Textile companies stop work as energy prices skyrocket
"Many companies have stopped production for a few days hoping that electricity and natural gas prices will fall so they can resume work," said the president of the Textile and Clothing Association.
Several companies in the textile sector have decided to stop production for a few days due to rising energy prices, the president of the Textile and Clothing Association of Portugal (ATP), Mário Jorge Machado, said on Tuesday.
“Many companies have stopped production for a few days hoping that electricity and natural gas prices will fall so they can resume work,” the association’s leader told Lusa.
According to Mário Jorge Machado, the increase in the cost of energy, associated with the rising cost of raw materials, is contributing to a “very complicated situation” in the market.
“Companies have decided to close for a few days because the cost of working is much higher than the cost of being closed,” he added.
The situation particularly affects the areas of spinning, weaving and finishing and less so the area of clothing, which is not a major energy consumer, he explained.
The cost of raw materials has been a problem, but the increase in energy price is “ten times greater,” he noted.
Mário Jorge Machado said he was only aware of one company in the textile sector that decided to close down permanently. However, that decision was taken even before the start of the war in Ukraine.
“The energy problem started before the war, namely in natural gas, which has increased six-fold since six months ago,” the ATP president said.
On Monday, Portugal’s minister of economy and digital transition, Pedro Siza Vieira, presented new support for companies to cope with rising energy prices.
At the press conference, Siza Vieira said that “the number of companies that so far have signalled they may suspend activity due to the escalating energy prices is minor”, added that the impact of costs is more accentuated among companies that consume natural gas, with 70% having contracts where the price is indexed to the daily price on the spot market.
Amongst the companies that have signalled the possibility of stopping their activities due to the rise in energy costs are some in the ceramics sector and the finishing area of the textile sector, the minister said.
According to the Portuguese Association of Ceramic and Crystal Industries (APICER), José Sequeira, seven companies in the ceramics sector are at a standstill due to rising energy prices, covering about 1,000 workers, but the number is expected to increase in April.
The seven companies that have suspended operations are located in the Centre region.
