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.

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/eligibility

Table IV.4 (cont'd)

Sugar cane Subsidy: Registered under the Farmers'

- Fertilizers: 50% of c.i.f. price Registration Programme
- Aerial spraying: 100% of cost

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.

1H11 Revenues
Portugal
(Euro million)
Wire line PT Communicators 100% 917
Mobile TMN 100% 610

1H11 Revenues
Brazil
(Euro million)
Integrated
telecom 25.3% 6,124
operator
Contact centre Context 14.1% 584

1H11 Revenues
Main International Assets
(Euro million)
(1)(2)
Unitel 25% Unitel Mobile 590
CTM 28%(1) Macau Wire line, Mobile 174
MTC 34%(2) Namibia Mobile 75
CVT 40%(2) Cape Verde Wire line, Mobile 38
Timor 22
41%(2) Timor Wire line, Mobile
Telecom
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
PT Systems de
Systems and IT 100%
Information
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 Data
Name Portugal Telecom SGPS SA
Av. Fonts Pereira de Melos, 40
Address
1069-300 Lisbon
Country Portugal
Industry Integrated telecom operator
Currency Euro
Commercial register 503 215 058
Date of incorporation 23 June 1994
Financial year 1 January to 31 de December
Stock exchanges EN Lisbon and NYSE
ISIN PTPTC0AM0009
Shares issued 896,512,500
Outstanding shares 859,990,247
Share capital (euro) 26,895,375
Par value (euro) 0.03
Initial 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
th
External Affairs to Lisbon from 10-12 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
th
Rosa, Secretary of State for (MOS) for Environment visited India to participate in the 11
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.

India-Portugal Trade Statistics

(Calendar Years)

(Value: Million India’s Exports to India’s Imports Bilateral Total India’s Trade
Euros) Portugal from Portugal 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

Euros 262, 24 Euros 40, 39 Euros 302, 63 Euros 221, 85

2009
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: [dɛɫtɐ kɐfɛʃ]), 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.
 India-Portugal Trade Statistics

(Calendar Years)

(Value: India’s Exports India’s Bilateral India’s

Million to Imports Total 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 348,09

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.
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 Women’s Average earnings

textiles industry average pay as % in textiles industry
.
as % of average of men’s in as % of average for
for all sectors textiles industry 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.