Storm Kristin leaves mould and component sectors unable to supply multinationals and exports

Storm Kristin left many companies destroyed or partially affected. With production at a standstill, either due to the impact of bad weather or power outages, sectors such as moulds and automotive components are unable to supply the large multinationals they work for or customers abroad.

Manuel Oliveira, secretary-general of CEFAMOL — National Association of the Mould Industry, acknowledges “very significant” impacts and “several million” in losses for the sector. The representative of mould companies explains that there are “many limitations”, both in terms of energy and telecommunications, as well as infrastructure itself.

“Some of the units have problems with their roofs and damaged structures inside and outside”, and high-tech equipment is at risk, laments Manuel Oliveira, adding that, given the high demand, it is difficult to find materials and construction teams.

According to the secretary-general of Cefamol, companies that have generators are operating, but even they are experiencing difficulties. This situation will delay orders in a sector that sells 80% of its production abroad, which will cause “difficulties in exports”, he admits.

According to the same official, the sector supplies large multinationals, namely car manufacturers and companies in the value chain, which will also be affected by the problems in the region.

Another sector heavily affected by the storm is automotive components. “There are companies struggling to supply production lines for customers in Europe”, acknowledges José Couto. According to the president of AFIA – Association of Manufacturers for the Automotive Industry, “Germany and Spain are the countries that will suffer most” from the effects of Storm Kristin on component companies.

“There are cases where companies have been destroyed”, a “serious” situation that affects the ability of the components industry to supply both Tier 1 and OEM [automotive manufacturers]. “There is a supply line that has been interrupted”, points out José Couto, emphasising that there are about a dozen companies “with more significant stoppages” and high losses.

In a second line, José Couto talks about companies that have been partially destroyed, with walls destroyed, and which face additional problems, such as power shortages. The AFIA president notes that, in the first case, it will take time to rebuild the units, while the second group, of around 20 companies, faces “significant losses and production stoppages”.

According to José Couto, this is the first assessment of the situation, as it has not yet been possible to speak to all members due to communication problems. While acknowledging the efforts of the Government, which has created a mission structure for the Recovery of Affected Areas and support lines for companies to help resolve the problem more quickly, he speaks of a situation as “very complex”, with company employees having to deal with problems in their own homes.

Glassmakers, who have a strong presence in the region, also estimated the losses to the sector at millions of euros, which, in addition to the costs of rebuilding damaged factories, includes lost exports due to the Kristin depression.

“The losses will be in the millions”, said the president of the Association of Packaging Glass Manufacturers (AIVE), Tiago Moreira da Silva, quoted by Lusa. According to him, the costs involved are those of rebuilding “infrastructure, mainly roofing, filters and warehouses”, but also “lost exports”.

With suppliers in the region, the giant Autoeuropa guarantees that, for now, this situation has had no impact on production. “Volkswagen Autoeuropa has suppliers in the central region that were affected by storm Kristin”, said an official source at Autoeuropa, in response to ECO, about the impact of the storm.

The Volkswagen Group giant assures that “these events have had no impact on production”, but adds that it is “working closely with all affected suppliers to ensure continuity of operations”.

Associations want speed and non-repayable support

Business associations in the Santarém, Leiria and Coimbra regions consider the measures put forward by the Government to help companies affected by the Kristin depression to recover to be positive, but warn of the lack of non-repayable support.

AIP – Portuguese Industrial Association, NERLEI – Leiria Region Business Association, NERSANT – Santarém Region Business Association and NERC – Coimbra Region Business Association met to assess the situation of companies in the region.

This meeting resulted in a set of proposals for “priority measures, which have already been presented to the Ministry of Economy, notably the extension of subsidies up to €10,000, currently provided for agriculture and forestry, to other sectors, for micro-enterprises, as well as the activation of the Productive Capacity Replacement System under Decree-Law No. 4/2023, with non-reimbursable support for the most affected companies. The acceleration of access to credit lines, using existing instruments, the reprogramming of existing incentive contracts and the streamlining of payments, reimbursements and advances under the PRR and Portugal 2030 were also advocated”, the AIP highlights in a statement.

“The disaster situation affects a region with a strong business fabric and a high export vocation, which reinforces the need for an effective and well-calibrated response”, acknowledges the Portuguese Business Association (AEP), also in a note.

“The country must respond to exceptional situations with equally exceptional measures. This has always been the position of the AEP, both during the Covid-19 pandemic and in previous disaster situations, such as the major forest fires”, said Luís Miguel Ribeiro, president of the AEP, quoted in the statement.

In the same statement, the AEP argues that it is “very important, as was the case during the Covid-19 pandemic, to ensure that these financing instruments take into account the need to strengthen companies’ capitalisation, and that the Banco Português de Fomento should therefore play an active role in this process”.

The association says that the priority should be speed of execution. “What is truly critical is to ensure swift action. Companies need quick responses to repair damage, resume activity and avoid further losses that could compromise their viability”, stresses the president of the AEP.