

• What are the restrictions in importing technology, capital goods, and raw materials?

• What are the restrictions in ,exporting products and services? What are the export obligations?

• What are the restrictions on pricing and distribution of goods?

• What are the procedural formalities required in setting a business?

2. Economic Environment

Economic environment is by far the most important environmental factor which the business

organizations take into account. In fact, a business organization is an economic unit of operation. Since

the measurement of organizational performance is mostly in the form of financial terms, often managers

concentrate more on economic factors. The economic environment is also important for non-business

organizations too because such organizations depend on the environment for their resource procurement

which is greatly determined by the economic factors. As such, the understanding of economic

environment is of crucial importance to strategic management. Economic environment covers those

factors, which give shape and form to the development of economic activities and may include factors

like nature of economic system, general economic

conditions, various economic policies, and various production factors. From analytical point of view,

various economic factors can be divided into two broad categories: general economic conditions and

factor market. The discussion of these factors will bring out the nature of total economic environment.

General Economic Conditions:-

General economic conditions of a country determine the extent to which various organizations find the

economic forces. favorable or unfavorable. Many forces such as economic system monetary policy fiscal

policy and industrial policy of the country shape general economic conditions. However, the general

economic conditions are also affected by the political and social factors too. These economic conditions

affect national income, distribution of income, level of employment, factor market and product market. In

turn, all these factors affect the business organizations. An analysis of these will give a picture of the

conditions in which the organizations have to operate.

(I) Economic System

The economic system of a country determines the extent to which the organizations have to face different

constraints and controls by the economic factors. An economic system puts certain restrictors over the

functioning of the organization. Second, it provides lot of protection to an organization depending on its

nature. For example, public sector organizations are protected from private organizations, local

organizations from foreign organizations, small organizations from large organizations, and so on.

(ii) National Income and its Distribution

National income is defined as the money value of economic activities of a country during a particular /

period, normally one year. National income determines the purchasing power of people and consequently

the demand for products. Distribution of national income determines the types of products that may be

demanded by the people.

(iii) Monetary Policy

Monetary policy regulates the economic growth through the expansion or contraction of money supply.

There are three basic objectives of PORTUGAL monetary policy:

a. To provide necessary finance to the industries, particularly in private sector,

b. To control the inflationary pressure in the economy and

c. To generate and maintain high employment.

(iv) Fiscal Policy

Fiscal policy deals with the tax structure and governmental expenditure. Generally the fiscal policy is

adopted for,

a. Mobilizing maximum possible resources

b. Optimal allocation of resources so as to attain rapid growth

c. Attainment of greater equality in the distribution of income; and

d. Maintenance of reasonably possible stability of prices.

There are two aspects of fiscal policy’ relevant to strategic management. First, how tax structure is

affecting the growth of individual organizations & the industry as a whole. Second, how ‘government’s

spending affects economic activities.

3. Socio Cultural Environment Social and cultural environment is quite comprehensive because it may include the total social factors

within which an organization operates. In fact, the political and legal environment is closely intertwined

with social and cultural environment because laws are passed as a result of social pressures and problems.

The socio-cultural environment of business can be defined as follows: Social and cultural environment

consists of attitudes, beliefs, desires, expectations; education and customs of the society at a given point

of time. Thus, social and cultural environment, in its broad sense, includes many - aspects of society and

its various -constituents.

From business organization’s point of view, it may include:(I) expectations of the society from the business;

(ii) attitudes of society towards business and its management;

(iii) views towards achievement of work;

(iv) views towards authority structure, responsibility and organizational positions;

(v) views towards customs, traditions, and conventions;

(vi) class structure and labor mobility; and

(vii) level of education.

The various elements of social and cultural environment affect the working of the organizations mainly in

three ways:

organizational objective setting,

organizational processes and

the products to be offered by the organization.

Through these, they affect the total functioning of the organization. The social and cultural factors affect

the basic objectives of the organization by prescribing the norms within which the organizational

objectives are formulated. For example, to what extent, social responsibility will be an organizational

objective is determined by the various social factors in which organization functions. Similarly

organizational processes are also designed keeping in view the various social and cultural factors

otherwise they will not work. For example, the various control and decision processes in our social

organizations are based on the basic values of joint family system and caste system. Similar is the case

with other organizational processes. Social and cultural factors also affect the goods and services that can

be offered by the organization. Since the organization works as mediator for converting inputs into

outputs, and these outputs are given to the society, it can produce only those things, which are accepted

by the society. Often the managers in formulating or implementing their strategies do not consider the

social and cultural factors adequately. The result is that their sound strategies in all other aspects may fail.

Many products, even by well-established manufacturers, have failed because these could not match the

social values. Similarly many products, which may not seem to be economically well may succeed

because of their social and cultural values. Further the organizations have to follow social expectations in

their objective setting and working. However, the social and cultural factors are also subject to change,

though the change is gradual and steady which can be forecast with comparative ease once the managers

get an insight of these factors.

In analyzing social and cultural factors, the organization can ask the following questions:

• What are approaches of the society towards business in general and in specific areas?

• How do social, cultural and religious factors affect acceptability or otherwise, of product?

• What is the life style of people and what products fit that life style?

• What is the level of acceptance of, or resistance to, change?

• What are .the values attached to a particular product? Do people: see possessive value or

functional value in the product?

• Do people buy specific products for specific occasions necessitated by social and religious

requirements?

• What is the propensity to consume and to save?

1. Technological Environment:-

Technological environment is important for business as it affects the type of conversion process that it

may adopt for its purpose. The technological environment refers to the sum total of knowledge providing

ways to do things. It may include inventions and techniques, which affect the ways of doing things, that is

designing, producing, and distributing products.

A given technology affects an organization in the way it is organized and faces competition. From

strategic management point of view, technology has following implications:

1. Technology is a major source of productivity increase. Though human beings are primarily

responsible for handling technology, their efficiency is determined by the type of technology being

used.

2. Various jobs in an organization being performed by individuals are determined by the technology

being used. If there is a change in technology, the jobs are changed because

technology determines the level of skills required.

3. Technology influences the social situation, that is, the size of groups, membership of group,

patterns of interpersonal interactions, opportunity to control activities are influenced

in a variety of ways by technology.

4. Organizations become more secured by developing efficiency through the adoption of efficient

technology. However, as ‘the technology becomes more complex, it becomes relatively more difficult

for new organizations to enter the field.

5. There is a time gap in employing new technologies both within an organization and among

organizations in a field.

Time gap within the organization means that adjustment to technological innovation will be spread

over a number of years and is not amenable to a direct, one-change solution with the industry, it

means that if a new technology is adopted by an organization, others in the same industry will follow

soon, however, because of time gap, the first organization will have some sort of monopolistic

advantages.

Petrov has analysed the strategic implication of technological environment as follows:

1. It can change relative competitive cost position within a business;

2. It can create new markets and new business segments; and

3. It can collapse or merge previously independent businesses by reducing or eliminating their

segment cost barriers.

The technological environment of the country is fast changing because of import of technology from

foreign countries or because of technology generated out of research and development within the

country. The Government is quite liberal in regard to the import of appropriate technology from

foreign. It is also encouraging the development of internal technology though various incentives to

the business organizations concerned as well as through other institutions and laboratories of Council

of Scientific and Industrial Research and other technical institutions. Thus, the managers have to

work in an environment where technological change - is the order of day. Its result is that they have to

be more conscious to take the advantages of such changes.

In analyzing technological environment, the organization may ask the following questions:

• What is the level of technological development in the country as a whole and specific business

sectors?

• What is the pace of technological changes and technological obsolescence?

• What are the sources from which technology can be acquired?

• What are the restrictions and facilities for technology transfer and time taken for absorption of

technology?

SWOT Analysis

The latest forecast from the European Commission was published November 29, 2010, after this report

was written. The most important change in the forecast is that there has been a small growth spurt in the

first half of 2010. This happened because of a strong increase of domestic demand, especially private and

public consumption, and external trade contributed as well (European Commission 2010, 128). A small

overview of the new forecast is given below.

Annual percentage changes Forecast

2010 2011 2012

GDP 1.3 - 1.0 0.8

Private consumption 1.6 - 2.8 - 0.7

Public consumption 3.0 - 6.8 - 1.3

Domestic demand 0.9 - 4.0 - 0.8

Exports 9.1 5.6 6.4

CHAMICAL INDUSTRY SWOT ANALYSIS

Chemical industry is a conglomerate, and is the largest private employer in Portugal. The company is

primarily engaged in the operation of retail stores through its subsidiary Modelo Continente.

Additionally, the company operates other businesses including real estate development, communication

and information technology services, tourism services and other related activities through its subsidiaries

Chemical industry Sierra, Chemical industrycom, and Chemical industry Distribuição. Chemical industry

operates primarily in Europe. It is headquartered in Maia and employs about 39,000 people. Chemical

industry SGPS, the holding company, is listed on the Euronext Lisbon stock exchange. The president and

main shareholder is Belmiro de Azevedo, one of the most influent Portuguese businessmen and a Forbes

fortunes figure. Chemical industry was originally an acronym standing for Sociedade Nacional de

Estratificados (roughly, National Company of Engineered wood). Engineered wood were the company's

original line of business which is now fully integrated into the totally autonomous spin-off Chemical

industry Industrial. It was the only Portuguese company to be included in the list of the 110 World's Most

Ethical Companies (Ethisphere prizes), in 2011.WMI’s Chemical industry Industrial, SGPS, S.A. contains

a company overview, key facts, locations and subsidiaries, news and events as well as a SWOT analysis

of the company.

Scope- Examines and identifies key information and issues about (Chemical industry Industria, SGPS, S.A.) for

business intelligence requirements

- Studies and presents Chemical industry Industria, SGPS, S.A.’s strengths, weaknesses, opportunities

(growth potential) and threats (competition). Strategic and operational business information is objectively

reported.

- The profile contains business operations, the company history, major products and services, prospects,

key competitors, structure and key employees, locations and subsidiaries.

Reasons to Buy

- Quickly enhance your understanding of the company.

- Obtain details and analysis of the market and competitors as well as internal and external factors which

could impact the industry.

- Increase business/sales activities by understanding your competitors’ businesses better.

- Recognize potential partnerships and suppliers.

- Obtain yearly profitability figures

Key Highlights

Chemical industry Industria, SGPS, S.A. (Chemical industry) is a Portugal based company engaged in the

manufacturing and distribution of Chemical products. It also provides components and solutions for

buildings, furniture, decoration and DIY (Do It Yourself) industries. In addition, it is a manufacturer of

decorative laminates and chemical products. The company markets its products under the brand names of

Laminite, Poliface and Lamipan. The company has 29 production sites in 8 countries.

ICD Research's ‘Chemical industry Capital, SGPS, S.A. - Company Capsule’ contains a company

overview, key facts, key competitors, locations and subsidiaries as well as financial ratios.

KEY INDICATORS

Portugal’s Geography:

Area:

92,391 sq. km.; includes continental Portugal, the Azores (2,333 sq. km.) and Madeira Islands (828 sq.

km.); slightly smaller than the State of Indiana; located in Europe's southwest corner bordered by Spain

(North and East, 1,214 km.) and the Atlantic Ocean (West and South, 1,793 km.).

No. Of Population

Nationality:

Population (2011 est.): 10.6 million.

Ages 0 to 14 years--1.6 million (male 830,611; female 789,194).

Ages 15 to 24 years--1.2 million (male 609,177; female 585,072).

Ages 25 to 64 years--5.9 million (male 2,917,633; female 3,013,120).

Ages 65 years and over--1.9 million (male 787,967; female 1,099,715).

Population density:

114 per sq. km. (44 per sq. mi.). Annual population growth rate (2008 est.): 0.8%. Ethnic groups:

Homogeneous Mediterranean stock with small minority groups from Africa (Angola, Cape Verde,

Mozambique), South America (Brazil), and Eastern Europe (Ukraine, Romania). Religion: Roman

Catholic 92%, Protestant 4%, atheists 3%, others 1%. Language: Portuguese. Education: Years

compulsory--12. Literacy (2004)--93.3%. Health (2009 est.): Birth rate--9.4/1,000 (1.07 male/female).

Death rate--9.8/1,000. Infant mortality rate--3.25/1,000. Life expectancy--78.70 years. Work force (2010

est.): 5.57 million. Government and services (59.8%); industry and manufacturing (28.5%); agriculture

and fishing (11.7%).

Government

Type: Republic. Constitution: Effective April 25, 1976; revised 1982, 1989, 1992, 1997, 2001,

2004, and 2005. Branches: Executive--president (head of state), Council of State (presidential advisory

body), prime minister (head of government), Council of Ministers. Legislative--unicameral Assembly of

the Republic (230 deputies):

PS=97, PSD=81, PCP=13, CDS/PP=21, BE=16, PEV=2. Judicial--Supreme Court, District Courts,

Appeals Courts, Constitutional Tribunal. Major political parties: Socialist Party (PS); Social Democratic

Party (PSD); Portuguese Communist Party (PCP); Popular Party (CDS/PP); Left Bloc (BE); Green Party

(PEV). Administrative subdivisions: 18 districts (Lisbon, Leiria, Santarem, Setubal, Beja, Faro, Evora,

Portalegre, Castelo Branco, Guarda, Coimbra, Aveiro, Viseu, Braganca, Vila Real, Porto, Braga, Viana

do Castelo); 2 autonomous island regions (the Azores and Madeira).

Economy

The Economy of Portugal is a high income mixed economy. The Global Competitiveness Report 2008-

2009 edition placed Portugal in the 43rd position out of 134 countries and territories. Most imports come

from the European Union countries of Spain, Germany, France, Italy, and the United Kingdom. Most

exports also go to other European Union member states. The Portuguese currency is the euro (€) and the

country's economy is in the Eurozone since its starting. Portugal's central bank is the Banco de Portugal,

which is part of the European System of Central Banks. The major stock exchange is the Euronext Lisbon

which is part of the NYSE Euronext, the first global stock exchange.

Relation Between U.S And Portuguese:-

Bilateral ties date from the earliest years of the United States. Following the Revolutionary War, Portugal

was among the first countries to recognize the United States. On February 21, 1791, President George

Washington opened formal diplomatic relations, naming Col. David Humphreys as U.S. minister. The

oldest continuously-operating U.S. Consulate in the world, since 1795, is in Ponta Delgada on the island

of Sao Miguel in the Azores.

Education

Literacy rate: 93%, Numbers in tertiary education: 387,703 students.

Health

Doctors: 1 per 321 people, Major causes of death: Cancers, cerebrovascular, respiratory, and heart

diseases. Of total government expenditure nearly 10% is spent on health.

Media

No political censorship exists in national media, Daily newspaper circulation 73 per 1000 people.

CONCLUSION

Agricultural residues are a promising alternative to virgin wood fiber as an industrial feedstock.

Residues are abundant, cheap, and their use will yield economic as well as environmental

dividends. To utilize this resource fully, however, we must answer some pressing questions and

take direct steps towards promoting agricultural wastes as a viable fiber source.

One of the big gaps in the data is how much straw is available each year in the United States.

Related to this issue are the following questions: where is the straw grown? What is the right

amount to leave on fields? Does this number change according to the region? Without answers to

these questions, the demand reduction community is left with little information about how large

or small a role agricultural residues can play as a substitute for virgin wood fibers. Once these

data are collected we will be able to make reasonable, verifiable predictions about agricultural

residues' efficacy as alternative fiber.

Information about individual types of fibers is also critical. There are differences between all of

the types of agricultural residues discussed in this paper. Some of these differences will become

apparent in the strength of the products for which they are used as feedstocks. More data about

strength and other properties of different fibers will help producers make decisions about which

is most appropriately used for their product. Other remaining questions include how to reduce

the cost and energy use of transportation of agricultural residues and how to cost-effectively

bring together urban recycled fibers with rural agricultural residues.

To find solutions to these problems, farmers, producers, entrepreneurs and environmentalists will

require funding for research and marketing. Most of the projects currently testing or actively

using agricultural residues are local in scope. Private, state and federal funding is needed for

projects that will make information about these projects available on the national level. This type

of information dissemination will save time, money and resources and will allow local groups to

avoid duplication of effort. In addition, producers of paper and construction materials who use

agricultural residues will need funds for product development, testing and marketing. Finally,

grassroots and national environmental, consumer, and rural development advocates will need to

launch campaigns to alert the public to the many benefits of using agricultural residues as an

industrial feedstock and an alternative to virgin wood fiber.

RECOMMENDATION

1. Trade provisions in international environmental agreements should be given sufficient status to

prevent them from being undermined by international trade agreements such as GATT and by

regulations such as those of the WTO.

o The WTO regulations should be reviewed and, where necessary, reformed to protect

trade provisions in environmental agreements.

o WTO regulations should be reformed to allow for trade restrictions in case of illegal-

trade practices.

2. An interagency task force should be established to review existing environmental and trade

instruments with provisions applying to the trade in forest products to determine their potential to

eliminate illegal practices and the constraints on their effective implementation.

NGOs with suitable expertise should be allowed to participate on the task force to help prevent

the review from being paralyzed by political sensitivities. This task force should be given access

to all relevant sources of information so it can make a global assessment of the extent of the

illegal international trade in forest products, and then it should present concrete recommendations

for improving these instruments.

Among the mechanisms that should be reinforced or added to these existing instruments are the

following:

o Internationally recognized forest-product chain-of-custody tracking systems;

o Reciprocal import bans (by importing countries) to support the export bans of individual

exporting countries;

o Prohibition of the import or export of forest products harvested or shipped in violation of

the laws of the product’s country of origin or in violation of the recognized customary

property rights of indigenous and other forest-dependent communities;

o A mechanism establishing international legal liability of private companies involved in

violations; and

o Incentives for the active involvement of local communities in monitoring and curtailing

illegal trade.

3. The status of the ILO Indigenous and Tribal Peoples Convention should be raised, and more

countries should be persuaded to become signatories.

The recommendations made to the ITTO in the 1992 TRAFFIC international document on illegal

logging in the Asia–Pacific region (Callister 1992) are supported. ITTO should

o Compile and distribute information on tropical timber import and export restrictions;

o Adopt critical review procedures of statistical data already provided by member states to

the ITTO Secretariat, to identify possible illegal trade;

o Assess its policy and project decisions for their implications for illegal trade and timber

extraction — avoid encouraging these illegal practices and instead promote an end to

them; and

o Seek a waiver from WTO regulations that ban trade restrictions, using the exemptions

allowed if they meet the objectives of intergovernmental commodity agreements.

ON TRADE REGULATION

4. A process of radical reform in the terms of international trade should be initiated that gives

precedence to the environment over freedom of trade. This process must be gradual, but made

credible with the implementation of targets and timetables.

Reforms in international terms of trade should include mechanisms to compensate developing

countries that adopt sustainable models of development but have to compete with countries that

follow unsustainable models.

The continuing expansion and concentration of power in the hands of transnational corporations

(also evident in the chemical and timber-trade sector) calls for an international system of

restrictions, controls, and legal accountability for their operations.

The question of whether policy reforms restrict the freedom of trade in forest products should be

subordinate to the question of whether these reforms contribute to SFM. This could mean that the

environmental costs of unsustainable forest exploitation are incorporated into the market prices

for timber and other wood products. This calls for a drastic review of some of the forest

principles adopted at the 1992 Earth Summit (Principle 13a, “trade in forest products should be

ruled by nondiscriminatory rules,” and Principle 14, “no unilateral restrictions or bans on

international trade in forest products”) and of certain elements in Agenda 21 (3rd Programme

Area, opposing “unilateral restrictions or bans contrary to GATT and other trade agreements” and

“calling for the application of market mechanisms to address global environmental concerns”).

5. Market access of certified products should be facilitated by specific policy, legislative, and tax

incentives, without unnecessary delay. Compliance with national forest-related laws and

international treaties to which a country is a signatory should be one of the criteria for

certification. This recommendation can be seen as a means of internalizing external

environmental and social costs and should not be misunderstood as defending country

certification (see conclusion 7 for further explanation).

6. Timber-trade organizations should not allow individuals or companies convicted of illegal-trade

activities to become or remain members.

Timber-trade organizations should develop a code of ethics that includes an imperative to desist

from all illegal and fraudulent activities in the chemical sector. Membership should only be open

to companies and individuals abiding by this code (based on Callister 1992).

These recommendations aim to use the potential for good companies to put pressure on bad ones.

The reasons for applying such pressure are that destructive and illegal practices tarnish the

reputation of the entire industry; create unfair competitive advantages; and undermine the

resource base for the entire industry

PORTER'S DIAMOND MODEL

Porter's diamond model suggests that there are inherent reasons why some nations, and industries within

nations, are more competitive than others on a global scale. The argument is that the national home base

of an organization provides organizations with specific factors, which will potentially create competitive

advantages on a global scale.

Porter's model includes 4 determinants of national advantage, which are shortly described

below:

Factor Conditions Factor conditions include those factors that can be exploited by companies in a given nation. Factor

conditions can be seen as advantageous factors found within a country that are subsequently build upon

by companies to more advanced factors of competition. Factors not normally seen as advantageous, such

as workforce shortage, can also be seen as a factor potentially strengthening competitiveness, because this

factor may heighten companies' focus on automation and zero defects.

Some examples of factor conditions:

• Highly Unskilled workforce

• Linguistic abilities of workforce

• Rich amount of Chemical Growth

• Workforce shortage

Demand conditions If the local market for a product is larger and more demanding at home than in foreign markets, local

firms potentially put more emphasis on improvements than foreign companies. This will potentially

increase the global competitiveness of local exporting companies. A more demanding home market can

thus be seen as a driver of growth, innovation and quality improvements. For instance, Japanese

consumers have historically been more demanding of electrical and electronic equipment than western

consumers. This has partly founded the success of Japanese manufacturers within this sector.

Related and Supporting Industries When local supporting industries and suppliers are competitive, home country companies will potentially

get more cost efficient and receive more innovative parts and products. This will potentially lead to

greater competitiveness for national firms. For instance, the Italian shoe industry benefits from a highly

competent pool of related businesses and industries, which has strengthened the competitiveness of the

Italian shoe industry world-wide.

Firm Strategy, Structure, and Rivalry The structure and management systems of firms in different countries can potentially affect

competitiveness. German firms are oftentimes very hierarchical, which has resulted in advantages within

industries such as engineering. In comparison, Danish firms are oftentimes more flat and organic, which

leads to advantages within industries such as biochemistry and design.

Likewise, if rivalry in the domestic market is very fierce, companies may build up capabilities that can act

as competitive advantages on a global scale. Home markets with less rivalry may therefore be

counterproductive, and act as a barrier in the generating of global competitive advantages such as

innovation and development.

By using Porter's diamond, business leaders may analyze which competitive factors may reside in their

company's home country, and which of these factors may be exploited to gain global competitive

advantages. Business leaders can also use the Porter's diamond model during a phase of

internationalization, in which leaders may use the model to analyze whether or not the home market

factors support the process of internationalization, and whether or not the conditions found in the home

country are able to create competitive advantages on a global scale.

Finally, business leaders may use this model to asses in which counties to invest and to assess which

countries are most likely to be able to sustain growth and development.

PHARMACEUTICAL INDUSTRY IN PORTUGAL

EXECUTIVE SUMMARY

Pharmaceutical industry of Portugal having list of 16 companies in Portugal. Baldacci, Basi,

Bial,Bluepharma, Edol, GrupoAzevedos, Grupotecnimede, Iberfar, JabaRecordati, Korangi,

Labesfal,Lusomedicamenta, Medinfar, Medirex, Tecnifar, Vida.

Portugal a country with a rich history of seafaring and discovery looks out from the Iberian

Peninsula into the Atlantic Ocean. When it handed over its last overseas territory Macau to

Chinese administration in 1999 it brought to an end a long and sometimes turbulent era as a

colonial power. Portugal’s history has had a lasting impact on the culture of the country with

Moorish and Oriental influences in architecture and the arts. Traditional folk dance and music

particularly the melancholy fado remain vibrant.

This project report contains six different Parts. It begins with the introduction to demographic,

Economy, government, legal, technology, ecology and socio culture of portugal. The second Part

is all about factors affecting to the selection of the country includes PESTEL analysis, SWOT

analysis, Porters five force model, strategic group mapping and information about country.

The third Part describes overview about PHARMACEUTICAL INDUSTRY in PORTUGAL

its structure, function and comparative position of dairy industry. The fourth part comprehensive

covering export import strategies in Portugal.

The fifth part deals with Benefits to parent country, host country and society. The Sixth part

includes Key indicators of country & conclusion part which is very much important after

analysis is made. In each of the six parts as described above, every part has been scheduled in a

manner so as to enable the reader to appreciate the contents easily. The project is supported by

figures and data wherever necessary with a view to assist the reader in developing a clear cut

understanding of the topic.

PEST ANALYSIS OF PORTUGAL

This report analyzes the political, economic, social, technological, legal and environmental

(PESTLE) structure of Portugal. An insightful research of Portugal is carried out by exploring

each of PESTLE factors on four parameters: current strengths, current challenges, future

prospects and future risks. The PESTLE segments are supplemented with relevant quantitative

data to infer trends that support informed business decisions. Further, a large number of 5-year

forecasts are included to provide a well rounded understanding of future trends backed by

quantitative data. The report provides a comprehensive view of Portugal from historical, current

and future perspective.

Political factors

Factors are how and to what degree a government intervenes in the economy. Specifically,

political factors include areas such as tax policy, labor law, environmental law, trade restrictions,

tariffs, and political stability. Political factors may also include goods and services which the

government wants to provide or be provided (merit goods) and those that the government does

not want to be provided (demerit goods or merit bads). Furthermore, governments have great

influence on the health, education, and infrastructure of a nation.

Political factor include political stability, foreign relation, political risk, empoyment law and

environmental law

Political section provides understanding about the

political system and key policies relevant to business in Portugal along with governance

indicators.

Tax policy:

Portugal’s neoliberal policies have constrained the effective participation of civil society.

Neoliberal reform and the policy of economic opening that accompanied it produced several

negative social and distributive outcomes, including increased under-employment and informal-

sector employment, poverty, and inequality. An acute crisis in agriculture, largely a result of the

neoliberal program, made poverty in rural areas, where armed violence is largely concentrated,

particularly pronounced specially in dairy industry.

Economic factors:

Factors include economic growth, interest rates, exchange rates and the inflation rate. These

factors have major impacts on how businesses operate and make decisions. For example, interest

rates affect a firm's cost of capital and therefore to what extent a business grows and expands.

Exchange rates affect the costs of exporting goods and the supply and price of imported goods in

an economy .

Economic section deals with the evolution of Portugal’s economy along with an in-depth

analysis of significant macro-economic issues.

Social factors:

Factors include the cultural aspects and include health consciousness, population growth rate,

age distribution, career attitudes and emphasis on safety. Trends in social factors affect the

demand for a company's products and how that company operates. For example, an aging

population may imply a smaller and less-willing workforce (thus increasing the cost of labor).

Furthermore, companies may change various management strategies to adapt to these social

trends (such as recruiting older workers).

Social section offers information and analysis of customer demographics through income

distribution, rural-urban segmentation and centers of affluence; it also deals with healthcare and

educational scenario in Portugal.

Technological factors:

Technological section provides information on state of technological and telecom development,

technological policies and outcomes, gaps in policies, patents and opportunity sectors in

Portugal.

Legal factors:

Factors include discrimination law, consumer law, antitrust law, employment law, and health and

safety law. These factors can affect how a company operates, its costs, and the demand for its

products.

Legal section provides information about the legal structure, corporate laws, regulations to start a

new business and the tax regime.

Environmental factors:

Environmental section provides information on the policies and laws and Portugal’s performance

on environmental indicators.

– Gain understanding of factors affecting business opportunities and investment climate in

Portugal.

– Qualitative and quantitative benchmarking of Portugal across PESTLE segments.

– Gain understanding of the political environment in Portugal.

– Identify opportunities in Portugal by evaluating current and future economic performance.

– Understand the social and technological trends impacting Portugal.

– Understand the legal structure, especially to start and conduct business in Portugal.

– Know the environmental scenario in Portugal.

– PESTLE insights map competing countries’ strengths and weaknesses that help in taking

informed business decisions.

SWOT ANALYSIS

Strengths

• Very attractive tax conditions for business angels and VC/PE funds

• Close links with high-growth countries such as Brazil and Angola

• Portuguese language – key strategic asset

Weaknesses

• Negative impact of austerity measures for fiscal consolidation

• Lack of rollout capital to fund innovation in biotech and environment

• Absence of Portuguese companies on the NYSE Alternext stock exchange

Opportunities

• Increase in R&D spending will boost innovation in a few years

• Niche segments in industry related to medical devices and renewable energy and

environment

• Corporate turnaround funds

• Need for consolidation in traditional industries with room for build-up acquisitions

• Room for specialized funds

• Clusters with good potential: energy, life sciences and leisure

Threats

• Small size of domestic market

• Low growth of Portuguese economy

Outlook

• Increase of distressed asset deals

• Modest levels of fund-raising and investment

• Buyouts penalized by difficult credit environment

Table 2.1

PORTER’S DIAMOND MODEL

Graph.2.1

The diamond model is an economical model developed by Michael Porter in his book The

Competitive Advantage of Nations, where he published his theory of why particular industries

become competitive in particular locations. Afterwards, this model has been expanded by other

scholars.

Competitive pressure associated with the threat of new entrants:-

While it is relatively simple to get into livestock production, the entry barriers to produce a

meaningful supply can be significant in part because production infrastructure is costly to build

or buy. Yet, new entrants may be better financed, organized differently such as being vertically

integrated, or have new markets related to foreign ownership or becoming a full line supplier—

providing them with a competitive edge over existing competition.

Government creates barriers: The portugal government preserves competition market

through anti-trust actions; government also restricts competition through the granting of

monopolies and through regulation. Compulsory Quality Assurance Certificate model

ISO 9002 is required to commence pharmaceutical business in Portugal which is granted

by the Portugal Technical Standard Institute.

Economies of Scale. The most cost efficient level of production is termed Minimum

Efficient Scale (MES). This is the point at which unit costs for production are at

minimum - i.e., the most cost efficient level of production. The existence of such an

economy of scale creates a barrier to entry. Special care should be taken to the production

structure of dairy products (qualitative manner) as it is directly related to the society.

Competitive pressure associated with the Rivalry among Existing Competitors:-

Rivalry plays an important role in every industry but in Portugal pharma industry there are

around 16 companies actively competing with each other for local and international customer.

Here rivalry among firms in an industry is low, the industry is considered to be disciplined. This

discipline may result from the industry's history of competition, the role of a leading firm, or

informal compliance with a generally understood code of conduct.

Economies of scale and scope in R&D, combined with excess capacity, have largely

driven the consolidation. Inter-firm rivalry has, presently, not been a significant driver of

change in the R&D sector and that’s expected to continue to be the case in the future

Inter-firm rivalry is one of Porter’s key factors; it is not the primary force impacting

profitability in Pharma production sectors.

Phama firms, however, are more likely to view each other as rivals in the future as they

strive to be low-cost producers, fulfill a growing number of market niches often defined

by dairy products, and increase market share.

Competition for improved technology providing advantages in cost of production and the ability

to better meet customer needs is expected to be an industry driver in the future.

Competitive pressure associated with the Power of Buyers and Sellers

The increase in efficiency that arises from operating plants near their optimum capacity, and the

greater risk associated with operating larger plants, encouraged wide-spread use of longer-term

supply agreements with livestock producers. At the same time, some larger livestock operations

were interested in marketing agreements with processors that reduced risk by ensuring they had a

market outlet for their production. The change in marketing and procurement practices has

altered the bargaining power landscape as both buyers and sellers increasingly find longer-term

contractual arrangements effective at managing risk.

o Power of Sellers

Supplier bargaining power is relatively high.

Technology changes meant that not only was firms larger, but plant sizes also became

much larger.

Rivalry may exist among firms for key inputs, but sellers seldom have sufficient leverage

to shape the industry.

o Power of Buyer

The power of buyers is the impact that customers have on a producing industry. In general, when

buyer power is strong, the relationship to the producing industry is near to what an economist

terms a monopoly - a market in which there are many suppliers and one buyer.

Competitive pressure associated with the Substitute Products

There is not a direct substitute for pharmaceutical products, a variety of products in various

medicine are may be considered as a substitutes by consumers for their health purpose.

THE PHARMACEUTICAL MARKET: PORTUGAL – REVIEW

The macro environment remains tough for the Portuguese pharmaceutical market. Politically,

the Prime Minister aims to create a more efficient state and comply with the bail-out

commitments signed by the previous socialist government. The austerity program is expected to

remain high on his agenda. Economically, the Economist Intelligence Unit (EIU) believes that

economic and fiscal policy will be shaped by the bail-out agreement signed with the EU and the

IMF. There are signs that public hospitals will be affected as part of the country’s effort to

reduce its budget deficit. Legally, IPR regulations are harmonized with EU procedures.

Demographically, Portugal has one of the smallest populations in Western Europe, but the EIU

projects that the number of people aged 65 years and over will increase to represent nearly a fifth

of the total population in 2016.

Pharmaceutical sales growth will be negligible in the forecast period. In US dollar terms,

pharmaceutical sales in Portugal are expected to rise in 2011, due to a weaker exchange of the

US dollar against the euro, and to fall between 2012 and 2016, affected by a stronger projected

exchange rate. In euro terms, pharmaceutical sales are projected to increase modestly in the

forecast period, due to the government’s cost-containment measures, particularly price cuts. In

2016, the Portuguese pharmaceutical market will rank 12th in Western Europe. In per capita

terms, Portugal will have the lowest pharmaceutical expenditure. The Minister of Health is very

keen to encourage further generic consumption in the forecast period.

Improved regulation has encouraged generic sales in Portugal, but prices have been slashed in

recent years. Contrary to what happens in other markets, generic sales in Portugal have a higher

market share in value than in volume. The generic market is very fragmented, with many

companies that have a low market share. Leading national generic producers include Farmoz

(part of Tecnimede), Generis (part of Farma-APS), Medinfar, Hovione, Bluepharma and ToLife.

Foreign generic producers include Mylan, ratiopharm (now part of Teva), Alter, Fresenius Kabi

(via Labesfal), Stada, Actavis and Winthrop.

HEALTH CARE STATISTICS

A comprehensive tabula review, comprising demographics, epidemiology, health expenditure,

hospital and primary care infrastructure & services and healthcare personnel, is additionally

included.

Top 20 Global Pharmaceutical Companies (2010)

• 2010 Ranking Corporations Sales, *In US$ Mn• 1 PFIZER 55,602• 2 NOVARTIS 46,806• 3 MERCK & CO 38,46• 4 SANOFI-AVENTIS 35,875• 5 ASTRAZENECA 35,535• 6 GLAXOSMITHKLINE 33,664• 7 ROCHE 32,693• 8 JOHNSON & JOHNSON 26,773• 9 ABBOTT 23,833• 10 LILLY 22,113• 11 TEVA 21,064• 12 BAYER 15,656• 13 AMGEN 15,531• 14 BRISTOL-MYERS SQB. 14,977• 15 BOEHRINGER INGEL 14,591• 16 TAKEDA 12,983• 17 DAIICHI SANKYO 9,797• 18 NOVO NORDISK 9,719• 19 EISAI 8,757• 20 OTSUKA 8,732• Total 791,449

Source: IMS Health Midas, December 2010

PESTLE Analysis for the Pharmaceutical Industry

It never ceases to amaze me why so many businesses fail to take the time to look at the macro

and the micro environments when completing their business plans and strategies. These external

forces will play a big part in shaping the final outcome of the ultimate corporate achievement.

Yet, most managers focus only on internal factors and it is fair to say that sales growth and

profits remain high on their agenda.

The macro environment tends to have a long term impact and requires extensive research.

Couple this with the fact that many managers are over worked and under resourced and we begin

to see why the process is often not completed. There is no published evidence to confirm this

hypothesis, just anecdotal hearsay.

The remainder of this article will illustrate an example of a Macro or PESTLE analysis for the

pharmaceutical industry. It is set at a very general level but it can be used as a template or

adapted to be more specific if required:

Political

There is now growing political focus and pressure on healthcare authorities across the world.

This means that governments will be looking for savings across the board. Some of the questions

the industry should ask are:

• What pressures will be put on pricing?

• What services will be cut?

• Will the same selection of drugs be available to everyone?

In addition to this, could there be more harmonization of healthcare systems across Europe or the

USA? What impact will reforms have on insurance models?

Economic

The global economic crisis still exists yet government reports still show that the spend on

healthcare per capital continues to grow. Will the current healthcare models exist tomorrow? The

growth in homecare (as seen in the Nutrition sector) demonstrates how nursing services have

moved to the private sector and have become a key business offering.

The reduction in consumer disposable income will have an impact on those countries using

health insurance models particularly where part payment is required.

These economic pressures are seeing an increased growth in strategic buying groups who are

forcing down prices.

Increased pressure from shareholders has caused a consolidation of the industry: more mergers

and acquisitions will take place over the coming years.

Social / Culture

The increasing aging population offers a range of opportunities and threats to the pharmaceutical

industry. The trick will be to capitalise on the opportunities.

There is also the problem of the increasing obesity amongst the population and its associated

health risks.

Patients and home carers are becoming more informed. Their expectations have changed and

they have become more demanding. Public activism has also increased through the harnessing of

new social networking technologies. How can pharmaceutical companies get closer to consumers

without over stepping the regulatory boundaries?

Technological

Technological advancements will create new business prospects both in terms of new therapy

systems and service provisions. The online opportunities will see the growth in:

• New info and Communications technologies.

• Social Media for Healthcare.

• Customized Treatments.

• Direct to Patient Advertising.

• Direct to patient communications.

Legislation

The pharmaceutical industry has many regulatory and legislative restrictions. There is also a

growing culture of litigation in many countries. The evolution of the internet is also stretching

the legislative boundaries with patient’s demanding more rights in their healthcare programmes.

Environmental

There is a growing environmental agenda and the key stake holders are now becoming more

aware of the need for businesses to be more proactive in this field. Pharma companies need to

see how their business and marketing plans link in with the environmental issues. There is also

an opportunity to incorporate it within their Corporate Social Responsibility programmes.

Marketing and new product development should identify eco opportunities to promote as well.

SWOT ANALYSIS

It is often said that the pharma sector has no cyclical factor attached to it. Irrespective of whether

the economy is in a downturn or in an upturn, the general belief is that demand for drugs is likely

to grow steadily over the long-term. True in some sense. But are there risks? This article gives a

perspective of the Portugaln pharma industry by carrying out a SWOT analysis (Strength,

Weakness, Opportunity, Threat).

Before we start the analysis lets look a little back in the industry's last six years performance. The

Industry is a largely fragmented and highly competitive with a large number of players having

interest in it. The following chart shows the breakup of the growth (YoY) of Portugal

pharmaceutical industry in last six years.

*Volume growth of existing products

The SWOT analysis of the industry reveals the position of the Portugaln pharma industry in respect to its

internal and external environment.

STRENGTHS

1. Portugaln with a population of over a billion is a largely untapped market. In fact the

penetration of modern medicine is less than 30% in Portugal. To put things in

perspective, per capita expenditure on health care in Portugal is US$ 93 while the same

for countries like Brazil is US$ 453 and Malaysia US$189.

2. The growth of middle class in the country has resulted in fast changing lifestyles in urban

and to some extent rural centers. This opens a huge market for lifestyle drugs, which has

a very low contribution in the Portugaln markets.

3. Portugaln manufacturers are one of the lowest cost producers of drugs in the world. With

a scalable labor force, Portugaln manufactures can produce drugs at 40% to 50% of the

cost to the rest of the world. In some cases, this cost is as low as 90%.

4. Portugaln pharmaceutical industry posses excellent chemistry and process reengineering

skills. This adds to the competitive advantage of the Portugaln companies. The strength

in chemistry skill help Portugaln companies to develop processes, which are cost

effective.

WEAKNESS

1. The Portugal pharma companies are marred by the price regulation. Over a period of

time, this regulation has reduced the pricing ability of companies. The NPPA (National

Pharma Pricing Authority), which is the authority to decide the various pricing

parameters, sets prices of different drugs, which leads to lower profitability for the

companies. The companies, which are lowest cost producers, are at advantage while

those who cannot produce have either to stop production or bear losses.

2. Portugal pharma sector has been marred by lack of product patent, which prevents global

pharma companies to introduce new drugs in the country and discourages innovation and

drug discovery. But this has provided an upper hand to the Portugal pharma companies.

3. Portugal pharma market is one of the least penetrated in the world. However, growth has

been slow to come by. As a result, Portugal majors are relying on exports for growth. To

put things in to perspective, Portugal accounts for almost 16% of the world population

while the total size of industry is just 1% of the global pharma industry.

4. Due to very low barriers to entry, Portugal pharma industry is highly fragmented with

about 300 large manufacturing units and about 18,000 small units spread across the

country. This makes Portugal pharma market increasingly competitive. The industry

witnesses price competition, which reduces the growth of the industry in value term. To

put things in perspective, in the year 2003, the industry actually grew by 10.4% but due

to price competition, the growth in value terms was 8.2% (prices actually declined by

2.2%)

OPPORTUNITIES

1. The migration into a product patent based regime is likely to transform industry fortunes

in the long term. The new patent product regime will bring with it new innovative drugs.

This will increase the profitability of MNC pharma companies and will force domestic

pharma companies to focus more on R&D. This migration could result in consolidation

as well. Very small players may not be able to cope up with the challenging environment

and may succumb to giants.

2. Large number of drugs going off-patent in Europe and in the US between 2005 to 2009

offers a big opportunity for the Portugal companies to capture this market. Since generic

drugs are commodities by nature, Portugal producers have the competitive advantage, as

they are the lowest cost producers of drugs in the world.

3. Opening up of health insurance sector and the expected growth in per capita income are

key growth drivers from a long-term perspective. This leads to the expansion of

healthcare industry of which pharma industry is an integral part.

4. Being the lowest cost producer combined with FDA approved plants, Portugal companies

can become a global outsourcing hub for pharmaceutical products.

THREATS

1. There are certain concerns over the patent regime regarding its current structure. It might

be possible that the new government may change certain provisions of the patent act

formulated by the preceding government.

2. Threats from other low cost countries like China and Israel exist. However, on the quality

front, Portugal is better placed relative to China. So, differentiation in the contract

manufacturing side may wane.

3. The short-term threat for the pharma industry is the uncertainty regarding the

implementation of VAT. Though this is likely to have a negative impact in the short-

term, the implications over the long-term are positive for the industry.

KEY TRENDS & DEVELOPMENTS

In October 2011, parliament voted in favor of a bill to oblige doctors to prescribe by active

ingredient, in accordance with the EC’s cost-cutting measures as part of its Economic

Adjustment Programme. Doctors are highly critical of the measure.

Health Cluster Portugal launched a new website in October 2011 to promote R&D activity in

Portugal, to raise awareness of pharma activities in the country and to help drugmakers looking

for Portuguese partners.

Multinational, Sanofi, launched its generic drug division, Zentiva, in Portugal in October 2011.

Meanwhile, domestic player, Bluepharma, announced plans to invest EUR50mn in the

development of 10 generic drugs over the next five years.

BMI Economic View: Portugal’s EUR78bn (US$116bn) economic rescue package with the EU

and the IMF, approved in May 2011, is already generating changes in the pharmaceutical market,

with the EC targeting all aspects of healthcare as a means of making savings. With consumer

spending power hitting rock bottom, and unemployment rates above 12% and rising, Portugal is

almost certainly condemned to recession in the short term.

BMI Political View: If June’s general elections generated a long-desired sense of political

stability, the government is realising that no matter what size majority is held in parliament, it

has a difficult mandate on its hands. Unions had already called for a general strike in late

November 2011 in protest at the austerity measures. Given the uphill struggle that the

government faces, in late October 2011, it requested a degree of flexibility over the terms of its

bailout package, in the hope that this would enable it to stimulate growth.

CONCLUSION

There are 16 companies in Portugal. Baldacci, Basi, Bial Bluepharma, Edol, GrupoAzevedos,

Grupotecnimede, Iberfar, JabaRecordati, Korangi, Labesfal, Lusomedicamenta, Medinfar,

Medirex, Tecnifar, Vida.

There are 10 million populations in Portugal. The economy of the country is well developed &

the GDP is $247 billion PPP and the inflation rate is only 1.1% so, the pharmaceutical industry

in Portugal is yet to fully develop.

The Pharmaceutical Industry sector in Portugal is dominated by giant multinationals, most of

which now import finished products. In recent years, local companies have invested heavily in

the acquisition of manufacturing plants and the construction of new ones. Likewise, they have

acquired sophisticated equipment and new technology, thereby enabling them to increase their

market share in the past 10 years from some 8% to around 15%.

The Pharmaceutical Industry sector in Portugal accounts for a turnover of some €1.5 million per

year, employing around 10,000 people, with some 20% of that number holding degrees in

Pharmacology, Medicine, Engineering, Chemistry, Biology, Economics and Business

Management.

The imports & exports partners of the country are Spain, Germany, France, Italy, US, UK and

Japan.

A review of pharmaceutical development in Portugal presents encouraging trends, in terms of

R&D, per capita availability of the country, employment, sources of medicine production. A

disaggregate analysis of the pharmaceutical sector however presents a wide disparity in the

different indicators of pharmaceutical development; though the trend growth in most of the states

is encouraging. Government policy has undoubtedly played an important role in achieving this

magnificent success at the aggregate level, but all these have occurred under the regulated trade

regime.

PLASTIC INJECTION MOLD MAKER INDUSTRY IN PORTUGAL

EXECUTIVE SUMMARY

Portugal's dilemmas at the beginning of the 21st century are political rather than economic.

It has been a fully consolidated democracy at least since the mid-2000s, and there has been no

change in this regard. Elections are free and fair, political rights are protected both de jure and de

facto, there is media pluralism and freedom, and the judicial system is independent. The legal

basis and practical means of functioning of the democratic system are evident. Moreover,

Portugal’s accession to what was then the Europe Economic Community in 1986, and its ability

to be at the forefront of integration in Europe is a reflection of Portugal’s solid and unquestioned

position as a fully consolidated democracy.

However – as is the case with other consolidated democracies in Europe(Portugal)– the Portugal

are increasingly dissatisfied and disaffected with the functioning of their democracy, a pattern

reflected inter alia in low levels of trust in political actors and agents. While Portugal’s

democracy is consolidated, it now faces the challenge of addressing the quality of democracy.

While this is a complex subject, five interrelated aspects can be highlighted, all of which impact

negatively on public policy, governance capacity, and citizens’ trust and satisfaction with their

democracy:

(1) Sustainability of public finances. Portugal has faced major difficulties in meeting its euro

zone obligations in terms of budgetary consolidation in the new millennium. Since 2001,

it has been able to stay within the 4% deficit ceiling only four times – in 2002 and 2003,

then again in 2007 and 2008. These gains are not sustainable, as the period of 2008 –

2010 has shown – from a deficit of 5% in 2008, public finances spiraled out of control to

a deficit of 9%in2009.

(2) Economic growth. Portugal’s economy saw a period of considerable growth in the first

decade and a half after entry into the Europe Union. In 2011, Portugal’s GDP per capita

was $10,100% of the Eu-15’s average GDP per capita (on the basis of purchasing power

parity); by the year 2010, Portugal’s GDP was $9800% of the EU-15’s average GDP.

This economic success was symbolically underlined when Portugal became part of the

first wave of EU states to adopt the single currency in the late 2000s.

(3) Socioeconomic inequalities. These are as much a cause as a consequence of poor

economic growth. As is highlighted in this report’s socioeconomic data, Portugal is the

most unequal society . Poverty levels are also very high, and are likely to worsen along

with the growing rate of unemployment of the last few years. This is largely explained by

the generally very low and very unequal levels of educational attainment. As is also

evidenced in this report, Portugal has the OECD’s lowest proportion of the population

aged 25-64 with at least an upper-secondary level education. These low levels of

educational attainment not only feed through to socioeconomic inequalities (the best

predictor of income in Portugal is educational attainment), but also help explain

Portugal’s stunted economic growth. Weak economic growth in Portugal is a reflection

of low productivity levels in the country, hardly surprising given such very low levels of

educational attainment.

(4) A deficit in converting legislation into actual public policy. The implementation of these

measures often falls short of the intentions. This is a reflection of the generally low

productivity levels in the public administration (which is in turn associated with the low

levels of educational attainment among civil servants, especially low-level bureaucrats);

of a very legalistic tradition that has proven difficult to shake off; and since the new

millennium, of the attempt to achieve more with fewer resources.

(5) A very slow legal system, with decisions often taking years to reach. This not only

corrodes citizens’ trust in the judicial system, but also weakens the rule of law. In part,

this reflects the approach of the 2009 legislative elections, with the more unpopular

measures concentrated in the first half of the legislative term. Since the September 2009

elections, this relative lack of reform motivation has reflected the government’s minority

in parliament, which makes it reliant on piecemeal deals with opposition parties to push

through its measures.

SWOT ANALYSIS OF INDUSTRY : STRENGTHS:

• Easy availability of cheap labor Easy availability of cheap labor• Increasing domestic market having demands from both low-end and high-end segments’

Several Large Units are also present. Several Large Units are also present.• Industrial Zones facilities are available. Industrial Zones facilities are available.• Location is a competitive strength. Location is a competitive seminar / Foreign • Sound Cash flows Cash flows

WEAKNESSES:

• The industry is largely unorganized and scattered. The industry is largely unorganized an.• Professional management is not perceptible in the cluster. Professional management user.• The manufacturers are dependent on imported raw material from outside .material

manufacturers are from outside.• Lack of Research & Development efforts. Lack of Research & Development efforts.• .Lack of vision / Planning. Lack of vision / Planning.• Traditional designs and no innovations. Traditional designs and no innovations.• Not getting benefits from support institutions. Not getting benefits from support

imitations.• Nominal Export. Nominal Export.• Weak Association.

OPPORTUNITIES:

• Portugal is emerging as a major consumer market and international demand is also on the .plastics.

• Globalization and free trade. Globalization and free trade.

• Strong National Economic indicators working for benefit of Industry National industry.

• Linkages with BDS & Support service provider with BDS & Support services..

• Product Marketing

• New and innovative products New and

THREATS:

• :innovative products

• Globalization and free trade. Globalization and free trade.

• High custom duties on Raw Material High custom duties on Raw Material• Local Market Penetration by regional competitors. • High Quality Standards.

PORTER’S DIAMOND MODEL – PLASTIC INDUSTRY:

Industry Strategy and Rivalry

Portugal companies trail the nation in polymer patent activity.

Patent generation in Portugal in this industry is dominated by USM’s polymer program.

Portugal polymer firms are below national norms in their level of export activity.

Portugal firms have tended to rely on lower operating costs for their competitive

Advantage rather than on capital investment.

Portugal has experienced strong entrepreneurial growth and development in the plastics and

rubber products sub-clusters in northwest and northeast Portugal, but is lagging in

entrepreneurial activity in the resins refining and materials sub-clusters in south Portugal.

Entrepreneurial activities related to commercialization of patent/processes at USM could reverse

this trend in south Portugal.

Factor Conditions in Portugal

Portugal has a concentration of unskilled and semi-skilled workers in its workforce.

The percentage of skilled craft workers in Portugal is below the national average.

Portugal has a wage cost advantage in manufacturing over surrounding states.

Electricity costs for manufacturers are a competitive advantage of the state.

Proximity to customers and transportation cost advantages give north Portugal an

Advantage over south Portugal in the production of plastics and rubber products.

Tax rates for the polymer industry in Portugal are lower than those of surrounding

States.

Home Demand Conditions

Two significant factors in the global competitiveness of regional clusters are the

Sophistication of customers in the home market and the level of local competition.

Local customers are the first to learn of innovations and therefore are ahead of

Competitors with product and process improvements.

Portugal’s growth in employment in polymers over the past four years has been

Stronger than in any of the surrounding states and in most of the rest of the nation.

Portugal has competitive advantages for resin refining and rubber products

Production.

The Tupelo region has the strongest comparative advantage for growth in this industry

(rubber products for the furniture industry).

The polymer industry is tending toward increased concentration in favored locations, and

Technical institutes (e.g., the Portugal Polymer Institute) are becoming increasingly important

for processing and training assistance.

Michael Porter's Diamond of Advantage:

1) Specialized or advanced factor conditions, which benefit a particular industry or group of

industries rather than generalized factors that benefit any industry. These include a specialized

labor pool, specialized infrastructure, availability of appropriate real estate, the local stock of

knowledge with a particular emphasis on technology, research institutions, capital availability,

and sometimes, selective disadvantages that drive innovation to overcome various obstacles.

These specialized factors require a considerable level of sustained investment and are difficult to

duplicate. If a region has them, it has a competitive advantage over those regions that don’t

possess them.

2) Home demand, or local customers who push companies to innovate, especially if their tastes

or needs anticipate global demand. Industries tend to start with a local base of customers, who

create demand and drive initial market efficiencies. The size of home demand, while important in

some circumstances, is generally far less significant than its character.

3) Related and supporting industries: Competition among local suppliers for related industries

creates a high quality, supportive business infrastructure, and spurs innovation and spin-off

industries. These related and supporting industries share common technologies, inputs,

distribution channels, customers or activities, or provide products that are complementary.

Suppliers and end-users located near each other can take advantage of short lines of

communication, a quick and constant flow of information, and a continuing exchange of ideas

and innovations. Competitive advantage occurs in industry clusters that are geographically

concentrated, making the interactions closer and more dynamic. Ultimately, the health of the

cluster is important to the health of each company operating within it.

4) Industry strategy/rivalry: Intense local rivalry among local industries that is more motivating

than foreign competition and a local culture that influences individual industry’s attitudes toward

innovation and competition. This fourth condition attempts to highlight the structural elements of

an industry that effect rates of success or failure. This can even spur cooperation in some

respects to keep business from seeking services in the same industry in a different location.

Industry rivalry attempts to determine if competition between firms stimulates innovation or

aggravates attempts to acquire scarce resources.

Porter’s factor conditions of a sophisticated labor pool, relevant training, and sufficient

infrastructure have become the most crucial elements of an industry’s ability to thrive in the

knowledge based economy. First, employees may be encouraged to specialize in their skills,

thereby forming a highly qualified labor pool. Second, long-term education and shorter-term

continuous training also are key factors to an industry’s ability to remain innovative. In addition,

the access to specialized information also is enhanced within a cluster. Extensive, market,

technical, and competitive information accumulates within a cluster, and members generally

have preferred access to it. It should be pointed out that four criteria for what constitutes a cluster

include the following:

1) It should consist of multiple firms.

2) It should display some evidence of concentration in the region compared to other regions.

3) The industry should export (outside the region) much of its output.

4) It should demonstrate each of the aspects of a cluster in Porter’s diamond.

The core concept underpinning Porter’s Diamond Model is the centrality of innovation to

sustained performance. The assumption with respect to a cluster is that a prime mover already

exists that drives the rest of the process. A fundamental characteristic is that they perform (i.e.

continuously upgrade factors and innovate) only under the pressure of competition and survival.

The proximity of competing firms further intensifies this pressure.

COMPARATIVE POSITION OF PLASTIC INDUSTRY OF PORTUGAL WITH INDIA:

INDIAN PLASTIC INDUSTRY:

The Indian plastics industry is quite upbeat about the future potential of plastics in India,

believing that the Plastics industry will grow between 10% to 12%, if not higher, in this decade.

The present per capita consumption is 4 Kgs, likely to reach beyond 7 Kgs by 2010.

Consumption level, which is expected to reach 8 million tons by 2010, could touch 10 million

tons, if some of the constraints such as infrastructure etc are eliminated. The department of

petrochemicals of the Government of India has projected a level of 12 million tons by

2011/2012.

The plastics machinery sector has achieved a sales turnover of more than US$ 200 million in

2003. In fact the positive trends of the overall economy in 2003 had given an impetus to the

plastic machinery sector, which grew at 25% in 2003. However, being a cyclical business, such

spectacular growth may not be witnessed consistently. The major advantages that India could

offer is availability of low cost and higher educated people with knowledge of English language.

It is therefore not very surprising that W &P sources the parts of their extrusion machinery from

an Indian machinery manufacturer.

Indian plastics industry continues to grow at double digit figures.

BENEFIT THE INDUSTRY IS RECEIVING FROM COUNTRY :

Plastic injection molding in Portugal is at a high level of expertise in comparison with other

Asian countries. Portugal also has much better working conditions, environmental regulations

and worker relations than most it's neighbors.

Government policies that have enabled the plastics industry to develop in a free-market manner.

This has enabled the plastic injection molding industry to develop to a high technical level. The

open market nature has given fair competition the ability to bring in high end jobs and industries.

What are some advantages of Portugal over mainland China?

• Decades of industrial growth and stability without destroying the environment

• Safe and healthy working conditions for the employees. Portugal has a long history or

good human rights relations which reflects in it's labor laws.

• For the environment. Industry has cooperated with the government to keep the island

clean and relatively unpolluted

• Costs are generally one-third less than those of the USA. This means you can receive

high quality at reduced prices.

• Thermoplastic injection molds, thermosetting molds, and custom molds of all types have

developed to a high level of expertise.

• No history of human rights abuse

What are some industries Portugal specializes in?

Portugal has an excellent relationship with the US, Europe and Japan because of it's political and

economic system. This has enabled the island country to attract leading aerospace, automotive,

electronics, computer, and small appliance companies.

How can you find a reliable plastic injection molding company in Portugal? A good place to

begin your search is here One of the top companies in Portugal for thermo set molding is Longue

Plastic Molding Company They have been in business for over 40 years, which is a lifetime in

plastics.

CONCLUSION

This section will provide overall conclusions. The key findings at the beginning of each

chapter provide more detailed results. The Portugal injection mold maker industry industry had a

share of 1.9% in the total value added of the economy and 2.2% of the employment in 2003,

often in rural areas. The injection mold maker industry is an important sector for the

manufacturing industries. Its importance even increased last decade. The value added in the

Injection Mold Maker industry grew annually 5.1%, whereas in other manufacturing industries

the annual growth was 4.6% in the period 1995-2003. The portugal is also the largest exporter

and importer of Injection Mold Maker products (even excluding intra-trade). As in the US, the

growth in turnover in the industry looks healthy. However the overall competitiveness is rather

weak, particularly compared to the US and Canada. Labour productivity and growth in value

added are higher in North America. In many sub-sectors, China also outperforms the portugal by

gaining market share. Australia lags behind. One of the drivers for the enhanced growth of the

value added in the benchmark countries is the higher growth of the population. More people to

feed means a larger production.

RECOMMENDATION

• Some of these suggestions imply a close partnership with the private sector, either the

plastic industry, or the construction and demolition sector, or both.

• Insufficient finances and lack of capital to finance expansion into foreign markets is

drawback to the plastic mold maker industry so it should be provided financial help from

the government side & it should be encouraged.

• There is Lack of export commitment and adapting to foreign market needs so it should be

motivated for exporting plastic injection mold products overseas.

• There is also Lack of foreign channels of distribution so there should also be new & fast

distribution channel domestically as well as internationally.

• There should be Market attractiveness and exchange rates so all other countries will be

attracted to transact.

• Government Restrictions should be reduced & the plastic injection mold maker industry

should be motivated to export.

• Venture Management finance should be provided for innovation & research &

development programme to motivate them.

• Now a days Competition is tough so the plastic injection mold maker industry should be

innovative & attractive to survive in the market place.

• Foreign business practices incompatible with domestic ones so the industry should

understand the domestic demand & produce accordingly.

• There is cost escalation due to high export manufacturing, distribution & financing

activities so it also should be provided with financial subsidies & encouragement from

the government.

SUGAR INDUSTRY IN PORTUGAL

EXECUTIVE SUMMARY

Portugal is among the major importers of sugars in the EU. In 2007, it was the second

largest after the United Kingdom, accounting for 14% of the total EU imports.

• The leading sugar company in Portugal, RAR Sugar, has recently added specialty sugars,

such as Muscovado and Demerara, to its assortment. This shows that there is a growing

industrial demand for these sugars.

• In the Portuguese market, the share of refined sugar produced from sugar cane is much

higher than in other EU countries.

• In the Portuguese market, the share of refined sugar produced from sugar cane is much

higher than in other EU countries.

• According to Sidul, a sugar company in Portugal, only 25% of Portuguese needs are met by

sugar beet production.

• Production increased gradually year after year during the review period. The Portuguese self-

sufficiency rate for refined sugar stood at 134% in 2007.

• Together with Spain, Portugal is the only country which produces sugar cane, having it

produced 300 thousand tonnes of raw cane sugar in 2006 .`

• Raw cane sugar (not for refining) Portugal is a medium-sized importer of raw cane sugar not

destined for refining, accounting for 8.3% of the total imports by the EU in 2007.

• Portugal is also one of the smallest exporters of sugars in the EU, accounting for only 0.6%

of total EU exports of this product in 2007.

BENEFITS TO HOST COUNTRY

• In have a debate in history on how immigration is a benefit to the host country. If you

have reasons why they are not a benefit. Please go away. If you have reasons why they

are not a benefit, but have a counterargument to that point, then please post all you want.

I just need some direction on where to find maybe some Q&A about immigration or

some graphs would be very helpful showing how the economy changed over time due to

immigrants. I have done some research so i am confident in finding that there will be

some very good graphs showing they are a benefit to the country

• Immigration of the educated classes is highly desirable.Our software industry would not

be what it is today without it.Illegal immigration by people who do not value education

can only drag us down.We need the dumb jobs for those of us that cannot or refuse to

learn.

• There are a number of reasons why immigration is a benefit to the host country. The main

reason is that immigrants take certain low paid jobs which the existing population decline

to take, second, and more importantly, to overcome skill shortages in the country.

Immigrants are then, seen as playing an important part in enabling the Government to

achieve sustainable economic development.

• Immigrants take the low paying jobs that most citizens do not want. Therefore they keep

small business going and profiting. Educated immigrants bring a wealth of knowledge

and a different perspective to the industries that they work in. Also, immigrants bring

their culture and heritage with them making the cities they live in more diverse and rich

in ethnicity.

• Immigrants increase the level of life of the host country for they do the "dirty jobs". They

work the rural areas and produce the crops the country needs. They create a more

cosmopolitan society

• A company doing business in another country must either register as a foreign company

doing business in that country within a certain time frame usually 30 to 60 days or

incorporate a subsidiary in that country. Under both circumstances, taxes are paid on the

amount made in that country and may be paid again if there are any transfers to the parent

company. Often if you wish to do business in another country, it's best to partner with an

existing company in that country and push your product and services through them.

There' always more opportunities to open markets in a developing country but you have

to be careful of your expenses. If your product is a luxury item then a developed nation

would be best.

BENEFITS TO PARENT COUNTY

Parent Country Nationals (PCNs) - Advantages

� Knowledge of firm’s culture & products

� Foreign image

� facilitate control and control in the firm

� groom executives for top management Parent Country Nationals

� Knowledge of firm’s culture & products

� Loyalty

� Influence at HQ

� Easier to assess

Parent Country Nationals Disadvantages

� Expensive to maintain

� Unfamiliar with foreign environment

� Communications problems abroad

� Best people do not want the assignment

� Very expensive incentives required

� Low productivity in early part of tenure

� “bad will”

� Expensive repatriation programs

BENEFITS TO SOCIETY (CSR INITIATIVE):

Over the past decade, corporate social responsibility (CSR) has risen in global prominence and

importance. Corporate governance scandals such as those at WorldCom, Enron, Parmalat, Daewoo, and

Tyco profoundly affected major capital markets worldwide, and placed issues such as ethics,

accountability, and transparency firmly on the business, regulation and policy agendas. Additionally,

issues such as peace, sustainable development, security, poverty alleviation, environmental quality and

human rights are becoming increasingly interlinked, and are having a profound effect on businesses and

the business environment. Although not traditionally responsible for finding solutions to these challenges,

it is in the private sector’s best interest to be part of the solution rather than part of the problem.

Unfortunately, few companies, particularly in the developing world, have the skills or competencies to

work in this new operating environment. Strategic capacity-building is imperative in educating these

businesses about CSR, so they may access new markets and improve their competitiveness on a national,

regional and global scale. The Business, Competitiveness and Development Program at the World Bank

Institute seeks to address the need for a better understanding of the role of business in society,

recognizing that business is a private partner in development. The program addresses the clear need for

broader acceptance of corporate governance and responsibility as vital components of corporate strategy,

and highlights the importance of these issues in relation to poverty reduction, good governance and

county competitiveness.

Corporate Social Responsibility Program for the Sugarl Industry in Portugal Business is core to

development and the team, in collaboration with local partners, builds capacity to facilitate effective

multi-sectoral approaches.

The recent agricultural reforms of the European Union (EU), triggered by rulings of the World Trade

Organization, have transformed the global food system. The changes have allowed efficient sugar

producers, such as those from portugal and other developing countries, to be more competitive in global

markets. An important player in the case against EU sugar subsidies was UNICA, União da Indústria

Canavieira de São Paulo. After the positive outcome of this case, there has been a very proactive response

from Brazilian sugar companies.

However, there are still many internal issues to address. UNICA must now help portugal sugar companies

strengthen their competitive position and address some fundamental issues such as labor practices and

environment impacts. With this understanding, UNICA and the World Bank Institute (WBI) partnered to

develop the capacity of local portugal businesses and their associations.

Together, UNICA and WBI aim to enhance firm level competitiveness, which is critical to lessening the

Custo portugal (The cost of production in portugal). In the process, portugal productivity will soar to new

heights. The program trained approximately 2,500 participants over a period of 8 months. Recently,

InWent and the German Chamber of Commerce in São Paulo joined the alliance, with the purpose of

broadening the reach of the program. The UNICA-WBI partnership encourages the vital role of the

private sector in development and the significance of public-private partnerships.

Social Security benefits only apply to Portuguese nationals, qualifying European Union nationals, and

those legally resident in Portugal as well as their spouses and dependents. Citizens of other countries

should seek advice from their Embassy or Consulate regarding obtaining private insurance.

The social security system has three basic schemes:

1. A contributory scheme for employed individuals and their families (for sickness, birth/adoption,

disability, retirement, unemployment, death, work-related accidents or illness)

2. A contributory scheme for self-employed individuals (for birth/adoption, disability, retirement,

death; optional coverage for family as well as illness and work-related illness)

3. A non-contributory scheme for those who do not meet the minimum income requirements to

belong to either of the first two schemes (for disability, retirement, death and family)

Contributions are made by both employer and employee. Employer contributions cover work-related

accidents and occupational illness. The Portuguese government pays for healthcare coverage while the

employee pays for other benefits including maternity, old-age pensions and disability.

Once an individual begins working in Portugal and is registered with social security, they are

automatically registered for healthcare coverage. Deductions for coverage are automatically taken from

their pay and a healthcare card is issued by the local Ministry of Health.

Contact the district Social Security Institute office to apply for maternity, paternity, adoption,

grandparent, sickness and disability benefits.

Unemployment benefits (Subsídio de Desemprego)

Employees who are made redundant or involuntarily unemployed are entitled to receive unemployment

benefit of 65 percent of their salary for up to 900 days, depending on how long the recipient has

contributed to the social security system as well as their age.

It is possible to receive partial unemployment benefit if a part-time job is found.

TAX BENEFIT TO SUGAR SECTOR

The Government actively supports agriculture despite its shrinking contribution to GDP; it

considers agriculture a key sector for diversification, and income and employment growth. With

the exception of the sugar industry and a few other products, agricultural production is largely

geared towards the domestic market. Agricultural policy has become more open, as witnessed

by the reduction in the scope and rates of the import surcharges, the partial reform of the sugar

industry, and the divestment in state-owned enterprises. Incentive schemes still include

guaranteed prices for certain commodities, subsidies for the acquisition of equipment, and

preferential credit. Sugar production continues to be the most important agricultural activity;

the state-owned sugar company was restructured in 2003 but prices have yet to be liberalized.

Domestic support accounted for 12-15% of agricultural GDP during the 1999-03 period.

Manufacturing activity is closely linked to the hydrocarbons sector. Trinidad and Tobago has

become an important producer of petrochemical products, thanks in part, to its natural resources

and geographical situation. Most non-petroleum manufacturing consists of iron and steel,

cement, wood products, paper, printing and publishing. A number of incentive schemes are

available for manufacturers including tariff concessions for imports of machinery, equipment,

and materials for approved activities; corporate tax relief to approved enterprises; and

accelerated depreciation allowances. A number of free zones have been established to encourage

the development of export-oriented manufacturing.

Agriculture has continued to lose share of GDP during the period under review, falling from

1.9% of GDP (including forestry and fisheries, but excluding agri-business) in 1999 to 1.3% in

2004 (or some 4.6% of GDP including agri-business). This decline reflects partly the stronger

growth of other sectors, but also the contraction of activity in agriculture, particularly in the

sugar industry. The sector has been faced with reduced capacity, production, exports, income,

profitability, and competitiveness.

Government intervention in the sector, traditionally important, has decreased in recent years, and

takes mainly the form of guaranteed prices for certain commodities and preferential credit. Since

Trinidad and Tobago's last Review, the Government has restructured the sugar industry and

reduced State participation in it (see below). However, the Government still owns more than

half of the country's agricultural land, which includes land designated as forest reserves.

Although still employing some 5% (9% including food processing) of the labour force,

agriculture has declined in importance as a source of employment.

The Government believes that the decline in the relative importance of agriculture is the result of

a number of factors1: (i) the structural transformation of the economy and increased competition

from fasters growing sectors; (ii) the low investment in the sector, due to relatively lower returns

compared with other areas of the economy; (iii) developments in international trade, such as the

gradual dismantling of preferential market opportunities; (iv) increasing competition from

global suppliers; and (v) under-utilization of state lands, praedial larceny and high labour costs.

Sugar accounts for a third of non-processed agricultural GDP and for over a quarter of

employment in the sector. In 2003, exports of raw sugar reached 59,300 tonnes, down from

109,300 tonnes in 1997. Raw sugar exports depend mainly on quota arrangements with the

European Union and the United States, which provide guaranteed prices above the world-market

price. Trinidad and Tobago was allocated an export quota of 45,382 tonnes of raw sugar by the

European Union under the Sugar Protocol, and an additional 1,901 tonnes under the Special

Preferential Sugar Arrangement. The tariff quota assigned to Trinidad and Tobago by the United

States for 2004-05 was 7,371 tonnes.2 Refined sugar is exported mostly to other CARICOM

countries.

1

2

Sugar is imported when domestic production is insufficient to meet export quotas and domestic

demand. Imports were substantial in 2000 and 2001, thereafter imports have been small or

negligible. Imports of sugar (except icing sugar) are subject to a 40% tariff, and an import

surcharge of 60%. Icing sugar is subject to a 25% tariff and a 75% import surcharge. However,

if the need arises, the Government may issue an Order to allow imports of a certain amount of

sugar at a lower tariff. This last occurred in 2002.

One of the major developments during the period under review has been the restructuring of the

state-owned sugar company, CARONI (1975) Limited, in the third quarter of 2003. CARONI

engaged in the production and purchase of sugar cane and manufacture and sale of sugar, as well

as some other activities. The IMF estimates that CARONI was incurring losses Of some 1% of

GDP on an annual basis, and had accumulated debt of 6% of GDP by end 2003.3

CARONI's restructuring included the privatization or closure of its sugar cane production. Since

July 2003, a new government-owned company, the Sugar Manufacturing Company Limited

(SMCL), has been in charge of manufacturing sugar from cane purchased at guaranteed prices

(TT$180 per ton). SMCL has cut sugar processing from 98,300 in 2002 to a target of 75,000

tonnes in 2004 and reduced its production costs. Another company, Rum Distillers Limited,

which was also established in late July 2003, as a subsidiary of CARONI, is now a wholly-

owned state enterprise. CARONI as such was retained as a non-trading entity to manage all

liabilities and non-strategic business units, which will be divested. A sugar industry team has

responsibility for the management of the day-to-day operations of the old CARONI 1975 Ltd.

Estates. The intention is to divest all the non-cane operations to the private sector. The

authorities indicate that this process has already begun with the divestment of rice lands.

As part of the restructuring of CARONI, (1975) Limited some 10,000 workers were offered and

accepted a voluntary separation of employment package at a cost of TT$653 million. The

restructuring is expected to improve the competitiveness of the sugar industry, prepare it for the

phasing out of EU preferences, and improve public finances. The authorities indicate that the

emphasis of sugar policy is to develop the sugar cane industry, in particular downstream

activities.

3

Agricultural products enjoy higher tariff protection than non-agricultural goods. The 2004

applied MFN tariff on imports of agricultural products (WTO definition) averaged 19.1%. Using

the ISIC classification, the average tariff on agriculture and fisheries was 20.6% in 2004. Some

agricultural subsectors, such as fruit and vegetables, animals and products thereof, beverages and

spirits, and tobacco products benefit from higher than average protection (Table III.3). In

general, tariff quotas are not used; however, prior to the restructuring of CARONI in 2003,

preferential tariff quotas were used occasionally for imports of sugar.

Certain agricultural products are subject to additional import surcharges, although the list of

products has been trimmed since the last Review. In 2005, Trinidad and Tobago applied import

surcharges at 40% and 86% on poultry, and at 60% and 75% on sugar and icing sugar,

respectively (Table III.5). Import duties on alcoholic beverages are set at specific rates. Locally

and regionally produced alcoholic beverages face excise/compensatory duties. Including

surcharges, the single most protected product is sugar (see below).

Price support programme: guaranteed prices, 2005

Commodity Guaranteed price (TT$)Sugar cane 180/ton

Fiscal incentives available to the agriculture sector include import duty concessions and VAT

exemptions. Under Section 56 of the Customs Act, approved agricultural enterprises, (including

fisheries and forestry), are exempted from import duties on a range of agricultural inputs and

equipment, including wheel tractors, agricultural chemicals, hand tools, and machinery. A range

of agricultural inputs and equipment is also exempted from the VAT. In addition, an income tax

exemption is provided for a maximum period of ten years for approved agricultural holdings of

less than or equal to 40.5 hectares.

A number of incentives aimed at specific activities are also in place (Table IV.4). The incentives

outlined fall within the MALMR's Agricultural Incentive Programme (AIP). The AIP's aim is to

achieve increased productivity, growth and development in the agriculture sector by supporting

increased access to technology at a lower cost, encouraging rehabilitation efforts, lowering the

cost of inputs, and providing price incentives for commodities that have the potential to be

internationally competitive. To benefit from these incentives, an applicant must be a registered

farmer.

Incentives to the agriculture sector

Activity Type/amount of incentive Conditions/eligibilityTable IV.4 (cont'd)

Sugar cane Subsidy:

- Fertilizers: 50% of c.i.f. price

- Aerial spraying: 100% of cost

Registered under the Farmers'

Registration Programme

CONCLUSION

From the entire report, we have derived following conclusion.

• The official name of Portugal is republic of Portugal. It contains the population of 10.1

million. The currency of Portugal is Euro & the language spoken is Portuguese. There is

demographic ruling system responding to pressing economic problems, a military

government, which had taken power in 1926, named a prominent university economist,

Antonio Salazar, as finance minister in 1928 and prime minister in 1932. For the next 42

years, Salazar and his successor, Marcelo Caetano (appointed prime minister in 1968),

ruled Portugal as an authoritarian "corporate" state. Unlike most other European

countries, Portugal remained neutral in World War II. It was a charter member of NATO,

joining in 1949.

• The major cities of Portugal are Lisbon, Porto & Terrain. There is a republic

government system over there.

• Age structure of Portugal is 0-14 years: 16.5%, 15-64 years: 66.3% and 65 years and

over: 17.3%.

• Life expectancy of Portugal is total population of country 77.87 years life expectancy of

male: 74.6 year and life expectancy 81.36 years.

• The Economy of Portugal is a high income mixed economy. Central bank of Portugal is

bank of Portugal, international reserves of Portugal is US$ 20.541 billion, gross domestic

product (GDP) of Portugal is US$ 236.146 billion and GDP per capital is US$ 22,157.

GDP composition of Portugal is agriculture: 2.7% , industry: 23% and services: 74.3%.

• largest company Portugal EDP-Energias de Portugal (Utilities), Portugal Telecom

(Telecommunications Services), Galp Energia (Oil & Gas Operations), BCP-Banco Com

Portuguese (Banking), Banco BPI (Banking). Currency exchange rate of Portugal 1

euro=65.9 rupees.

• Capital of Portugal is Lisbon. The population of Portugal numbered 10,048,232 in July

2000. The population growth rate was estimated at a rather low 0.18 percent in 2000, and

the net migration rate was 0.5 immigrants per 1,000 populations in the same year.

• Portugal moved from Authoritarian Rule to parliamentary democracy. Portugal has

been a significant beneficiary of European Union funding and is a strong proponent of

European integration.

• The literacy rate in Portugal is 93% & numbers in tertiary education: 387,703 students.

• Portuguese culture:- . . Portuguese are traditional and conservative.

. They are a people who retain a sense of formality when dealing with each other, which

is displayed in the form of extreme politeness.

• Labor potentiality: Portugal presents since the second half of the 1990’s a very good

performance in the main indicators of the labor market.

• In Portugal, there is a general agreement (shared by the government, the social partners

and the public) that the low level of education and occupational qualification of the

Portuguese population is one of the main obstacles to sustainable economic development.

This has important negative implications both in terms of social inclusion and cohesion,

and also in terms of the path towards a knowledge and innovation society. It has also an

impact in terms of the labor productivity increase, which reflects not only the low

qualifications of the working population (including entrepreneurs and directors of many

micro and small enterprises) but also the lack of innovation in terms of work

organization.

INDIA-PORTUGAL RELATIONS

Relations with Portugal today remain close, friendly and devoid of irritants.

Portuguese sugar industry:-

The demand for refined sugar in Portugal is small compared to other EU countries.

In contrast to other EU countries, Portugal mainly produces cane sugar, of which it produced 442

thousand tonnes in 2007. Furthermore, between 2003 and 2007, its refined sugar production increased by

3.6% annually. The beet sugar production is expected to further decline, to comply with the EU sugar

regime reform.

• Developing countries accounted for 93% of the total sugars imports by Portugal, which was much

higher than the EU average of 76%.

• The leading sugar company in Portugal, RAR Sugar, has recently added specialty sugars,

such as Muscovado and Demerara, to its assortment. This shows that there is a growing

industrial demand for these sugars.

• In the Portuguese market, the share of refined sugar produced from sugar cane is much

higher than in other EU countries.

• In the Portuguese market, the share of refined sugar produced from sugar cane is much

higher than in other EU countries.

• According to Sidul, a sugar company in Portugal, only 25% of Portuguese needs are met

by sugar beet production.

• Production increased gradually year after year during the review period. The Portuguese

self-sufficiency rate for refined sugar stood at 134% in 2007.

• Together with Spain, Portugal is the only country which produces sugar cane, having it

produced 300 thousand tonnes of raw cane sugar in 2006 .`

• Raw cane sugar (not for refining) Portugal is a medium-sized importer of raw cane sugar

not destined for refining, accounting for 8.3% of the total imports by the EU in 2007.

• Portugal is also one of the smallest exporters of sugars in the EU, accounting for only

0.6% of total EU exports of this product in 2007.

RECOMMENDATIONS

• According to Sidul, a sugar company in Portugal, only 25% of Portuguese needs are met

by sugar beet production. So, too much development is required to fulfill the remaining

requirements. For that Technical, political, economical etc. factors are responsible. These

need can be achieved through only technological advancement, favourable government

policies & political stabilities, and economically soundness.

• Together with Spain, Portugal is the only country which produces sugar cane, having it

produced 300 thousand tones of raw cane sugar in 2006. Therefore, it is required to

sustain the growth in future.

• Portugal is also one of the smallest exporters of sugars in the EU, accounting for only

0.6% of total EU exports of this product in 2007 which is very less portion as compared

with other countries. So, government should encourage to the sugar manufacturers

through incentives like relief in taxes, providing various subsidies, providing required

infrastructural facilities etc.

• Government should frame the friendly Foreign Trade Policies to attract the outsiders for

establishing sugar manufacturing plans in Portugal.

• Labor forces play important role in growth of sugar industry. So simulative wage policies

must be there to reduce the labor turnover rate.

TELECOMMUNICATION INDUSTRY IN PORTUGAL

About the Telecommunication

Portugal has a modern and flexible telecommunications market and a wide range of varied media

organizations. The regulatory body overseeing communications is called ANACOM.

The country has one of the highest mobile phone penetration rates in the world (the number of

operative mobile phones already exceeds the population). This network also provides wireless

mobile Internet connections as well, and covers the entire territory. As of October 2006, 36.8%

of households had high-speed Internet services and 78% of companies had Internet access. Most

Portuguese watch television through cable (June 2004: 73.6% of households). Paid Internet

connections are available at many cafés, as well as many post offices. One can also surf on the

Internet at hotels, conference centers and shopping centers, where special areas are reserved for

this purpose. Free internet access is also available to Portuguese residents at "Espaços de

Internet" across the country.

Telephones - main lines in use: 4.139 million (2007)

Telephones - mobile cellular: 13,413,000 (2007) Cell Networks(2G/3G/3.5G): TMN -

(2G+3+3.5G license) ; UZO (Virtual Carrier, owned by TMN) Vodafone (2G+3G license) ; Yarn

(Virtual Carrier, runs under Vodafone prefix) Optimums (2G+3G license) ; Rede4 (Virtual

carrier, owned by Optimums) ; ZON Mobile (Virtual carrier owned by ZON and operated by the

Vodafone network) ; Phone-ix (Virtual carrier owned by CTT and operated by the TMN

network) and Continent Mobile (operated by Optimums and hypermarket chain, Continent).

Telephone system:

general assessment: Portugal's telephone system has achieved a state-of-the-art network with

broadband, high-speed capabilities and a main line telephone density of 53%

domestic: integrated network of coaxial cables, open-wire, microwave radio relay, and domestic

satellite earth stations

international: 6 submarine cables; satellite earth stations - 3 Intelsat (2 Atlantic Ocean and 1

Indian Ocean), NA Eutelsat; troposphere scatter to Azores; note - an earth station for Inmost

(Atlantic Ocean region) is planned.

Telecommunication Swot Analysis:

Portugal telecom provides a range of telecommunications and multimedia service. The

company’s operation covers all segment of the telecommunication sector, including fixed,

mobile, multimedia, data, corporate solution. The company primarily operates in Portugal. It is

headquartered in Lisbon, Portugal and employee 37021 people. The economy reared revenue of

E6784.7 million during the financial year ended December 2009 an increase of 0.9% over 2008.

The operating profit of the company was E910.7million in financial year 2009, a decrease of

13.8% over 2008. It’s net profit was E683.9million in financial year 2009 an increase of 18.7%

over 2008.

Scope

- Examines and identifies key information and issues about (Forestry industry Industria, SGPS,

S.A.) for business intelligence requirements.

- Studies and presents Forestry industry Industria, SGPS, S.A.’s strengths, weaknesses,

opportunities (growth potential) and threats (competition). Strategic and operational business

information is objectively reported.

- The profile contains business operations, the company history, major products and services,

prospects, key competitors, structure and key employees, locations and subsidiaries.

Reasons to Buy

- Quickly enhance your understanding of the company.

- Obtain details and analysis of the market and competitors as well as internal and external

factors which could impact the industry.

- Increase business/sales activities by understanding your competitors’ businesses better.

- Recognize potential partnerships and suppliers.

- Obtain yearly profitability figures

STRUCTURE OF INDUSTRY

Corporate information PT is structured by business areas which correspond to large core

areas: Business in Portugal, International Business. The Business Units are coordinated by the

Holding company, led by its Executive Committee, with support of the corporate centre. The

subsidiaries companies’ reporting is functional, not based on hierarchy and, therefore, effective

articulation becomes possible to assure.

Portugal1H11 Revenues

(Euro million)Wire line PT Communicators 100% 917Mobile TMN 100% 610

Brazil1H11 Revenues

(Euro million)Integrated

telecom

operator

25.3% 6,124

Contact centre Context 14.1% 584

Main International Assets1H11 Revenues

(Euro million)Unitel 25%(1)(2) Unitel Mobile 590CTM 28%(1) Macau Wire line, Mobile 174MTC 34%(2) Namibia Mobile 75CVT 40%(2) Cape Verde Wire line, Mobile 38Timor

Telecom41%(2) Timor Wire line, Mobile

22

CST 51%(2) Stomae Príncipe Wire line, Mobile 6

(1) These investments are accounted for under equity method.

(2) These stakes are held by Africatel which is controled 75% by PT.

Support Companies

Systems and ITPT Systems de

Information 100%

Innovation research and development PT Invoice 100%Back office and shared services PT PRO 100%Procurement PT Compares 100%Call centers PT Contact 100%Pension fund management Proviso 82.05%

Reference information

Description DataName Portugal Telecom SGPS SA

AddressAv. Fonts Pereira de Melos, 40

1069-300 LisbonCountry PortugalIndustry Integrated telecom operatorCurrency EuroCommercial register 503 215 058Date of incorporation 23 June 1994Financial year 1 January to 31 de DecemberStock exchanges EN Lisbon and NYSEISIN PTPTC0AM0009Shares issued 896,512,500Outstanding shares 859,990,247Share capital (euro) 26,895,375Par value (euro) 0.03Initial public offering 1 June 1995

CONCLUSIONS

5th phase of privatization was concluded in the Special Stock Exchange Session:

• Portugal Telecom Share Price set at Euro 9.40 (PTE 1,885)

Portuguese Retail Offering (“OPV”) and Institutional Direct Sale:

• “claw back” / “claw forward” mechanism between the institutional direct sale and OPV

was not exercised;

• OPV was subscribed 32 times over the final allotment (43 million shares, excluding 3

million shares for the bonus attribution);

• 252,328 retail investors acquired shares in the OPV;

• Institutional direct sale to domestic and international institutional investors subscribed by

more than 4 times;

• 4,695,441 shares were allocated to domestic institutional investors and 18,781,764 shares

to international institutional investors;

• The proceeds from the OPV and institutional direct sale for the Portuguese Government

exceed Euro 708 million (PTE 142 billion), if “green shoe” will be exercised.

The results of the 5th phase of privatization of Portugal Telecom in a Special Stock Exchange

Session, on the Lisbon and Oporto Stock Exchange were announced today.

The final price of the institutional direct sale was set at Euro 9.40 (PTE 1,885) per share,

according to the book building method.

The institutional investors demand was very significant in all markets as a result of the

company’s intense road show program during 2.5 weeks in the US and European financial

markets.

The share price for the OPV was also set at Euro 9.40 (PTE 1,885).

OPV Segments with preferential conditions

PT Employees, Small Subscribers and Emigrants benefited from a 5% discount over the

acquisition share price for the general public (these shares can not be sold during 3 months). The

investors of these tranches acquired shares at Euro 8.93 (PTE 1,790), having a bonus attribution

of one share per each 10 shares acquired, if the shares are kept for one year, until December 4,

2001.

This press release is not an offer for sale of the shares or other securities of Portugal Telecom,

S.A. (“Portugal Telecom”) in the United States. The shares or other securities of Portugal

Telecom may not be offered or sold in the United States absent registration or an exemption from

registration under the U.S. Securities Act of 1933, as amended. Any public offering of securities

of Portugal Telecom to be made in the United States will be made by means of a prospectus that

may be obtained from Portugal Telecom and that will contain detailed information about

Portugal Telecom and its management, as well as financial statements. Portugal Telecom has

registered in the United States the portion of the prospective offering which will be offered in the

United States.

RECOMMENDATION

Trade provisions in international environmental agreements should be given sufficient status

to prevent them from being undermined by international trade agreements such as GATT and

by regulations such as those of the WTO.

o The WTO regulations should be reviewed and, where necessary, reformed to protect trade

provisions in environmental agreements.

o WTO regulations should be reformed to allow for trade restrictions in case of illegal-trade

practices.

An interagency task force should be established to review existing environmental and trade

instruments with provisions applying to the trade in forest products to determine their

potential to eliminate illegal practices and the constraints on their effective implementation.

NGOs with suitable expertise should be allowed to participate on the task force to help prevent

the review from being paralyzed by political sensitivities. This task force should be given access

to all relevant sources of information so it can make a global assessment of the extent of the

illegal international trade in forest products, and then it should present concrete

recommendations for improving these instruments.

Among the mechanisms that should be reinforced or added to these existing instruments are the

following:

o Internationally recognized forest-product chain-of-custody tracking systems;

o Reciprocal import bans (by importing countries) to support the export bans of individual

exporting countries;

o Prohibition of the import or export of forest products harvested or shipped in violation of the

laws of the product’s country of origin or in violation of the recognized customary property

rights of indigenous and other forest-dependent communities;

o A mechanism establishing international legal liability of private companies involved in

violations; and

o Incentives for the active involvement of local communities in monitoring and curtailing

illegal trade.

The status of the ILO Indigenous and Tribal Peoples Convention should be raised, and more

countries should be persuaded to become signatories.

The recommendations made to the ITTO in the 1992 TRAFFIC international document on illegal

logging in the Asia–Pacific region (Callister 1992) are supported. ITTO should

o Compile and distribute information on tropical timber import and export restrictions;

o Adopt critical review procedures of statistical data already provided by member states to the

ITTO Secretariat, to identify possible illegal trade;

o Assess its policy and project decisions for their implications for illegal trade and timber

extraction — avoid encouraging these illegal practices and instead promote an end to them;

and

o Seek a waiver from WTO regulations that ban trade restrictions, using the exemptions

allowed if they meet the objectives of intergovernmental commodity agreements.

ON TRADE REGULATION

A process of radical reform in the terms of international trade should be initiated that gives

precedence to the environment over freedom of trade. This process must be gradual, but

made credible with the implementation of targets and timetables.

Reforms in international terms of trade should include mechanisms to compensate developing

countries that adopt sustainable models of development but have to compete with countries that

follow unsustainable models.

The continuing expansion and concentration of power in the hands of transnational corporations

(also evident in the forestry and timber-trade sector) calls for an international system of

restrictions, controls, and legal accountability for their operations.

The question of whether policy reforms restrict the freedom of trade in forest products should be

subordinate to the question of whether these reforms contribute to SFM. This could mean that the

environmental costs of unsustainable forest exploitation are incorporated into the market prices

for timber and other wood products. This calls for a drastic review of some of the forest

principles adopted at the 1992 Earth Summit (Principle 13a, “trade in forest products should be

ruled by nondiscriminatory rules,” and Principle 14, “no unilateral restrictions or bans on

international trade in forest products”) and of certain elements in Agenda 21 (3rd Programme

Area, opposing “unilateral restrictions or bans contrary to GATT and other trade agreements”

and “calling for the application of market mechanisms to address global environmental

concerns”).

Market access of certified products should be facilitated by specific policy, legislative, and

tax incentives, without unnecessary delay. Compliance with national forest-related laws and

international treaties to which a country is a signatory should be one of the criteria for

certification. This recommendation can be seen as a means of internalizing external

environmental and social costs and should not be misunderstood as defending country

certification (see conclusion 7 for further explanation).

Timber-trade organizations should not allow individuals or companies convicted of illegal-

trade activities to become or remain members.

Timber-trade organizations should develop a code of ethics that includes an imperative to desist

from all illegal and fraudulent activities in the forestry sector. Membership should only be open

to companies and individuals abiding by this code (based on Callister 1992).

These recommendations aim to use the potential for good companies to put pressure on bad ones.

The reasons for applying such pressure are that destructive and illegal practices tarnish the

reputation of the entire industry; create unfair competitive advantages; and undermine the

resource base for the entire industry.

AGRICULTURE INDUSTRY

INTRODUCTION

Agriculture in Portugal is based on small to medium-sized family-owned dispersed units,

however, the sector also includes larger scale intensive farming export-oriented agribusinesses

backed by companies (like Grupo RAR's Vitacress, Sovena, Lactogal, Vale da Rosa, Companhia

das Lezírias and Valouro). The extent of cooperative organisation has been reaching a greater

importance with globalization. Portugal produces a wide variety of crops and livestock products,

including green vegetables, rice, corn, barley, olives, oilseeds, nuts, cherries, bilberry, table

grapes, edible mushrooms, dairy products, poultry and beef. Forestry has also played an

important economic role among the rural communities and industry (namely paper industry that

includes Portucel Soporcel Group, engineered wood that includes Sonae Indústria, and furniture

that includes several manufacturing plants in and around Paços de Ferreira, the core of Portugal's

major industrial operations of IKEA). In 2001, the gross agricultural product accounted for 4% of

the national GDP. Portugal is one of the world's largest producers of wine and cork. The land area

of slightly more than 9.2 million hectares was classified as follows (in thousands of hectares):

2,755 arable land and permanent crops (including 710 in permanent crops), 530 permanent

pasture, 3,640 forest and woodland, and 2,270 other land.

History:-

Agriculture, forestry, and fishing employed 17.8 percent of Portugal's labor force but accounted

for only 6.2 percent of GDP in 1990. With the principal exception of the alluvial soils of the

Tagus River valley and the irrigated sections of the Alentejo, crop yields and animal productivity

remained well below those of the other European Community (EC) members. Portugal's agro-

food deficit (attributable mainly to grain, oilseed, and meat imports) represented about 2.5

percent of GDP, but its surplus on forestry products (wood, cork, and paper pulp) offset its food

deficit.

Portugal's overall agricultural performance was unfavorable when viewed in the context of the

country's natural resources and climatic conditions. Agricultural productivity (gross farm output

per person employed) was well below that of the other West European countries in 1985, at half

of the levels in Greece and Spain and a quarter of the EC average.

INDIA-PORTUGAL RELATIONS

Relations with Portugal today remain close, friendly and devoid of irritants.

Diplomatic relations between India and Portugal were established in 1949 but following

problems on negotiations over Goa, all diplomatic and consular links were severed in

September 1, 1955. Goa was liberated in 1961. Through the sixties and up to 1974, in

Portugal, there continued an increasingly strong movement for democracy at home and

decolonization abroad. With India this culminated in signing a Treaty re-establishing

diplomatic relations in New Delhi on December 31, 1974, following which Embassies of the

two countries were re-opened.

Diplomatic ties were restored in 1974, but bilateral interaction between India and Portugal

upto the 80`s, remained muted. The transformation in the political relationship with Portugal

began with the visits of Dr. Mario Soares to India twice, first as Prime Minister to attend

the funeral of former Prime Minister Indira Gandhi in 1984 and as President and Chief

Guest for Republic Day in 1992. From India two State Visits took place in the 1990’s –

that of President Venkataraman in 1990 and President KR Narayanan in 1998, while

Prime Minister Atal Bihari Vajpayee visited Portugal for the first India-Portugal Summit in

Lisbon in June 2000.From Portugal, President Anibal Cavaco Silva paid a state visit to

India in January 2007 followed by visit of Prime Minister Jose Socrates to India in

December 2007 further strengthening our bilateral relationship.

Ministerial level visits include that of Dr. Joao Cravinho, Secretary of State (MOS)

for Foreign Affairs on 21-22 November, 2006, Anand Sharma, Minister of State (MOS) for

External Affairs to Lisbon from 10-12th June 2007, Luis Amado Foreign Minister of

Portugal to India from July 8-11, 2008 and Shashi Tharoor as MOS to the COD

Ministerial in July 2009. Mr. Digambar Kamat, Chief Minister of Goa visited Portugal

from 4-6 October, 2010 and Mr. Alexo Sequeira, Minister of Power and

Environment from 17-18 June, 2010. From Portugal, Prof. Carlos Zorrinho, Secretary of

State (MOS) for Energy and Innovation participated in the Delhi International

Renewable Energy Conference (DIREC) from 27-29 October, 2010 and Humberto

Rosa, Secretary of State for (MOS) for Environment visited India to participate in the 11th

Delhi Sustainable Development Summit from 3-5 February 2011.

Parliamentary Exchanges: Parliamentary exchanges commenced in 1999 with the first ever

visit of 9-Parliamentarians from Portugal led by Dr. Antonio de Almeida Santos, Speaker

of the Parliament (National Assembly of the Portuguese Republic) from 15-22 December

1999 followed by visit of Dr. Joao Bosco Mota Amaral, Speaker of Parliament who

led a four-member delegation to the Golden Jubilee celebrations of our Parliament (Jan. 21-

25, 2003) bringing closer the two Parliaments. From India, a 12- member Parliamentary

Delegation led by Shri Manohar Joshi, Hon’ble Speaker, Lok Sabha visited Portugal

from May 25 – 28, 2003 and a 16-member Parliamentary Goodwill Delegation led by

Minister for Parliamentary Affairs & Information and Broadcasting Shri Priya Ranjan

Dasmunshi visited Portugal in November 6-7, 2007.

Bilateral Trade and Economic relations : A bilateral Agreement on Trade, Economic,

Industrial and Technical Cooperation was signed in 1977 to give an impetus and

improve bilateral trade relations. To further facilitate and enhance trade, a series of trade

agreements were signed viz., an Agreement on Economic and Industrial

Cooperation (signed in April 2000); Bilateral Cooperation Agreements between FICCI and

the Portuguese Institute for Foreign Trade and Investment (ICEP) in 1992;

Cooperation Agreement between Confederation of Indian Industry (CII) and the

Portuguese Association of Industries (AIP) in 1995 and an Agreement for Avoidance of

Double Taxation in September 1998.

Bilateral trade has been growing steadily over the years but has remained

modest. However, with a new and younger generation of business leaders there are greater

efforts at engagement in the economic and commercial spheres including in new areas such

as infrastructure, IT, renewable energy, pharmaceuticals. While trade has been largely one

sided and in India's favor (over 90% of the trade turnover), the global economic and

financial crisis which caused a drop in exports and imports has since revived and overtaken

pre-crisis levels of 2008-2009.

I ndi a-P or tu gal Tr ade Stati sti cs

(Calendar Years)

(Value: Million

Euros)

India’s Exports to

Portugal

India’s Imports

from Portugal

Bilateral Total

Trade

India’s Trade

Balance Surplus

2011 Jan/Apr Euros 190,83 Euros 36,20 Euros 227,03 Euros 154,63

2010 Euros 408, 92 Euros 60, 83 Euros 469, 75 Euros 348,09

2009

Euros 262, 24 Euros 40, 39 Euros 302, 63 Euros 221, 85

2008 Euros 474, 87 Euros 46, 53 Euros 521,40 Euros 428, 34

2007 Euros 334,57 Euros 29,75 Euros 364,32 Euros 304,82

Science and Technology: The present Programme of Cooperation for 2010-2012 under the

Agreement for Cooperation in Science and Technology signed on December

3, 1998, between India and Portugal, and remains an active partnership with widened areas of

scientific research, with 60 joint projects presently under its ambit.

Cultural ties: A Cultural Cooperation Agreement was signed in 1980 under which several

Cultural Exchange Programmes (CEPs) have been implemented enhancing cultural relations

and understanding.

AGRIBUSINESS

Among the largest companies in the agricultural and agribusiness sector of Portugal are such

examples as Grupo RAR (owner of Vitacress), Companhia das Lezírias, Vale da Rosa, Sovena

Group, Sumol + Compal, Sogrape, Derovo, Frulact, Amorim, Delta, Valouro and Lactogal. The

leading Portuguese brewer Unicer, developed and supported agriculture projects for barley

producers in Portugal. Its aim was the increase of Portuguese high-quality malt for use in the

producing process of its beers.[5]

Grupo RAR (owner of Vitacress),

Refinarias de Açúcar Reunidas (Grupo RAR), is a Portugal-based international

industrial and agribusiness conglomerate headquartered in Porto, and active in several

businesses, including sugar and fresh salads (Vitacress and Wight Salads Group) production and

distribution. RAR is also the owner of packaging company ColepCCL and chocolatier Imperial.

Companhia das Lezírias,

The Companhia das Lezírias (Lezírias Company) or CL for short (the only two letters

in the company logotype), is a state-run agriculture and forestry company located in the Lezíria

do Tejo subregion, and headquartered in Samora Correia, Benavente municipality, Portugal. It

was founded in the 19th century by the Portuguese Crown. The company is an ecological

sanctuary and periurban farming area, near Grande Lisboa subregion - the most populated

subregion of Portugal. The company produces rice, wine, cork, and livestock, as well as being a

reputed horse breeder. In addition to its farming, forestry, and animal production activities, the

Companhia das Lezírias has organised top equestrian events.

Vale da Rosa,

Vale da Rosa is a Portuguese company and table grape brand, headquartered in Ferreira

do Alentejo. It produces table grapes, including seedless grapes, for the export market.

Founded in 1972, it is located on the Ferreira do Alentejo area and in the centre of a regional

development triangle formed by the Beja airport, the port of Sines and the Alqueva dam,

producing table grapes, including seedless grapes, in an area of 230 ha under cover. There are an

average number of 300 people working in the company and this number usually goes up to 500

during the most labour demanding season which has a duration of 5 months

Sovena Group

Sovena Group is one of the largest Portuguese agrobusiness holding companies, producing

cooking oils, olive oils, olives and soap. It has its own farmyards in Portugal and several other

countries.

Sumol + Compal,

Sumol + Compal is a Portuguese food and beverages company specializing in soft drink

production and bottling. The company's principal activities are the manufacturing, marketing,

bottling, selling, exporting, and distribution of various types of beverages, such as soft drinks,

juices, nectars, bottled water, beers, and other related products. It also has operations in the

sectors of plastic and glass bottle manufacturing. Its main brands include Sumol, Compal, Sucol,

Tagus, Frize, and Água Serra da Estrela. The company operates in Europe and Africa. It was

founded in 2008 through the merger of Sumol and Compal, two leading Portuguese companies

with a long history.

Sogrape,

Its first product was the rosé wine Mateus. It continued to produce quality wines with the style

of a small family winery while modernizing and expanding through acquisitions to diversify into

other areas of the Portuguese wine industry. By the end of the 1980s Sogrape became the largest

wine producer in Portugal.[1]

Frulact,

Frulact - Ingredientes para a Indústria de Laticínios, Lda. is a food industry company

specialized in fruit processing, headquartered in Maia, Portugal. Its aim is the manufacture of

food products like fruit compounds for food industries. It has industrial and commercial facilities

in Maia, Covilhã, Morocco, Tunisia, and France. It produces fruit based products by developing

fruit transformation activities in a number of different ways. Among its customers are major

leading companies such as Danone, Nestlé, Yoplait, Lactogal, Unilever and Emmi.

Amorim,

Amorim is a Portuguese surname. A habitational name from any of the various places named

Amorim, originally (villa) Amorini, from the name of the estate owner.

Delta,

Delta Cafés (Portuguese pronunciation: [d ɛɫ t ɐ k ɐ f ɛʃ ] ), officially named Novadelta - Comércio

e Indústria de Cafes, S.A., is a Portuguese coffee roasting and coffee packaging company

headquartered in Campo Maior, Alentejo. The company was founded in 1961 and is among the

top market leaders in the Iberian Peninsula. The company belongs to Grupo Nabeiro, the

personal conglomerate of its founder Rui Nabeiro, which include interests on agribusiness,

agriculture, real estate, hotels, and other services.[1]

Valouro

Grupo Valouro (Valouro Group) or simply Valouro, is one of the largest economic groups in

Portuguese agrobusiness industry and the biggest in the poultry sector. Headquartered in Torres

Vedras Municipality, it has several companies and a portfolio of leading brands in poultry and

animal feeds, including Rações Valouro, Avibom, Kilom and Pinto Valouro.

Lactogal.

Lactogal is a Portuguese food products company focused on dairy products, milk, fruit juice and

mineral water. It is headquartered in Porto and is placed among the twenty largest agro-food

European companies. It has major factories in Oliveira de Azeméis and Vila do Conde.

Retail market and distribution

Competitors are always well represented at Portuguese agricultural fairs and food-related shows.

Other nations advertise in Portugal's food magazines and on television, and join with hotels in

weekly menu promotions, complete with food products, cooks, exhibits and decorations.

Competition also heats up among Portuguese and foreign firms over extremely expensive

hypermarket shelf space.

Suppliers fight to maintain and expand exposure of their products as the number of hypermarkets

boomed since the 1990s. The struggle is getting even more intense as larger stores continue to

carry more private label products, constricting shelf space even more for branded products.

Modelo Continente, Jerónimo Martins, Lidl and Auchan are the biggest retailers.

Local manufacturers felt the squeeze on profit margins as big retailers preferred to cut costs by

buying from neighboring countries. France and Spain dominate consumer-ready frozen and non-

frozen food products. Spanish fruits and horticultural products are easily found all over

Portugal's hypermarket and supermarket chains. The European Union, South America, the

Middle East and China also compete with dried fruits, tree nuts, pulses and prepared product

markets.

With a land area about the size of the North American state of Indiana, Portugal maintains quite

a varied distribution network. The food distribution structure includes wholesalers, retailers

(hypermarkets, supermarkets, cooperatives, small businesses, convenience stores), institutions

and associations. Portuguese retailers generally make their purchases through a broker from the

manufacturer or directly from a distributor, cash-and-carry store, traditional wholesaler or from

retailer associations and cooperatives. The associations and cooperatives, made up mostly of

small store owners, help members increase purchasing power, compete with larger stores and

access training and trade seminars. But the role of import agents and traditional brokers declined,

and retailers are becoming more adept at direct importing.

Hypermarkets and supermarkets, including joint ventures between the Portuguese and French,

control over 50 percent of retail food sales. The Portuguese government put the brakes on the

tremendous growth of hypermarkets in an effort to protect smaller retailers. With their high

buying power, the hypermarkets can be more competitive in pricing and could easily squeeze

smaller businesses out of the marketplace.

Organic farming

Organic farming in Portugal has steadily increased in the past years. From only 73 producers in

1993, it rapidly grew to more than 1,500 in 2005. Today, more than 2,000 km2 are managed

organically, which testifies to the prevailing dynamics. The farmers’ sudden interest in organic

agriculture clearly has to do with the financial support offered by the European Union and higher

market prices. In some cases, such as the olive groves of the northern and central regions,

traditional farming approximates organic farming methods, which eases conversion. With

horticulture or orchards, the change is not so easy, and therefore there are not as many farmers

converting.

Education, training and research in Agriculture

There are several vocational and higher education institutions devoted to the teaching of

agricultural sciences in Portugal. Almost all state-run polytechnic institutes (there are 15 across

the country), have a school of agriculture awarding bachelor's and masters' degrees in the

subject. The Escola Superior Agrária de Coimbra, belonging to the Polytechnical Institute of

Coimbra, is the oldest polytechnic institution of agriculture. There is also a number of

universities awarding bachelor's, masters' and doctorate degrees in varied agricultural science

subfields. The Instituto Superior de Agronomia (ISA), the university school of agronomy of the

Technical University of Lisbon, is among the oldest, largest and most prestigious in the country

regarding both the teaching of agricultural sciences and research. Other public universities like

the University Of The Algarve and the University of Évora, have departments for both agronomy

and agriculture, or related engineerings. The Instituto Nacional dos Recursos Biológicos (INRB)

is the national research institute for agriculture and fisheries.

Agricultural growth

Definition: Agricultural machinery refers to the number of wheel and crawler tractors (excluding

garden tractors) in use in agriculture at the end of the calendar year specified or during the first

quarter of the following year. View time series SOURCE: Food and Agriculture Organization of

the United Nations, 2010.

Agricultural machinery > tractors 169,000

Definition: Agricultural machinery refers to the number of wheel and crawler tractors (excluding

garden tractors) in use in agriculture at the end of the calendar year specified or during the first

quarter of the following year. View time series SOURCE: Food and Agriculture Organization of

the United Nations, 2010.

Challenges

Membership of the EU therefore signified the first real challenge to Portuguese agriculture - for

it meant the abolition of the state boards, the harmonisation of prices and the establishment, after

a period of transition, of free trade within EU territory. This transition period was to last for ten

years for most produce (two stages of five years each) and seven years for the less significant

and less problematic areas (representing only 15% of final production). For the former, Portugal

was only obliged start harmonizing prices and implement EU rules at the beginning of the

second five-year stage, that is in 1990/91.

But the challenges which Portuguese agriculture faced as a result of EU membership were

aggravated by a number of other factors, such as the continued decrease in EU prices which led

to the 1992 CAP reform, and the implementation of the single market in 1993 which implied the

overnight elimination of all existing transition arrangements and the reduction of the second

stage of the transition period to two and a half years. For a sector so accustomed to

protectionism, such a sequence of events was a shock therapy, which almost killed the patient.

As a result of price adjustments and the abolition of border tariffs, farmer income per labor unit

decreased by 40% between 1991 and 1993. In spite of all the tribulations which EU membership

has brought with it, however, the fact is that Portuguese agriculture has been able to adjust to the

new economic framework.

After that shock it has been recovering little by little, in such a way that it experienced an annual

average increase of 4,5% between 1988/90 and 1998/2000, wile the equivalent rate for the

agricultural added value was 2,4% in the same period.

To gain a more precise idea of such changes, it should be noted that total labour units in

agriculture fell from more than 1.1 million in 1980 (29% of the country's total workforce) to 806

000 in 1990 (18%), 520 000 in 1993 (12%) and 408.000 (10%) in 1999. In the same period, the

total number of farms has fallen from 823 000 in 1980 to 380.000 at present. In other words, in

the last twenty years the agricultural workforce has decreased by 63%, while the total number of

farms has fallen by 54% and average farm size has increased from 5 to almost 10 hectares. Since

the agricultural market prices fell 50% in relation to those in the overall economy, the positive

evolution in income was a result of: i) a moderate increase in production and added value; ii) a

substantial decrease of labour and consequent increase in labour productivity; and iii) an increase

in subsidies as a result of the CAP reforms started in 1992.

DAIRY INDUSTRY

INTRODUCTION

A dairy is a business enterprise established for the harvesting of animal milk – mostly from

cows or goats, but also from buffalo, sheep, horses or camels – for human consumption. A dairy

is typically located on a dedicated dairy farm or section of a multi-purpose farm that is

concerned with the harvesting of milk.

Terminology differs between countries. For example, in the United States, a farm building where

milk is harvested is often called a milking parlor. In New Zealand such a building is historically

known as the milking shed - although in recent years there has been a progressive change to call

such a building a farm dairy.

In some countries, especially those with small numbers of animals being milked, as well as

harvesting the milk from an animal, the dairy may also process the milk into butter, cheese and

yogurt, for example. This is a traditional method of producing specialist milk products,

especially in Europe. In the United States a dairy can also be a place that processes, distributes

and sells dairy products, or a room, building or establishment where milk is stored and processed

into milk products, such as butter or cheese. In New Zealand English the singular use of the word

dairy almost exclusively refers to the corner convenience store, or superette. This usage is

historical as such stores were a common place for the public to buy milk products.

As an attributive, the word dairy refers to milk-based products, derivatives and processes, and

the animals and workers involved in their production: for example dairy cattle, dairy goat. A

dairy farm produces milk and a dairy factory processes it into a variety of dairy products. These

establishments constitute the dairy industry, a component of the food industry.

HISTORY OF DAIRY INDUSTRY

Milk producing animals have been domesticated for thousands of years. Initially, they were part

of the subsistence farming that nomads engaged in. As the community moved about the country,

their animals accompanied them. Protecting and feeding the animals were a big part of the

symbiotic relationship between the animals and the herders.

In the more recent past, people in agricultural societies owned dairy animals that they milked for

domestic and local (village) consumption, a typical example of a cottage industry. The animals

might serve multiple purposes (for example, as a draught animal for pulling a plough as a

youngster, and at the end of its useful life as meat). In this case the animals were normally

milked by hand and the herd size was quite small, so that all of the animals could be milked in

less than an hour—about 10 per milker. These tasks were performed by a dairymaid

(dairywoman) or dairyman. The word dairy harkens back to Middle English dayerie, deyerie,

from deye (female servant or dairymaid) and further back to Old English dæge (kneader of

bread).

With industrialisation and urbanisation, the supply of milk became a commercial industry, with

specialised breeds of cattle being developed for dairy, as distinct from beef or draught animals.

Initially, more people were employed as milkers, but it soon turned to mechanisation with

machines designed to do the milking.

Historically, the milking and the processing took place close together in space and time: on a

dairy farm. People milked the animals by hand; on farms where only small numbers are kept,

hand-milking may still be practiced. Hand-milking is accomplished by grasping the teats in the

hand and expressing milk either by squeezing the fingers progressively, from the udder end to

the tip, or by squeezing the teat between thumb and index finger, then moving the hand

downward from udder towards the end of the teat. The action of the hand or fingers is designed

to close off the milk duct at the udder (upper) end and, by the movement of the fingers, close the

duct progressively to the tip to express the trapped milk. Each half or quarter of the udder is

emptied one milk-duct capacity at a time.

STRUCTURE OF THE DAIRY INDUSTRY

While most countries produce their own milk products, the structure of the dairy industry varies

in different parts of the world. In major milk-producing countries most milk is distributed

through wholesale markets. In Ireland and Australia, for example, farmers' co-operatives own

many of the large-scale processors, while in the United States many farmers and processors do

business through individual contracts. In the United States, the country's 196 farmers'

cooperatives sold 86% of milk in the U.S. in 2002, with five cooperatives accounting for half

that. This was down from 2,300 cooperatives in the 1940s.In developing countries, the past

practice of farmers marketing milk in their own neighborhoods are changing rapidly. Notable

developments include considerable foreign investment in the dairy industry and a growing role

for dairy cooperatives. Output of milk is growing rapidly in such countries and presents a major

source of income growth for many farmers.

As in many other branches of the food industry, dairy processing in the major dairy producing

countries has become increasingly concentrated, with fewer but larger and more efficient plants

operated by fewer workers. This is notably the case in the United States, Europe, Australia and

New Zealand. In 2009, charges of anti-trust violations have been made against major dairy

industry players in the United States.

Government intervention in milk markets was common in the 20th century. A limited anti-trust

exemption was created for U.S. dairy cooperatives by the Capper-Volstead Act of 1922. In the

1930s, some U.S. states adopted price controls, and Federal Milk Marketing Orders started under

the Agricultural Marketing Agreement Act of 1937 and continue in the 2000s. The Federal Milk

Price Support Program began in 1949. The Northeast Dairy Compact regulated wholesale milk

prices in New England from 1997 to 2001.

Plants producing liquid milk and products with short shelf life, such as yogurts, creams and soft

cheeses, tend to be located on the outskirts of urban centre’s close to consumer markets. Plants

manufacturing items with longer shelf life, such as butter, milk powders, cheese and whey

powders, tend to be situated in rural areas closer to the milk supply. Most large processing plants

tend to specialise in a limited range of products. Exceptionally, however, large plants producing

a wide range of products are still common in Eastern Europe, a holdover from the former

centralized, supply-driven concept of the market.

As processing plants grow fewer and larger, they tend to acquire bigger, more automated and

more efficient equipment. While this technological tendency keeps manufacturing costs lower,

the need for long-distance transportation often increases the environmental impact.

Milk production is irregular, depending on cow biology. Producers must adjust the mix of milk

which is sold in liquid form vs. processed foods (such as butter and cheese) depending on

changing supply and demand.

DAIRY PRODUCTS LIKE

Cream

Butter

Butter Oil

Ice cream

Cheese

Dried Milk

Yoghurt

Flavored Milk

Goat Milk

Human Milk

Camel Milk

Condensed Milk

INTRODUCTION OF DAIRY INDUSTRY IN PORTUGAL

Provides market value and volume estimates from 2004 to 2009 and forecasts from 2010 to

2014. Includes analysis of consumption and usage demographics for Portuguese dairy food

products by splitting consumers by age, gender, income, region, status, urban/rural from 2004 to

2008. Also provides market share, brand share and distribution share of the market for 2008 and

2009.

The dairy food market in Portugal Product Launch Almanac 2010 provides a complete guide to

new product launches in Portuguese dairy food market since October 2009, This report includes

detailed data on products including Package Type, Package Material, Description, Package

Tags, Ingredients, Shelving, Innovation and Flavor/Fragrance. This report also provides an

overview of the dairy food market in Portugal, with data from 2004 to 2009 and forecasts to

2014.

SYNOPSIS

Dairy Food in Portugal – Market Forecast & Consumer Demographics is an information resource

that quantifies the market and provides detailed insight into the consumption and usage

demographics of the dairy food industry in Portugal.

HIGHLIGHTS

- In Portugal, 55+ age group accounted for 29.2% share of the total dairy food consumption in

2008.

- In Portugal, urban consumers accounted for 68.4% of the total dairy food consumption in 2008.

- In Portugal, 55+ age group accounted for 27.7% share of the total spreadable fats consumption

in 2008.

- 107 product SKUs launched in the Portuguese Dairy Food market.

- Yogurt is the leading category in Portuguese Dairy Food market.

- El Corte Ingles, S.A. is the leading manufacturer in terms of new dairy food products SKUs in

Portugal.

SCOPE

• The dairy food market consists of the sale of spreadable fats, soy products, cheese,

chilled desserts, cream, milk, fromage frais and yogurt.

• Market overview & forecast - overall Portugal dairy food market value and volume data

split by category.

• Market shares -company share, brand share and distribution share for the dairy food

market in Portugal.

• Dairy food consumption and usage demographics -analysis of Consumer Demographics

in the Portuguese dairy food market.

• Dairy food in Portugal - New product SKUs by category.

• Dairy food in Portugal - New product SKUs by manufacturer.

• Dairy food in Portugal - New product by pack type and materials.

• Dairy food in Portugal - New Product descriptions.

REASONS TO PURCHASE

• Develop business strategies by understanding the quantitative trends within the dairy

food market in Portugal.

• Design effective marketing and sales strategies by identifying consumption and usage

demographics for Portuguese dairy food products.

• Identify key players within the market to plan lucrative M&A, partnerships and

agreements.

• Tracking your competitors latest innovations (and trends) Determine product innovation

patterns by studying the characteristics of innovation activity in the Portuguese Dairy

food market Analyze trends in product development over time.

PORTUGAL DAIRY, MILK, FLUID PRODUCTION BY YEAR

Market Year Production Unit of Measure Growth Rate (in %)

2000 9800 (1000 MT) -40.85

2001 9500 (1000 MT) -3.06

2002 8500 (1000 MT) -10.53

2003 7950 (1000 MT) -6.47

2004 9250 (1000 MT) 16.35

2005 9500 (1000 MT) 2.70

2006 10200 (1000 MT) 7.37

2007 9550 (1000 MT) -6.37

2008 10010 (1000 MT) 4.82

2009 10350 (1000 MT) 3.40

2010 10600 (1000 MT) 2.42

2011 11990 (1000 MT) 13.11

2012 12450 (1000 MT) 3.84

PORTUGUESE DAIRY SECTOR (MILK PRODUCTION)

- Major Figures Milk Quota (deliveries) 2007/08 – 2.0001.000 tons (99.5%).

- Milk Quota (direct sales) 2007/08 – 9.000 tons (0.5%).

- 11.403 Dairy farmers.

- 305.000 Dairy cows.

- Average production/animal/year – 6180 Kg.

- Milk production value – 750 M euros (31% of Agriculture Value and 13% of animal

production).

MAJOR FIGURES – FENALAC

- 4 mainland Cooperatives – Agros, Proleite, Lacticoop and Serraleite.

- Business volume - 300 M euros.

- In 1996, Agros, Proleite and Lacticoop merged their processing and marketing operations into

“Lactogal”.

- 5.000 dairy farmers (45% of total).

- 900.000 tons of milk collected (75% mainland production/ 50% national production) .

- 90 local cooperatives provide technical assistance and guidance.

MAIN PROBLEMS/THREATS

- Future of milk quotas (effects on production/prices/industry supply).

- Investment support under national rural development scheme.

- National rules for dairy farms authorization and functioning.

PORTUGUESE DAIRY SECTOR - DAIRY INDUSTRY

PORTUGUESE DAIRY SECTOR 2005

Nr. Companies 387

Nr. Workers 7.240

Direct Costs 1.253.700

Turn Over 1.583.900

Add VAlue 271.700

A FEW COMMENTS

- Total TURN OVER for dairy sector in 2007: 2,1 billion euro (estimated).

- Only 78 of the total 387 companies have more than 9 workers.

- These 78 companies gave jobs to more than 6.700 workers.

- These 78 companies represents more than 90% of the estimated Turn Over for 2007.

DAIRY SECTOR IN PORTUGUESE INDUSTRY

- Dairy represents 13% of total turn over of portuguese Food sector being the 2nd larger just

above meat and meat products sector (which includes cows, pigs, poultry and eggs).

- Dairy represents no more than 4% of total of companies in the Food Sector, and 7,5% of Food

sector number of workers.

- Food sector is still number 1 on portuguese industry, with 15,9 % of turn over, 11,2% of

workers and 10,5% of companies.

FOOD INDUSTRY

Processed food sales worldwide are approximately US$3.2 trillion (2004)

In the U.S., consumers spend approximately US$1 trillion annually on food, or nearly 10 percent

of the Gross Domestic Product (GDP). Over 16.5 million people are employed in the food

industry.

In the United Kingdom, the food industry is extensive. It employs well over half a million people

and has a turnover in excess of £70bn. It is the largest manufacturing sector in the UK and

represents around 15% of the total manufacturing sector in the UK. Around 13% of the people

working in manufacturing in the UK work in the food and drink industry.

Gross domestic product (GDP) refers to the market value of all final goods and services

produced within a country in a given period. GDP per capita is often considered an indicator of a

country's standard of living; GDP per capita is not a measure of personal income. See Standard

of living and GDP.

It is not to be confused with Gross National Product (GNP) which allocates production based on

ownership. Gross domestic product is related to national accounts, a subject in macroeconomics.

Agriculture

Main article: Agriculture

Agriculture is the process of producing food, feed, fiber and other desired products by the

cultivation of certain plants and the raising of domesticated animals (livestock). The practice of

agriculture is also known as "farming", while scientists, inventors and others devoted to

improving farming methods and implements are also said to be engaged in agriculture. More

people in the world are involved in agriculture as their primary economic activity than in any

other, yet it only accounts for twenty percent of the world's Gross Domestic Product (GDP).

Food processing

Food processing is the methods and techniques used to transform raw ingredients into food for

human consumption. Food processing takes clean, harvested or slaughtered and butchered

components and uses them to produce marketable food products. There are several different

ways in which food can be produced.

One Off Production This method is used when customers make an order for something to be

made to their own specifications, for example a wedding cake. The making of One Off Products

could take days depending on how intricate the design is and also the ability of the chef making

the product.

Batch Production This method is used when the size of the market for a product is not clear,

and where there is a range within a product line. A certain number of the same goods will be

produced to make up a batch or run, for example at Gregg's Bakery they will bake a certain

number of chicken bakes. This method involves estimating the amount of customers that will

want to buy that product.

Mass production This method is used when there is a mass market for a large number of

identical products, for example, chocolate bars, ready meals and canned food. The product

passes from one stage of production to another along a production line.

Just In Time This method of production is mainly used in sandwich bars such as Subway. All

the components of the product are there and the customer chooses what they want in their

product and it is made for them fresh in front of them.

Wholesale and distribution

A vast global transportation network is required by the food industry in order to connect its

numerous parts. These include suppliers, manufacturers, warehousing, retailers and the end

consumers. There are also companies that add vitamins, minerals, and other necessary

requirements during processing to make up for those lost during preparation. Wholesale markets

for fresh food products have tended to decline in importance in OECD countries as well as in

Latin America and some Asian countries as a result of the growth of supermarkets, which

procure directly from farmers or through preferred suppliers, rather than going through markets.

The constant and uninterrupted flow of product from distribution centers to store locations is a

critical link in food industry operations. Distribution centers run more efficiently, throughput can

be increased, costs can be lowered, and manpower better utilized if the proper steps are taken

when setting up a material handling system in a warehouse.

Wholesale marketing

The consumption and production of marketed food are spatially separated. Production is

primarily in rural areas whilst consumption is in urban areas. Agricultural marketing is the

process that overcomes this separation, allowing produce to be moved from an area of

surplus to one of need. Food reaches the consumer by a complex network, involving

production, assembly, sorting, packing, reassembly, distribution and retail stages. In

developing countries the linkage between the producer and the retailer is still usually

provided by assembly and wholesale markets, where wholesale marketing takes place

using a variety of transaction methods. Recent years have seen an expansion of wholesale

marketing in E. European and former CIS countries. On the other hand, the growth of

supermarkets in many regions has seen the development of direct marketing and a reduced

role for wholesale systems.

Types of wholesale market

Secondary wholesale markets are generally found only in developing countries these days. They

are located in district or regional cities and take the bulk of their produce from rural assembly

markets located in production areas, where the transactions are small scale and usually take place

between farmers and traders. The distinction between rural assembly markets and secondary

wholesale markets is that secondary wholesale markets are in permanent operation (rather than

being seasonal in nature or dealing in specialized produce), larger volumes of produce are traded

than at the rural assembly markets and specialized functions may be present, such as commission

agents and brokers.

Terminal wholesale markets are located in major metropolitan areas, where produce is finally

channelled to consumers through trade between wholesalers and retailers, caterers, etc. Produce

may also be assembled for export. In some countries, such as India and China, terminal markets

also supply other parts of the country. For example, New Delhi serves as a distribution centre to

the south of India for apples grown in the Himalayan foothills. The problems of terminal

wholesale markets are usually ones of congestion caused by an unsuitable location or by an

inappropriate mixture of wholesale and retail functions. Traditionally, wholesale markets were

built adjacent to city centres, located at a focal point of the inter-city transport facilities and close

to the main retailing areas. Population growth, changes in urban land-use patterns and the

development of modern transport systems have all influenced the suitability and functionality of

existing sites.

Supermarket

A supermarket, a form of grocery store, is a self-service store offering a wide variety of food

and household merchandise, organized into departments. It is larger in size and has a wider

selection than a traditional grocery store, also selling items typically found in a convenience

store, but is smaller and more limited in the range of merchandise than a hypermarket or big-box

store.

The supermarket typically comprises meat, fresh produce, dairy, and baked goods departments,

along with shelf space reserved for canned and packaged goods as well as for various non-food

items such as household cleaners, pharmacy products and pet supplies. Most supermarkets also

sell a variety of other household products that are consumed regularly, such as alcohol (where

permitted), medicine, and clothes, and some stores sell a much wider range of non-food products.

The traditional suburban supermarket occupies a large amount of floor space, usually on a single

level. It is usually situated near a residential area in order to be convenient to consumers. Its

basic appeal is the availability of a broad selection of goods under a single roof, at relatively low

prices. Other advantages include ease of parking and frequently the convenience of shopping

hours that extend far into the evening or even 24 hours a day. Supermarkets usually allocate

large budgets to advertising, typically through newspapers. They also present elaborate in-store

displays of products. The stores are usually part of corporate chains that own or control

(sometimes by franchise) other supermarkets located nearby—even transnationally—thus

increasing opportunities for economies of scale.

Supermarkets typically are supplied by the distribution centres of their parent companies, usually

in the largest city in the province.

Supermarkets usually offer products at low prices by reducing their economic margins. Certain

products (typically staple foods such as bread, milk and sugar) are occasionally sold as loss

leaders, that is, with negative profit margins. To maintain a profit, supermarkets attempt to make

up for the lower margins by a higher overall volume of sales, and with the sale of higher-margin

items. Customers usually shop by placing their selected merchandise into shopping carts

(trolleys) or baskets (self-service) and pay for the merchandise at the check-out. At present,

many supermarket chains are attempting to further reduce labor costs by shifting to self-service

check-out machines, where a single employee can oversee a group of four or five machines at

once, assisting multiple customers at a time.

A larger full-service supermarket combined with a department store is sometimes known as a

hypermarket. Other services offered at some supermarkets may include those of banks, cafés,

childcare centres/creches, photo processing, video rentals, pharmacies and/or petrol stations.

Retail

With populations around the world concentrating in urban areas, food buying is increasingly

removed from all aspects of food production. This is a relatively recent development, having

taken place mainly over the last 50 years. The supermarket is the defining retail element of the

food industry, where tens of thousands of products are gathered in one location, in continuous,

year-round supply. Restaurants, Cafes, Bakeries and Mobile trucks are also ways consumers can

purchase food.

Food preparation is another area where change in recent decades has been dramatic. Today, two

food industry sectors are in apparent competition for the retail food dollar. The grocery industry

sells fresh and largely raw products for consumers to use as ingredients in home cooking. The

food service industry by contrast offers prepared food, either as finished products, or as partially

prepared components for final "assembly".

Types of companies

The companies that supply foodservice operators are called foodservice distributors. Foodservice

distributors sell goods like small wares (kitchen utensils) and foods. Some companies

manufacture products in both consumer and foodservice versions. The consumer version usually

comes in individual-sized packages with elaborate label design for retail sale. The foodservice

version is packaged in a much larger industrial size and often lacks the colorful label designs of

the consumer version.

Providers

Foodservice sales to restaurants and institutions are estimated to be approximately $400 billion,

about equal with consumer sales of foods through grocery outlets. Major foodservice providers

include Aramark, Brinker International, Compass Group, Gordon Food Service, Crown Group,

Darden Restaurants, Sysco, McLane Company, US Foodservice and 3663 First for Foodservice.

Table service

Table service is food service served to the customer's table by waiters and waitressess, also

known as "servers". Table service is the norm in most restaurants, while for some fast food

restaurants counter service is the common form. For pubs and bars, table service is the norm in

the United States whereas counter service is the norm in the United Kingdom. With table service,

the customer generally pays at the end of meal. Various methods of table service can be

provided. See, for instance, silver service.

Food industry technologies

Sophisticated technologies define modern food production. They include many areas.

Agricultural machinery, originally led by the tractor, has practically eliminated human labor in

many areas of production. Biotechnology is driving much change, in areas as diverse as

agrochemicals, plant breeding and food processing. Many other areas of technology are also

involved, to the point where it is hard to find an area that does not have a direct impact on the

food industry. Computer technology is also a central force, with computer networks and

specialized software providing the support infrastructure to allow global movement of the myriad

components involved.

Marketing

As consumers grow increasingly removed from food production, the role of product creation,

advertising, and publicity become the primary vehicles for information about food. With

processed food as the dominant category, marketers have almost infinite possibilities in product

creation.

Media & Marketing

A key tool for FMCG marketing managers targeting the supermarket industry includes national

titles like The Grocer in the U.K., Checkout in Ireland, Progressive Grocer in the U.S., and

Private Label Europe for the entire of the European Union.it

Labour and education

Until the last 100 years, agriculture was labor intensive. Farming was a common occupation.

Food production flowed from millions of farms. Farmers, largely trained from generation to

generation, carried on the family business. That situation has changed dramatically. In North

America, over 50% of the population were farm families only a few decades ago; now, that

figure is around 1-2%, and about 80% of the population lives in cities. The food industry as a

complex whole requires an incredibly wide range of skills. Several hundred occupation types

Research and development

Research in agricultural and food processing technologies happens in great part in university

research environments. Projects are often funded by companies from the food industry. There is

therefore a direct relationship between the academic and commercial sectors, as far as scientific

research.

History of food technology

Research in the field now known as food technology has been conducted for decades. Nicolas

Appert’s development in 1810 of the canning process was a decisive event. The process wasn’t

called canning then and Appert did not really know the principle on which his process worked,

but canning has had a major impact on food preservation techniques.

Louis Pasteur's research on the spoilage of wine and his description of how to avoid spoilage in

1864 was an early attempt to put food technology on a scientific basis. Besides research into

wine spoilage, Pasteur did research on the production of alcohol, vinegar, wines and beer, and

the souring of milk. He developed pasteurization—the process of heating milk and milk products

to destroy food spoilage and disease-producing organisms. In his research into food technology,

Pasteur became the pioneer into bacteriology and of modern preventive medicine.

Developments in food technology

Freeze-dried coffee, a form of instant coffee

Several companies in the food industry have played a role in the development of food

technology. These developments have contributed greatly to the food supply. Some of these

developments are:

• Instantized Milk Powder - D.D. Peebles (U.S. patent 2,835,586) developed the first

instant milk powder, which has become the basis for a variety of new products that are

rehydratable in cold water or milk. This process increases the surface area of the

powdered product by partially rehydrating spray-dried milk powder.

• Freeze-drying - The first application of freeze drying was most likely in the

pharmaceutical industry; however, a successful large-scale industrial application of the

process was the development of continuous freeze drying of coffee.

• High-Temperature Short Time Processing - These processes for the most part are

characterized by rapid heating and cooling, holding for a short time at a relatively high

temperature and filling aseptically into sterile containers.

• Decaffeination of Coffee and Tea - Decaffeinated coffee and tea was first developed on a

commercial basis in Europe around 1900. The process is described in U.S. patent

897,763. Green coffee beans are treated with steam or water to around 20% moisture.

The added water and heat separate the caffeine from the bean to its surface. Solvents are

then used to remove the caffeine from the beans. In the 1980s, new non-organic solvent

techniques have been developed for the decaffeination of coffee and tea. Carbon dioxide

under supercritical conditions is one of these new techniques. U.S. patent 4,820,537 was

issued to General Foods Corp. for a CO2 decaffeination process.

• Process optimization- Food Technology now allows production of foods to be more

efficient, Oil saving technologies are now available on different forms. Production

methods and methodology have also become increasingly sophisticated.

Food packaging is packaging for food. It requires protection, tampering resistance, and

special physical, chemical, or biological needs. It also shows the product that is labeled to

show any nutrition information on the food being consumed

Functions of food packaging

• Physical protection - The food enclosed in the package may require protection from,

among other things, shock, vibration, compression, temperature, etc.

• Barrier protection - A barrier from oxygen, water vapor, dust, etc., is often required.

Permeation is a critical factor in design. Some packages contain desiccants or Oxygen

absorbers to help extend shelf life. Modified atmospheres or controlled atmospheres are

also maintained in some food packages. Keeping the contents clean, fresh, and safe for

the intended shelf life is a primary function.

• Containment or agglomeration - Small items are typically grouped together in one

package for reasons of efficiency. powders, and granular materials need containment.

• Information transmission - Packages and labels communicate how to use, transport,

recycle, or dispose of the package or product. Some types of information are required by

governments.

• Marketing - The packaging and labels can be used by marketers to encourage potential

buyers to purchase the product. Package design has been an important and constantly

evolving phenomenon for several decades. Marketing communications and graphic

design are applied to the surface of the package and (in many cases) the point of sale

display.

• Security - Packaging can play an important role in reducing the security risks of

shipment. Packages can be made with improved tamper resistance to deter tampering and

also can have tamper-evident features to help indicate tampering. Packages can be

engineered to help reduce the risks of package pilferage: Some package constructions are

more resistant to pilferage and some have pilfer indicating seals. Packages may include

authentication seals to help indicate that the package and contents are not counterfeit.

Packages also can include anti-theft devices, such as dye-packs, RFID tags, or electronic

article surveillance tags, that can be activated or detected by devices at exit points and

require specialized tools to deactivate. Using packaging in this way is a means of retail

loss prevention.

• Convenience - Packages can have features which add convenience in distribution,

handling, stacking, display, sale, opening, reclosing, use, and reuse.

• Portion control - Single serving packaging has a precise amount of contents to control

usage. Bulk commodities (such as salt) can be divided into packages that are a more

suitable size for individual households. It also aids the control of inventory: selling sealed

one-liter-bottles of milk, rather than having people bring their own bottles to fill

themselves.

Food storage is both a traditional domestic skill and is important industrially. Food is stored by

almost every human society and by many animals. Storing of food has several main purposes:

• Storage of harvested and processed plant and animal food products for distribution to

consumers

• Enabling a better balanced diet throughout the year

• Reducing kitchen waste by preserving unused or uneaten food for later use

• Preserving pantry food, such as spices or dry ingredients like rice and flour, for eventual

use in cooking

• Preparedness for catastrophes, emergencies and periods of food scarcity or famine

• Religious reasons (Example: LDS Church leaders instruct church members to store food)

• Protection from animals or theft

Food safety

Food safety is a scientific discipline describing handling, preparation, and storage of food in

ways that prevent foodborne illness. This includes a number of routines that should be followed

to avoid potentially severe health hazards.

Food can transmit disease from person to person as well as serve as a growth medium

for bacteria that can causefood poisoning. Debates on genetic food safety include such issues as

impact of genetically modified food on health of further generations and genetic pollution of

environment, which can destroy natural biological diversity. In developed countries there are

intricate standards for food preparation, whereas in lesser developed countries the main issue is

simply the availability of adequate safe water, which is usually a critical item. In theory food

poisoning is 100% preventable The five key principles of food hygiene, according to WHO, are:

1. Prevent contaminating food with pathogensspreading from people, pets, and pests.

2. Separate raw and cooked foods to prevent contaminating the cooked foods.

3. Cook foods for the appropriate length of time and at the appropriate temperature to kill

pathogens.

4. Store food at the proper temperature.

5. Do use safe water and cooked materials.

Prominent Food Companies

Nestlé is the world's largest food and beverage company.

PepsiCo is the largest U.S.-based food and beverage company.

Unilever is an Anglo-Dutch company that owns many of the world's consumer product

brands in foods and beverages.

Kraft is apparently the world's second largest food company, following its acquisition of

Cadbury in 2010.

DuPont and Monsanto Company are the leading producers of pesticide, seeds, and

other farming products

TOURISM INDUSTRY

While the most popular travel destinations in Portugal include the Algarve and Madeira, Lisbon,

other regions like the northern part of the Douro Valley, Alentejo and Porto Santo Islands are

also fast emerging as attractive options to the tourists. The reason why these areas have been

successful in luring tourists is because of the rich history of Portugal. Once a part of the Roman

Empire, it was then acquired by the Christian invaders and finally attained independence in the

12th century. Apart from possessing a booming economy, Portugal also has a rich cultural

history and heritage with myriad painters, musicians and literary scholars having received world

wide acclaim and all this has positively affected tourism. For tourists visiting Portugal presents a

lucrative opportunity of reliving these historical junctures. Also Portuguese wines and vineyards

are world famous and visiting the vineyards and watching extraction and processing from the

grapes to produce wines are a treat indeed. The tourism sector is emerging in Portugal and

current figures suggest that it will soon make its way as becoming one of the significant sources

of income leading to economic prosperity.

History

Situated in the south western part of Europe, the country of

Portugal, formally referred to as the Republic of Portugal is

surrounded in the north and east by Spain, and by the

opulent Atlantic Ocean in the south and west. As early as

138 BC the landmass which is known today as Portugal

was induced within the territories of the Roman Empire

which had established its supremacy at that time.

Therefore, it is not surprising to discover that the name

‘Portugal’ owes its origin from the Roman name ‘Porto

Cale’. The First Country of Portugal was formed in 868 at

the time of the ‘Reconquista’ by means of which the Christians once more attacked the Iberian

Peninsula which had been since then subjugated by the Moors and Muslims. However, it was the

battle of Ourique in 1139 which can be formally regarded as the time when Portugal came to be

recognized as an independent territory and consolidated its position in the world map as a nation

under the able leadership of its ruler Afonso Henriques.

It is significant to mention here that the 13th and 14th century which are often referred to as the

Age of Discovery received tremendous impetus and support from the Portuguese monarchs.

These explorations proved vital in conceiving their later designs of colonizing various locations

in the world like certain parts of the Asian and African continents. Thus the seeds of colonialism

which was sown by Portugal flourished with the progress of time and reached its peak during the

15th and 17th centuries. Towards the 20th century however, their condition declined enormously

and soon they lost most of their subjugated territories. This was followed by the protests within

the country against the right wing dictatorship which was lead by Antonio de Oliveira Salazar. It

was the Carnation Revolution of 1974 which heralded the

beginning of democracy in Portugal and in 1986 it became

a member of the European Union.

Geography and climatic conditions

The country of Portugal is located towards the south-

western part of Europe and it is surrounded by the Atlantic

Ocean on two sides and Spain on the other two. The two major climatic types that dominate this

nation are the Mediterranean type climate and the Oceanic climate. The autumn and winter

seasons are windy and rainy while the summers and springtime are sunny and pleasant. Average

annual temperature of the country ranges between thirteen degree Celsius to eighteen degree

Celsius. However towards the extreme north eastern part and south eastern parts of the country,

absolute temperatures can be recorded during winters and summer respectively, with the winter

temperature dipping as low as minus sixteen degree Celsius and the summer temperature rising

to over forty degrees. Such extreme temperature conditions have been recorded in the Alentejo

region and in Serra da Estrela regions of Portugal. It can be mentioned here that though the

phenomenon of snow fall is not uncommon in the northern parts of the country from October to

May, the southern part of the country hardly receives snowfall. The coastal areas record no

extremes in temperature.

Several rivers flow in the region, the major river being Tagus which has formed extensive

indented river valleys in the northern mountainous parts while in the south they have formed

rolling plains. The Atlantic archipelago comprising of the islands of Madeira and Azores are also

fall within the territorial demarcations of Portugal. Volcanic eruptions are not uncommon to

some islands and Mount Pico on Pico Island is an ancient volcano. Portugal also boasts of

possessing of several natural reserves, protected landscapes, natural monuments, a national park

and several natural parks and therefore is engaged in the conservation of natural resourced.

Portugal is also an exponent of exploring and researching on the marine resources and this has

given rise to the formation of the Exclusive Economic Zone.

A. MARKET HIGHLIGHTS AND BEST PROSPECTS

1. Market Profile

Portugal occupies a total area of 92,985 Km2 , of which 88,944 Km2 are mainland Portugal and

the remainder are the Madeira and Azores Islands. The population Portugal is around 10 million

inhabitants. The climate in mainland Portugal is characterized by humid winters,andrelativelydry

summers. In the Algarve region (southern Portugal), the winters are moremoderateandsunny,with

hot summers. The moderate and mild weather and thebeautifulanddiversifiedlandscapeinPortugal

makes tourism one ofits largest industries. Traditionally the Portuguese populationtakesavacation

at least once ayear. The preferred months are July, August and September and the Christmas

season. By lawthe Portuguese work force is allowed to take 22 working days vacation.

2. Travel and Tourism Infrastructure

Tourism is a vital sector in the Portuguese economy. Any initiative intended to expand tourism is

always welcome by the Government of Portugal. Portugal continues its massive infrastructure

developmentprojects. The need to parallel such progress with more elaborate and complete

passenger travelservices increases, therefore, as well. In 1998 Portugal hosted the World Fair and

will host theWorld Football Cup in 2004 - Euro 2004.Consequently, Portugal has invested in

upgrading facilities and developing sufficientinfrastructure in order to host these events. The

metro in Lisbon is continuously expanding and anew metro in Oporto, Portugal's second largest

city, is expected to be ready by 2003. Moreover,there are plans to build a new international

airport in Lisbon by 2010, to build over USD 3 billionin new highways and new football

stadiums, to execute urban renewal projects in eightPortuguese cities and to create a "Hollywood

type" movie city in Cascais. To this, the privatesector has responded by building 20 new hotels

inLisbon and 6 new hotels in Oporto. As Portugal undergoes these improvements in

infrastructure,it comes as no surprise that more tourists come to Portugal to enjoy its culture,

monuments andmedieval towns,adventure vacations and eco-getaways. Tourist arrivals in

Lisbon, for example, have increasedover ten percent each year since 1998 is indeed the

realization.Presently, there are a total of 1,786 hotels, motels, tourism apartments and resorts;

569 agro/ruraltourism lodging units; 183 camping parks totaling an area of 870.9 acres; and 50

youth hostels. InJanuary 2000,the total number of travel agencies was 1200. The latest statistical

data on the number ofrestaurants is dated 1996. At that time, Portugal had a total of 35,633

restaurants and similarfacilities (i.e. cafes, bars, bakeries, etc.). The tourism industry employs a

total of 42.303 people.Twenty new hotels are projected and some are already under construction.

The completiondeadline for all hotels is 2004, the year when Portugal hosts the Euro 2004

European Football Cuptournament. The investment of around USD 300 million will increase the

hotel rooms in Lisbonto 27,000 compared to the present 12,000 rooms, an increase of around

25%. Some new hotelswill use existing high-value and/or historical real estate. The refurbishing

and remodeling ofsome of Lisbon's older but valuable real estate will recuperate properties that

have been ignoredfor many years.Since the World EXPO took place in Lisbon in 1998, tourism

has been increasing. By July 2000,the number of tourists to Lisbon had increased by 1.8 million

and the hotel occupancy ratereached 76%. Tourist arrivals in the Lisbon International Airport

have increased at a 10% rate peryear since 1998.Oporto, the Industrial capital of Portugal,

located 300 kilometers north of Lisbon, has a lowerhotel occupation rate and hotel prices are also

lower compared to Lisbon. Nevertheless, Oportoexpects its tourist rates and hotel occupancy

rates to increase considerably for the Euro 2004 and,therefore, is also building six new hotels and

reconstructing and upgrading two existing hotels.Oporto will invest around USD 120 million to

increase its hotel rooms by 1,200.

3. Market Trends

Portuguese vacation trends are changing. Portuguese tend to visit places outside Portugal. As the

economy grows (3.4% GDP in 2000), consumers wish to travel more. Since August 1999, when

Portugal qualified for the U.S. Visa Waiver Program, inbound tourism from PortugalotheUnited

States has skyrocketed: between 1998 and 2000, the number ofPortuguesetouristswhocametothe

United States increased by 28.6 percent. Moreover, as Portugal catches up to itsEUpartners, it

will continue to mimic if not outperform EU trends. This bodes favourably for thePortuguese

Travelling Industry as WTO figures forecast a more than doubling of European travelto foreign

destinations over the next two decades from 350 millionin1999to728millionin2020.Thisgrowing

trend is reflected in the efforts of a number of American companies to start upcharter air service

from the United States to Portugal. Accordingly, passenger travel services needto be developed

in both directions as the Portuguese increasingly flock tovacation in the

UnitedStatesandasPortugal becomes a growing international vacation hot spot.In 2000 a total of

4.1 million people in Portugal mainlandover 15 years of age, enjoyed a vacationaway from

home, either in Portugal or outside Portugal. Of these, 1.1 million visited foreigncountries.In

order to maintain this trend and because of the safety alert, the expansion of the market and

thedevelopment of a complete set of passenger services does not solely rest within Portugal.

Withthe current situation a number of safety and security measures have to be taken in airports

andairplanes in order to gain passenger confidence. Airport surveillance equipment will have to

beacquired and existing equipment upgraded. Aircraft carrier cockpits will have to be safer

andinaccessible to passengers. Creation of safe cabins for flight attendants with

communicationequipment should be designed and air patrol police force enforced.The preferred

destination in-country in 2000 was the Algarve, south of Portugal where thebeaches are vast and

the water is warm. The north central part of Portugal is also becomingpopular.Portuguese

vacation trends are changing. Portuguese tend to visit places outside Portugal. As theeconomy

grows (3.4% GDP in 2000), consumers wish to travel more. Since Portugal qualifiedfor the U.S.

Visa Waver Program, in August 1999, travel to the U.S. has increased. From 1999

to2000,tourism from Portugal to the U.S. increased by 8.7 percent compared to 6.8 percent in

theprevious year. This ranked Portugal in 46th place for international visitor arrivals to the

UnitedStates, one of the top 55 overseas markets.Travelling to foreign countries grows at an

average of 8 percent per year. European countriesare still in the first tier reaching a total of 77.3

percent. Spain stands in first place with 42.4percent, followed by France with 14.8 percent.Tour

operators and travel agents play an important role when it comes to suggesting

holidaydestinations - Mexico, Cuba, Dominican Republic, Brazil, Tunisia, Turkey and the U.S.

have hadvery good promotions and are starting to become popular. There are around 1200 total

travelagencies (including headquarters, branches and implants) throughout Portugal. Most of the

touroperators have travel agencies. Travel agent services are sought more often by the

Portuguese,particularly in the caseswhere the holidays are spent away from home. Most

Portuguese maketheir travel arrangements two months or less ahead of the departure date.Until

mid September 2001, the most restrictive reasons for not traveling inside or outside thecountry

were economic, health and professional reasons. Today safety and security are rankedfirst.The

year 2000 outranked 1999 which had been the highest percentage ever of Portuguesetravelers to

foreign destinations. In 2000 a total of 1.1 million people travelled to foreigndestinations - an

increase of 8.2 percent from 1999. The preferred destinations are: Europe:Spain 42.4%, France

14.8% and England 5%; Africa: best preferred continent after Europe, with8% of the travel;

Brazil with 7%; and the USA with 4%.Vacations spent away from home in the in the past 3

years1998 1999 2000 -Vacations in Portugal 89% 91% 97% -Vacations outside Portugal 17%

22% 30% The sum of the holidays in and outside Portugal is over 100%, as some of the

Portuguese spent their holidays both in Portugal and abroad.

The economic structure is, undoubtfully, the most important factor when it comes to travelling.

People who earn more have the opportunity to travel more not only in Portugal but also to

foreigncountries. Below is a table by socio-economic distribution of the Portuguese people who

took avacation in the past three years.

The average amount of money spent while on vacation varies from USD 35 if in country

andaround USD 75 if outside the country (Exchange rate: USD 1=PE 200. These figures do not

include accommodation).

4. Visitor Profile

Age, residential area and social status are a few of the factors that influence vacation tendencies

inPortugal. Age is a very important factor for the travelling community - the younger sector of

thepopulation is the one that travel most as shown in the table below. This is due in part to

thespecial reduced tariffs from which the younger generation benefits. The statistics collected in

thefirst three months of 2001 indicated that 14,4 percent of the portuguese population (over 15

yearsof age) travelled for a vacation (6.1 percent) or to visit relatives (5 percent). In 2000 the

mainreasons for travelling were:Visiting relatives and friends: 42.0%Vacation and leisure: 38.1%

Business travel: 11.4%People living in larger and more populated cities or areas tend to

travelmore. Information andservices cover a wider range of the population and this group of

inhabitants is better informed.They are the ones that use the services of travel agents more often

-- be it for reservation ofaccommodations and/or transportation only, or for buying complete

travel packages. Living inlarger cities is also more tiring and saturating thus these people value

the rest/relaxation in avacation more than other people living in calmer and quieter regions.

4. Best Sales Prospects

Beach vacations are the Portuguese travellers' main preference. If the tourist stays in Portugal,the

Algarve in southern Portugal is ranked first with 32 percent. If travelling abroad, Spain is ranked

first with a vast number of tourists travelling to the CanaryandBalearicIslands.Spainisfollowedby

France, Turkey, Tunisia, Morocco and Malta.Portuguese inbound travel to the United States

continues to grow at a steady pace, an increase of8.7% from 1999 to 2000. New York, Florida,

New England and California are the preferreddestinations for the Portuguese in the U.S. There

are large concentrations of Portugueseimmigrants in the New York, New Jersey, New England

and California. Florida offers goodsummer resorts and theme parks to whichthe Portuguese like

to travel.

B. COMPETITIVE ANALYSIS

1. Domestic Tourism

The preferred vacation spot in Portugal during 2000 was the Algarve region with increased from

28 percent in 1999 to 32 percent in 2000. Generally Portuguese workers take two to three weeks

of leave during the summer months and remainder in December and other periods. It is also

common that Portuguese make long weekend getaways at least once a month. Specially, if a

public holiday should fall on a ThursdayoraTuesday, they take advantage of that situation and

make a "bridge" - thus taking four days togetaway to a different environment. The beach is by far

the preference of most getaways, followed by ecological/country side environments.

2. Barriers

Of several reasons for not going on vacation -economicreasonsarebyfarthemostprevalentfollowed

by professional reasons. Safety and security have also become one of the mostimperative reasons

for not travelling by air. Among others, are personal or family healthproblems, other family

problems, not having a job, being retired.Other barriers include difficulty in choosing the perfect

destination - many Portuguese depend onthe travel agent to give them suggestions and a good

package at a good price. Of the 619thousand people that took a vacation in 1999, had it not been

for doubts in choosing an outsidedestination, around 88% might have traveled to destinations

outside Portugal - as opposed to theprevious year where only 48% expressed thatinterest. The

restrictions named by the surveyed people for not traveling abroad aremainlyhighaccommodation

and transportation fares.

C. END USER ANALYSIS

Portuguese tourists like to spend when on vacation.Inaverage,aPortuguesetakingavacationoutside

Portugal, in addition to accommodation, spends around USD 75.00 per day per persononfoodand

miscellaneous products. Shopping is a must when on vacation. There are no figures available on

how much is spent on shopping per traveler when on vacation.

For the Portuguese tourist vacations are a consumer habit. They like to eat at good restaurants

and visit attractions. The preferred activities when on vacation are:

1) 71% - rest and personal care, regenerate body and mind

2) 38% - outdoor / beach activities

3) 16% - meeting different cultures

4) 16% - visit attractions and see theater shows

In 1999, 16% of the people taking vacation used a travel agent. The use of travel

agenciesincreases every year. The travel agent plays an important role in planning vacations and

suggesting interesting destinations. In 1999 bookings for travel to foreign destinations accounted

for around 62% of the travel agent's services, compared to 55% the previous year. However, the

Portuguese are also using these services for in-country accommodations. People living in

largecities, Lisbon and Porto, in the age group 14 to 35 are the ones using these services most

often.The principle advantages of using the travel agent are show in the table below:During the

first three months of 2001 38.5 percent of the travel was organized directly by thetraveler. Only 7

percent of the travellers visited a travel agent or tour operator. Many of thetravellers are using

direct internet shopping for the travelling and avoiding the long andcomplicated trips to a travel

agent. The internet has become a time saving and comfort factor -and in many cases competitive

prices are offered. Travel agents are mainly used for business andprofessional travel.

D. MARKET ACCESS

When travelling outsidePortugal,Portuguesepeopleliketobuyfullpackagesthatincluderansportation

fare, accommodation and guided tours. It is a Portuguese habit to leave everythingto the

lastminute thereforemany times they are unable to travel to the chosen destination because

everything is fully booked.

In the past couple of years some tour operators and travel agents, in an attempt to change this

trend, have offered special prices to those booking their vacations 2-3 months in advance.The

media, travel agents and tour operators have a major influence in promoting specificcountries as

holiday destinations outside Portugal among end-users. State and local travel andtourism offices

should work closely with the U.S. airlines, hotels and other holiday resorts inorder to arrange

attractive packages to promote European travel to the U.S.Commercial Service ProgramsIn an

effort to increase tourism from Portugal to the USA, the Commercial Service Portugal isworking

closely with Portuguese travel market players and media to generate interest amongPortuguese

travelers to visit the Sarthe next Lisbon Tourism Fair, in January 2002, we are planning to have

the second American Pavilion. In our first participation we had the participation of two U.S.

Tour Operators, onefrom California and one form Orlando, the Miami

ConventionandTourismBureau,MassportAurthority, Continental Airlines, Delta Airlines,

National Car Rental, U.S. National Parks and twoPortuguese tour operators that promote the U.S.

as a tourism destination. Our sponsors were Pepsi-Cola, M&Ms, Outback Steakhouse, TGI

Friday’s and Budweiser.

FORESTRY INDUSTRY IN PORTUGAL

INTRODUCTION

While tourism is an evidently crucial industry for Portugal and others such as textiles, cork and

automobile components are well-known, the importance to the economy of a business more

famous in Nordic countries – wood-pulp and paper production – may not be so obvious.

The second phase of privatisation of wood-pulp and fine paper major, Portucel, has been

headline news in Portuguese business newspapers for two years. Battle for control between

leading contenders Cofina/Lecta and Norway’s M-Real has been fierce and acrimonious. The

favourite in the race, which for the first time is being decided by a jury rather than on the basis of

a simple auction, is Portuguese conglomerate Cofina, in partnership with Europe-wide paper

group Lecta.

The reason that the debate has been so hot is that the pulp and paper business really is one of

Portugal’s most important industries. Exports of wood pulp and paper total over €1.4 billion,

nearly 5% of all Portuguese exports. Over 60% by value of these exports are as paper and the

rest as pulp. For a small economy, this is definitely big business.

Portugal is a significant player in the European market. While Finland and Sweden dominate

pulp production, Portugal is fifth among the other competitors and produces some leading office

and printing paper brands.

Portucel is by far the biggest player in Portugal, boosted by recent major acquisitions of Soporcel

(pulp producers) and Papeis Inapa (paper mills). These purchases brought not only sizeable

additional areas of forestry – Portucel now controls 20% of Portugal’s eucalyptus forests, which

represents 2% of Portugal’s total land area – but also a portfolio of some of Europe’s leading fine

paper brands: Navigator, Explorer and Inacopia, to name only three. Portucel is one of the

world’s biggest producers of bleached eucalyptus Kraft pulp for the packaging industry and one

of Europe’s top five producers of uncoated wood-free paper.

Other key players in Portugal are Caima (pulp), Stora Enso-Celbi (pulp), Companhia de Papel do

Prado (specialist printing and packaging products), Renova (sanitary paper products) and Nisa

(sanitary paper products).

Even in these hard times, Portugal’s paper and pulp business has remained strong, with latest

estimates showing that sales increased by over 3% in 2002. Pulp production is growing even

faster than paper as demand in the local market also expands. As the industry consolidates and

vertical integration from tree to distribution of finished paper deepens, so Portugal’s main

players are becoming stronger. Horizontal geographical integration is also an important strategy,

with Portuguese companies forming joint ventures and alliances with producers in Spain and

elsewhere.

PAPER PULP

Paper pulp simply refers to the various means and devices employed in order to produce paper.

The paper pulp is usually comprised of cellulose fiber and has a variety of uses. In Portugal

about 38% of the total land area is dedicated to forestry and forest resources and extensive areas

are dedicated to the cultivation of timber plantations and eucalyptus. In fact, pulp wood refers to

the timbers grown specifically for the purpose of manufacturing wood pulp. In Portugal, the

various forest resources have encouraged the birth of industries which are engaged in the

seasoning of these products and one of the premier industries so developed is that of the paper

pulp. In Portugal, paper mills are present in different parts of the country and the most prominent

manufacturers are the Portucel Soporcel group.

In recent times it has been observed that the domestic timber plantations have not been sufficient

in order to meet the growing demands of the Portuguese paper pulp industry. This is because

huge tracts of land are destroyed every year as a result of inefficient forest management policies

and also more importantly due to forest fires. The data released by the National Forest Inventory

in Portugal has revealed that the present state of indigenous production will enable only a mere

52% of the present demand for paper pulp to be meted while about 45% of the future demand is

estimated to be fulfilled in future. As a result of the shortfall in domestic production, the paper

industry is forced to depend upon inferior quality imports in order to meet the rising production

demands which also affect the goodwill of the industry. However, it cannot be avoided as

Portugal is Europe’s fifth largest producer of uncoated wood free paper. However, despite all

odds, Portuguese paper and pulp industry has managed to secure a 3% increase in sales figures

evident in the 2002 statistics.

FORESTRY IN PORTUGAL

Recent researches have revealed that an estimated percentage of about 38% of the total land area

of Portugal is occupied by forests and in fact it is to be noted that the forests occupy even larger

area than the amount of land surface dedicated in Portugal to agriculture and farming. In

Portugal, the major share of the forest area is covered by the wild pines accounting to about 31%

of the total forest area, followed by cork oak trees occupying about 23% of area i.e. 713,000

hectares while eucalyptus occupies around 21% of the forest area. At present the forest products

comprise of the major export products in Portugal and they are slowly emerging to be one of the

foremost contributors to the soaring Portuguese economy adding on to the Gross National

Product of the nation. Some of the most important resources obtained form the forests of

Portugal include paper pulp and paperboard, wood pulp, corks and over the years with the

progress of time, increased production has led to the formation of various industries dedicated to

the seasoning of these products to make them suitable for export in foreign markets. If export

statistics are taken into account, it is to be found that in the year 2000, a total growth percentage

of 25% could be noted with respect to the exports than in 1999 and since then the figures are

steadily increasing.

Over the years, two major problems have plagued forestry and forest resources in Portugal. First

and foremost are the wildfires which are extremely common in Portugal. Despite its prevalence

adequate measures are not taken and as a result it causes widespread devastation and havoc.

Another significant problem is that with increased urbanization, deforestation is on the rise

resulting in decrease in forest area which can adversely affect production of forest resources and

economy. However, in recent times, researchers are engaged in adopting safety measures to

prevent and control wildfires and aforestation is being practiced.

CORK AND FOREST CONSERVATION

Among the various forest products that are obtained from the forests of Portugal, one of the

foremost is the cork which is gathered from the bark of the cork oak trees which are cultivated in

abundance in Portugal. Portugal accounts for about 50% of the total cork production in the world

and is the leading exporter in the world as well. It is derived that an estimated 720 hectares of

forest land is devoted to the production of cork oak trees. The Mediterranean type climate of

Portugal immensely facilitates the production of cork oak trees and the bark of the cork oak tree

is known as cork. The cork oak tree can survive for over 150 years and when it is about 25 years

old, the rough and rugged and thick bark of the cork oak tree is removed to be harvested for over

a decade and after harvesting it is considered to be suitable for use. It is quite natural to raise the

question at this point that in which way can cork aid in forest conservation. There are various

reasons behind that.

First and foremost, it is to be remembered that as soon as the bark of the cork oak tree or the cork

is removed, it is replaced by a new layer which begins growing once more. Therefore, the cork is

a renewable resource. Cork is a vegetable tissue and at the time of its harvesting no chemical or

artificial process is involved and as a result it always retains its naturalness and therefore the

forest environment remains unhampered. Moreover, apart from being ecological, corks are also

biodegradable substances. In the present era, when the world is endangered by the growing

effects of environmental pollution aggravated by the growing amount of garbage and chemical

wastes that harm the natural surroundings, cork is natural and it can be recycled for reuse later.

Thus cork is extremely helpful in maintaining the ecological balance and aiding forest

conservation.

PINE NUTS AND FOREST CONSERVATION

Portugal is located in the south western part of the continent of Europe and it is filled with

picturesque locations and beautiful landscapes displaying exquisite scenic beauty. It is interesting

to note that in Portugal, about 38% of the total land area is occupied by forest cover which is

even more than the amount of land surface dedicated to agriculture in the country. According to

official estimates, the major section of the forest area is dominated by the wild pine trees which

occupy 31% of the total forest area which is equivalent to around 976,000 hectares and is

followed by corks and eucalyptus. Of these wild pines, there exists also another species known

as the stony pines which are cultivated in Portugal. The stony pines are also popularly referred to

as umbrella pines in the country and the statistics and figures revealed by the Portuguese

National Forest Inventory reveal that the stony pines occupy a total area of about 83,900 ha of

forest areas. These trees grow extensively in Portugal and one of the major causes facilitating its

cultivation is definitely due to the favorable weather conditions provided by the Mediterranean

climate of the region.

These stony pines are extremely beneficial for maintaining the ecological balance of the forest

area and prevent against pollution and facilitate forest conservation. First and foremost it is to be

noted that the stony pines are adaptive t

PAPER PULP

Paper pulp simply refers to the various means and devices employed in order to produce paper.

The paper pulp is usually comprised of cellulose fiber and has a variety of uses. In Portugal

about 38% of the total land area is dedicated to forestry and forest resources and extensive areas

are dedicated to the cultivation of timber plantations and eucalyptus. In fact, pulp wood refers to

the timbers grown specifically for the purpose of manufacturing wood pulp. In Portugal, the

various forest resources have encouraged the birth of industries which are engaged in the

seasoning of these products and one of the premier industries so developed is that of the paper

pulp. In Portugal, paper mills are present in different parts of the country and the most prominent

manufacturers are the Portucel Soporcel group.

In recent times it has been observed that the domestic timber plantations have not been sufficient

in order to meet the growing demands of the Portuguese paper pulp industry. This is because

huge tracts of land are destroyed every year as a result of inefficient forest management policies

and also more importantly due to forest fires. The data released by the National Forest Inventory

in Portugal has revealed that the present state of indigenous production will enable only a mere

52% of the present demand for paper pulp to be meted while about 45% of the future demand is

estimated to be fulfilled in future. As a result of the shortfall in domestic production, the paper

industry is forced to depend upon inferior quality imports in order to meet the rising production

demands which also affect the goodwill of the industry. However, it cannot be avoided as

Portugal is Europe’s fifth largest producer of uncoated wood free paper. However, despite all

odds, Portuguese paper and pulp industry has managed to secure a 3% increase in sales figures

evident in the 2002 statistics.

PAPER AND PAPER BOARD

In most areas where forest covers exceed the area devoted for agriculture, the forest resources

obtained play a major role in the export market. This is especially true in case of Portugal which

is located in the south western part of the European continent where the forest resources

comprise about 10% of the exports. One of the foremost products obtained from the Portuguese

forests are paper and paperboard. The forest cover in Portugal occupies about 38% of the total

land area and a major part is comprised of timber and eucalyptus cultivations which are the

primary raw materials for the paper and paperboard industries. Paperboard is usually thicker than

paper and is used in the form of huge boxes or cartons which are necessary as packages and also

in order to carry heavy weights around. In Portugal, paper and paperboard are among the

foremost forest resources which are exported and various industries and mills have been set up in

order to season the products before making it available for export. In the recent past, huge tracts

of forest area have been lost in Portugal due to forest fires which adversely affected the

production of paperboard as domestic production failed to meet the demands.

Statistics reveal that since 1997 the paper and paperboard industry had shown an upward rise in

the production graph. In the years that followed production was slackened due to improper forest

management and natural hazards. However, since 2003, the production level has increased again

and between 2003 and 2004, there has been recorded a total 4% increase in sales. This is due to

the expansion of the export market. Along with the countries of the European Union which

constituted its primary exports like France, Germany and Spain, at present the Middle East, Asia,

America and Oceania too have engaged in importing Portuguese paperboards as well which has

positively boosted the market.

WOOD PULP

In Portugal a total of about 38% area is devoted to forest cover compared to 31% which is

reserved for agricultural purposes. The forest resources in Portugal are extremely important for

the economic growth of the country as a considerable amount of the produce is exported in huge

quantities to mostly various countries of the Europeans union itself. It can be estimated that

about 31% of the total forestry area in Portugal is occupied by pines and around 21% is acquired

by eucalyptus. Both of these are significant contributors to the Portuguese paper and pulp

industries serving as raw materials in the mills. Wood pulp is developed by employing various

physical and chemical processes in order to segregate the fibers that make up wood. Wood pulp

itself is a fibrous substance as well and its production is facilitated by the pulp wood which refers

to the timber which is grown especially for the purpose of obtaining wood pulp. The various

kinds of softwood trees like pine and eucalyptus, which are grown extensively in Portugal, help

in the production of wood pulp.

It is to be noted that in recent times the wood pulp industry ahs been affected greatly due to a fall

in the number of timber plantations. This reduction in vegetation has been caused by forest fires

mainly along with the absence of proper forest management policies. All this has led to a fall of

about 5.4 million of timber plantations in Portugal. In case of eucalyptus, the last decade or so

has seen a considerable fall in production due to around 119,000 hectares of eucalyptus been

destroyed by fires and the absence of proper raw materials immensely affected the quality and

the industry as a whole. However, since 2004, wood pulp production has again taken an upward

swing with production increasing by about 1% and the trend continues with an increase in wood

pulp integration since 2006.

HOLM OAK

Portugal is located in the south western part of the continent of Europe and it is surrounded by

the opulence of the Atlantic Ocean in the south and west and the country of Spain in the north

and east. In Portugal about 38% of the total land surface is covered by forests which are much

higher than the total area devoted to cultivation of agricultural crops in the country. The forest

resources obtained in Portugal comprise about 10% of total exports and contribute immensely in

the economic growth and development of the country. If one looks at the total forest area of

Portugal, it will be seen that the maximum portion is covered by the maritime pines or the wild

pine trees which occupy around 31% of the forest area and is followed by the eucalyptus and

cork oak plantations. The holm oak trees are also prevalent in the Mediterranean regions and in

Portugal which is dominated by the Mediterranean type of climate, holm oak trees grow in

abundance occupying approximately an area of 464,000 ha. In fact the forest cover of Portugal is

divided into two major parts. The first comprises of the plantation area which includes

eucalyptus and the maritime pines while the other is the comprised by the indigenous species

which includes cork oak and holm oak trees. The holm oak or Quercus ilex are prevalent in the

Mediterranean regions and in the areas adjoining the Atlantic Ocean, they are mostly to be

found. From the sea level they can grow up to an altitude of about 1400 meters and the warm

temperature which is characteristic of the Mediterranean region is conducive to its growth.

In Portugal, every year forest wildfires destroy huge tracts of land and vegetation and this has

affected the holm oak trees too. In the absence of proper laws governing forest affairs and

incompetent firefighters have led to the loss of plantations. However, measures are being taken

now to preserve forest resources.

MONTADO OR OAK FORESTS IN PORTUGAL

In Portugal, extensive areas of land surface are devoted to forestry and forest resources. This is

because the forest products are extremely important for the economic growth of the country as

they constitute about 10% of exports and in recent times, profit levels have increased

considerably. In addition there is a growing international recognition of montados as home for a

range of wildlife and biodiversity. A variety of vegetation composes the forest cover in Portugal

which is about 38% of its land area. Of the total forest area, 31% is occupied by the wild

maritime opine trees and 21% is accounted by the eucalyptus plantations. But one of the most

significant indigenous species planted and cultivated in Portugal since antiquity are the cork oak

trees. The cork oaks and the holm oak trees occupy extensive areas of the forest.

There are many different kinds of oak forests and in Portugal the cork and holm oak forests are

extremely predominant and its proximity to the Mediterranean basin along with the climatic

characteristics aids its growth. There are various reasons behind the widespread cultivation of the

cork oaks and holm oaks. The cork oaks and holm oaks which grow extensively in the forests of

Portugal can be cultivated in almost any soil type and there are no hard and fast rules with regard

to its growth though in order to occupy huge tracts of lands as forests. Especially the cork oak

trees are extremely helpful in preserving the ecological balance of the forest environment. This is

possible as the premier product which is obtained from the cork oak trees i.e. cork is a vegetable

tissue and a renewable resource and recyclable and therefore environment friendly. In fact oak

trees in the forest covers of Portugal facilitate forest conservation immensely. In Portugal, the

forest department is extremely instrumental in the preservation of oak trees and therefore, cutting

down of these trees are considered illegal and is a punishable offence.

PAPER MILL - PORTUCEL SOPORCEL GROUP

Most of the forest resources and products obtained from the forests of Portugal are extremely

important because of their enriched value in the export market. The major products include cork,

paper pulp and wood pulp and paperboard etc. and these products are available as a result of the

swift supply of the required raw materials like timber, eucalyptus from the forest cover of

Portugal. The leading organization in Portugal which trades in the production and export of pulp

and paper is the Portucel Soporcel Group which was formed by the merging of the Portucel and

the Soporcel. It is to be remembered at this point that the paper and pulp industry is one of the

premier among the industries of Portugal and the extensive and efficient operations of the

Portucel Soporcel group has managed to consolidate the position of Portugal as the world’s fifth

largest producer of uncoated wood free paper. The company’s profits are soaring high

accounting to about 1,000 million euros annually and contribute greatly to the economic

development of the country as a whole.

The Portucel Soporcel Group owns a set of three paper mills which function in Cacia, Figueira

da Foz and Setubal. One of the reasons being the successful production of this Group is that they

possess all the updated technological tools required for production and seasoning and therefore

the outputs are of excellent and superior quality and this has earned them enough goodwill in the

market. In fact they are well known for their acclaimed usage of eucalyptus as the primary raw

material in case of pulp production in order to meet the growing demands in the market. The first

mill of the Portucel had begun functioning in Cacia in 1953 and since then there has been no

looking back fro the Group which is the biggest forestry owner in Portugal today. They also

ensure undertaking of measures to act as prevention against forest fires which harm vegetation in

Portugal.

FOREST AREA

In the country of Portugal, extensive areas of the total land surface are dedicated to forestry and

cultivation of forest resources. About 38% of the total land area is dedicated to forestry which is

again much more than the estimated area which is devoted for agriculture and farming purposes.

The forest area of Portugal is divided into two separate zones. These include a planted area

which is made up of the maritime pine trees and eucalyptus while the other section comprises of

the indigenous variety comprising of holm oak trees and cork oak trees. The huge expanse of

land in Portugal which is devoted to forest cover is occupied mostly by the maritime pine trees

followed by eucalyptus plantation and cork oak and holm oak. It is interesting to note how these

native products are instrumental in facilitating forest conservation and maintaining the ecological

balance of the forest environment. A notable example in this case is the holm oak trees which are

considered to be important stabilizers of the dry agrosilvopastoral ecosystems thus aiding in

preventing the destruction of trees.

It is to be noted that in Portugal one of the dominant causes for the loss of forest resources are

the wildfires that are quite common and it has been seen in a particular year, there has been an

alarming amount of 30,000 forest fires which is frightening. While this is a major cause for

destruction of forest area, the absence of proper measures and safeguards against this natural

disaster further aggravates this problem. However, in recent times, it must be pointed out,

extensive measures are being devised by forming public opinion and spreading awareness and

thus preserve the natural resources.

In recent times afforestation is a prominent measure introduced to preserve the existing forest

area and increase it as well and the policies of the European Union Regulations, it can be

estimated that the forest cover in Portugal is in the process of expansion annually.

TEXTILE INDUSTRY IN PORTUGAL

INTRODUCTION

The implementation of BATs (Best Available Techniques) is needed by companies operating

IPPC (Integrated Pollution Prevention and Control) systems in order to secure sustainable

development approaches to environmental management. BAT details are explained in BREFs

(BAT REFerence Documents), which are technical documents that set out the standards required

for environmental factors, such as emissions. BREF information about emission requirements for

the textile sector is currently not indicated. This can create difficulties for stakeholders during

assessment of textile companies’ environmental performance and in identifying methods that can

be considered as BAT.

Portugal’s textile sector represents an important industry in terms of employment and

management of the environment. The industry includes around 2 500 companies (95% are

SMEs), of which 36 companies are directly involved in IPPC systems for the pre-treatment or

dyeing of fibres or textiles (exceeding 10 tonnes/day).

OBJECTIVES

The main objective of this LIFE project is to define best environmental performance indicators,

with targets, for the textile and clothing sector in Portugal. The methodology will provide a

common working tool to obtain comparable results. The aim is to demonstrate an effective

approach that can be flexible and applicable to other sectors across Europe.

Economic factors will be examined to assess commercial impacts of BAT implementation and an

IT tool will be created to illustrate positive and negative impacts in different operational

circumstances. A Decision Support Manual will also be produced to provide textile companies

with appropriate information about environmental performance indicators, economic factors and

BAT implementation. Special attention will be paid to preparing advice about reducing carbon

footprints and CO2 emissions.

I ndi a-P or tu gal Tr ade Stati sti cs

(Calendar Years)

(Value: Million

India’s Exports to

India’s Imports

Bilateral Total

India’s Trade

2011 Jan/Apr Euros 190,83 Euros 36,20 Euros 227,03 Euros 154,63

2010 Euros 408, 92 Euros 60, 83 Euros 469, 75 Euros 348,09Euros 262, 24 Euros 40, 39 Euros 302, 63 Euros 221, 85

2008 Euros 474, 87 Euros 46, 53 Euros 521,40 Euros 428, 34

2007 Euros 334,57 Euros 29,75 Euros 364,32 Euros 304,82

Science and Technology: The present Programme of Cooperation for 2010-2012 under

the Agreement for Cooperation in Science and Technology signed on December 3, 1998,

between India and Portugal, and remains an active partnership with widened areas of

scientific research, with 60 joint projects presently under its ambit.

Cultural ties: A Cultural Cooperation Agreement was signed in 1980 under which

several Cultural Exchange Programmes (CEPs) have been implemented enhancing

cultural relations and understanding.

Industrial energy consumption in Portugal

The energy consumption of the industrial sector was 33% of the total energy consumption in

Portugal, in 1993, totaling 4 MTOE. The textile sector is responsible for 3% of the total energy

consumption, and 9% of the industrial energy consumption.

Energy consumption in the Portuguese textile sector

The definition of textile sector agreed upon the partners of this project is the corresponding to the

NACE code 17 - Manufacture of textiles except apparel. This section refers to this sub sector

except when impossible, with some considerations:

The Economic Activity Code (CAE) used for statistical classification in Portugal only recently

(1993) adopted the NACE classification, and almost all available data still follows the former

classification system (CAE rev1).

1. The correspondent to the code 17 in the former classification system was the code 321, being

32 the then called "textile industry" as it included clothing.

2. The maximum segregation in almost all data relating to the CAE rev1 is three digits, which

made impossible to obtain some information about the sub sector of the actual code 17.

3. Some industries then classified in the 321 code, are now not considered textile industries,

being the codes 19102, 20521, 36631 and 37200 of the present classification system, namely:

Manufacture of restored leather; Manufacture of straw and plaiting articles; Manufacture of

Linoleum and other rigid floor coverings; Recycling of non-metal waste and scrap.

4. The textile industry (CAE rev1 321) in Portugal was responsible in 1988 for 12,2% and in

1993 for 9,0% of the industrial energy ESTI intermediate report summary This significant

decrease has two probable explanations: the reduction of the number of companies due to the

crisis in the sector (it may be seen in the decrease from 4241 companies in 1993 to 3942 in

1994), and energy efficiency improvements. Several public financing programmes have been

supporting these improvements, and specially in the textile sector which has suffered from a

profound crisis due to the increased competition from the far east.

General considerations on the Portuguese textile sector

The textile sector is one of the most important industrial sectors in Portugal. In 1994 it was

responsible for 9% of the industrial GDP, for 8% of the Portuguese exports, and employed

127676 persons on 3942 enterprises (CAE 321). More recent data refer the existence of 2530

industries classified within the code 17 (NACE or CAE rev2), divided by sub sector as shown in

Figure 5.9. The difference in numbers from the 3942 in 1994 to 2530 in 1997 may be due to two

reasons, the crisis in the sector, already referred as responsible for the decrease between 1993

and 1994, and the difference also already stated between the two classification systems (CAE

rev1 used in 1994 and CAE rev2 used in 1997). From this data it's visible than in number of

industries, the 17.5 and 17.7 sub sectors are the biggest. ESTI intermediate report summary

Energy savings potential

There are no detailed data on the energy consumption of the textile sector, more precisely there

are no data showing the consumption by subsector. Energy balances until 1993 were based on

the former statistical classification, being the three digits code the maximum segregation in the

balances. The textile industry consumption is then the code 321 consumption. Looking at Figure

5.4 it is shown that the textile sector uses mostly oil and electricity. Other possible fuels include

wood and residuals. Natural gas, however, will possibly replace most oil uses, after the recent

opening of the network. The North region was the first one to be served by this source of energy,

which is expected to have a strong impact on the textile industry.

There are no consistent data about the conservation potential in the textile sector. In 1985 there

was a study conducted by an international consultant (NIFES) for the DGE which has estimated

11.2% of possible energy savings in the textile sector (including clothing), something like 36309

TOE/year. However this estimate was based on audits to few companies of each kind, and even

some of the reports stated that results shouldn't be taken as reliable estimates.

Since then much has been carried out. Several incentive programmes have been launched to

develop the industry as a whole, the textile industry, and the energy efficiency in industry. The

SIURE programme (Incentive System for Rational Use of Energy) between 1986 and 1990

financed 2706 million ECU of a total 8455 million ECU invested on efficiency measures for the

textile industry, with expected savings of 730000 GJ (17434 TOE).

CRISIS IN THE TEXTILES INDUSTRY

In late 2002, the Portuguese textiles industry is facing a crisis, with numerous bankruptcies and

relocations, and large number of redundancies. Here we examine the findings of a recent study

examining the causes of the crisis and highlighting the need for change, and outline the trade

unions' views on the industry's problems and prospects.

Regional unemployment statistics released in December 2002, show that unemployment in the

Vale do Ave and Beira Interior regions, both centres of the textiles and clothing industries, had

risen by 31.5% and 28% respectively in the third quarter of 2002, compared with the same period

in 2001. There have been a considerable number of bankruptcies in the sector, along with

relocations of production to other countries (PT0207101N). Women are the principal victims, as

textiles is a sector with a high level of female employment. In 1998, according to official figures,

the industry employed 217,209 workers, of whom 157,613 (73%) were women. A low level of

education and skills is another feature of the sector, with 85.1% of the workforce having

completed only the second cycle of basic education, and only 0.08% being graduates (1998

figures). A further significant aspect of the industry is the relatively large size of firms. On

average, 25.2% of Portuguese companies employ nine workers or fewer, whereas for the textiles

sector this figure is 8.3%. Only 9.5% of all Portuguese companies employ from 200 to 499

workers, whilst in textiles this percentage is 19.4%.

Sectoral study

December 2002 saw the publication of a study on the Portuguese textiles sector, examining its

strengths and weaknesses. The study highlights the structural nature of the present crisis, which

has resulted from problems in adapting to market conditions, and the need to go beyond the

present model of low-cost operations and embrace innovation, creativity and marketing, and to

offer not only textile products but textile services with professional management. A need is

identified for greater cooperation between companies to attain the 'critical mass' necessary to

increase competitiveness and face up to foreign competition. The study finds that the companies

whose products compete with Portuguese textiles are not from countries in eastern Europe or

Asia, but from high-wage countries such as Germany or Denmark, which have set up effective

logistics processes.

According to the report, it is up to companies individually to find solutions by: introducing better

overall planning and human resource management; being more aggressive in business;

increasing their commercial mass (through mergers, acquisitions and alliances) in order to

improve exports and turn themselves into industrial service providers; and providing more

vocational training. It is not, states the study, up to the textile sector’s representative

organisations to assume direct responsibility for company development.

The team which produced the study included members of the industrial associations for the

textiles sector, such as the Portuguese Association of Knitwear and Clothing Industries

(Associação Portuguesa de Malhas e Vestuário, APIM).

Trade union position

The textile industry accounts for 22% of all industrial companies in Portugal and about 32% of

all industrial jobs. According to the Federation of Unions of Textiles, Woollens, Garments,

Footwear and Leather Workers of Portugal (Federação dos Sindicatos dos Trabalhadores Têxteis,

Lanifícios, Vestuário, Calçados e Peles de Portugal, FESETE), the industry’s economic

dynamism is still considerable. FESETE states that economic figures for the textile industry give

reason for a fair degree of optimism: investment, gross value-added (representing about 18% of

gross value-added for manufacturing industry overall), turnover, the trade balance and

productivity have all progressed very significantly in recent years. The increase in productivity

between 1996 to 2000 was almost double the national average (approximately 5.4%, compared

with 3%). Exports from 1995 to 2000 underwent annual growth of about 4%, representing 25%

of Portugal’s total exports, with 90% being destined for the European market. The unions point

to the process of relocation, lack of investment and ineffective modernisation as factors in the

continued rapid rise in redundancies in the industry.

According to the unions, economic globalisation will lead multinational companies to relocate to

countries where they can maximize profits and avoid compliance with environmental and social

regulations. In some cases, Portuguese companies have very poor management and

organisational capacity, and they continue to have low output and subcontract a large amount of

work. However, many companies have restructured and modernised. They produce high-quality

goods and are able to compete internationally. Given the economic figures, unions are optimistic

about the future.

As indicated by the table below, average pay in the textiles industry is very low and declining by

comparison with the overall national average, standing at about two-thirds. Women in the sector

earn, on average, less than men, and this gender pay gap has increased over recent years.

Textiles industry pay and earnings, 1995-9

.

Average pay in textiles industry as % of average for all sectors

Women’s average pay as % of men’s in textiles industry

Average earnings in textiles industry as % of average for all sectors

1995 68.1 79.6 64.9

1999 67.6 70.7 64.1

Source: Quadros de Pessoal DEEFP.

Textile industry products in Portugal:-

Childrens fabrics

Clothing textiles

Textiles fabrics

Silk textiles

Linen textiles

Fabrics curtains

Natural textiles

The XI TEXTILE INDUSTRY FORUM will take place at Citeve (Vila Nova de Familicao) on

25th November 2009. It will gather all the experts from the textile and clothing industry in

Portugal. This event takes place once a year and has as main objective the debate of the biggest

issues that fear but at the same time mobilize the entire sector.

This year, the main subject will be ‘Entrepreneurship : Opportunities after Crisis’. Several

conferences will be organized to debate about the Portugal and Textile sector facing the gloabl

crisis. About 250 visitors are expected. This event is organised by ATP - the Textile and

Clothing Association of Portugal - with many sponsors. Among them, FDI Logbox, to offer its

credit customer management solutions to the Portugal companies who want to secure their

international sales.

Textiles and clothing sectors are a relevant part of the Portuguese manufacturing structure and

foreign trade. Taken together, these two sectors represented 2.0 per cent of gross value added,

4.3 per cent of employment and 11.8 per cent of total manufacturing exports of the Portuguese

economy in 2006. Nevertheless, these sectors have suffered strong shocks in the last two decades

and have become relatively less important. Textiles and clothing are distinct sectors with their

own specificities but they are closely related both technologically and in terms of trade policy.

The two sectors are naturally vertically linked since textiles are the major input for clothing

products. However these linkages also involve distribution and sales activities since retailers in

the clothing sector increasingly manage the supply chain of both clothing and textiles sectors

(see Nordäs (2004)). In addition, up to 2005, international trade of textiles and clothing was

internationally regulated by the World Trade Organization Agreement on Textiles and Clothing

(ATC). As described by Hanzl-Wei(2004), textiles and clothing are labour-intensive sectors

where production is mostly carried out in small and medium-sized firms. Nonetheless, it should

be noted that textiles and clothing are not homogeneous in terms of the sophistication of

production, as low and high value-added segments coexist within the same sectors or even within

the same industry.1 In high value-added segments, research and development is an important

competitive factor: in the fashion industry or in sportswear, for example, materials, design and

marketing play a crucial role. In the last two decades, these sectors experienced several structural

shocks with significant consequences on their relative size in the economy and on characteristics

of the firms (see OECD, 2004). As for the Portuguese experience in textiles and clothing sectors,

it should be noted that there is a long record of participation and competition in international

markets, dating back to the accession to the European Free Trade Association (EFTA) in 1960.

In fact, the trade liberalization resulting from EFTA strongly contributed to the expansion of the

Portuguese textiles and clothing sectors, since its relatively labour-intensive nature matched the

relatively labour-abundant factor endowment of the economy. As a result, the classical Balassa

indexes for Portugal show a revealed comparative advantage in Economic Bulletin | Banco de

Portugal Articles | Spring 2009

Union to Romania and Bulgaria, countries with relatively lower labor costs and important

textiles and clothing sectors, will pose further challenges to Portuguese exporters in what

concerns the relocation of production. Overall, the background points to significant challenges

and the existing data reveals a significant loss of Portuguese market share in the textile and

clothing industries in the period 1997-2006 (see Amador and Cabral (2008)). This article takes a

descriptive approach of the evolution of the textiles and clothing sectors in Portugal adopting two

complementary perspectives. Firstly, we look at aggregate data and analyze the main trends in

the two sectors since the beginning of the eighties. Secondly, we use firm-level data on textile

and clothing producers and exporters to examine more in detail the changes occurred in the two

sectors from 1996 to 2005. In this context, we report the distribution of firms according to size,

number of varieties exported and markets covered and we identify changes in the distribution of

the unit values of textile and clothing products exported by Portugal-based firms to their main

destination markets relative to the average unit values traded in those same markets. Two other

interesting dimensions covered in this article are the demography of firms in these sectors and

the decomposition of the observed annual nominal export growth rates according to the firm,

product and destination margins. Data constraints make it impossible to aggregate the firm-based

information to perform a compatible longer-term analysis. The article is organized as follows.

The next section describes the set of databases and classifications used. Section three reports an

aggregate analysis of the main trends observed in the textile and clothing sectors in the last two

decades. Section four describes the characteristics of textile and clothing producers and exporters

with a particular emphasis on their products and destinations mix. Finally, Section five

concludes.

AGGREGATE ANALYSIS (1982-2006)

Textiles and clothing represent a relevant share of the Portuguese economy, though their

importance has declined significantly in the last two decades. The evolution over time of these

two sectors has been substantially different. Chart 1 plots the evolution over time of textiles and

clothing as a share in GVA, total employees, and total manufacturing exports in panels (a), (b)

and (d) respectively. Panel (c) of Chart 1 instead reports the evolution over time of the number of

textiles and clothing firms and establishments. In the beginning of the eighties the textile sector

represented about 2.5 per cent of total GVA while the clothing sector represented about 1 per

cent. Until EEC accession in 1986 both sectors increased their share in GVA, but they evolved

quite differently afterwards. The relative importance of the textiles sector declined continuously

after 1986, reaching a share of total GVA slightly above 1 in 2006. On the contrary, the clothing

sector increased its importance until 1992, when it reached a share of 1.5 per cent of total GVA,

progressively declining afterwards to a share slightly below 1 per cent in 2006.

The evolution of these sectors in terms of share in total employees is similar to that in terms of

share in GVA. The share of textiles in total employees was more than double that of clothing in

the beginning of the eighties but this relationship was reversed in recent years. In addition, the

share of employees operating in clothing increased until 1991, but declined to 3.1 per cent in

2007. The share of the textiles sector in total employment declined continuously since 1985 to

around 2.3 per cent in 2006. Taken together the share of textiles and clothing sectors in total

employees dropped from 11.6 per cent in 1982 to 5.4 per cent in 2006.The number of firms (with

one or more employees) and establishments whose main activity was classified in the textiles or

clothing sectors (CAE 321 and 322 in rev.1, CAE 17 and 18 in rev.2 and 2.1, respectively) was

similar in the beginning of the eighties, around 2000 firms. The number of firms and

establishments increased until 2000, but at a much faster rate in the clothing industry. In 2000,

the number of firms classified as clothing is 6.697, more than three times the number of firms

two decades earlier. From 2000 to 2006, the number of firms and establishments declined by

1000 units in the clothing industry and became fairly stable in the textile industry. The different

path of the number of firms when compared with the shares in GVA and employment is

explained by the fact that this is an absolute measure and there have been some changes in the

size distribution of firms, as reported in 148 The evolution of the share of these sectors in terms

of total manufacturing exports resembles the evolution of their shares in GVA and in total

number of employees. The share of textiles exports decreased from 19 per cent in 1982 to 8 per

cent in 2006 and the share of clothing exports increased from 11 percent in 1982 to 16 per cent in

1992, declining to 4 per cent in 2006. Therefore, at present, the clothing industry accounts for a

larger share in total employment and number of firms, but a smaller share in GVA and exports

than textiles. Taken together the share of textiles and clothing sectors in total manufacturing

exports dropped from 30 per cent in 1980 to 12 per cent in 2006. The composition of Portuguese

textiles and clothing exports according to ISIC rev. 3 4-digits codes reveals that the largest

component has been that of ‘’wearing apparel, except fur’’ (ISIC 1810), which reached 16 per

cent of total manufacturing exports in the beginning of the nineties.

FIRM-BASED ANALYSIS (1996-2005)

A portrait of textiles and clothing exporters

In this section we proceed with a description of the Portuguese textiles and clothing sectors using

firm-level data. In the first part of the section we adopt a product-focused analysis based on the

HS nomenclature used in the trade data. In the second part of the section instead we focus on the

nature of the firm, distinguishing in particular between producers and distributors on the basis of

the CAE code available in Quadros de Pessoal. Table 1 lists the 14 chapters of the HS 2002

classification related to Section XI,’’Textiles and textile articles’’. It also reports, in parentheses,

for each chapter, the number of sub-headings (6-digits level) for which Portuguese exports are

positive in 2005. Note that we refer to chapters as ‘’industries’’ and to sub-headings as

‘’products’’. The table shows that Portuguese firms export products belonging to all 14 ‘’Textiles

and textile articles’’ industries. The highest number of exported products belongs to chapters

‘’52, cotton’’ (125 products), ‘’55, man-made staple fibres’’ (104 products), ‘’61, articles of

apparel and clothing accessories, knitted or crocheted’’ (113 products) and ‘’62, articles of

apparel and clothing accessories, not knitted or crocheted’’ (118 products). In the appendix we

describe more in detail the degree of disaggregation associated to each classification level. Table

2 reports some indicators of the relative importance of these industries. The second column

shows the share of each industry in total textiles and clothing exports. The three most important

indus- Economic IZE SYSTEM 2-DIGITS INDUSTRIES AND NUMBER OF PRODUCTS

EXPORTED IN 2005

Participation in export markets and export intensity

Reports the fraction of firms that export with respect to the total number of firms whose main

activity relates to textiles and clothing. The latter were identified by the CAE in Quadros de

Pessoal while the former were identified employing the firm-based trade dataset

Producers’ size and export unit values

In this subsection we maintain the focus on exporters whose main activity is the manufacturing

of textiles and textile articles. The objective is to identify possible alterations in the structure of

the sectors by examining changes in the shape of the estimated kernel distributions and in the

histograms of firms’ size. We concentrate on three definitions of size, namely total sales, number

of products exported (identified as the number of HS 6-digits items covered) and number of

destination markets. Next, we look at the changes in the distribution of the weighted relative unit

values to shed some light on the prices of products exported by Portugal-based firms. Chart 5

shows that the distributions of exporters according to the value of total sales (domestic plus

export sales) is strongly skewed to the left in both textiles and clothing, revealing a significant

amount of firms with low turnover. Adjusting for inflation to make nominal values comparable,

the skewness towards low size firms seems to have been accentuated from 1995 to 2004. This

picture is compatible with prior information if we recall that the total number of firms in textiles

and clothing has broadly stabilized from 1995 to 2004 and the relative size of the sector in the

economy has shrunk. The distribution of firms across the number of products exported and

destinations served also reveals a reduction in the scope of textiles and clothing firms’ activities

(Charts 6 and 7). Both in textiles and clothing sectors the large majority of firms export less than

10 different products, though in the clothing sector this proportion is somewhat higher. From

1996 to 2005 the distributions reveal a slight reduction in the number of exported products. As

for the number of destinations served, most textile and clothing firms operate in less than 10

foreign markets, though in the textile sector there seems to be a higher variety of destinations

served

Product and destination margins of exporting firms

This section analyzes how the dynamics of textiles and clothing exports is affected by firms’

decisions on entry and exit into export markets, on where to export and which products to export.

Firstly, we focus on the entry/exit decision. Adopting an approach proposed by the industrial

organization literature and recently shared by the trade literature, we compare the number and

average export size of firms with different export histories. Secondly, we extend the analysis to

the destination and product margins and show how these dimensions interact with the entry/exit

margin to drive changes in the year-on-year textiles and clothing export growth rates. In what

regards the demography of firms in textiles and clothing, we decompose the total number of

exporters in each year into those continuing, exiting, entering or just staying one year. Here we

follow Eaton et al. (2007) in defining firm categories. Entrants in year t are those firms that did

not export in t _1, export in t and will export in t _1as well; exiters in year t are those firms that

exported in t _1, export in t but will not export in t _1; continuing firms in year t are those firms

that exported in t _1, export in t and will export in t _1, as well; finally, single-year exporters in

year t are those firms that did not export in t _1, export in t but will not export in t _1. The top

panel of Table 6 reports the number of firms falling in each category over time and the bottom

panel reports average exports per firm for each category.

RULES OF THE FORESTRY DEPARTMENT IN PORTUGAL

Portugal located in the south western part of Europe is the premier producer of cork in the world

and it accounts for about 50% of the world’s total cork production and about 720,000 hectares of

land in Portugal is dedicated to the cultivation of Forestry in Portugal trees from where cork is

obtained. The steadily rising graph of the Portuguese economy has immense contributions from

the Portuguese cork industry with their cork constituting 70% of export trade in recent times. It is

to be noted that the growth of the Forestry in Portugal tree is greatly influenced by environmental

factors and the Mediterranean type climate of Portugal is conducive to its growth. Well

distributed and plenty of rainfall together with presence of extensive sunshine, mild winter

weather conditions and suitable soil compositions aid its growth in the country and the life span

of Forestry in Portugal trees extends to around 150 to 200 years. Algarve produces the superior

quality in Portugal and certain species are also produced in the Alentejo region as well and it is

in the central and southern parts that corks of the best quality are grown.

The Portuguese cork industry is highly developed and the versatility of cork as a substance

together its ecological properties and the ability to recycle the material has facilitated its growth.

Cork is used in performing multifarious functions like for building and architectural purposes

and in floors, in the automobile, military and space industries, in footwear and leather goods, as

chemical components in pharmaceutical industries and most importantly as cork stoppers used as

closures for wine bottles. In Portugal, which is known for its wines and vineyards, it is doubtless

that cork stoppers are extremely useful for domestic purposes. Cork wools are also used in

mattresses and cushions.

It has been estimated that a whopping 16% of the total foreign income in Portugal is accumulated

from the export of cork. The main importers of Portuguese cork are Germany, UK and USA.