Portuguese footwear industry looks to be an alternative to Italy

Portugal is looking to become a “strong alternative to Italy” for the footwear industry after announcing it will invest 600 million euros into the sector over the next few years.

According to international consultancy EY Parthenon’s study, ‘The Footwear Industry’s Path to Luxury,’ Portugal could become a key player in the luxury footwear sector if it reduces costs and develops new market segments.

Currently, Portugal has 1,500 companies in the footwear cluster, covering footwear, components and leather goods, employs around 40,000 people and exports 90 percent of its production to 173 countries on five continents.

With Portugal looking to invest 600 million euros through its new Strategic Plan for the Footwear Cluster 2030, EY Parthenon states that Portugal will have to work on three levels: production development, commercial development and innovation.

Miguel Cardoso Pinto of EY Parthenon said that rising costs and increased competition are threatening the footwear sector, and it needs to “review its positioning” to achieve financial sustainability.

To achieve this, the consultancy adds it will be important to “increase scale by integrating different players,” while increasing productivity through new industrial processes, optimising labour costs and reducing raw material costs through product innovation.

EY Parthenon does note that Portugal has “several comparative advantages” over Italy, which it says is “threatened by high production costs, a market dominated by intermediaries and a lack of skilled labour”.

It adds that while both Portugal and Italy were found to offer high-quality footwear production, Portugal offers lower production costs.

Luis Onofre, president of the Portuguese footwear, components, leather goods manufacturers’ association (APICCAPS) said in a statement: “We want to be an important international reference. Every year, 24 billion pairs of shoes are produced, about 90 percent of them in Asia, which means that nine out of ten people wear Asian shoes. We don’t think this is sustainable, on the contrary, we think there is room in the market for players like Portugal.”