ENERGY & GREEN ECONOMY
Portugal is building a hugely ambitious floating wind farm set to come online in 2019.
IT, TELECOMS & MEDIA Europe’s hottest annual tech conference has chosen to relocate from Dublin to Lisbon.
TOURISM Portugal continues to improve ranking in WEF’s Travel & Tourism Competitiveness Index.
“Microsoft has been present in Portugal for over 28 years and has over 650 people working to live up to our goal of empowering every person and every organization on the planet.”
PAULA PANARRA Country Manager, Microsoft“Portugal has a trifecta of highly valued assets, such as the sea, sun, and wind, and I would risk a fourth, which is skill.”
JOÃO PEDRO SOEIRO DE MATOS FERNANDES Minister for the Environment and Energy Transition
“In 2017, we registered growth of 9% in terms of tourism arrivals, breaking the 20-million mark.”
LUÍS ARAÚJO President, Portuguese National Tourism Authority
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For this, our first edition on the Portuguese economy, we conducted over 130 interviews with key policymakers and top executives from all kind of sectors. With the support of our partner, the Confederação Empresarial de Portugal, we created a deep analysis of Portugal’s economy, highlighting its remaining challenges after the hit of a crisis, but also several great opportunities for the coming years.
Portugal’s government, elected on a wave of anti-austerity sentiment, has succeeded in returning the country to fiscal health and barnstorming economic dynamism following the European sovereign debt crisis. As of late 2014, Portugal had borrowed EUR79 billion from the IMF, EFSM, and EFSF in order to prevent insolvency, with strict conditions imposed on public-sector wages, working hours, holidays, and state pensions. Prime Minister António Costa owes his favorable public opinion to the fact that he has rolled back public spending cuts to return to pre-bailout levels in these areas.
Portugal’s economy continues to be buoyed by tourism, a sector that we covered in deep. Although if one sector stands out from the rest, that is ICT. We had a strong focus on how prepared is Portugal to be one of the first countries
adapting the 5G technology, meeting key players such the Minister of Science and Technology, the regulators, main operators, and multinationals that are taking part in this shift.
Portugal, for our readers, is well known, not only for its beautiful landscapes, delicious food, and secure business environment, but also its high level of human talent. Portuguese students have access to world-class level universities; all of them are fluent in several languages and with a broad and international mind that can nourish any business. For this reason, our Education chapter gathers the voices of decision makers that make this possible, from local primary schools to universities, as well as business schools.
The Business Year will help to introduce the people and ideas that are reinventing Portugal and its economy as it looks to play a greater role in the EU and beyond.
The result of this in-country project is the hard work of a team based in Portugal for 10 months, meeting face-to-face the players that have led Portugal out of a crisis, from north to south, from Madeira to the Azores, and not forgetting the interior of the country, where the opportunities are brighter than ever. ✖
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17 Everything’s gonna be alright
• Chapter summary
18 Manuel Caldeira Cabral, Former Minister of Economy • Interview
19 Upward growth trajectory
• Spotlight feature: The public sector and associations
23 Fiscal health check • Focus: Stability program
24 António Saravia, President, Confederation of Portuguese Industries (CIP) • Interview
25 Jorge Portugal, General Manager, COTEC Portugal • Interview
13
14 Making an impact • Focus: Community of Portuguese Language Speaking Countries
33 Earning its green • Chapter summary
34 João Pedro Soeiro de Matos Fernandes, Minister for the Environment and Energy Transition
• Interview
35 António Sá da Costa, President, Association of Renewable Energy (APREN) • Interview
36 Miguel Pernes, Country Managing Director, ABB Portugal • Interview
38 A green and pleasant land
• Focus: Renewables
26 Jorge Marques dos Santos, Former President, Portuguese Agency for Competitiveness and Innovation (IAPMEI) • Interview
27 João Castello Branco, CEO, Semapa • Interview
28 The right goals • Focus: Ease of doing business
29 Chambers • Forum
30 Eliana Bessada, Manager, I&F Portugal Bureau Veritas • Interview
31 Accountancy
• B2B
40 João Manso Neto, CEO, EDP Renewables • Interview
41 António José Nunes de Almeida Sarmento, President, WavEC Offshore Renewables • Interview
42 Duarte José Botelho da Ponte, President, Electricidad dos Açores (EDA) • Interview
43 Harnessing the ocean sky
• Focus: Offshore wind energy
44 Go with the flow • Focus: Wind energy
45 Conventional energy • B2B
47 In the money • Chapter summary
48 Carlos da Silva Costa, Governor, the Bank of Portugal • Interview
49 Don’t mind the disruption
• Focus: Fintech
50 Nuno Amado, Chairman, Millennium bcp • Interview
51 Voices from the sector
52 Madalena Cascais Tomé, CEO, SIBS • Interview
53 Carlos Alberto Silva, Executive Board Member & CFO, SONAE IM
• Interview
54 Chinese policy • Focus: Chinese investment in the insurance sector
55 José Manuel Dias da Fonseca, Global CEO, MDS Founder and Chairman, Brokerslink • Interview
56 David Legrant, CEO, MEDICARE
• Interview
57 Insurance • B2B
59 Make it • Chapter summary
60 António Braz Costa, General Manager, Portuguese Technological Centre for the Textile & Clothing Industries (CITEVE) • Interview
61 Mário Jorge Silva, CEO, and Ricardo Silva, Head of Operations, Tintex Textiles • Interview
62 Textiles • Forum
65 Tech-stiles • Focus: Textiles
66 Voices from the sector: Textiles
68 Rise and shine • Focus: Automotive industry
69 José Couto, President, Mobinov & Board Member, Microplasticos
• Interview
70 Fabrice Crevola, CEO Portugal, Groupe Renault • Interview
71 Francisco Geraldes, Managing Director, Mitsubishi Motors
• Interview
72 José Cordeiro, President, and Dr. João Romana, General Director, AED Portugal • Interview
73 Celia Reis, CEO, Altran
• Interview
74 Voices from the sector: Industry
77 Summit to see • Chapter summary
78 Manuel Heito, Minister, Science, Technology, and Higher Education
• Interview
80 Rogério Carapuça, President, Portuguese Association for the Development of Communications (APDC) • Interview
81 Alexandre Fonseca, CEO, Altice
• Interview
82 Chris Lu, CEO, Huawei
• Interview
83 IT leaders • Forum
84 Interconnected • Focus: Web Summit in Lisbon
87 Pedro Afonso, CEO, Axians Portugal & Board Member, Vinci Energies Portugal • Interview
88 Carlos Leite, Managing Director, Hewlett Packard Enterprise (HPE) Portugal • Interview
89 José Gonçalves, Country Managing Director, Accenture Portugal • Interview
90 Voices from the sector
92 Leading solutions • B2B
93 Daniel Araújo, CEO, Asseco PST
• Interview
94 AI • Forum
95 Francisco Pedro Balsemão, CEO, Grupo Impresa • Interview
96 Media Forum
97 Consultancy
• B2B
81
99 Port, oh! • Chapter summary
100 Miguel Frasquilho, Chairman of the board, TAP Air Portugal
• Interview
101 Marta de la Rocha, Regional Vice President for Southern Europe, Netjets • Interview
102 Right time to seize missed opportunities • Focus: New airport
104 Logistics • Forum
105 José António Reis, Managing Director, DHL Express Portugal • Interview
106 Richard Mitchell, Regional General Manager, Yilport Iberia
• Interview
107 Filipa Ferreira Mendes, Country General Manager, CHEPa Brambles Company • Interview
108 Voices from the sector
111 High stakes • Chapter summary
112 Rita Moura, President, Plataforma Tecnológica Portuguesa da Construçao (PTPC) and Cluster AEC & Head, R&D Teixeira Duarte Engenharia e Construçoes, S.A
• Interview
113 Esteban Adolfo Trouet, CEO, Odebrecht Portugal
• Interview
131 The doctor will see you now
• Chapter summary: Health
132 Marta Temido, Minister of Health
• Interview
134 The PPP regime • Focus: Excellence in healthcare
136 Germano de Sousa, President, Grupo Germano de Sousa
• Interview
144 Business schools • B2B
145 Arlindo Oliveira, President, Instituto Superior Técnico • Interview
146 An age-old problem • Focus: Public teaching staff
148 Voices from the sector: Education
151 Packed to the rafters • Chapter summary
114 Changing places
• Focus: Parque das Nações
115 Reshaping • Forum
116 Vasco Pereira Coutinho, CEO/ President of the Board, Temple Global and Lince Capital
• Interview
123 Shifting tastes • Chapter summary
125 Pedro Queiroz, General Manager, Federation of the Portuguese Agri-Food Industry (FIPA) • Interview
137 Sérgio Reis Soares, Director, and Samuel dos Santos-Ribeiro, Scientific Coordinator, IVI Lisbon
• Interview
138 Voices from the sector: Health
140 Chapter summary: Education
141 Isabel Capeloa Gil, Rector, Universidade Católica
• Interview
152 Luís Araújo, President, Portuguese National Tourism Authority • Interview
153 Pedro Manuel Monteiro Machado, President, Turismo Centro de Portugal • Interview
154 A feast for more than the eyes
• Photo essay: Azores
117 Developers • B2B
118 Fast-track to residency • Focus: Golden Visa
119 Eric van Leuven, Head of Portugal, Cushman & Wakefield
• Interview
121 Real estate • Forum
126 Paolo Fagnoni, CEO, Nestlé Portugal • Interview
127 Jorge de Melo, CEO, Sovena Group • Interview
128 A nice tipple • Focus: Portugese wine & cork
142 João Sàágua, Rector, Nova University
• Interview
143 Carlos Guillén Gestoso, President, Escola Universitária de Ciências Empresariais, Saúde, Tecnologias e Engenharia, & President, Atlantica University
• Interview
156 The more things change...
• Focus: Sustainability
157 Thomas Schoen, General Manager, Pine Cliffs, A Luxury Collection Resort • Interview
159 Spotlight: Portugal • Focus: International fairs and events
160 TBY recommends
Read more at thebusinessyear.com/portugal
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DESPITE A ROUGH DECADE, with stark comparisons drawn between the country and Greece, Portugal today is on solid footing. Having escaped recession, the Iberian nation is set to grow between 2.3 and 2.7% this year.
We spoke to dozens of top business figures in preparation for this publication, gathering information that will be invaluable for potential investors. Among headline developments are the country’s early exit from its EU-IMF bailout and a robust 7% increase in exports over the last year, boosting the economy as demand increases.
On the global stage, Portugal remains a key member of NATO, the EU, and the Community of Portuguese Language Countries, and recent visits provide some hints to the country’s priorities— high-profile visitors have included King Philippe of Belgium, Chinese President Xi Jinping, Angolan President João Lourenço, German Chancellor Angela Merkel, and Queen Maxima of the Netherlands. And given that the current head of the UN is Portuguese politician António Manuel de Oliveira Guterres, the country has never before held such significant international clout.
Portugal is at the forefront of Europe’s green revolution, as outlined in our chapter on energy and the green economy. While the EU aims to derive 20% of its final energy consumption from renewable sources by 2020, Portugal currently produces more than half of its energy needs from clean sources. For this publication, we set out to explore the solar, wind, and hydro energy sectors, with Portugal also looking to exploit opportunities across the border in Spain. We spoke with João Pedro Matos Fernandes, Minister of Environment, about the role of the private sector in advancing Portugal’s agenda in this respect, and he expressed his delight that “more industries in Portugal [are] placing decarbonization and circular economy at front and center in their business models.”
Part of this drive comes in the form of batteries, with R&D activity abuzz around the topic of lithium-based solutions for industrial-sized energy storage. And with Portugal joining the exclusive club of countries that have run, at least temporarily, entirely on renewable sources—in this case thanks to a high number of sunny yet windy days in 1Q2019—finding a battery solution has become more pertinent than ever.
Portugal has come a long way since the dark days of the financial crisis, having defied expectations to return to growth.
Portugal’s industry matrix also came under the microscope for this publication. While textiles remains the largest of its industries, representing 10% of all exports, new synergies emerging between universities and business are helping to move production up the value chain across a number of areas. Alongside automotive production, which has a long history in the country, Portugal is becoming a growing producer of higher technologies, including computer software, pharmaceuticals, biotechnology, and aerospace solutions.
While a concise summary of each chapter cannot be offered here, one sector that always stands out as a bellweather of overall economic health is real estate and construction. The Portuguese real estate and construction sector is a hive of activity, with stable economic indicators and increased in-
GDP PER CAPITA (2017)
SOURCE: WORLD BANK
USD21,136
INFLATION (2018)
SOURCE: STATISTA 1.75%
SOURCE: STATISTA
ward investment driving demand.
Construction activity grew 3.5% in 2018, and a figure of 5% is expected in 2019, pushed along by 7% growth in the residential area and 2.8% in the non-residential segment. The sector is also a significant employer, providing work for 300,000 people, or 6.4% of the total workforce. The sector contributes 7% to GDP. By talking to a series of top construction and real estate players, we hope to offer the reader a complete picture of this complex, yet telling sector.
During our time in Portugal, our editors and analysts felt a sense of optimism in the business community, and while many are perhaps wary of repeating past mistakes, there is a general feeling that Portugal, as an integral part of the EU, is on an upward trajectory. More popular with investors than ever, there has never been a better time to learn more about this robust Iberian economy.
SOURCE:THE WORLD BANK
NATO Secretary General Jens Stoltenberg visits the Joint Analysis and Lessons Learned Centre, NATO’s lead agency for the analysis of operations and training for the organization, in Monsanto.
Portugal doubles down on cork after demand for traditionally bottled wine booms. The world’s biggest exporter of cork products calls for more oak plantations across the country.
Eurovision Song Contest 2018, the European song contest, is held in Lisbon’s modern quarter, Parque das Nações.
Portugal’s parliament ratifies a new legal gender change law making it easier for people to change their legal gender.
Portugal’s parliament overwhelmingly approves a bill to legalize cannabis-based medicines, after rejecting earlier proposals to allow patients to grow the drug at home.
France, Portugal, and Spain agree to build an undersea power line in the Bay of Biscay with the aim of integrating electricity links between the Iberian Peninsula and Europe.
A centuries-old shipwreck is found off Portugal’s coast. Archaeologists discovered peppercorns, fragments of Chinese porcelain, and bronze cannons among the sunken remains of a 400-year-old ship that once sailed the spice route between Europe and India.
Chinese President Xi Jinping visits Portugal. The two countries discuss opportunities surrounding Belt and Road, an initiative that offers loans to build railways, roads, and ports across Asia, Europe, and Africa.
CEOs and founders of tech start-ups together with members of the global IT industry gather in Lisbon for Web Summit 2018, an annual gathering on the latest technology and innovation.
The Monastery of Alcobaça is a Roman Catholic monastic complex located in the town of Alcobaça, in central Portugal
Despite a rough decade, Portugal is today well positioned in southeastern Europe and enjoys huge popularity with tourists from around the world. It is also, according to the Global Peace Index 2018, one of the most peaceful places to live in the world.
Founded in the 12th century, it is also one of the world’s oldest states and is filled to the brim with history and tradition. Thanks to its location, it played a major role in the age of discovery, establishing far-flung colonies as far away as the Americas, Africa, and Asia.
During its long history, Portugal stands out as having been relatively peaceful. This has allowed it to forge strong alliances and trading relationships, with one such alliance, with the UK, dating back to 1386.
Today, the country is a member of NATO, the EU, and the Community of Portuguese Language Countries, a collection of nations from around the world made up mostly of former colonies of the Portuguese Empire.
The current President of the Republic is Marcelo Nuno Duarte Rebelo de Sousa, who was elected for his first five-year term in 2016, having previously served as a minister and whose background is as a law professor, journalist, and political analyst.
As with most former empires, the country also has ties to a number of autonomous regions, including Maderia and the Azores, which both
have regional presidents.
António Costa, the 119th and current Prime Minister of Portugal, in office since 2015, has overseen a recent cabinet reshuffle, the impact of which will be covered later in this publication. Portugal 2020, a priority vision for the Prime Minister and his team, permeates all areas of the economy and is the blueprint for the country’s commercial future.
On the diplomatic front, Portugal has been no less busy. In recent years, Portugal has hosted world leaders including King Philippe of Belgium, Chinese President Xi Jinping, Angolan President João Lourenço, German Chancellor Angela Merkel, and Queen Maxima of the Netherlands. Pope Francis also visited the country to celebrate the anniversary of a religious apparition.
And no summary of Portugal’s diplomatic endeavours could be complete without mention of António Manuel de Oliveira Guterres, the Portuguese politician and diplomat currently serving as the ninth Secretary General of the United Nations. We are thrilled to fea ture his words in this chapter.
Across the world, Portugal is opening embassies and promoting its food, culture, and products at an unprecedented rate. Brand Portugal is strong, and the country looks set to put the concerns of the past behind it as it continues to strengthen in the wider EU. ✖
BIO
Marcelo Nuno Duarte Rebelo de Sousa is a Portuguese politician serving as the 20th and current President of Portugal since March 9, 2016. Previously, he was a government minister and member of parliament, a law professor, journalist, political analyst, and pundit. Born in Lisbon, Rebelo de Sousa is a university graduate, Doctorate, Professor, and publicist specializing in constitutional law and administrative law from the faculty of law of the University of Lisbon, where he taught law.
The reform of the UN requires the commitment of all member states. Maintaining the status quo is a way of gutting multilateralism and multiplying risks, conflicts without prevention, underdevelopment, and the violation of human rights and human dignity. Not reforming the Security Council with a broad-based consensus is to ignore the geopolitics of the 21st century, which requires, at the very least, the presence of the African continent, Brazil, and India.
Our view of the world situation and of the role of the UN explains our positions on so-called regional questions, but which are global in scope. Let me now dwell on some that are of special relevance to Portugal: The strengthening of the Community of Portuguese Language Countries (CPLP), currently presided by Cabo Verde, to be followed by Angola, whose contributions to stability and development I wish to highlight. CPLP enjoys magnificent cooperation with the UN and pursues the goal of seeing the Portuguese language—one of the most widely spoken in the world—adopted as an official language of the UN; the steps taken in Guinea-Bissau in preparation for elections in November; the growing importance of the African Union, its key uniting role for peace and sustainable development, the intensification of the partnership with the UN and the historic step of the “Joint Declaration of Peace and Friendship” between Ethiopia and Eritrea. Our wish is for the elections in the Democratic Republic of Congo to be held in a safe, free, and fair manner and that the results will be respected by all; the important developments on the Korean Peninsula opening positive prospects for complete, verifiable and irreversible denuclearization and demonstrating the commitment and courage of the parties involved; and the signing of the Maritime Boundary Treaty between Australia and Timor-Leste under the auspices of the Secretary-General of the UN.
Unfortunately, certain parts of the Middle East and the Maghreb continue to show signs of permanent political, social and economic instability. In Libya, the international community must unite
Marcelo Nuno Duarte Rebelo de Sousa PRESIDENT, PORTUGALPortugal believes that multilateral action, political dialogue, and diplomatic wisdom are the only possible route to harmonious coexistence between nations and peoples.
to assist with the humanitarian and security situation and the creation of a solid state. Yemen remains the scene of one of the greatest humanitarian crises today, especially affecting the most vulnerable, women and children. Only negotiated political solutions, through the mediation of the UN and respect for international humanitarian law, will be able to reverse this increasingly tragic situation. Equally tragic is the humanitarian crisis in Syria, with one of the largest flows of refugees within and out of the region.
Here, also, only a substantive, inclusive and UN-mediated political solution will tend to ensure effective and broad-based international support for reconstruction, in the absence of which there will be apparent, sporadic and transitory agreements, but not the lasting peace. In any case, stabilization and peace in the Middle East will only be possible with the resolution of the Israeli-Palestinian conflict. Common sense demands the resumption of a credible negotiation process, addressing all the final status issues, including the question of Jerusalem, and leading to a practicable two-state solution based on coexistence by Israel and Palestine in peace and security.
As mentioned by Secretary-General António Guterres, true patriotism is only complete with cosmopolitanism. Portugal believes that multilateral action, political dialogue, and diplomatic wisdom are the only possible route to harmonious coexistence between nations and peoples. A short-term view or views, however appealing they may appear to be, are just a flash in the pan, which does not last, will not last, and will not solve the world’s true problems: development, justice, security, and effective respect for the rights of those who are the reason for our mandate and our presence in this General Assembly.
As Nelson Mandela said: “A fundamental concern for others in our individual and community lives would go a long way in making the world the better place we so passionately dreamt of.” This is the noble mission of this institution; it is also the reason for Portugal’s deep commitment to the UN. ✖
The oldest diplomatic alliance in the world, Portugal and the UK continue to nurture their strong ties in the pursuit of common opportunities.
It has become somewhat of a cliché, but a necessary one, to recall the Treaty of Windsor of 1386, which makes the Portugal-UK relationship thelongest-standing diplomatic alliance in existence between two countries in the world. More importantly, the relationship is still strong and vibrant. The ties between our countries are deeply rooted in culture and anchored in the vivid and growing communities of Portuguese here in the UK and British expats in Portugal.
As we prepare for Brexit, I want to recognize the invaluable contributions both communities provide to their country of residence. Both must be respected. Those who moved on the premise of freedom of movement should not be uprooted by Brexit. We must turn Brexit into an opportunity for both our countries to deepen our special relationship both politically and economically.
The important thing now is to minimize the negative consequences of Brexit and develop a relationship as close as possible with the UK. The European project is one of peace and progress, but also of opportunity. And it will continue to be. British businesses will continue to cross the Channel in search of profit, as will our own. Portugal has for centuries been a preferred destination of the British on the Old Continent. The UK is our largest source of tourists, our fourth-largest export market, and our fourth-largest source of FDI. That preference continues to this day. British investment in Portugal grew at a faster pace than EU investment in Portugal over the past two years. And over the last year, it multiplied by five. In the wake of Brexit, many companies have chosen Portugal to be their second home in Europe.
These are the dividends of a special relationship nurtured over centuries, and they pay both ways.
Today the opportunities for investing in Portugal are even greater because we are committed to the European project and are a living symbol of recovery from economic, financial, and social crises. Portugal is growing faster than Europe. Employment and investment growth are double the average of the EU and unemployment is falling faster than in any other eurozone country.
GDP grew by 2.7% in 2017. This growth allowed for a 0.9% public deficit, the lowest in our democratic history. Primary surplus was 3% and public debt fell more than 4 percentage points of GDP. We have left the excessive deficits procedure, and our sovereign debt is no longer junk-rated. Our current account balance is in surplus. Stabilizing the financial sector was a key priority for this government. Today, confidence and resilience are back to the financial sector and country.
In innovation, we are going above and beyond. Through December 2017, we approved support for almost 3,000 collaborative innovation projects worth almost EUR600 million. Recently, we launched six collaborative labs that bring together businesses and researchers to set priorities for the research agenda. We also issued new funding for sector-level technological centers, which have been the driving force behind innovation and entrepreneurship in traditional sectors.
In Portugal, you will always find a friend of Britain and British businesses, not to mention a safe harbor and fertile ground for your investment. Indeed, to British businesses I say—by opening in Portugal you can have a two-in-one; Brexit in the UK and Remain in the EU by investing in Portugal. Just as history proved before there even was an EU, and just as we will prove together after Brexit, Britain and Portugal can grow together. ✖
Address made at the Portugal-UK Economic Forum, April 2018
BIO
António Costa holds a degree in legal and political sciences from the faculty of law of the Universidade Clássica de Lisboa and a post-graduate degree in European studies from the Catholic University of Lisbon. He is a lawyer. He was Deputy to the Assembly of the Republic between 1991 and 2004. For more than 10 years, he was a member of the Lisbon Municipal Assembly and served as a councilor at the Loures City Hall. He served as Secretary of State for Parliamentary Affairs in the XIII Constitutional Government and Minister for Parliamentary Affairs. He was Minister of Justice between 1999 and 2002 and Minister of State and of the Internal Administration from 20052007. He was Mayor of Lisbon from 2007-2015.
Established in 1996, the Community of Portuguese Language Speaking Countries (CPLP) is a mechanism geared at linking and sharing the experience of Lusophone countries. Besides Portugal, this includes Brazil, Portugal, Cape Verde, Angola, Mozambique, Guinea-Bissau, and São Tomé and Príncipe.
while Portugal itself has a vibrant tech sector, and the CPLP is working hard to realize the potential of its African counterparts. Enabling cooperation across key areas, ranging from science and technology to culture, communication, and administration, impact investment capable of giving direction and depth to the respective economies of Lusophone Africa and fostering broader social welfare is hugely important. At the heart of such investment is the capacity to fuel startups and incubators, sectors that cause competition to flourish.
The language barrier is a challenge, as many firms from the continent, as well as from Asia and Europe, opt to locate to neighboring English-speaking countries from which they service Lusophones. Moreover, much, if not all, of the literature in the technology sector is published in English, though mitigating initiatives have included certain developers in Mozambique publishing in Portuguese. Then there's the commercial environment, where FDI is put off by structural problems in certain nations such as exchange regimes curbing repatriation of capital, an investment staple worldwide.
Orange Corners is a pan-African program funded by the Dutch government that supports entrepreneurship through a knowledge program and networking facilities to bridge start-ups and funding. Other notable developments thus far are Angola's first incubator, KiandaHub, and Acelera Angola, a news portal dedicated to entrepreneurship. In 2017, the start-up studio Bantu Makers set up shop to assist young enterprises. In Mozambique, the Maputo-based consultancy IdeiaLab is another ecosystem catalyst for local SMEs, while Cape Verde hosted Startup Weekend to galvanize interested start-ups. Two examples are the local taxi app Taxi Already and Ifome, a food delivery service. In 2013, Cape Verde also factored entrepreneurship into its education system. Though the country has suffered from brain drain, one young star who has stayed behind is Pedro Lopes, who organized the nation's first TEDx talk and went on to establish the youth organization Geração B-Bright to nurture entrepreneurial skills. In 2018, he was appointed the state secretary of innovation and technical training.
That same year, Guinea Bissau’s entrepreneurial ecosystem gained fame as the country hosted the global start-up competition of Switzerland-based Seedstars, where agri-tech startup ‘Bandim Online’ went home with the prize.
Lateral thinking has proposed an “if you can spend it, it must be cash” approach in Mozambique. Given the name “donor up” by a start-up called UX Information Technologies, the idea was to channel donor money into start-ups. If this sounds familiar, it is. It's the old “teach a man to fish” in action, and was floated at the Seedstars Africa Summit in Mozambique in 2017.
Unemployment is substantial in Mozambique, and UX saw potential in establishing the job portal emprego.co.mz, which leveraged the state policy of providing jobs first to locals in order to promote fairer access to a limited pool of around 750,000 jobs. In Cape Verde, a green energy policy pledges to generate 100% of electricity from renewable resources by 2025. The “Climate Launchpad” has thus far resulted in four start-ups.
As the year closed, the Lusophone countries appeared poised for a pipeline of USD5 billion in both private sector and private-public partnership (PPP) projects to stimulate economic growth. Meanwhile, a development finance compact between the African Development Bank, Portugal, and the Lusophone six was signed at the African Investment Forum in Johannesburg in November. It was noted that Lusophone countries were home to 267 million people worldwide and possessed substantial natural resources including oil and gas. These have not been exploited due to the lack of infrastructure that forthcoming investment could now reverse. The African Development Bank pledged financing guarantees to support projects also supported by Portugal, while Portuguese Development Finance Institution SOFID also pledged EUR20 million in credit lines for related projects. While the early shoots of entrepreneurial initiative are visible, forming development ecosystems will prove a long road for the Lusophone nations. One factor to watch is the policy of Brazil’s new president-elect Jair Bolsonaro toward his linguistic African compatriots. ✖
Lisbon, the capital of Portugal, remains a key commercial center, popular with businesses and tourists alikeImage: Alexandre Rotenberg
It is no secret that Portugal has had a rough decade. But against all odds, the Iberian nation has achieved something remarkable, escaping recession and turning risks into opportunities. While others still struggle today, Portugal has experienced moderate growth over the last three to four years, and despite the slow growth outlook, unemployment is down, the deficit is narrower, and debt has decreased.
Having spoken to dozens of top business leaders in the preparation of this publication, we discovered that while imbalances are being gradually corrected in the economy, growth is indeed slowing, and more moderate figures are likely this year and next. For this year, growth estimates hover between 2.3% and 2.7%. The OECD is the least optimistic when it comes to growth predictions. But while the majority of our interviewees believe a slowdown is more likely, the government believes it can maintain the growth levels of 2018.
The current economic and labour market momentum allows institutions to anticipate progress on the budget front. This year, both the public and private sectors expect an improvement over 2018 and that the unemployment rate will come in
somewhere around 6%. In this regard, the finance minister is still considering a slightly more modest unemployment rate of 7.2% next year.Everyone expects the deficit and debt to fall.
Last year also presented a big milestone, as the county made an early exit from the EU-IMF bailout, our interviewee, Carlos da Silva Costa, the governor of the Bank of Portugal, explained in an interview for this publication. It is also worth mentioning that the growth figure for 2018, released by Banco de Portugal, came in at 2%, above the EU projection and eurozone forecast. Growth was helped along by a robust 7% increase in the exports of goods and services, which should continue to boost the economy as global demand increases further.
Diversification in exports has also played an important role in stabilizing the economy. Services around tourism offer up huge potential, while sectors as diverse as pulp and paper create significant export power. We believe this chapter, featuring a range of big names from across the public and private sectors, will help readers gain a comprehensive picture of the state of play in the Portuguese economy in 2019. ✖
13% growth in investment in 2017
11.9% increase in exports in 2017
Portugal’s economy has seen five years of unprecedented growth. How has an anti-austerity policy mix contributed to this?
The government used anti-austerity measures to unleash society’s existing growth potential by following responsible and moderate policies. The first major impact of this was to boost citizen and consumer confidence, which was also reflected in the confidence of investors. These generated an atmosphere of certainty and led to an acceleration of this growth, far above the EU average. Our investment grew by 13% in 2017, the biggest increase in 18 years, mostly in private investment, both Portuguese and FDI. Second, we instilled stability into the public accounts. With more growth, we have more revenue and reduced unemployment, which reduces the costs of unemployment benefits and social security. We also sent a clear message about fiscal stability in our three approved budgets: we have no need to drum up revenue by hiking taxes. We succeeded through better management and by harnessing the opportunities created by economic growth to reduce the debt burden, while maintaining fiscal stability. This reduction of the deficit—to 1.3% in 2017, well below our ambitious targets— works as a guarantee of our ability to retain this fiscal stability, as we will not have more urgent needs in the short or medium term.
Is fintech becoming a priority area for the government, and how do you envisage technology-based economic development in the long term?
We see technology as a key factor for the evolution of the country. In terms of innovation, we have launched three different programs. One of these was Startup Portugal, which streamlined fiscal rules and instruments of venture capital, matched funds to co-invest with foreign investors in technology firms and created a network of incubators. In terms of fintech, we see many start-ups going from strength to strength, with some firms already securing significant investment. The latest example was Finzay, a leading firm in cybersecurity that won an injection of EUR50 million. Another development is that fintech has allowed banks and financial organizations
After recording several years of economic growth above the EU average, Portugal is now set to go beyond and focus on up-and-coming sectors.
Manuel Caldeira Cabral FORMER MINISTER OF ECONOMYto reorganize their production and services all over the world. Certain large financial institutions are moving key departments, such as cybersecurity or application development, to Portugal. We see two forms of movement: new firms experiencing rapid growth and investors and incumbents eyeing the market with interest. The Web Summit, held in Lisbon, helped to considerably draw attention to the Portuguese ecosystem.
How will Portugal capitalize on its image as an attractive hub for relocating companies?
We see many businesses moving to Portugal in different areas. There are new investments in terms of industry, namely in machinery, aeronautics, and the automotive industry, coming mainly from France, Germany, India, China, and the US. We have several banks creating large pockets of jobs in shared services in Portugal; there are engineering companies that have built R&D centers and many software companies investing here and growing fast. This has translated into an almost 11.9% increase in our exports in 2017 and a strengthening of our industrial capability because of nearshoring. One of the main attractions of opening shop in Portugal is our robust and diverse talent pool. It is a great opportunity to find engineers, software developers, people who speak different languages, people from the finance sector, managers, and people with different competencies.
What impact has qualified labor had on Portugal’s export mix?
We have seen considerable diversification. This used to be more centered on traditional sectors such as footwear, textiles, and clothing, though we have since seen a shift toward the machinery, automobile, aeronautics, and pharmaceutical industries. Even traditional sectors have become more focused on high quality with flexible production: producing more value with less people. Parallel to this, there has been a significant increase in technological services. 10-15 years ago, there were half a dozen software firms exporting; however, today the market has blossomed. ✖
Formidable relationships with key countries across all continents and a business environment that thrives on disruptive technologies are just two reasons why Portugal is set to reach new highs.
With its economy expanding continuously since 2014, unemployment falling faster than any other eurozone country, a positive current account balance, investment growth double the average of the EU, and its universities delivering increasingly highly qualified professionals to the labor market, Portugal and its leaders have much to be proud of. However, the public sector and industry associations are not resting on their laurels and seek further successes. The country has identified key initiatives in all sectors moving forward. Public sector officials and the relevant associations target the development of digital skills amongst Portuguese to further the country’s development, a creative mix of financing instruments to encourage entrepreneurship, connecting educational institutions and research centers with businesses to further innovation, and more industries placing sustainability at the center of their business models in the coming years.
Marcelo Rebelo de Sousa PRESIDENT, PORTUGAL
António Sá da Costa PRESIDENT, ASSOCIATION OF RENEWABLE ENERGY (APREN)
Manuel Heitor MINISTER FOR SCIENCE, TECHNOLOGY, AND HIGHER EDUCATION
António Costa PRIME MINISTER, PORTUGAL
Manuel Caldeira Cabral FORMER MINISTER OF ECONOMY
Joã o Pedro Matos Fernandes MINISTER OF ENVIRONMENT AND ENERGY TRANSITION
Rogério Carapuça PRESIDENT, PORTUGUESE ASSOCIATION FOR THE DEVELOPMENT OF COMMUNICATIONS (APDC)
António Saravia PRESIDENT, CONFEDERATION OF PORTUGUESE INDUSTRIES (CIP)
Marta Temido MINISTER OF HEALTH
THERE ARE TWO DIFFERENT VIEWS OF the world. One, short-term, is unilateral or monoliteral, protectionist, with domestic populist discourse, minimizing multilateralism in anything to do with sustainable development, prone to climate change denial, opposed to global pacts on migration and refugees, and only interested in conflict prevention and peacekeeping where and when, occasionally, it matters. The other, opposing, view, which we share, is multilateral, open, and favorable to the search for global governance, committed to sustainable development regarding international law, the charter, and human rights as values and principles, and never as means or conveniences. We are confident that, in the medium to long term, this view will prevail, as it has prevailed in the EU, which has given Europe the longest period of peace in living memory and the highest levels of welfare and social protection. Our view of the world situation and of the role of the UN explains our positions on so-called regional questions that are global in scope. Portugal believes multilateral action, political dialogue, and diplomatic wisdom are the only possible route to harmonious coexistence between nations and peoples.
IT HAS BECOME SOMEWHAT OF A CLICHÉ, but a necessary one, to recall the Treaty of Windsor of 1386, which makes the Portugal-UK relationship the longest-standing diplomatic alliance in existence between two countries in the world. The ties between our countries are deeply rooted in culture and anchored in the vivid and growing communities of Portuguese in the UK and British expats in Portugal. The important thing now is to minimize the negative consequences of Brexit and develop a relationship as close as possible with the UK. British businesses will continue to cross the Channel in search of custom and profit, as will our own. The UK is our largest source of tourists, our fourth-largest export market, and our fourth-largest source of FDI. That preference continues to this day. British investment in Portugal grew at a faster pace than EU investment in Portugal did over the past two years. And over the last year, it multiplied by five. These are the dividends of a special relationship nurtured over centuries, and they pay both ways.
Manuel Caldeira Cabral FORMER MINISTER OF ECONOMY
THE GOVERNMENT HAS USED anti-austerity measures to unleash society’s existing growth potential. The first major impact of this was to boost citizen and consumer confidence, and this was also reflected in the confidence of investors. Paired together, these trends generated an atmosphere of certainty and led to not just a continuation but an acceleration of growth, far above the EU average. Our investment grew by 13% in 2017, the biggest increase in 18 years, mostly in private investment, both Portuguese and FDI. The signals we gave off were, first, that we are an open economy for trade, investment, and visitors. Second, we instilled stability into the public accounts. With more growth, we have more revenues and less people in unemployment, which reduces the costs of unemployment benefit and social security. We also sent a clear message about fiscal stability in our three already approved budgets; we have no need to drum up revenue by hiking taxes. We managed through better management and harnessing of the opportunities created by economic growth to reduce the debt burden, while maintaining fiscal stability.
WHEN WE ESTABLISHED this association 30 years ago, our objective was shaped by the fact that all electrical business production, transport, and distribution was owned by the state through EDP since 1976. The sector was subsequently opened to private investment. The role of the association remains essential to unify the different investors in the system for the production of electricity. We want Portugal to have a higher share of renewable electricity in order to support the reduction of CO2 emissions and fight climate change. The companies that are members of APREN represent 93% of all renewable power installed in Portugal and on average produce a little more than half of the electricity consumed throughout the country. We work to find solutions for our sector; we address either technical or fiscal problems, those concerning the environment, as well as ways to interact with the remuneration of the sector for electricity production. We started from a system that basically involved feed-in tariffs and transitioned gradually to one determined by the market.
PORTUGAL HAS A TRIFECTA OF highly valued assets, such as the sea, sun, and wind, and I would risk a fourth: skill. When we think of the green energy sector, we tend to focus on the big projects: windmill, solar, and water. It is a fact that we have an extremely high-value industry both in hardware and software. It is not by chance that we attract companies such as Siemens, which may come to benefit of experienced Portuguese companies like A. Silva Matos and others; however, the green energy sector is also made of smaller projects. Take bio-economy, for example, in which we have an enormous potential for development, not only on the “blue” side—seas and rivers—but also on the “green” side— forests and agriculture—combining the cascading of value extraction from natural biomass with energy production. And in that context, we certainly have a solid and growing pool of companies and competences, from north to south of the country such as CIIMAR in Leixões, BLC3 in Oliveira do Hospital, Católica School in Porto, and companies like SilicoLife and A4F.
PORTUGAL IS A SMALL BUT OPEN ECONOMY. It has had throughout its history a differentiation: its relationship with both Africa and the Americas. We have a virtuous triangle: Europe, Africa, and the Americas. Through its history, culture, and relationships with countries that speak Portuguese as an official language, Portugal can help the EU face the challenge of globalization. Our privileged relationships can bring greater synergies to Europe and simultaneously allow Africa and the Americas to see Portugal as the gateway to Europe. However, Europe also has challenges, its biggest being dissolution. It is not just Brexit, but also Catalonia and the autonomous movements in Spain. We also have to consider how Brexit reflects on the reality of the UK. These are challenges that are beginning to undermine European cohesion. If we start thinking about the future, we will have not one Europe but 27 states with distinct realities. Portugal through its historical relationship with the world has a great power of knowledge and this rich history can be utilized by Europe.
NATIONAL SHORT-, MEDIUM- AND LONGTERM STRATEGIES FOR the development of digital skills were set out through the National Digital Skills Initiative (INCoDe2030), so that by 2030 approximately nine out of 10 citizens are frequent users of the internet, and we increased by 50% the number of IT experts in companies. The strategies include, among other aspects, providing support to creative communities in the area of inclusion and at a local and decentralized level throughout the country in close interaction with the local/regional administrations; supporting teachers in the progressive and systematic modernization of the education system working closely with the Minister of Education and related central and regional administrations; establishing regional networks of qualification and digital specialization, namely through partnerships between polytechnics, local administration, and companies namely in the regions of West-Leiria, Cavado and Ave, Nordeste Transmontano-Bragança, Castelo Branco, and Setúbal-Palmela; the establishment of a national AI strategy, with the specific involvement of the public administration, R&D centers, and companies and in close European interaction; and the development of advanced forms of computing, including the creation of the Minho Advanced Computing Center-MACC.
THE IT AND ICT SECTORS ARE REVOLUTIONIZING AND DISRUPTING ALL INDUSTRIES. The question is not if ICT will disrupt business, but when and how much it will change some particulars of the market. For example, in the last seven to eight years, the media and entertainment sector in Portugal lost 40% of its advertising revenues. Digitization is basically a revolution; if we talk solely about technology-related transformations, we had the agricultural, the industrial, and now the digital revolution. The difference is that the digital revolution transforms business and society in a much shorter timeframe than previous revolutions, which took hundreds of years. The first part of the digital revolution was the appearance of computers that could take over support functions for businesses. However, the real revolution started in the last 20 years when businesses were completely transformed due to the exponential growth of several variables that has been maintained from 1958 to date. Things that were impossible 20 or 30 years ago are now easy as a result of the computing power to do them.
IN PORTUGAL, THE PRIVATE SECTOR ALWAYS played a role in the provision of healthcare services in specific areas. The relationship between the public and private areas is of complementarity though also to some effect competitive; in fact, the Basic Law of 1990 envisaged a competitive relationship between both sectors. Traditionally, the private sector provides care in some of the most lucrative areas and where the public sector fails to provide full or timely coverage, as is the case of medical specialist appointments, elective surgery, and medical exams. In the last two decades, the provision of healthcare services by the private sector has shifted from small medical cabinets, geographically spread, and more abundant in urban areas to variable size, well-equipped, high-quality clinics, and small hospitals where medical specialists are concentrated and specialized, and medical exams are readily available. This happened alongside the increase in the percentage of the population covered by a voluntary health insurance, estimated to be 20% in 2014. There are great examples of the relationship between the private and public sectors in the provision of care, such as the dental voucher, where the government contracts with private providers for specific oral care screenings and treatments for vulnerable groups of the population, or the provision of specific services in community pharmacies that are privately owned and well spread throughout the country.
Having emerged from a debilitating crisis, the Portuguese economy, though still susceptible to externalities, is being shored up internally to grow at sustainable rates.
BACK IN APRIL OF 2018, PORTUGAL submitted its 2018 Stability Programme for the 2018-2022 period. The country remains subject to the preventive mechanism of the EU's Stability and Growth Pact (SGP). With this cautionary position, it aims to keep the economy on an even keel and meet the Medium-Term Budgetary Objective (MTO) of the European Commission (EC). MTOs, which function as a check on fiscal health, acknowledge a member country's need to ensure sustainable debt levels, giving governments sufficient leeway to adjust to prevailing conditions while setting a margin against breaking the bloc's fiscal rules.
Because of runaway public spending, budget deficits have long plagued the Iberian nation, which had a debt ratio of 129.9% of GDP in 2016. That year Lisbon undertook remedial efforts that by 2020 could meet EU stipulations, and a fiscal surplus of 0.7% is forecast for that year. The structural balance, forecast at 0.7% of GDP for 2018, is expected to have a surplus for 2020 and hit 0.2% in the parliamentary election year of 2019. In short, the government wants the political term to end with a bang, on virtually a zero deficit level. The public debt goal for 2018 is 122% of GDP (a downward revision of the government's original forecast of 123.5%) and 118% for 2019. The official forecast for public debt in 2022, the end of the forecast period, is 102% of GDP.
The EC has cautiously recognized “fiscal improvement.” GDP grew 2.8% in 2017 to USD217.6 billion. The EC forecasts growth of 2.2%, 1.8%, and 1.7% for 2018, 2019, and 2020, respectively. Yet the Stability Programme sets real GDP growth at 2.3% per year for 20182020, with a slight dip to 2.1% in 2022. Its take on the 2018 Stability Programme, which it issued in May, observed that in 2017, Portugal had seen an improvement in its structural balance of 0.9% of GDP, in compliance with the MTO. However, in cautionary tones it noted that the pace of growth in government spending, net of discretionary revenue measures and one-offs, had overshot, resulting in a negative deviation of 0.5% of GDP in the base fiscal position. In general terms, the EC sees the potential for deviation from set targets in both 2018 and 2019.
On November 29, 2018 Portugal revealed plans to repay its outstanding debt to the IMF in 2018, having begun repayments in 2015. Post-crisis, it had secured a financial rescue package from a troika including the Fund and the EU. Of the EUR78-billion package, EUR26.3 billion was from the IMF. According to the Portuguese Treasury and Debt Management Agency (IGCP), as of the end of October, EUR4.7 billion was outstanding, some 17%. The sooner the debt is repaid, the sooner Portugal frees itself of its Post-Program Monitoring status, a solid indicator for would-be investors and capital markets. Meanwhile, its public debt maturity profile remains key to shaping international perceptions.
Meanwhile, the deceleration in GDP reflects a loss of momentum in exports and investment, though the job market has continued to improve, with unemployment falling from 7.9% in December 2017 to 6.6% in September 2018, driven by broad-based employment growth.
That being said, banks should still ensure buffers against potential economic headwinds in light of recent rising demand for property and higher prices. Continuing ongoing efforts to strengthen the legal and institutional framework for debt enforcement and insolvency are necessary to support a more productive allocation of economic resources. Keeping labor markets flexible is important for Portugal’s ability to process adverse shocks, and maintaining competitiveness requires wage growth consistent with developments in productivity.
The external balance has deteriorated somewhat since the start of the year, influenced by weaker-than-expected exports of goods and a slowdown in tourism. Oil prices have also adversely affected terms of trade and thus the nominal trade balance. Imports are set to continue outperforming exports, resulting in some deterioration in the current account balance. Larger dividend payments to foreign shareholders put additional pressure on the current account, while the projected increase in absorption of EU structural funds and lower interest costs for domestic borrowers are having a positive impact. ✖
How do you define CIP’s role in the context of business in Portugal?
The global economy is going through a series of rapid changes, demanding that organizations adapt to new challenges in the business context. CIP interprets these challenges and finds the best solutions, thus acting as a beacon that guides companies. CIP must focus on finding the answers to these new challenges. We represent 140,000 Portuguese companies and are the largest employers’ confederation among 70 associations. The diversity of the companies we represent provides us with a deep knowledge of the day-to-day activities and needs of our companies, replicating best practices that have worked for other companies in need.
What are Portugal’s current competitive factors, and what needs to be done to improve them?
We have an excellent communication network, great highways, and young people who are highly qualified. However, we still need to improve the qualification of our human resources, because it is through knowledge that differentiation among countries will prevail. Incorporating knowledge to create innovation will allow us to differentiate ourselves in the highly competitive global economy. In addition, more structural reforms are needed. The wealth of the country does not support the dimension of the state we currently have. Portugal must improve the qualification of its human resources and free the state from activities that consume a great deal of the wealth generated in order to transfer the surplus to the economy. We must stimulate the improvement of competitiveness factors by reforming tax and reducing bureaucracy so it is less stifling. If the state manages these points, then companies will be able to perform their roles far better.
What is the importance of strategy in terms of Portugal’s efforts to change its industrial profile theme?
The country cannot be based on services alone; we must also have an industrial base. The weight
of industry in the economy must increase, and this can be reached with a well-defined strategy. Portugal must bet on sectors such as aeronautics or the maritime sector. The country must also look to traditional industries such as footwear and textiles, where we have excellent examples. Portugal must define its strategy and business model to diversify and improve. The country must know what it wants and what it can do; we have excellent examples in the metallurgical and metal-mechanics industry, where we are increasing sales and exports. There are great successes in the aeronautics industry, where Embraer and other companies have come to Portugal. Then, there is the automotive industry, where we are attracting companies through clusters that provide components to the sector. Portugal must define industries and, within these, aggregate and develop strategies, promote reforms, and fiscally encourage possible ways to invest. We must attract productive investment and bring more national and foreign investments that will bet on internal production, substituting imports for internal manufacturing, and developing more industry than what we currently have. The weight of industry in Portugal’s GDP has fallen in the last 20 years, and we must return industry to the center of our economy.
We will continue to demand that the government look at our internal politics and our role in Europe and the world. We want the government to promote reforms that must be undertaken. We need fiscal stability, and our fiscal policy must be more predictable. We cannot change the fiscal framework every year; there must be an attractive fiscal policy toward investment. It must allow predictability for investors and ensure that taxes will not change in the next five or eight years. The reform of the state must allow the economy to set itself free and entice stimulus so that it can benefit. We need a more efficient legal system with less bureaucracy in order to benefit economic agents. ✖
Part of CIP’s focus is advising the government on reforms that stimulate the economy and attract greater investment.OF PORTUGUESE INDUSTRIES (CIP)
111 interviews were conducted for The Business Year: Portugal 2019 Analytics.
BUSINESS CONFIDENCE INDEX
How confident are you about the outlook for business in Portugal this year (1-5)?
ADVANTAGES & CHALLENGES
What are the most commonly mentioned advantages and challenges of doing business in Portugal?
ADVANTAGES
Dynamic and innovative market
Considerable potential for export
Advanced levels of digitization
High quality of life
Educated young generation
Bilingual population
Developing tourism sector
CHALLENGES
Need for structural reform
Long bureaucratic procedures
Ageing demography
High taxation and unfair labor laws for foreign investors
Limited supply market
Shortage of human resources
What are Portugal’s top-5 advantages as an IT hub?
With which sectors are you collaborating?
Top-5 technologies in which interviewees are investing:
Sub-sectoral breakdown of our interviewees in the industry sector:
Overall, do you find your location in Europe advantageous or disadvantageous? HIGHLIGHTED BY 68%
What are the competitive advantages of Portugal’s industrial sector?
HIGHLIGHTED BY 80% of interviewees
Who are your key partners, and which partnerships are you looking to expand?
Most mentioned advantages:
87% Proximitytomarkets
27% Knowledgeexchange
13% Prioritizationonsustainability
50% 45% Innovation and R&D Emphasis on sustainability Value-added products
Interviewees who mentioned the importance of internationalization for Portugal’s education institutions
73% YES
27% N/A
What does internationalization include?
1 Diverse student populations
2 Increased offerings in English
3 Utilization of foreign curricula, such as IB
4 Partnerships and programs with other universities and education institutions
Which countries are you partnering and/or looking to partner with?
What investments are you making to improve the university?
What will be the impact of Brexit on business in Portugal?
Many companies are worried about the negative impact Brexit will have on their business. We certainly heard of people leaving the UK before Brexit and that many more have left, especially in the last couple of months. These are individuals who are very apprehensive about Brexit and see Portugal as a good option for relocation.
Education sector interviewees with strong and/or developing relations with education institutions in the UK:
Which energy sources, both conventional and renewable, have the most potential in Portugal?
HIGHLIGHTED BY 87.5% of interviewees
Which trends do you see developing in terms of energy and electrification?
HIGHLIGHTED BY 87.5% of interviewees
What are COTEC’s key objectives?
For us, one of the key aims is to generate open innovation and collaborative networks. COTEC is a network that brings companies together. We are not focused on any one sector or specific level of company development. From the outset, we looked to create synergies between SMEs and large companies as a key mechanism to promote economic growth. We now see a growing interest from larger companies to address the innovation problems they need to solve, and they believe interaction with SMEs with specific skills from other sectors may bring in additional expertise that can help. Working with the government also plays a major role, and Industry 4.0 is a great example of identifying innovation barriers to be overcome.
To what extent can a culture of innovation act as a catalyst for job creation, and what impact can it have on supporting SME development?
Our growth potential is in moving SMEs to different stages of scale and impact in terms of turnover or employment. From that perspective, we demonstrated a strong correlation between innovation and the ability to manage these processes with a proprietary maturity framework called Innovation Scoring. We also demonstrated the growth potential of SME companies. This would have a growth impact on the national economy of 0.5% of GDP. Innovative SMEs create more and better-paying jobs and play an important social role since they distribute more profit across society. This growth model supported by innovative SMEs is a sustainable one, both in terms of business growth and achieving quali-
ty employment. SMEs in the COTEC network are on average smaller and stuck in that trap between size, scale, and level of innovation. They have many opportunities to grow but simply do not have the resources or financial capital to address those opportunities.
What initiatives have been the most effective in achieving COTEC’s core objectives?
For example, Portugal’s aerospace cluster has been evolving for 100 years. During this time, a number of companies active in maintenance, transport, injection-molding, and metals have entered the market, and it has grown a great deal over the past decade. For this cluster of activities, Portugal is in an extremely selective club of aeronautic manufacturers. There are almost 200 companies in Portugal working in some way; however, this is just one example, and there are many more. We need to stimulate a cluster of activities in order to extract the growth potential because most are highly capital- and knowledge-intensive and able to provide quality employment. We can identify several clusters, including food, the agro and pulp and paper industry, tourism, and health as having excellent prospects for new growth and investment.
What image you would like the international investment community to have about Portuguese innovation?
In the last 25 years, we have been building an international case to have the appropriate talents and capabilities in different areas. We have well-positioned universities that are training researchers and professionals in management
and engineering with one of the best engineering faculties in Europe, and the best proof of the way we train engineers and managers is the success of the Portuguese abroad. A number of sectors have been transformed into innovative businesses, and we are now able to use not only the supply capabilities, but also have markets and business that can use those innovative capabilities. What we need is external investment to boost and consolidate these areas of high-value activities. More investment will have not only a direct effect but a multiplying one, because the country is ready to grow on the next-generation demand. We already have the connections between the companies and universities that supply the source of knowledge; however, we also need a great and international partner network. COTEC may help bring together and activate those cross-country networks of innovation with what we call entrepreneurial discovery, which is not only about the business people and entrepreneurs but the scientists, technicians, and companies that supply technologies. ✖
BIO
Jorge Portugal has been General Manager of COTEC Portugal since 2016. He served for 10 years as advisor on innovation, entrepreneurship, and competitiveness for the President of Portugal. Previously, he served as a consultant to the government on innovation in public services. He earned his bachelor’s, MSc, and PhD in mechanical engineering from Instituto Superior Técnico, University of Lisbon. He also holds an MBA from NOVA School of Business and Economics.
IAPMEI seeks to boost innovation and entrepreneurship as well as spur investment in enterprises, especially SMEs.
What is your agency’s role as a strategic partner in providing both technical and financial support to Portuguese enterprises?
IAPMEI is a public institution under the Ministry of Economy. Our role is to promote competitiveness and growth and ensure the best policies regarding industrial activity are in one place. The aim is to reinforce innovation and entrepreneurship as well as investment in enterprises, namely SMEs. In Portugal, micro, small, and medium-sized enterprises represent 99.9% of the economy, much higher than the European average. Micro enterprises employ less than 10 workers, and these comprise 96% of the Portuguese economy. The average number of employees is eight, and SMEs represent 80% of job employment and 63% of added value. This means we have to give SMEs a great deal of attention. Therefore, we pay attention to financial issues beyond normal banking activity with commercial entities. We are the financing partners of other means of financial support for SMEs other than commercial activity. That is mostly when there is a market failure. SMEs have difficulties getting to the market, so we have a system of mutual guarantees supported by the state and a set of financing activities with credit lines and supporting investments.
What steps do you take to devise the best policies to foster entrepreneurship and innovation for companies in the local business community and industry?
tance in addition to financing. One of the most important is providing management capabilities for entrepreneurs. We have an academy where we focus on training enterprises in terms of capacity and entrepreneurship. Another department promotes special support for the three enterprise cycles. We accompany the developments from the pre-start-up idea phase to the scale up process until they grow into a normal enterprise.
Could you tell us about your agency’s strong representation in strategic clusters?
BIO
We are consulted for new legislation proposed by others than IAPMEI, and we pay special attention, concerning the potential impact taking into account SME characteristics. In terms of political support, we propose the creation of structural incentives for investment and lines of credit for certain activities to promote innovation, entrepreneurship, scaling up, or the concentration of companies. We also take into account the fact that we are the ones that manage the system of certification of SMEs, following the European rules for classifying. There are other ways in which we can offer assis-
The clusters are one of the most important things we intend to give increased attention. Clusters have already been formally created in Portugal, and they can improve collaborative efficiency by bringing together companies’ knowledge, academia, institutions, associations, and public entities. We already have 20 recognized clusters, and IAPMEI is in charge of formally recognizing them. Thse 20 clusters already involve 2,100 different associates, more than 1,800 SMEs, and many micro enterprises. Crucially, there are always other major players in these clusters that have a pulling effect. The aeronautics cluster is witnessing fantastic development in Portugal. We have been involved in the creation of a development of a project together with Brazil, implementing a new kind of airplane from Embraer. This company already has two factories in Portugal and is growing the different players in the cluster, be they technological centers or parts suppliers. Even universities that develop courses and prepare people for work are involved in it. The idea is that there is critical mass combining different actors, which will result in greater end results than if they were to work alone. Then, they are able to organize events, exchange ideas, and create projects where they can have special conditions for mutual support. One of our biggest hopes is that the implementation of clusters will help the development of the Portuguese economy and give us a greater economic advantage. ✖
Semapa seeks to strengthen its core businesses as well as diversify as a group.
What have been the main achievements of Semapa since its founding?
We are an industrial group with three main businesses: pulp and paper, cement, and environment. The group acquired Secil, the cement company, in 1994 and Navigator, the pulp and paper business, in 2004. In the meantime, the group also became one of the first players in renewable energy in Portugal, which was subsequently sold to Babcock & Brown. The environmental business (ETSA) was acquired in 2008 in the context of Secil’s incineration strategy and subsequently followed an independent path. Currently, Navigator is our main business, with EUR1.6 billion in revenue, and Secil is number two, with around EUR500 million in revenue. Throughout the years, we have been one of the most significant industrial investors in Portugal. At Navigator, we have invested in some of the bigger and more efficient paper plants in the world, and we have built an international portfolio that allows us to benefit from diversification effects. Since the rebirth of the group in the 90s, our shareholders’ returns have been in the range of 19% per year, which is significant.
We are an international, export-oriented group, and our challenge as a business is to maintain our competitiveness in this context. Although most of Navigator’s assets and operations are based here, the company exports more than 90% of the pulp and paper it produces. We are the leading office paper producer in Europe and also export to the US, Africa, and the Middle East. Our main raw material
is wood, where we compete with pulp players from the southern hemisphere. Keeping enough wood supply in Portugal is of the utmost importance to us and to an industry that represents one of the biggest and higher value-added export industries of the country. We are actively engaged with all our wood suppliers to ensure the sustainability of their forestry practices, and currently more than 60% are already certified. This number is increasing every year. We need, therefore, to make sure the government and regulatory authorities recognize this and do not introduce unnecessary restrictions. Navigator is also expanding into the tissue market as a growth option. Energy competitiveness, among others, will be a key ingredient of success. In cement, most of our production is outside of Portugal, though we still have a sizable operation here, exporting a significant part of its output. Again, energy competitiveness is key and is not evolving as it should. Another critical factor is the evolution of the CO2 Emission Trading Scheme in Europe to ensure a level playing field vis-à-vis non-compliant countries.
What future developments are in the pipeline for Navigator at the international level?
We have a distinctive global leadership position in office paper. We will continue to grow this business by constantly improving our throughput. Beyond that, we have been exploring two routes. One is to invest further in pulp-producing capacities by modernizing and increasing the capacity of our plants. We recently finished an investment in our Figueira plant of about EUR80 million to increase output by 70,000 tons. We
João Castello Branco CEO, SEMAPAare also exploring the tissue route. It is a growing market, which uses our hardwood pulp, and we aim to replicate the successful integration strategy pursued in office paper. In 2015, we acquired a company in this space and recently concluded a EUR-120 million investment in the construction of an integrated factory in Cacia. The view is that we will be able to develop a particularly competitive position to serve some markets. Value creation needs to take precedence from growth for the sake of it. We also have a long-term, forest-based bet in Mozambique. ✖
BIO
João Castello Branco has been CEO of Semapa since 2015 and Chairman of the Board of Directors of the Navigator Company and Secil – Companhia Geral de Cal e Cimento since 2018. Earlier, he was a Director at McKinsey & Company in the Iberian office, which he joined in 1991. Prior to this, he worked at Renault’s engine development center in France. He is an engineer by training from Lisbon’s IST and has an MBA from INSEAD.
“We are an international, export-oriented group, and our challenge as a business is to maintain our competitiveness in this context.”
IN 2018 LISBON HOSTED THE INAUGURAL SOCCA6 WORLD CUP in a new purpose-built stadium sponsored by local government and businesspeople. The event shined a favorable light on the country's competitive spirit and commercial drive. Portugal has no monopolistic economic sectors, although as commonly found, private ownership in certain businesses, including basic sanitation (excepting waste treatment), international air transport, railways, ports, and airports is capped at 49%. Significantly, the government has recently introduced diverse regulatory reforms to grease the wheels of commerce and investment.
Healthy competition invites fresh business initiatives and can ultimately reduce the cost of goods and services for the consumer. It follows, then, that protectionist structures tend to repel would-be FDI flows. To determine the remedial work required to hone its competitive edge, the Portuguese Competition Authority (PCA) in October 2016 turned to the Organization for Economic Co-operation and Development (OECD) for a comprehensive and impartial Competition Assessment Review. These identify regulatory, transport, and other infrastructural realities deemed restrictive to efficient market operation. As such, they provide governments with a roadmap of effective public spending and policy. The OECD's recommendations highlighted key economic sectors requiring legal reform to broaden competitiveness, including construction, gas, media, the liberal professions, pharmaceuticals, retail, tourism, and transport. To take transport as but one example, ranging from road haulage to taxi fares, 485 restrictions were identified for potential reform. Supporting this were calculations of vital statistics such as output, employment, and price trends.
The World Bank notes that over the past year, regulatory reforms to ease business conditions peaked worldwide. Indeed, from June 2017
to May 2018, 128 countries implemented a record 314 reforms to enhance their commercial environment. Portugal's regulatory initiatives since 2018 have been overwhelmingly positive. Among competitive regulatory improvements to establishing a business is the 'Empresa na Hora' initiative that allows companies be incorporated in under an hour. To this is added swifter connection of utilities; a reduced corporate income tax rate and more favorable taxable profit ratio for SMEs; streamlined legal enforcement of contracts thanks to a new code of civil procedure, and a scrapping of the need to report to the Ministry of Labor. Where labor market regulation is concerned, severance pay per year of service has been reduced, while the maximum cumulative duration of fixed-term contracts has been raised. Construction permits are easier to obtain due to time limits imposed on the processing of urban projects with simplified attendant procedures. Meanwhile, cross-border trade has been facilitated by the operation of a single window in port procedures. And should the unfortunate occur, insolvency is now a simpler process to navigate under a new law that expedites liquidation procedures through fast-track processes both in and out of court. Portugal has also established a "Cutting Red Tape" website, pooling all steps taken since 2005 to curb bureaucracy. The Agency for Investment in Portugal (API) also systematically publishes investment opportunities.
With a vibrant tech industry in play, Portugal has recently also ramped up renewable energy initiatives and already operates the world's second-largest solar power plant. Indeed, the entire spectrum of green energy is seen as a juicy enticement for foreign investment. The United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2018 reported that FDI to Portugal in 2017 saw modest YoY growth to USD6.95 billion from USD6.3 billion in 2016. Incidentally, Germany beat Poland 1-0 in the Socca6 World Cup final. To its credit, Portugal made it to the Plate Final, where Russia beat it 2-1. Yet, its national economy might be a longer-term winner. ✖
Portugal has come far since the darker days of economic crisis, and recent reforms are making it a more appetizing investment proposition.
SINCE Portugal started emerging from years of crisis. Portugal has been a key focus for three or four years now, and the chamber of commerce is one of the doorways to the country. We organize many events such as seminars across multiple economic sectors with the objective of making contacts between French and Portuguese companies. Our dynamism is our best image and promotion tool to boost membership. We organize events to assess successes in particular areas of business such as exports to France and Portugal, environment, innovation, as well as a company nominated by the jury. This gives companies who want to highlight some of their projects a chance to receive acclaim in the press for their achievements. We also work with European chambers of commerce in Portugal to organize events to enable networking. In-depth market research and analysis on macroeconomic trends also helps businesses. Here, we are fortunate that there is extensive collaboration between different entities, which is not the case in every country. Business France has the most information for market studies to help expand French exports into Portugal. However, we take the lead when the company is already in the market and provide it with information to set up a company here and help them invest.
BartonMANY UNCERTAINTIES REMAIN REGARDING BREXIT, and it will stay high on the topical agenda for several years to come. Many companies are worried about the negative impact it will have their business, whilst others are rejoicing about the new opportunities that are emerging. We intend to monitor developments as they occur and offer seminars to help prepare our members. For some, there was the perception that chambers of commerce were rather traditional institutions, and that image still sticks. We, therefore, made a conscious effort to be more appealing to a new generation of companies that are dominating the business scene. We created more activities targeting start-ups and entrepreneurs. In 2017, we were pleased to welcome Google as a member, which illustrates our appeal to such companies. Companies such as Google, Amazon, and Facebook are dominating our landscape; for them to join us and use the chamber to project their brand is a great indication for us. In the early days, the chamber was much more into manufacturing, wine, and textiles, though more recently it has moved more toward services and tourism, where it is strong in the Algarve region. The activities in the north are more geared toward manufacturing, whereas the central region has a higher concentration of services and tech.
Hans-Joachim Böhmer EXECUTIVE DIRECTOR, GERMAN CHAMBER OF COMMERCE AND INDUSTRY
THIS GERMAN CHAMBER IS PART OF the network of German chambers in over 90 countries and was established in 1954 as a bilateral chamber working with both German companies coming to Portugal and with Portuguese companies going to Germany for investment, exports, or imports. It is always about finding opportunities for both sides. There are altogether 400 German companies in the country, of which most are industrial. We bring in German companies and provide services for them and also help Portuguese businesses enter the German market. We do professional education, which is one of our important areas, because companies need qualified people. We have offices and training centers in Lisbon and Porto as well as a training center down south. All these activities are focused on what is needed. Economic relations are increasing, which means our activity will grow as well. We are here to help German-Portuguese economic activities grow in different areas. As a chamber of commerce, we are a lobbying organization, though especially oriented toward services for our members. We help German companies here find partners to get information on the relevant laws and regulations. We have many German companies exporting industrial products to Portugal and entering into production processes here. Our goal is to help lower the threshold of doing business here.
CHAMBER OF COMMERCE
Given the favorable outlook of the Portuguese economy, foreign chambers in the country are keen to help businesses set up in the country, be a sounding board, and lobby for the necessary legislation.
BIO
Eliana Bessada holds a degree in chemical engineering from Instituto Superior de Engenharia do Porto. She has been the Country Manager for Bureau Veritas (I&F) since September 2017. Before leading the Portuguese operations of Bureau Veritas, she spent over 12 years working at SGS Portugal, where she moved from Quality Coordinator to Business Manager.
Can you elaborate on the company’s milestones and achievements in Portugal?
Bureau Veritas came to Portugal 36 years ago. Its main activity is testing, inspection, verification, certification, and training. The objective, with the acquisition of Rinave in 2004, was to enter the industrial market. Bureau Veritas is also an international classification society of ships, and the acquisition of Rinave also strengthened our position in Portugal. There are a few classification societies in the world, and Rinave was an investment target here. In 2004, there was a group of three companies, one dedicated to ship classification, one to consultancy, and one to industry inspection. The overall objective was to enter the industrial market. The acquisition process was interesting, because at that time Rinave was larger than Bureau Veritas. The acquisition gave it a strong position in the industrial market, especially with testing, inspections, and certifications. We work with all market segments, specially the oil and gas market, power and utilities, retail, building and infrastructure, and so on. In 2017, we performed extremely well. Bureau Veritas in Portugal has five companies. We have Bureau Veritas Industry & Facilities (I&F), which includes Bureau Veritas Rinave and Bureau Veritas Certification. We are dedicated to certification of systems and products, testing, inspection and certification in the industrial and real estate areas. Then, Rinave is focused on ship classification and related statutory services. Another company, Inspectorate, an acquisition from 2008, is dedicated to commodities and the inspection of transactions made between importers and exporters of oil, gas, and chemical products, agriculture, and minerals. We have another company, BIVAC Iberica, dedicated to government services. Globally, in 2017, Bureau Veritas closed with EUR15 million, and we had approximately 4% growth YoY. 2017 was challenging with the changes, though we were still able to achieve our objectives.
What challenges do international companies face while investing in Portugal?
There is a great deal of bureaucracy in Portugal. Sometimes, it is a real challenge to move things forward and get things done. It can take years for a company to establish itself here. Depending on the sector, sometimes it is expensive, especially companies that are highly dependent on energy. One positive of Portugal is the labor cost. Compared to northern Europe, labor is cheaper. Bureau Veritas aims to be the number-one player in the immediate future, which is why our slogan is “move forward with confidence.” One of our strengths is our international brand, and our presence in nearly every country. When a client wants to buy equipment and components from other countries, we can connect with our other affiliates to ensure the needed services and be the eyes of our client at that destination. This is a real advantage to our clients. Furthermore, having certification from a company that is recognized worldwide is a mark of confidence and strength for companies working with us. The Portuguese market sees us as a competent company with inspectors, technology, and strict rules and code of ethics.
What are your main priorities for the coming years?
We have an ambitious plan for 2019. Bureau Veritas has a 2020 plan to grow and reach its main operational profit targets. In Portugal, there are several things we have to do to achieve these results. For example, industry represents almost 70% of our revenues, but only 25% of our operational profit. Certification represents 25% of our revenues, but around 70% of our profitability. We must make sure we have a well-balanced mix of products to have a great balance between revenue and profitability. This represents many things in terms of commercial activity, reorganization processes, and internal process changes. ✖
Consultancies work to add value to their clients by bringing in new ideas, providing links to foreign companies and markets, and introducing new methodologies.
What have been the main milestones and achievements of the company’s operations in Portugal?
SÉRGIO DO MONTE LEE Deloitte Portugal has an undisputed leadership in professional services. We are ranked number one in delivering professional services among the Big Four and hold the largest market share in tax services for the 250 largest national companies. In Portugal, we employ more than 2,500 practitioners, and our cluster has regional rights to operate in Portugal, Angola, Cape Verde, and São Tomé and Príncipe. More than 60% of our business is in Portugal, 20% in Africa, and the remainder comes from other Deloitte’s practices. Across the global network of Deloitte, we are also a reference in innovation and technology areas through our seven centers of excellence in financial and non-financial services. We recently announced a new location in Portugal, in Viseu, where we opened a technological center, to reinforce the center of excellence in Outsystems. We aim to be the best in all that we do to help clients realize their ambitions, make a positive difference in society, and maximize the success of our people.
JOSÉ MANUEL BERNARDO We initially had a significant consultancy business
in Portugal, and most of that business was sold around 2002 to IBM to create IBM Consulting Services, which was one of our main milestones. Since then, we have been doing other things in terms of consultancy, mostly in IT. We later set up departments for deals, mergers and acquisitions, corporate finance, and so on and started doing more business in areas such as incentives, processes, revenue improvement, and so on and less in IT. We are creating areas of competences in terms of the digital space, technologies, and AI. We are focused on these now together with assurance and tax consultancy. We also set up a legal firm here called CCR Law, a separate entity, in early 2018 to operate in the legal space. CCR Law is a member of PwC's legal network. Our key clients are Banco Santander, Total, BPI, Galp, EDP, and Millennium BCP, among others. Our revenue is above USD120 million, though it is significant in the context of the firm or in the context of the UK, for example. It is a reasonable market of 10 million people and is in line with the other PwC firms in this scale.
What makes Portugal so attractive for investment?
SDML It is a combination of different factors. First, the country’s economic, social,
and political stability has been especially relevant in a decade of unrest in many regions of the world. Second, our recent governments have followed tax, administrative, and regulation policies that favor investment in the country; increased flexibility in labor laws is a great example of such measures. Finally, investors have access to high-skilled labor at a competitive cost compared to the majority of our European neighbors. When combined with foreign language proficiency and an increased culture of client service, it makes Portugal particularly attractive to the establishment of nearshore operations.
JMB In the areas of services and technology, for example, we have great potential because young people are skilled in foreign languages, education is excellent, we have a great communications network, and it is a peaceful country. It is not that expensive, especially outside of Lisbon and Porto; therefore, the country has a great deal to offer. It is a seven-hour flight to the US or Moscow, meaning it is right in the middle.
What are your main goals and priorities for the year ahead?
SDML Leading business through innovation is one of our key priorities. In our experience, innovation results from the convergence of a wide range of perspectives, knowledge, and insight focused on specific industries and issues. Young generations are also challenging top management approaches. The latest Deloitte Millennial Survey shows a dramatic, negative shift in their feelings about business motivations and ethics. Therefore, attracting and retaining millennials will be also a key priority for us.
JMB We have a significant position in the insurance market that we want to continue, and we are doing a great deal of work and investment in new technologies. We are reinforcing our advisory practice by bringing in engineers, IT experts, mathematicians, and experts in machine learning, AI, blockchain, and others because we have competitors in the market and need to do something different. For example, cybersecurity is one area of concern for us. There are many issues in terms of cybersecurity in the market, and this area has great potential. That is why we are contracting people and investing significantly there. ✖
The EU aims to derive 20% of its final energy consumption from renewable sources by 2020. The European Council also endorsed the EU-level binding target of increasing the share of renewable energy to at least 27% of the EU’s energy consumption by 2030. The renewable energy market in Portugal produces more than half of its energy needs from clean energy, and there has been an extraordinary level of growth in the market since Portugal recognized its geographical opportunities and invested in its natural resources. This makes Portugal a leader in the sector, setting an example for the rest of the EU.
The Portuguese Association of Renewable Energies (APREN) is a non-profit association formed in 1988 with the mission of coordinating and representing the common interests of its associates in the promotion of renewable energies in the electricity sector. There are three main green energy resources in the country: solar, wind, and hydro. The country looks to benefit from its proximity to the once-more growing Spanish market and understand how to benefit from these resources.
Portugal is also investing in the battery business with R&D tenders to explore the topic of lithium-based solutions for industrial sized energy storage. An expanding sector in Portugal, renewable resources already account for a large share in this sector, with these developments
reducing greenhouse gas emissions in the first quarter of this year. For several days, all electricity consumed came from renewable sources, due to a high number of sunny, yet also windy, days. In the period between November 2017 and October 2018, 52.7% of electricity produced on the continent was renewable from a total of almost 46,000GWh. The decrease in the contribution of fossil fuels to production was driven by a significant increase in wind power. In 2018, renewable energy sources accounted for 41.3% (158GWh) of total electricity production in the Autonomous Region of the Azores, mainly in hydro and wind, but also in geothermal energy, which is available due to the volcanic geological terrain on eight of the nine islands, collectively producing some 235.5MW. On the other hand, in the Autonomous Region of Madeira, 38.6% (161 GWh) of total electricity production was clean. Madeira has invested a lot in hydro, wind, and solar energy, with plans to increase the number of solar farms enough to switch off its fossil fuel energy plants. The goal is to integrate renewables into the grid and make the island truly green.
The increase in renewables has meant Portugal also reached a new record in the export of electricity to Spain. This is thanks to the number of dams and wind farms that have been inaugurated over recent years. At this point, the country produces more electricity than it needs. ✖
The Ministry for the Environment and Energy Transition is focusing on decarbonizing the economy, valuing the territory and its habitats, and striving for a more circular use of the country’s resources.
What is the role of the private sector in advancing the Portugal’s agenda to become a clean energy country?
One of the things we have seen during this mandate is a growing awareness by companies that change is coming, and sooner than they expected.
I am glad to see more industries in Portugal placing decarbonization and the circular economy at the front and center of their business models. Several sectors are investing in R&D and thinking about new business models that first reduce costs and second guarantee materials for their future, the while striving to emit less and preserve local jobs. For me, that is sustainability. And, last but not least, high-tech start-ups are redirecting their solutions toward fulfilling the Sustainable Development Goals. One clear example was the great success of the Govtech competition by the Ministry of Administrative Modernization.
What have been the main highlights and achievements of your mandate to date?
and software (e.g. electronic systems). It is not by chance that we attract companies such as Siemens, which benefit from experienced PT companies like A. Silva Matos and others; however, the green energy sector is also made of smaller projects. Take the bio-economy, for example, in which we have an enormous potential for development. We certainly have a solid and growing pool of companies and competences, from north to south of the country: CIIMAR in Leixões, BLC3 in Oliveira do Hospital, Católica School in Porto, and companies like SilicoLife and A4F.
What are your primary ambitions and goals for the ministry in 2019?
João Pedro Soeiro de Matos Fernandes has been Minister of the Environment in the XXI Constitutional Government since November 2015. He graduated in civil engineering from the faculty of engineering of the University of Porto and completed his masters in transportation at Instituto Superior Técnico. He previously worked for the Coordination Commission of the Northern Region (Territorial Planning) and was the coordinator of the transport sector. He also served as Deputy Secretary of State for Natural Resources and Chief of Staff of the Assistant Secretary of State for the Environment Minister, in addition to having been Administrator of Quarternaire Portugal, Consultoria para o Desenvolvimento, SA, among other positions.
We started our mandate based on three integrated policy areas that are fundamental to guaranteeing long-term prosperity: decarbonizing our economy, valuing the territory and its habitats, and striving for a more circular use of our resources. As of now, all these strategies are being deployed in the field: The National Program for Territory Ordinance (PNPOT), the National Plan for Circular Economy (PAEC), and the National Roadmap for Carbon Neutral Portugal 2050 (RNC2050). To make the third happen, we have our Environmental Fund, which has been crucial to financing the integration of these principles among municipalities, companies, and citizens.
What are the main advantages of investing in the green energy sector?
Portugal has a trifecta of highly valued assets, such as the sea, sun, and wind, and I would risk a fourth: skill. We have an extremely high-value industry both in hardware (e.g. metalworks)
In 2019, we will continue moving forward with our main orientations, chiefly in decarbonizing the public transport sector. The most evident effort will certainly be in continuing the expansion of the subway lines of Oporto and Lisbon. But there is another area in particular that we want to focus on, and that is financing. Having the right mix of public and private financial support is crucial in guaranteeing a safe and just low-carbon and circular transition of our economy; there is a lot to tackle. It is impossible to expect that public funding alone can support this. On the other hand, we have a financial system that is still very much focused on short-term and linear forms of value. That, in general, runs away from innovation and environment-based solutions and deems it risky. The commission is working on a taxonomy for sustainable finance; the European Investment Bank is pulling out all the stops to support projects on circular and bio-economy; and the next Cohesion Fund will demand an allocation between 65% and 85% of support to smart, sustainable (low-carbon and circular) projects. We have 12 years to come to a full stop on the climate breakdown of our natural system. I am confident in Portugal’s resilience and ingenious drive to tackle these challenges. ✖
“Portugal has a trifecta of highly valued assets, such as the sea, sun, and wind, and I would risk a fourth, which is skill.”António Sá da Costa PRESIDENT, ASSOCIATION OF RENEWABLE ENERGY (APREN)
APREN’s main goal is for Portugal to have a higher share of renewable electricity in order to support the reduction of CO2 emissions and fight climate change.
What is the importance of your role in promoting renewable resources for electrical production?
When we established this association 30 years ago, our objective was shaped by the fact that all electrical business production, transport, and distribution was owned by the state through EDP since 1976. The sector was subsequently opened to private investment. The role of the association remains essential to unifying the different investors in the system for the production of electricity. We want Portugal to have a higher share of renewable electricity in order to support the reduction of CO2 emissions and fight climate change. The companies that are members of APREN represent 93% of all renewable power installed in Portugal and on average produce a little more than half of the electricity consumed throughout the country. We work to find solutions for our sector and address technical and fiscal problems concerning the environment and electricity production. We started from a system that basically involved feed-in tariffs and transitioned gradually to one determined by the market.
What are some of the factors behind Portugal’s successful development of wind energy?
We still depend a great deal on hydropower, which fluctuates between dry and rainy years. 2017 was a dry year, where we got only 42% from renewables, while the year before was a wet one, with 64%. The government realized we had to move
away from fossil fuels for two main reasons: we do not have oil, gas, or coal, and we are too small of a country to have a nuclear power plant. By developing renewables, we avoided expending hard currency to buy something to burn. This has been extremely successful in terms of minimizing CO2 emissions as well. The other main fact was the use of the feed-in tariff policy. This was important to bring us a step forward to where we are today. Compared to other countries, we have not made retroactive changes in recent years. Now, we are doing things the traditional way, as well as moving toward a market-oriented remuneration of the system. We do not seek subsidized tariffs; rather, we want stability for investors as well as reduced costs for consumers. Neither of these two things are certain based on the current policy.
What potential do you foresee for Portugal to engage in energy produced by waves and ocean thermal energy conversion? These are essentially what we call marine technologies. In Portugal, we have potential in the next 10-15 years to use two marine sources that have the best prospects in Portugal: offshore wind and waves. Marine-based electricity is important to develop, though it is not as important in terms of Portugal’s supply of electricity because the adoption of these technologies is still far off in the future. Marine is extremely expensive compared to onshore. In the south of Portugal, there is double the amount of sun radiation of
central Europe. However, if the growth in demand for electricity matures beyond our expectations, we will have to make use of marine technologies. We have excellent conditions to study, develop, and test offshore marine technologies, especially in waves and wind.
How does APREN participate more broadly in terms of European energy policy monitoring and implementation?
We do it through the four associations we belong to: the European Renewable Energy Federation (EREF), which is similar to APREN at the European level and has all the technologies; Wind Europe; Solar Power Europe; and European Biomass Association. We also have excellent connections with the European Parliament and Commission because we have been active for many years and have developed a great rapport with them. ✖
António Sá da Costa holds a civil engineering degree from Technical University of Lisbon and a MSc and PhD in water resources from MIT. He is the current president of APREN and the vice president of the European Renewable Energy Federation (EREF). He was a consultant engineer for over 40 years, with special focus on small hydropower plants, wind farms, and environmental studies. He was formerly an associate professor of hydraulics and water resources at the Technical University of Lisbon.
What are ABB’s most important projects in Portugal?
With over 150 employees and a turnover of USD70 million, ABB focuses on adding value to service and engineering for power transmission, distribution, and automation.
We were awarded a project that requires an innovative solution on the island of Porto Santo, next to Madeira, one of the first such projects in Europe. It is a battery storage system that will sustain the island’s grid. The project will store energy and regulate the power in the island; the goal of the local government is to make these two islands energy efficient from an environmental point of view. The ultimate goal of this system is to integrate renewables into the grid and make the island a truly green island.
How would you characterize the current investment climate in the energy sector?
We are witnessing a major change, especially due to efforts from Portugal’s two main utility providers, REN and EDP, which are also among ABB’s top 10 clients in Portugal. These two companies made a huge effort and investment to accommodate the penetration of renewables into the grid. Therefore, the current energy grid is new as a result of their efforts, allowing us to have a secure and dependable network. At the same time, there is a new challenge for grid operators to manage the penetration of electrical vehicles and the distributed power generation as a result of residential micro production.
Who are your main clients and partners?
management system. One of our most important values is to share and give value back to our employees. The average age of our employees is around 40, which means we are a young company. We put in a great deal of effort and invest in training our employees in all aspects, from technical training to themes related to OHS, integrity, and finance.
From a global perspective, how would you assess Portuguese innovation?
Portugal is one of the most advanced countries in the power automation segment. We are experiencing the fourth industrial revolution, and the world is now talking about digitization, but in Portugal, the first steps toward digitization began about 20 years ago. That is why Portuguese engineers are well prepared for modern challenges. Similarly, many small Portuguese companies are developing solutions that are out of the box. We see these as opportunities to become leaders in new developments and innovations.
What are your priorities and goals for the next few years?
BIO
Miguel Pernes graduated in electrical engineering from Instituto Superior Técnico (IST). He started his career as an electrical engineer for ABB, subsequently moving up to become manager of the Protection and Substation Automation Department. He was later appointed local division manager for the Power Products & Power Systems Division with ABB, becoming a member of the Executive Commission of ABB in Portugal and then Country Managing Director in Portugal in 2011, subsequently integrating the Executive Commission of ABB Spain and Portugal. He is also a member of the National Association of Electrical and Electronic Equipment (ANIMEE) and the Conselho Estratégico Nacional da Energia at CIP.
One of our primary clients is Navigator, a pulp and paper company where we installed a huge base. Meanwhile, Volkswagen AutoEuropa is our main client in terms of the robotics area. On the utilities side, we have REN and EDP, as well as EEM in Madeira for the Porto Santo project.
What are your human resource requirements in Portugal, and how do you keep your existing talent?
ABB has around 150 employees, 50% of which are engineers, service engineers, application engineers, and sales staff. We have a demanding and precise talent
The strategy of ABB is clear: profitable growth, relentless execution, and business-led collaboration. The company wants to be present in all segments of the economy related to its portfolio. We want to be the best in the area, promote talent, develop the future, and be ahead of our customers to attend upcoming challenges. ABB operates in more than 100 countries with about 147,000 employees. We work in network and in several developments, and our goal in Portugal is to adapt this group strategy to local realities. ABB will have an even bigger presence in automation and digitalization as well as in the new concept of mobility. We want to be part of this revolution and influence the use of applications and digitalization. Finally, we want to continue working on our platform to gather all the relevant technologies and put them to work for customer needs. ✖
Madeira, an autonomous region of Portugal, is an archipelago lying off the northwest coast of Africa. It has a population of just under 300,000.
Portugal’s high-tech commitments, with significant R&D activity spearheaded by institutions such as the Foundation of Science and Technology (FCT), have gone hand in glove with a distinctly green national energy policy.
In April 2013, as an EU member, Portugal committed to national renewable energy targets stipulated by the National Renewable Energy Action Plan (NREAP) 2013-2020. EU Directive 2009/28/EC requires member states to submit NREAPs to the European Commission in step with 2020 renewable energy, energy efficiency, and GHG reduction targets. The plan aimed at wind power reaching an installed capacity of 5,300MW by 2020, with 27MW reserved for offshore wind. Those targets, however, have already been exceeded. Related state initiatives of 2017 were geared toward offshore wind energy and national grid security. 2017 was beset by meteorological challenges, namely pronounced drought. This challenge underlines the advantages of a diversified energy mix. The government is now considering investments that better exploit solar and bio-energy schemes to bolster its energy independence over the years to come, while also beating a path toward the de-carbonization targets of the Paris Agreement.
The 2018 edition of The Portuguese Renewable Energy Association
(APREN) Yearbook indicates five biomass power plants with a total capacity of 209MW, 235 wind farms with 5,189MW, 46 large hydropower plants with 6,751MW, 99 small hydropower plants with 369MW, 30 photovoltaic solar plants with 92MW, and three geothermal power plants with 33MW. This equals an installed capacity of 12,643MW at 418 renewable power plants.
Portugal has confirmed the commercial viability of green energy. Back in 2017, installed capacity at renewable power plants led to a drop in the average wholesale market price of electricity to EUR18.3 per MWh. To the consumer, this spelt savings of EUR727 million. What’s more, Portugal registered fossil fuel import savings of EUR770 million, while dodging 8.5 million tons of CO2 emissions. Fast forward, and in March 2018 Portugal generated 104% of its electricity mainland consumption from renewables, chiefly from wind and hydroelectric technology. The next highest figure had been realized in 2014 at 92.2%. Fossil fuels were periodically turned to for supply needs. But now official data suggests that by 2040, renewable electricity generation will account for total annual
electricity consumption. This means no less than the total elimination of electricity sector greenhouse gas emissions. For March, hydroelectric facilities met 55% of monthly energy consumption, made possible by conducive wintry weather. It was followed by wind turbine generation of 42%.
In 2017, renewables accounted for 44% of Portugal’s power generation. Of that, total installed wind energy capacity at end-2017 was at 5,313MW, marking 38.6% of the country’s total renewable capacity. Wind farms generated 12.3TWh that year, supplying 24% of total electricity demand. Average production at full capacity was 2,399 hours, down 0.8% YoY from 2,419 hours. While hydroelectricity generation appreciated by 9% YoY, wind generation soared 34%. No additional wind capacity was rolled out during the period for the first time since that component factored into the energy grid.
For a third consecutive year, wind power met over 100% of demand at certain hours in an entirely fault-free performance from Portuguese Transmission System Operator (TSO). In fact, Portugal has witnessed a new era in energy generation where feed-in tariffs do not apply to the surplus generation of wind farm projects. Moreover, record performances were seen in the instantaneous and daily electricity demand met by wind energy of 110% and 82%, respectively.
In short, Portugal has invested in green energy for decades now with the goal of navigating a full year’s worth of demand exclusively through renewables, an achievement as yet some way in the future. The ultimate consequence of its renewables policy is full de-carbonization of the economy. And by leveraging a mix of hydropower, solar PV, and onshore wind, Portugal seems set to attain the targeted 85% renewables ratio of total generation in 2030 and 90% in 2050. ✖
EDP Renewables has grown extensively to become the world’s fourth-largest wind energy producer.
João Manso Neto CEO, EDP RenewablesBIO
João Manso Neto studied economics at the Instituto Superior de Economia before completing a postgraduate degree in European economics from the Universidade Católica Portuguesa. In the past five years, he has served as Chairman of EDP Gestão da Produção de Energia S.A., CEO and Vice Chairman of Hidroeléctrica del Cantábrico S.A., along with numerous other senior management positions. Prior to these positions, he was a member of the board of Banco Português de Negócios, as well as head of the international credit division at Banco Português do Atlântico.
How does the company currently contribute to Portugal’s energy mix through its installed capacity of wind farms?
We began in Portugal and Spain, which today are two important markets, and have been developing from the beginning. We represent around 24% of the Portuguese installed capacity. Renewables not only reduce our import bill in terms of energy, but also have an important impact on local communities. Traditionally, renewable energy is located in areas with low levels of development, and the wind industry has been able to distribute income to those areas. An important part of our portfolio was linked to an industrial cluster in Portugal. About 10 years ago, there was a competition wherein developers not only had to build wind farms but also bring together an industrial cluster. Today, there are more than 1,000 people linked to that. It is important because this electrical production not only supplies the domestic market, but most of this production is exported. Our work in Portugal not only has a direct impact in terms of balance of payments and population, but also developing the industry itself.
EDP Renewables plans wind farms throughout the construction, development, and operation of the project. How does this meticulous process enable your company to fully maximize the value of your assets?
This is not a short-term activity but something we need a long-term view for. If we want to extract value, we have to go through the entire value chain, from the identification of the country and place to the kind of renewable energy available. We also have to obtain permits, which are extremely important. Renewables are important; however, they also have environment impacts that have to be mitigated. Subsequently, we focus on the optimization of the layout and construction, as well as operation and maintenance throughout the entire project. In the past, things were different, and we
were just focused on production and generation. Today, we have to know how to sell in the markets and be able to manage market risks and have a better forecast of the wind. This enables us to be better prepared throughout the entire value chain.
What is your company’s commitment to world-class engineering and construction standards?
The plants we build should be first-class plants. We do not build plants to have the maximum amount of MW but efficient. Wherever there is sun or wind, we must be available in order to generate power. Having a high quality of construction and first-class management is extremely important. Construction is just the first phase. We also need excellent operation methods; otherwise, we do not extract value. Before, developers externalized everything. We are increasingly internalizing activities to take care of what is going on in terms of operation. We have increased the quality of our work as well as the yield.
What have been the key factors contributing to EDP Renewables’ successful international expansion?
Our core markets were Portugal and Spain, and we decided to go abroad to export our experience throughout the entire value chain. We began with France, though the big jump was with the US. Today, the US represents about 50% of our total capacity and has been the most dynamic market. We are proud when we go abroad to act as a local company. We have centralized expertise; however, when we go out to the field, we act as locals. Therefore, we are not seen as a foreign company. It is important that we do not have an obsession with centralization but with efficiency, respect, and understanding the local market. Today, Portugal represents no more than 15% of our EBITDA. Spain is still important, though the US is one of the most important areas in terms of growth. ✖
Would you give us an overview of the evolution of WavEC?
WavEC started in 2003 as a spin-off from the Instituto Superior Técnico (IST) to foster industrial development in wave energy. Currently, we have three business areas: wave, offshore wind, and ocean technologies, including offshore aquaculture. WavEC now has about 25 people, of which 10 have a PhD, while the others have master’s in engineering, environmental sciences, and biology. About 60% of our income comes from R&D projects, meaning there is a strong R&D base to our work. The other 40% make up services that we render to companies, demonstrating that we work on real problems that the industry faces. In both cases, about 85% of the income comes from outside Portugal. Our R&D projects are mainly European-funded projects, while our services to companies are from everywhere.
Is WavEC partnering with more private or public entities, and who are your main partners?
We do both. The mix in the private sector has changed over the years due to the evolution of the sectors. One of our main clients over the last two years has been Redes Energéticas Nacionais (REN). We have also been working with EDP on various projects, not only in offshore wind, but also on floating solar photovoltaic (PV) cells for dams. Our main partner internationally in recent months is the Carbon Trust, a UK state-owned company that fosters the development of low-carbon industry in the UK. Another important international client in 2018 was Gas Natural Fenosa, for whom we undertook an in-depth review of the offshore deep-sea wind and wave energy market and technology. On the research side, we have many partners; one important one is IST in Portugal. However, we also partner with universities and research centers, such as the University of Edinburgh, University College Cork, École Centrale Paris, and Delft University of Technology.
What does the outlook for Portugal’s green energy market look like?
There has been some turbulence in the internal market with pricing, which creates instability. However, in the longer term the outlook is positive for
Given the various opportunities, WavEC is betting heavily on Portugal’s renewable energy market.
Portugal’s green energy market. Portugal has great potential for testing and demonstrating the marine renewable technologies due to our strong electricity grid and significant number of parts and shipyards close to the coast. We also have other necessary infrastructure and relatively mild climatic conditions, which is an opportunity to test technologies developed for open-ocean coasts. Portugal should make itself an attractive place for such work to be carried out, which would also create an opportunity to engage the industry in the supply chain. Portugal should bet heavily on making the country attractive for the demonstration phase and see how the technology evolves before we invest significantly in producing the units. If we are talking about energy production, we must go for cheap energy and develop that technology; if we are talking about innovation, marine renewable energy is extremely interesting.
What are the key targets for WavEC for the coming year?
We want to maintain our activity in wave energy. Our target in that area is to test the first full-scale prototype for Corpower Ocean in Portugal. We are also working with WaveRoller, a Finnish wave energy technology company, to take these same steps here. It would be interesting having two technologies tested here because that would create synergies and help us develop critical mass in terms of the supply chain. Similarly, it is important for us that the WindFloat Atlantic project goes ahead as planned, because this will increase the critical size of marine renewable energy activity in Portugal. We are also working with international partners to expand our offshore wind services offering in the North European market. We also expect to have a stronger presence in Portugal’s offshore and onshore aquaculture industry in the coming year and to reinforce our presence in the Norwegian offshore aquaculture market. ✖
60% of income from R&D projects, 40% from services
25+ highly qualified engineers and marine biologists
BIO António Sarmento is the Chair of the Steering Committee of the Atlantic International Research Centre, a member of the Installation Committee of the Observatory of the Atlantic, and founder and president of WavEC Offshore Renewables. He was Associated Editor of the International Journal of Ocean and Wind Energy, Member of the General Assembly of European Wave and Tidal Energy Conference, and is a retired associate professor with the mechanical engineering department at IST.
Sarmento
“Our R&D projects are mainly European-funded projects, while for our services to companies, the work comes from everywhere.”
All of EDA’s efforts with regard to renewables are in line with the environment because nature is one of the Azores’ most important assets.
Duarte José Botelho da Ponte PRESIDENT, ELECTRICIDAD DOS AÇORES (EDA)
What steps have you been taking to modernize and maximize the efficiency of EDA’s operations?
Some 10% of EDA belongs to Energías de Portugal (EDP), and we have strong links with it. The government’s plan was for EDA to have a strategic partner as one of our stakeholders so that the advances in the energy industry elsewhere would also be passed on to the Azores. In addition to EDP, we try to cooperate with other companies and bring state-of-the-art practices and technologies to the Azores in various ways. Although we are geographically small, we constantly work to improve quality and introduce as many innovations as possible. The Azores has 246,000 inhabitants and users. We produce about 800GWh year-round and need to do this in a way that preserves quality and processes that are state of the art.
How does EDA support the overall development of the Azores and its economy?
We do so by providing excellent service. We do not set the price of the tariffs, which the Energy Services Regulatory Authority (ERSE) regulates. We provide a great service for our clients that meets their needs, continue to improve the quality of what we do, and put in place best practices and state-of-the-art systems and processes.
What steps are you taking to rationalize the utilization of electricity?
the capacity of our geothermal plants by adding 9MW at our plant in São Miguel and 6MW in Terceira. This will give us a higher penetration of renewables on the grid. It is possible to have more than 50% renewables on the grid within four years; however, we need to solve the issue of how we store energy generated at night. We may be able to replace some thermal units with battery storage, and there are several studies ongoing at the moment to look into this issue.
Do you anticipate any opportunities for joint venture partnerships or investors in the future?
We are working with several companies. However, we can proceed without any problems if new investments in storage are feasible because we know exactly what to do in terms of geothermal energy. First, we need to solve the problem of storing energy between midnight and 8am, when consumption is low. The challenge with renewable energy is that we cannot export it as one would on the mainland, for example, whereby Portugal exports to Spain or France. Here in the Azores, each island is isolated. Once we solve the storage issue, we can increase our renewables to 50% without help from other parties and use our own funds and investments.
BIO
Duarte José Botelho da Ponte is President of the Board of EDA. He is a university professor, with a degree in chemical engineering from the faculty of engineering of the University of Porto and a PhD in food technology from the University of Wageningen in the Netherlands. He was pro-rector for planning and infrastructure at the University of the Azores. He is a member of the PRAXIS XXI National Advisory Council and coordinator of the Economics and Development panel of the Convention for a New Autonomy. He was formerly also Regional Secretary for Youth, Employment, Commerce, Industry and Energy in the VII Regional Government of the Azores.
One such step is efficiency; we work to have our clients on the best tariffs possible so that they use energy at night instead of consuming it during periods of peak day demand. We do promotions for these tariffs and provide incentives for using equipment that is more environmentally friendly, for example, electric systems that heat hot water for homes at night when electricity demand is lower, which is also preferable to having a gas water heating system. Customers are given a discount when purchasing such equipment and can pay over a four-year period.
How important is renewable energy to EDA, and what role will it play in the company’s future?
In 2017, renewables accounted for 37.5% of our energy on the grid. Most of this was geothermal while the remainder was generated through our hydropower plants and wind farms. It is possible to increase this figure to 40% in 2018. In the near future, we want to increase
What steps are you taking to safeguard the islands’ natural resources?
Our goal at EDA is to be in harmony with nature. We want to significantly increase our renewable energy capacity in the islands, though we want to do this with care. This includes preventing high CO2 and other emissions that pollute the environment. We also want our clients to understand that the best protection for the environment is to save energy and use it carefully. ✖
“Our goal at EDA is to be in harmony with nature. We want to significantly increase our renewable energy capacity in the islands, though we want to do this with care.”
EDA expands the penetration of renewable energy throughout the Azores
try. And in addition to being able to withstand winds of 60 knots, WindFloat Atlantic will also be able to withstand waves of up to
As a central goal of its Strategic Energy Technology Plan (SETPlan) to develop, standardize, and manufacture improved multiMW modular floating platforms, the European Commission has been firmly behind the project’s launch. Of the EUR96 billion provided for the farm’s construction, EUR60 billion came from the European Investment Bank (EIB) and another EUR29.9 billion from the Commission’s NER300 program, one of the world’s largest funding programs for innovative low-carbon energy projects. The Portuguese government provided an additional EUR6 million.
To be constructed by Windplus S.A., a subsidiary of Spanish firms EDP Renováveis (79.4%) and Repsol S.A. (19.4%), and American wind power company Principle Power Inc. (1.2%). The first of its kind, it will use Principle Power’s custom-made triangular semisubmersible platforms and be located 20km off the coast of Viana do Castelo near the country’s northwest border with Spain. ✖
EU member Portugal may be committed to the national renewable energy targets of the National Renewable Energy Action Plan (NREAP) 2013-2020, but more traditional energy sources remain vital to picking up the slack.
PORTUGAL’S COMMITMENT TO A DIVERSIFIED RAFT OF RENEWABLE ENERGY INCLUDING onshore wind, hydropower, and solar technology has led to an installed capacity of 12,643MW at 418 renewable power plants. The national target is to achieve an 85% renewables ratio of total generation in 2030 and 90% in 2050. One may conclude then that fossil fuels very much remain a part of the energy equation for the foreseeable future.
Liquefied natural gas (LNG) is a commodity of mixed character. Its purity, higher methane and energy content, and more stable composition render it superior to pipeline gas. Nothing is free, however, and the price paid is greenhouse gas emission. That being said, it is also the cleanest burning fossil fuel, which curbs maintenance and replacement cost at related facilities. Prices tend to be more stable, too, than energy inputs derived from crude oil. According to the International Energy Agency, LNG is likely to supersede pipeline gas in global gas trade.
The vagaries of commodity pricing spawn interesting methods of mitigating energy market uncertainty. One tendency to have emerged involves so-called stationary cargoes; the practice of sellers retain fuel afloat inside transporter vessels at minus 162 degrees Celsius for long periods in anticipation of better pricing. What we are talking about here is the process of contango, namely the condition whereby as land-based supplies are consumed there is no immediate rise in the price of LNG, and hence the option to retain stock in vessels, despite the cost involved. As of late 2018 though, industry data pointed to just 30 out of a global fleet of over 500 LNG supertankers were engaged in the practice. Besides, the global LNG fleet operates a transportation capacity of just over 44 million tons—far lagging behind the crude oil tanker fleet’s 370-plus million tons, based upon sector numbers from
Clarkson Research Services Ltd. A sudden unforeseen leap in demand, say from inclement weather, can predictably lead to sizeable profits.
THE CWC 19TH ANNUAL WORLD LNG SUMMIT & AWARDS EVENING, 2018
From November 27–30, 2018 Lisbon hosted the leading annual occasion for discussion and networking for the world’s LNG operators. In discussing ideas such as the one covered above, its overarching brief was to position LNG as a commercially attractive fuel capable of competing strongly with other fuels in an ever more commoditized world.
Portugal is a small player, accounting for a mere 1.3% of European gas demand. Lacking homegrown gas production however, it is entirely dependent upon those imports, although as we see elsewhere, green energy is a major national initiative making huge strides. It imports Algerian piped gas through the Maghreb pipeline via Spain. Portugal’s primary gas distributor Energias de Portugal (EDP) handles those imports under a long-term supply contract. Galp Energia, Portugal’s national oil and gas monopoly, sources LNG from Nigeria.
Meanwhile, LNG enters its terminal at Sines, a facility constructed in 2003, but upgraded in 2012. Portugal mostly imports LNG from Nigeria, Algeria, and Qatar. Back in 2014, EDP penned a 20-year agreement with Cheniere to import US LNG from 2019, followed in 2018 with a contract with Venture Global for 1MPTA of LNG for a 20-year period, to commence in 2023. Sine LNG import terminal is operated by Portugal-based holding company Ren Redes Energeticas Nacionais SGPS SA (REN), a vital player in Portugal’s energy arena. The holding transports natural gas at high-pressure and operates underground natural gas storage. It is also engaged in electricity transmission and national grid management, as well as telecoms. ✖
How did the company enter the Portuguese market, and what were its most important milestones?
EMANUEL FREITAS OZ Energia’s business is centered on the development, licensing, and centralization of bottled gas. Its main goal was to consolidate the current business and determine a set of variables when it comes to the autonomy of purchasing. We started a study to acquire other companies that would deliver this opportunity to us. We acquired a significant participation in the group in order to have two terminals and gain autonomy to import LPG, while simultaneously launching other activities to diversify our products. We are also working on changing our way of doing business and making an effort to digitize the company. Our goal is to consolidate our offerings and diversify into other areas.
NUNO RIBEIRO DA SILVA We came to Portugal with a proactive approach from our time in the Spanish market. Starting in 1995, when the Spanish electricity market began to liberalize, we were able to develop a great deal of relevant and valuable experience and then use that in Portugal. We knew how to deal with closed markets that were controlled by governmental ad-
ministrators and learnt how to address the problems and adaptations inherent to a market entering a period of liberalization. The processes of change in terms of the liberalization of the energy sector in Portugal were different to those in Spain, and we therefore had to adapt accordingly. We started with generation and only began to see real opportunities in the electrical generation and natural gas spaces in the last eight years.
What measures is the company taking regarding an eco-friendly future?
EF We have looked at products beyond the sector that have taken these measures with the environment. We have a product that is green in its combustion though it is not well known. We also have a container project we sought to develop at a national level, which is a transition product and extremely important. We are focused on developing this consciousness in terms of social and community issues and developing products that are environmentally friendly.
NRDS Being sustainable requires mixing many different issues, parameters, and areas of focus. Mobility and movement rep-
resent 40% of overall energy consumption in Europe, and this is truly the last area defined by oil consumption. Being proactive in the change from internal combustion to electric vehicles is thus vital for our industry. The basic fuel for mobility is changing from oil products to electricity, and it represents a huge opportunity for the power subsector. Electrification will be the easiest and cheapest way to control emissions and combat climate change. Our first and main responsibility is to support the transition from oil-based mobility to electricity-based. We strive to be more proactive on this front, maximizing the impact of sustainability and ensuring a healthier planet.
What have been the main challenges in doing business in Portugal?
EF The biggest challenges are related to the entry of new players to the market. It is a market that is growing through electricity and natural gas, though our main challenge is anticipating the market in order to be able to do business. Our key focus is on creating tools to have greater proximity with the final customer. At this moment, this sets us apart. We have a distribution network that is different from our competitors, and this network is close to the final customer. We have always gained market share in comparison to our competitors, which is linked to the relationship we develop with the final customer. We are also investing significantly in online systems, as we were not that developed in this field. We started slightly behind and are investing in a new ERP, CRM, and others, especially to prepare ourselves for the future.
How does your experience in both the public and private sectors help you?
NRDS Having been in state government and international energy groups has given me an excellent vantage point to understand the value that diverse knowledge brings to the industry. While I am currently in the private sector, my previous time in government enabled me to understand the perspectives and concerns of the public sector, which is essential. Nearly every week I discuss developments with MPs, ministers, and civil servants. We engage many different types of stakeholders and NGOs, and as a result of my experience I can quickly and effectively recognize, respect, and address the vast array of different opinions and sensibilities that impact this industry. ✖
The future of energy will be based on renewables, and more clients will seek suppliers that can offer diverse energy options.
The Palácio da Bolsa, or Stock Exchange Palace, is located in Porto and classified as a National Monument. It was built in the 19th century by the city’s Commercial Association.
The World Bank recently released its latest doing business report, with Portugal placing 25th out of 190 in the “Ease of Doing Business” classification. And on the international investment front, a recent Ernst & Young report shows Portugal breaking its record for most number of foreign investment projects ongoing country wide. With Portugal now a regular fixture on investors’ radars, it is recording investment plans above the European average. The surveys paint a rosy picture, with positive indicators including the stability of the social climate, competitive labor costs, highly skilled workforce, and well as strong telecoms infrastructure. All these helped the country attract EUR5.6 billion in FDI this past year, while elsewhere export power also grew significantly. The five main countries with which Portugal trades its goods represent 62% of all exports and include Spain, France, Germany, the UK, and the US.
The banking sector is controlled by the Bank of Portugal. In an interview with the governor, we learned exports now represent 45% of GDP, up from 30% in 2008, signaling an important restructuring of the economy. Financial recovery has also been backed up by strong investment growth.
The Supervisory Authority for Insurance and Pension Funds (ASF) considers last year’s results “very positive in that they contribute to the strengthening of the financial trustworthiness of the companies operating in the domestic market
and show the capacity of the insurance sector to keep up with the growth dynamics of the economy and ensure financial solidity.” In numbers last year, life insurance grew by 14.5%, mostly driven by life insurance, not linked to investment funds (29.5%), while elsewhere insurance linked to investment funds (where the risk is covered) declined to 19%. In line with what has been happening in recent years, the non-life sectors also showed an increase in production of 7.4%, with their volume exceeding EUR4.8 billion. Also, in the last year, the regulator highlighted “significant growth” in auto insurance (6.7%) and fire and other damages (5.4%). Altogether, we observe a healthy market with some remaining growth areas.
The banking industry is presently undergoing a particularly demanding period. In fact, the European banking system is now experiencing a deep change in regulatory and governance paradigms based on an assumption of deleveraging, capitalization, and the strengthening of its flow. The import of goods is mainly characterized as equipment and hand-tools, vehicles, other transport material, mineral fuels, and agricultural products.
Compiling this chapter was straightforward since the country has a strong and transparent regulatory system. All our interviewees emphasized how finance is undergoing a fundamental change with the latest fintech or IoT innovations, making banking and investment easier and making the public become more financially aware. ✖
While developments in Portugal’s banking sector have been encouraging, banks’ adjustment efforts will have to continue.
What is your perspective of Portugal’s transition from recession, austerity, early exit from the EU/IMF bailout, and return to growth?
The economy started recovering in 2013, reflecting a gradual recovery of domestic demand and strong export growth, on the back of an improving external and financial environment. One remarkable characteristic during the adjustment period and ongoing recovery was the behavior of exports. Portuguese exporters have been gaining market share in external markets since 2008. A notable dimension of the export performance has been the services sector, especially tourism. Exports’ share of GDP increased from around 30% in 2008 to close to 45% in 2017, which signals an important restructuring of the economy. The economic recovery was also supported by strong investment growth, in particular business investment. However, public and housing investment has lagged behind. The economy has been able to maintain a surplus in the current and capital account and also in the goods and services account. These developments have contributed to a gradual improvement in the international investment position, which is still negative. The economy underwent a strong and unprecedented fiscal consolidation process. The general government deficit stands currently at a historically low. Public debt as a percentage of GDP has also initiated a downward trajectory but remains high and considerably above the euro area average. This reinforces the importance of meeting the commitments under European fiscal rules. Moreover, the reduction in the indebtedness ratios of firms and households, together with positive developments in the banking system, has made the Portuguese economy more resilient to shocks.
In 2010, the bank initiated a comprehensive strategy to address the challenges faced by the banking sector. This strategy was broadened in the context of the 2011-14 EU/IMF Economic Adjustment Program. Our most immediate concerns were to ensure banks’ access to liquidity and the reinforcement of their capital ratios. At the same time, banking supervision became significantly more intrusive and forward looking, and the regulatory environment was considerably strengthened. The country’s full participation in the banking union, and particularly in
the Single Supervisory and Resolution Mechanisms, can be seen as a natural corollary of this much more demanding strategy that we have consistently been following since mid-2010. Major progress has been achieved over the past eight years. Portuguese banks are now increasingly robust, as evident by stronger liquidity and capital positions, reinforced shareholder structures in major banks, and improvements in asset quality. The banking system recognized over EUR33 billion of credit impairments while the biggest banks raised over EUR20 billion of equity. Regarding asset quality, while economic growth has certainly been beneficial, the ongoing comprehensive strategy to reduce NPLs is also bearing fruit. NPLs have decreased more than EUR13 billion since the peak in June 2016. Equally important, deposits have been quite resilient, showing that depositor confidence has been preserved. In addition, banks have continued to fulfill their role in financing the economy.
How do you encourage banks to further strengthen their balance sheets, improve overall asset quality and liquidity, and reduce the level of non-performing loans? While developments in the banking sector have been encouraging, banks’ adjustment efforts will have to continue. The ongoing challenges are fourfold: improve profitability, review the existing business models, reinforce governance models, and embed technological advances in retail banking. Improving profitability is a priority. Amid still-low interest rates, further progress on cost reduction is needed. This is even more pressing in view of the stricter regulatory requirements and the digitization trend. Moreover, banks need to continue to deliver on the targets agreed in their NPL reduction plans. The sustainability of banks’ business models, risk management controls, and internal governance processes are key to guaranteeing the soundness of the banking system. These elements are closely monitored and challenged by the Single Supervisory Mechanism and the Bank of Portugal. ✖
BIO
Carlos da Silva Costa has been Governor since 2010. He is a member of the Governing Council and General Council of the European Central Bank, the General Board of the European Systemic Risk Board, and the Financial Stability Board Regional Consultative Group for Europe. He is the Chairman of the National Council of Financial Supervisors and honorary Vice-President of the European Investment Bank (EIB), Visiting Full Professor at the Portuguese Catholic University of Oporto and University of Aveiro, and Chairman of the Consultative Council at the School of Economics of the Portuguese Catholic University of Oporto. He graduated in economics from the Faculty of Economics of Oporto University.
Having won the 2017 Eurovision Song Contest, Lisbon hosted the 2018 event. The relevance? Well, the contest began back in 1956 as a showcase not only of song, but of then-nascent live television broadcast technology. Today, Portugal is on the cutting edge of new technological developments.
PORTUGAL IS WORKING TOWARD BECOMING AN ICT HUB, having already exceeded the EU average across penetration metrics. Fixed-broadband coverage is at virtually 100% and at 98.3% of rural households as of mid-2017. Portugal has also beaten 20 competing countries to host Web Summit, Europe’s key tech event, for a full decade through to 2028. One notable topic treated at Web Summit 2018 was micro-insurance, a disruptor to bancassurance and other traditional vendors that participants from as far away as Canada are keen to tap into locally. Ultimately, the ICT world is the definitive playground for start-up innovators, and Portugal is cresting the wave of emerging technology, not least fintech.
While only one piece in the puzzle, the financial sector has always been a major tech spender. In fact, the term fintech truly gained traction after the credit crunch of 2008, as disruptive technology was envisaged as an alternative route to the banked and unbanked alike in the face of a discredited banking system. Since then, a plethora of services have come into play. Meanwhile, the capabilities of IoT and blockchain are becoming more tangible.
Well-established sectors have long had their respective watchdogs. What to do then with the shifting sands of ICT, that to many observers still resemble the plot of a cyberpunk novel? Some nations have even opted to turn their backs on more tentative realities such as bitcoin, though this will no doubt be reversed in due course. The question really is one of regulation, as this will give that extra push to resisting investors and foster greater public take-up. Having a serious go at answering this question is Portugal FinLab. In late July 2018, the Portugal Fintech
Association and Banco de Portugal, in tandem with the Portuguese Securities Market Commission and Portuguese Insurance and Pension Funds Supervisory Authority, launched Portugal FinLab. Championing fintech innovation, the institution is the self-proclaimed “communication channel between innovators, new players in the market, or incumbent institutions—and the Portuguese regulatory authorities.”
Given that the very nature of fintech is flux, regulators provide essential guidelines to innovators that help turn idea into workable, aboveboard solutions and services. Effectively an invitation for innovators to submit proposals for appraisal, the first and second applicant contingents are due for assessment, with selection to follow on January 21 and February 18, 2019.
Portugal-based digital bank Banco BNI Europa, at the forefront of the fintech shift, has partnered with European loan data and intelligence platform Alterest to streamline investment analytics and risk management between the bank and its credit originating partners. The significance of this is borne out in the fact that a year earlier, Banco BNI Europa had seen 231% growth of investment into the credit originated by fintech platforms. Alterest enables the bank to monitor loan-level analytics for around 10 lending platforms and draw conclusions accordingly. Banco BNI Europa is actually a subsidiary of Angolan bank Banco de Negócios Internacional (BNI), which bills itself as a challenger bank, exploiting the digital low-cost banking platform model to deliver tailor made customer services.
Portugal’s digital innovators, then, are wasting no time cementing the field they are giving shape to at the speed of zeroes and ones. ✖
Would you give us an overview of the evolution and main milestones for Millennium bcp?
Millennium bcp is focused on continuing to grow its customer base and business acquisition on a sustainable basis.
BIO
Nuno Amado studied business administration at ISCTE Business School and completed an Advanced Management Program at INSEAD in Fontainebleau. In 1985, he joined the audit and consulting department at KPMG, and five years later began a banking career that continues today, working at Citibank Portugal, Banco Fonsecas & Burnay, and Deutsche Bank Portugal. In 1997, he joined Banco Santander Totta and became the Group CEO for Portugal in 2006. In 2012, he became CEO of Millennium bcp and was named chairman of the bank’s Board of Directors in 2018.
Millennium bcp is the only private-sector bank listed on the Portuguese Stock Exchange. This clearly marks us apart from other Portuguese banks. We currently have a well-balanced balance sheet in terms of funding and lending; we went from having a loan-to-deposit ratio of 164% to having more deposits than loans today. Second, we currently have a much stronger capital base of 12% up from 4%, and want to continue to grow this ratio to obtain a larger capital base. Our non-performing loan (NPL) figure was previously close to EUR13 billion; it has since fallen to around EUR6 billion and falls by EUR1-1.5 billion every year. Moreover, we have increasing volumes of new loans and businesses. There were several years when we did not grow our customer base in Portugal, although we managed to increase it in Poland and Africa. In 2018, for the first time in a long time, we had a net gain in customers and new opportunities. Our main challenge is to continue to grow our customer and business acquisition on a sustainable basis. We also want to work on the profitability of Millennium bcp, because we have an excellent cost-to-income ratio of 46-47%. However, we have to maintain and improve it in the future to ensure our capacity to generate capital, reduce NPLs, acquire more business and customers, and invest more rapidly in the digitization processes. We need greater digitization both for our processes and to change the way we connect with our customers.
What is your strategy to keep growing and strengthen your position in dynamic markets like Mozambique and Poland?
Our approach is to focus on our key, core markets, which are basically Portugal, Mozambique, and Poland, as well as Angola through a partnership. Our objective is to maintain a solid capital position in all these core markets, along with a quality balance sheet, while growing our customer base. This is a common strategy for all the key markets we are present in, though some adjustments are necessary in each market because not every country is in the
same position in their financial cycle. In the Portuguese market, we have a critical mass as the largest private sector bank in the country in terms of business volumes. In Poland, we have around 5%—and growing—market share in what is considered a large market. In Mozambique, we are the key foreign bank in the sector, and in Angola, we are one of the top three private-sector banks with our partner there. We did a merger two years ago and are now better prepared for the future than before. We are extremely comfortable in the markets we are in.
In 1H2018, Millennium bcp reached a net profit of EUR150 million, a 67% increase YoY. What are the reasons for this? The measurement we use is cost-to-income, which refers to our operating profit for our business size and cost base. A cost-to-income ratio of about 4647% means one has an excellent operating profit ratio. In the past, a high level of impairments affected this figure, and we still have a high level in 2018; however, the level is lower than before, and our profits have increased. The main tools to maintain and develop our profitability are an excellent costto-income ratio and a solid operating profit base, coupled with normalizing our impairment level over the coming years. We are doing this very consistently, with decreases in our NPL book. We have also seen our business and customer volumes increasing since 2017. In 2018, we gained in net terms more than 300,000 customers, more than 100,000 of which were in Portugal. On the other hand, we also expect to see a normalization of interest rates. Together, these factors give a reasonably good perspective for 2018 and 2019. ✖
Nuno Amado CHAIRMAN, MILLENNIUM BCP
“Our approach is to focus on our key, core markets, which are basically Portugal, Mozambique, and Poland, as well as Angola through a partnership.”Pedro Vargas David CEO, ALPAC CAPITAL
How do you target companies with significant scale-up potential?
We focus more on B2B and sometimes B2G; we do not invest in B2C as a rule. We look for Portuguese companies that have already proven themselves in their home market. When the moment comes to expand and go international, this is where one starts having different views about expansion strategies. The right way forward is not necessarily pushing these Portuguese companies too quickly into the US or UK market, or trying to position themselves in Silicon Valley. Portuguese companies looking at their first international moves need to go to markets they understand, where it makes sense, and they will be more appreciated than in Silicon Valley.
What are your top priorities and initiatives for the next two years?
We are fairly positive about the economy in the next two years, both in Portugal and the various regions where we operate. I would encourage more people to start looking at Portugal as a destination for investments. In terms of the development of our companies and how we take them internationally, we have to continue to change the perspective of the capacity, services, and products that Portuguese technological companies can provide. The degree of quality and the number of things around the world today that rely on Portuguese technology is surprising.
Jorge Brás MANAGING PARTNER & CO-FOUNDER, PATHENA
How do your platforms such as ebankIT and i2S Insurance Knowledge provide your customers with a competitive edge?
i2S offers insurance software solutions covering a generic portfolio of needs to support insurance operations. It has a core system that guarantees the business can get up and running. We complement this with modules covering various aspects of the business, such as a configuration tool to easily simulate and launch new insurance products and analytics tools. One of our key strengths is offering our customers a user-friendly capability to simulate and then launch new insurance products without needing to go to their IT departments to change the software. We have our software running in seven countries. We have supported several greenfield operations for new businesses and directly implemented these packages in less than six months. On the banking side, ebankIT provides a complete suite for omni-channels by integrating them, such as online banking and mobile apps, in real time. This is a flow of real-time integrated information that provides flexibility. After testing this in the domestic market, we have been cutting deals in different countries. For example, we recently closed a deal with a bank in Canada. In 2017, ebankIT grew 100%, and we expect the same pace of growth to continue.
SIBS has grown to become the largest fintech innovator in Portugal and one of the largest in Europe within the payment landscape.
have been delivering on our mission, which is to be the preferred partner in payments with the most innovative, convenient, and secure payment solutions.
How do you assess the company’s financial performance internationally?
How do you see SIBS’ portfolio evolving in the midterm? SIBS has expanded into other areas that are less typical for a payment processer, namely anti-fraud services. We have one of the lowest fraud levels in Europe, which is due to our strong team and the fact that we developed specialized capabilities in terms of infrastructure. We monitor security issues 24/7 across the payment touch points, which is a unique service. We have also developed a card production factory that personalizes more than 15 million cards every year, the highest in the Iberian Peninsula. We also developed process-outsourcing capabilities related to account opening. We differentiate ourselves in this business through our automation and support structures.
In terms of internationalization, what is your strategy to position SIBS as the payment partner of choice in other markets?
We have also developed and strengthened our international footprint. We started these efforts roughly 10 years ago, and are now present in three of the top five African markets, including Nigeria, Algeria, and Angola. Our largest footprint is in Angola. In these geographies, nationwide payments are processed with our proprietary software. In 2018, more than 330,000 POS terminals with more than 2.2 billion transactions will be processed through SIBS' proprietary solutions. We have been taking an active part in developing the competencies and core systems of the national payment entities. We also operate in eastern Europe, namely in Poland, where we have been present since 2008. We are growing in this market, growing by 40% in 2017, double the market. This is a core area of growth focus for us, and we want to continue to invest. All in all, we
We have been growing. We started our international operations in Angola 16 years ago. The European market in particular has been consolidating and accelerating from a set of domestic markets to a broader European one. We want to take part in this progress and consolidation. Our European approach began in 2009 in Poland, and with the recent acquisition of Paytel we took an even larger step in this direction. At present, international activity represents approximately 9% of the company’s operations, and our target is to increase that to more than 15% by 2023.
What does MB WAY reaching the 1-million-user mark mean for the company?
This was an important milestone for both the company and country. This is particularly true when we take into account that more than 65% of these transactions are worth less than EUR25. That we are able to provide such a convenient user experience allows us to develop more digital customers. When we launched MB WAY, there were 700,000 mobile banking users, whereas currently there are about 1.7 million. MB WAY played a major role in developing this base of users and creating new digital habits. We are always evolving, and we recently launched two new features: the ability to request money and split bills. More importantly, we are deploying QR code payments in the POS system. This will allow consumers to have the same experience across different terminals and operating systems and use mobile payments in stores in a physical POS. This is also a more intuitive user experience for customers. In 2019, we will continue to evolve in every way, developing new use cases. It is a growing trend where people only need their mobile phone to bank. We are also developing a new feature that will allow people to interact with the ATM using only their mobile phone. One can already withdraw money without cards; by the end of 1Q2019, users will be able to use any of the same 60 functionalities with their phone. ✖
3.4 billion transactions per year
More than 14k ATMs under management
More than 370k POS
More than 1M users on MB WAY
BIO
Madalena Cascais Tomé joined SIBS as CEO in 2015. Prior to that, she was director of commercial operations at Portugal Telecom, as well as director for remote channels and online and new channels for SMEs. Before that, she was project manager at McKinsey & Company in banking, insurance, telecoms, and distribution. She was also a renowned consultant for retail banking and strategic marketing. Previously, she joined the business consulting unit at Arthur Andersen/ Deloitte. She graduated in applied mathematics at ISEG and has a postgrad degree in market research and CRM from Universidade Nova de Lisboa.
“We have been delivering on our mission, which is to be the preferred partner in payments with the most innovative, convenient, and secure payment solutions.”
How do your platforms enable your clients to overcome complex IT challenges?
We were launched as the tech investment arm of SONAE Group in early 2016, building on a strong track record of launching tech companies and helping them grow internationally through organic growth or acquisitions. We have done acquisitions, namely, in the US, Brazil, the UK, and Ireland. We invest in three main areas: technology retail, telecom retail, and cybersecurity. Tech retail and telecommunications tech are easy to understand because the main assets of the group are mainly in those two areas. Cybersecurity started in 2013 when we identified it as a critical area, and we built up significant expertise throughout this period. Our main goal is financial returns; it is in fact our only goal. Being in a group with such a dimension, we explore the linkages of the portfolio companies and SONAE Group’s businesses. We try to leverage our assets as much as possible, even as a key differentiating point as an investor.
What have been the crucial factors behind SONAE IM’s presence in 13 countries?
It depends on the companies: These countries correspond to the footprint of the companies we control, but a significant part of our investments is also in minority stakes that are present in additional countries. The rationale is typically to expand to core geographies that in some cases work as hubs. It applies to
the US, Brazil, and Mexico, and our offices there cover North America and South America. In the Asia Pacific, we are present in Malaysia and have a small presence in Australia that allows us to cover the region. Regarding cybersecurity, we have various offices around Spain and Portugal. We are also present in Mexico City because we need to follow the customer. Most of our customers in Spain are in Mexico and Latin America, so we naturally need to go there. It is a different approach to when one does technology, which results in international expansion.
What corporate synergies does your company gain from being part of the SONAE Group?
The main asset we leverage from SONAE starts with reputation; being a part of SONAE is an added value for us, not only in Portugal, but globally. Although SONAE is not that well known in the US, when we start to describe it, people begin to understand the group, and this certainly brings value. For a small country such as Portugal, being the biggest employer in terms of relative size compared to the country is extremely significant. In terms of assets, we leverage the expertise of the group in retail and telecoms. We liaise with the teams in this business and know the technologies we should invest in. We know their main pain points, and they know the dream technologies that could help them better do their job. These are the kind of interactions we have with them; we cross that
Carlos Alberto Silva EXECUTIVE BOARD MEMBER & CFO, SONAE IM
with the market size, competitive landscape, and filter and select two or three technologies. For bigger investments such as cybersecurity, one thing we did was partner with NOS in Portugal to sell cybersecurity solutions through S21SEC. This is a strategic partnership that we are replicating in Spain, for example, with another operator, though it started here.
What are some of your top priorities for the coming two years?
Our priorities lie along the lines of what we have been working on recently: to continue to find the best investments available, nationally or internationally. In terms of economic exposure, we are more than 50% exposed to the international market. Portugal’s economic boom is a critical factor, but more in the sense of attracting talent and investment to the country. It is critical in early-stage investments to attract international investment since the local market is not large, and those companies need help to expand internationally. ✖
BIO
Carlos Alberto Silva is an executive board member and CFO at Sonae Investment Management, heading the investment activities in telecoms technology and cybersecurity. It is also responsible for the shared services division, which helps manage the portfolio companies. He has over 20 years of experience in the technology, media, and telecoms sector, having led numerous strategic projects in telecoms as well as several M&A transactions under several jurisdictions. He holds a degree and an MsC in electrical and computer engineering from the School of Engineering, University of Porto. He also received an executive MBA from the Porto Business School.
“Being in a group with such dimension, we explore the linkages of the portfolio companies and SONAE Group’s businesses.”
Chinese investment in core economic sectors has included finance, banking, and insurance.
Cynics in the EU answer this by pointing to diversified Chinese investment worldwide. Their claim is that China, long on the ascendancy, yet checked by the US, pursues overseas acquisitions to expand its political, as well as commercial, scope of influence. Indeed, strategic investments in energy, real estate, and finance have been massive, not least in Portugal.
A more prosaic answer points to commercial expediency in what was effectively the fire-sale of post-crisis Portugal. Lisbon, economically gutted by the 2008 crisis, received an USD89 billion EU-IMF bailout conditional upon austerity and a comprehensive privatization of state assets to reanimate growth. Meanwhile, the wealthy Chinese population in Portugal was boosted by the popular money-spinning solution of the golden visa, whereby investment of USD600,000 provided foreign nationals a welcome foothold in the European market. Whichever way you slice it, in the 2010-2016 period Chinese investment (roughly USD8 billion to date, mostly in energy, banking, and insurance sectors) had come to account for 3.6% of Portugal’s GDP, with China Portugal’s 11th-largest trade partner in the 10 years since the crisis, at which time ranked 28th.
Listed on the Hong Kong stock exchange, China’s Fosun International has a market capitalization north of EUR6 billion. In 2016, this war chest enabled the purchase of a 16.75% stake in Portugal’s biggest listed bank, BCP, with roughly a 30% market share. Fosun, chaired by majority major shareholder Guo Guangchang, China’s own Warren Buffet, had spent over EUR1 billion two years earlier on its preeminent insurance company, Fidelidade. In fact, it had purchased the three insurance firms Fidelidade-Companhia de Seguros, Multicare-Seguros de Saude, and Cares-Companhia de Seguros, formerly wholly owned by Portuguese state-owned bank Caixa Geral de Depositos (CGD). The latter deal streamlined the Portuguese group by narrowing the focus to core banking activity, in step once again with Portugal’s commitment to the Financial and Economic Assistance Programme signed with the European Commission, the ECB, and the IMF. The deal was southern Europe’s largest insurance acquisition in three years, but the largest ever for Portugal, leaving the
insurer in comparable financial health to that of its European peers. In a two-way street, while Fosun leverages the well-established reputation and commercial acumen of CGD, privatization of the latter has lent its insurance units fresh vitality and long-term competitiveness. Fosun had identified insurance as one of its core future interests ahead of the huge acquisitions. The claim has been borne out in the fact that while back in 2012, the sector accounted for a mere 4.8% of its total assets, its value skyrocketed 1,182% post acquisition.
With the financial sector explicitly connected to all others, diversified Chinese buyouts have effectively been downstream acquisitions. It is no fortunate coincidence that in 2014 Fosun also purchased Luz Saude, Portugal’s largest healthcare provider by hospital number, for EUR460 million.
Portugal is not a passive observer of Chinese influence and has recently pledged cooperation on the unfolding new silk road project, the Belt and Road Initiative. A related MoU was penned in December 2018 by Chinese President Xi Jinping and Portuguese Prime Minister António Costa. Indeed, 17 bilateral cooperation MoUs of the type Beijing has in place across Asia, Africa, and Europe were signed in a bid to bridge the space between. Portugal also seeks to benefit from China’s call for deeper cooperation across culture, education, tourism, science, and technology.
In a bid to check “predatory” Chinese inroads to key European industries, the EU in 2017 recommended a non-binding screening mechanism for member-state debate on Chinese expansion. Approved by the European Parliament, the law will scrutinize would-be deals and where the bloc feels it necessary, attempt to persuade individual member states to rethink. Predatory in business however, as China would doubtless argue, is just another a term for sour grapes.
Be it silk road or spider’s web, then, Chinese investment has proven to be a valuable solution to Portugal’s post-crisis commitments, testament also to China’s new status in the global order. ✖
Could you elaborate on MDS’s evolution and milestones over the course of its history in Portugal?
MDS is currently a multinational company specializing in insurance brokerage and risk consultancy. This would not have happened without investment to build team expertise and skills, developing a solid, respected brand, shareholder backing, establishing solid partnerships, and pursuing a long-term vision. Innovation has been the staple behind our performance for over 30 years and will be our guide for the future. It has been a long journey that started with 17 employees in 2000. MDS Group now employs 700 people all over the world. We are the market leader in Portugal, one of the largest players in Brazil, and have a direct presence in Angola, Mozambique, Spain, Malta, and Switzerland. We founded a global brokerage company, Brokerslink, in 2004 and have a major stake in the business. With over 18,000 insurance professionals, Brokerslink has established itself as one of the major brokerage companies in the world. In 2017, we achieved our status as a Lloyds' broker, giving us direct access to the London market. This brings advantages to the Portuguese market, as there is now a partner that can place risks with leading emerging risk experts. In line with our group strategy, in 2018, we launched the Risk Consulting Group (RCG). Formerly known as Herco, RCG is set to become an international player within the risk management consultancy sector. RCG provides services from enterprise risk management, risk analysis and loss control to fleet and health risk management, cybersecurity, and more. MDS Re, our reinsurance unit, has become an especially important area to develop, having a strong focus on Europe and Africa. The group is also home to HighDome PCC, a Protected Cell Company and captive insurer/reinsurer based in Malta.
How is it possible to further innovate in the insurance sector, and what is MDS doing in this regard?
MDS has a great track record in innovation in the Portuguese market, and we are excited about ongoing developments today and our fundamental role in them. For example, we pioneered the introduction of new business lines, namely: affinities,
risk consulting, captives, environmental insurance, and cyber risk, plus new business models, such as wholesale and retail distribution. Digital transformation is one of our strategic priorities, and we have been investing in equipment, software, and teams. This has allowed us to redefine our customer relationship parameters. This can be seen with Proximity—an online platform with a user-friendly interface that lets companies manage their insurance portfolio anytime, anywhere, in a secure manner. Another is our innovative online FlexBen solution, which streamlines the administration of flexible benefits and gives employees full autonomy to manage their individual insurance benefit plans and other support services.
What is your vision, and your main strategies for 2019? MDS has been performing extremely well. However, we aim to grow even more. We want to be a key player in the market, leading by example in terms of size, quality of our team, resources, international reach and technological assets. We are a living, ever-changing company, always on the lookout for opportunities. This could be through mergers and acquisitions, specifically with technology companies that can bring value to the group as a whole. This was the case with 838 Soluções in Brazil, where we acquired a majority stake. 838 is pioneering tools to automate benefits and flexible benefits management. This followed the acquisition of a stake in FlexBen, which operates in the same sector. Brazil still presents excellent development opportunities, and we will pay attention to this area. Risk consulting is another strategic focus for the group, which is why we have consolidated operations at RCG. We are quick to identify new risks and challenges and are ahead of the game when it comes to developing products and solutions for them, for example cyber risk, environmental and climate change, longevity, health management, and others. ✖
700 people USD70 million in revenue
Having worked in the insurance industry for 35 years, José Manuel Fonseca has a wealth of experience across many disciplines. He has held senior insurance and risk management roles with varying professional organizations, including as member of the board of directors of the Council of Insurance Agents & Brokers (CIAB) and former vice president of the Federation of European Risk Management Associations (FERMA). He founded the Portuguese Risk Management and Insurance Association (Apogeris), which he presided over for 15 years, as well as Brokerslink, the global brokerage company. Before joining MDS, he managed Portugal’s first bancassurance business, set up and ran one of the first pension fund management companies, and chaired an insurance company.
MDS’ talented team and value propositions have established the company as a role model in insurance brokerage and risk consultancy.
“Innovation has been the staple behind our performance for over 30 years and will be our guide for the future.”
Can you elaborate on the company’s evolution in the last 12 years and its milestones in Portugal?
This business started 12 years ago in Europe.
MEDICARE saw the potential to launch a health service, and we offered a product based on the no-purchase commitment. Our customers tried our products, and if they liked it, they bought it. We catapulted the company to great success and will close 2018 with a billing of USD50 million. We have a commercial DNA; our focus is on selling, the quality of our service, and the loyalty of our customers. It is more expensive to sell products than to retain customers. We have a portfolio of 220,000 clients. We are consistent in the market.
MEDICARE has many services: health for people, animals, health food products, and car insurance. We are a versatile company with different products that meet all the needs of people today.
MEDICARE recently launched insurance products for the automotive segment. What was behind this decision, and how have the results been so far?
MEDICARE did an 18-month study to identify a business area with strong growth possibilities and identified the automotive sector as poorly serviced and in need of a different product. We thus decided to launch an innovative product in Portugal. It is not an insurance service, but a discount product. MEDICARE does not cover the risks of insurance; however, we look for people who offer services like clinics and hospitals. MEDICARE has over 200,000 clients, and we offer them our clients in exchange for great discounts. We guide our clients to those services. We have agreements with the best providers of health or car services. The clients pay a monthly service fee, though we do not have any internal financial connection with the provider. We merely channel our clients to the best discounts.
The company started its internationalization process in 2014 with Spain, Angola, and Brazil. How is each mar-
ket evolving?
Spain is a difficult market. We faced some initial setbacks because healthcare is excellent there. The fact that our company was Portuguese did not benefit our entry into the market, and the results were not the same as in Portugal. We had a smaller investment, though we sought to make sure we did not lose any opportunities to serve in Spain. In Portugal, there are more than 50 products like MEDICARE, although they are smaller, and there are also similar products in Spain. We want to consolidate our current businesses overseas. Our focus is on maintaining what we have already built. Spain and Portugal are extremely important for us, and Angola will also be important.
What is your strategy to attract and retain the best human talent?
MEDICARE is attentive to human talent and seeks to make everyone in the company feel that they are differentiating elements. I want them to feel satisfied with the firm. We typically work with human resources companies, and they bring us the employees. We have an inbound and outbound contact center. We have a great deal of internal work in these areas. If we have a specific career path, we contact the universities, and they send us students. We have many internship programs. We want employees to see the company as a place where their careers can grow; therefore, we have programs that allow interns to experience different departments, allowing them to understand the different areas, the synergies between departments, and their possible career paths. This is a strategy to retain our talent.
What are your goals for 2019?
We are focused on the final customer; we are on the internet and are on television daily selling our products. We are very close to our customers through our ambassadors and other forms of communication. ✖
MEDICARE is a versatile company with different products that meet the growing needs of ever more people.
David Legrant CEO, MEDICARE
care is one sector we are betting on and investing in. Household insurance is another line of business that we are interested in because it is closely linked with several other services we provide. Similarly, motor insurance is one of the segments that will change rapidly. Allianz Group has a strong advantage in this segment because it is already investing in the future.
SB If we are looking at the long term, technology will change everything, and everything will be interconnected. Other insurance will be extremely important, such as cyber. In healthcare as well, there is 3D printing based on stem cells and microscopic robots to enter bodies and repair things. For a long time, insurance was only medical or auto; however, this has changed completely, and business is growing to include prevention. Fidelidade and Traquilidade are our main competitors, though in Portugal there are two business lines that are still overall loss making—motor and workers compensation. There should be more discipline in the pricing for motor and workers compensation.
How important is the Portuguese market for the group?
TERESA BRANTUAS It is great for our company to be part of the Allianz Group for many reasons. These include the support we have from the group in terms of technical know-how, human and financial resources, and access to what is going on worldwide. Allianz Portugal only represents 7.5% of the group’s annual revenue because the country is small; however, it is still important for the group to have a presence in the Portuguese market because Allianz wants to cover more European countries. During the economic crisis, belonging to a group like Allianz was extremely important because it gave our customers, partners, providers, and employees a great deal of confidence. They knew we had a safe network to fall back on.
STEVEN BRAEKEVELDT Portugal is gaining in importance and will continue to do so. Ageas Seguros was completely lossmaking when we bought it, with losses of between EUR30 and 40 million a year. We are now on the verge of
breaking even, and after 2019 will start to grow and become fairly quite important. In terms of the top line, Portugal is important because we do about EUR2 billion, which is important for the group and in terms of profits. The target is for EUR100 million in net profit from Portugal. We are still hungry in the Portuguese market; therefore, if new opportunities arise, we will look into acquiring more business.
What are the biggest opportunities and challenges for the company in the insurance business?
TB Our big challenge is changing the company to fulfill our clients’ requirements. Looking at where our clients want to be and giving them what they need at the particular stage is always our focus. We have a full digitization project going on that is totally focused on the clients' needs. We work for almost every segment, including retail, corporate, and SME clients. Different business lines will evolve in different ways. Healthcare in particular will see the most change. This is a great opportunity for us, and health-
What is your strategy to retain human capital?
TB We have to transform ourselves and give our employees the capabilities to be able to do this. This is the main pillar of our strategy because the people who work with us are our foundation. If we have people with the right skills who are happy to be at Allianz Portugal, we are halfway to success and carrying out the transformation we need to make. We have to provide our staff with professional training and ensure their wellbeing.
What are your main goals and priorities for the coming years?
SB Our goal for Portugal and Ageas is to move the country ahead. For the company, we need to work further on our holistic approach to customers, as by and large we are not there yet. We have to look at truly satisfying our customers and ensuring that Ageas becomes a social necessity. People should say, “if you get old, need something for your house, or if there is something wrong with your health, go to Ageas.” ✖
Portugal’s industrial matrix is wide ranging and complex, a large chunk of which is covered in this chapter through extensive interviews and analysis. Sub-sectors include textiles, automotive, and aerospace, as well as ceramics and a number of raw materials. The development of new areas of production helps ensure exports remain a major money-maker for the treasury.
The textiles industry is mainly located in the northern part of the country, in the region of Braga and Porto. The segment represents 10% of all national exports and at the EU level 3% of all textile and clothing exports. A total of 15% of the workforce is employed by the Portuguese manufacturing industry.
There is also strong synergy between industries and top local universities, not to mention R&D initiatives at all levels. Our findings paint a picture of a skilled workforce, proficient in language, IT, and more. This helps fuel industries as complex as automotive, which also has a long history in the country.
In the late 1960s, near Viseu, in the interior, the Centro de Produção de Mangualde was opened and later acquired by Citroën for its own produc-
tion. A decade later, in 1977, when the government decided to create an automotive industry closer to Lisbon, Renault built the first modern car manufacturing plant in the country, in Setubal, 40km away from the capital. Nowadays, the south bank of Lisbon’s Tejo river has a lot to show in this segment. Volkswagen’s AutoEuropa is one of the nation’s biggest exporters and is on course to produce over 135,000 vehicles this year, a record.
Elsewhere, the Mitsubishi Fuso plant is testing an electric version of its popular track with Lisbon City Hall, Francisco Geraldes, the managing director of Mitsubishi Portugal, reported to us. Our interviewees also point out that the sector, worth EUR11 billion, represents around 6% of the country's wealth.
Not one to be left behind, business owners in Portugal have also begun turning to more modern industries, with production increasing in the computer software, pharmaceutical, IT, biotechnology, and aerospace areas. Through this chapter, we hope to introduce readers to a number of players across a diverse range of sectors to paint a picture of the positive business sentiment prevailing in the country today. ✖
CITEVE has transformed the industry by promoting value addition, adopting the latest technologies, and ensuring the highest standards of environmental sustainability.
António Braz Costa GENERAL MANAGER, PORTUGUESE TECHNOLOGICAL CENTRE FOR THE TEXTILE & CLOTHING INDUSTRIES (CITEVE)
The textile sector is of crucial importance; it represents 10% of total industrial exports from Portugal and more than 15% of employment in the manufacturing industry. The most important thing, however, is that the sector is counter-cyclical to other first-world countries. From 2008-2009, GDP shrank by about 20%. However, since 2009 we have increased exports by 50% and employee efficiency by 50%. These figures are extremely important because we are not operating in a protected market. We grew significantly outside of the EU in the first 10 years after the crisis. We went to Russia, South America, Asia, and the GCC, for example, as a result of the reaction to the fall in consumption in Europe in 2009. We have a gap of about EUR200 million between production and turnover. Basically, we produce all the products we sell, and it is necessary to have the most efficient processes and generate more value per article per square meter. This is the current situation of the sector in Portugal.
How has the sector worked to set itself apart from its competitors around the world?
ers understand that we can play a part in developing their collections. This is a completely new approach. We have also focused a great deal on technical development and created new applications for the automotive, defense, and health sectors, among others. This was important in distancing ourselves from emerging economies, where labor costs are often extremely low.
Which areas of the sector have potential in the coming years?
There are certain other subsectors that are extremely important for us. Automotive, sport, and protective equipment applications are on top, a clear nexus between technology and design. Sports clothing or protective equipment is also fashionable, and materials must improve performance. The link between technical materials and fashion is vital. We are extremely involved in the development of fabrics as advanced devices and sensors.
Which subsectors of the textile industry are likely to attract the most investment and development in the future?
António Braz Costa is General Manager of CITEVE. He holds a degree in mechanical engineering from Universidade do Minho and participated in advanced management for public managers program at Instituto Nacional da Administração. He was previously General Assembly Secretary for Mobinov - Cluster Automóvel Portugal and CEO & Board Member at the Centre for Nanotechnology and Smart Materials (CeNTI).
First of all, Portugal has a flourishing textile and fashion culture and a strong and consolidated industrial experience, demonstrated by the way we preserved the industry in the last two decades. Second, we have a strong scientific and technological system within the industry. Well-known textile institutions and companies from around Europe now send people to study here. Finally, we have completely changed the way we do business with textiles related to management systems and practices. Many Portuguese companies offer a lead time of two weeks currently, which is amazing for any sector. We also developed product development and innovation as a current component. In 2005, Portugal basically used to sell “minutes” of industrial transformation, including machine time, energy, and labor, while today almost all the companies develop and design the products they sell. Now, we offer fashion solutions, and custom-
Most textile companies in the country are owned and operated by Portuguese. We have many people capable of driving new companies and partnerships. If we have the right financing for companies, then we are well positioned. Our past experience with international companies was not successful, because they came mainly to exploit differences in labor costs and would leave at the first sign of difficulty. Had the textile sector belonged to foreign banks or investment partnerships during the 2008-2009 crisis, the industry would have definitely closed down. Fortunately, the industry is in the hands of Portuguese families, and they have a different mindset about the companies. Portuguese industrialists are more willing to invest in the sector when times get tough. Family ownership was the secret to Portugal’s success during the difficult years. Recently, several foreign companies came to Portugal to invest in the sector, now motivated by the excellence our country offers. ✖
Textiles contribute over 10% of exports and more than 15% of industrial employment
What competitive advantages has TINTEX leveraged to succeed?
RICARDO SILVA In 1998, TINTEX began its journey as a respected expert in the highest quality levels of dyeing and finishing techniques, which became its key asset and differentiating factor when these skills were used to make smart, high-quality, natural, and sustainable jersey fabrics. With ecology and sustainability concerns front and center of the TINTEX strategy, the company grew to become an industry leader and true master of all aspects of its textile heritage. By using the latest and best sustainable hi-tech processes and inventing extraordinary new approaches for dyeing and finishing, TINTEX has reinforced its advanced vision to better supply the contemporary fashion, sports, and lingerie markets.
How do you ensure the transfer of latest skills in the textile industry?
RS To keep up with the latest technologies we always need to be at the forefront around the world, not just in Portugal. We source knowledge globally, looking for new technologies, processes, and materials to learn what is new and promote partnerships with other companies. That is our best strength because these companies believe in what we do, and together we create a better response for the mar-
ket. With knowledge from our partners, we transfer this expertise internally to our different teams in sales, production, and R&D. TINTEX is committed to a continuous program of sustainable innovations and refinements throughout the processing, production, and supply of better-made, nature-based textiles. These brought about a 70% reduction in our environmental impact.
What impact do your R&D investments have on being a best-in-class manufacturer of high-end jersey fabrics?
MÁRIO JORGE SILVA We started innovating with Tencel and have been the leaders in developing Tencel fabrics since 2002. Later, we evolved to polylactide (PLA) and other sustainable fabrics. A textile cluster was recently created in Portugal with several special interest groups, and we are proud to say that our sustainability manager, Ana Silva, is responsible for the coordination of its sustainability area. Last season we proudly announced our complete switch from the use of conventional cotton
to our own brainchild, Naturally Advanced Cotton by TINTEX, a select range of three advanced cotton solutions such as ECOTEC by Marchi & Fildi, GOTS-certified organic cotton, and Supima. In addition to this, we joined the Better Cotton Initiative (BCI), a not-for-profit organization that seeks to improve cotton’s long-term sustainability and profitability.
How does TINTEX ensure its textile production is environmentally sustainable?
RS Millennials, new consumers, and future generations want to be informed about what they are buying. They no longer merely buy according to price, but also according to the story. To do so, we need to be fully transparent, a key aspect of sustainability, and make sure the environmental impact is as low as possible, a fact we must convey. That is why sustainability combines traceability with low environmental impact. TINTEX has a sustainability manager, and we form partnerships with trusted suppliers. We can ensure the traceability back to the fibers throughout the supply chain. Trust is the most important thing, and we have earned the trust of our partners and customers.
How will companies like TINTEX move the sector forward?
MJS At a company such as ours, we mix 1012 different areas to bring new approaches and fresh ideas to develop concepts that set us apart. Moreover, by taking part in the Make Fashion Circular initiative by the Ellen MacArthur Foundation, an initiative based on the principles of a circular economy to collaborate and innovate towards a new textiles economy, TINTEX is helping activate change industry wide. Other core partners include Burberry, Gap Inc., H&M, Nike, and Stella McCartney, each of which is transforming the sector.
What subsectors in the industry represent good opportunities?
RS Today, labels look for contemporary design, innovation, and sustainability through basic and seasonal articles. Whereas once we had pure fashion, pure sport, and pure lingerie, today we see a blend of all three. ✖
A market leader in sustainable, natural-based textiles, firms like TINTEX are ramping up their R&D to satisfy the world’s most demanding brands.
“TINTEX is committed to a continuous program of sustainable innovations and refinements throughout the processing, production, and supply of better-made, nature-based textiles.”
From high fashion to cutting-edge military wear, Portuguese textile manufacturers are breaking ground at every end of the spectrum, with dramatic results.
Manuel Gonçalves EXECUTIVE BOARD DIRECTOR, TMG GROUP
WE HAVE CONCENTRATED OUR EFFORTS ON the European textile market because brands today are introducing more collections into the market to keep clients interested. The textile business in Europe, and Portugal in particular, has been growing in recent years. We benefit from being close to North Africa. Turkey is our main competitor because it is completely vertical. Portugal has a long tradition in textiles. Textile businesses are divided in many specialties, and Portugal has become extremely strong in Europe. Our main focus is shirts, trousers, jackets, and knitted materials for polos, sweats, and others. The knowledge is here as a result of our long tradition in the sector. The most competitive element today is our proximity to the consumer. We work to be an industrial extension of our clients, to provide quick solutions for their product differentiation challenges, and offer shorter wait times for their idea to reach the market. Our know-how and capacity are important, though the most significant thing is our proximity to the client.
José Alexandre Oliveira PRESIDENT, RIOPELE
WHAT RIOPELE HAS BECOME TODAY IS a result of the company’s constant evolution. Our current production involves not only the way the product is made on a daily basis, but also the company itself. We also have to consider the results of our work from a commercial and a financial standpoint that involves all of the company’s departments. A decade ago, people were saying the textile sector was an obsolete industry that needed to delocalize production and be closer to raw material producers and more affordable labor. However, Riopele successfully transformed that trend through innovation. It also did something that is increasingly important for companies: ensuring the client recognizes the company and its quality of services. If a client sends an order to Riopele today for delivery in six weeks, the challenge for us is to ensure that in six weeks, it will be delivered. In order for innovation to be a reality, the company has to operate like a finely tuned orchestra with everyone working closely together to implement the same strategy.
João Mendes MANAGING DIRECTOR, A. SAMPAIO E FILHOS TEXTEISWE WERE FOUNDED IN 1947 and over the years have learned how things work and identified trends in each of our four markets. We are present in the fashion business, where we work from middle to high end. We have to identify the latest trends in fashion and bring our clients the right products at the right time. We are also active in the sports business, and more ideas emerge through R&D. Our strategy is already set, and we know where we are and where we want to be for each market segment. Our collection for 2019-2020 is ready to be presented in segments such as fashion, sports, protective, work wear, and sustainable fabrics. In each case, we know the trends and the market. Products for the military are different from selling high fashion or sports items. We maintain our strategy of leading the market in our different segments. We will strengthen our presence in the US, especially with performance sports. We do not want textiles to be a passive element, but rather an active one in the Portuguese economy.
INOVAFIL IS A BRAND-NEW PROJECT FOR spinning mills owned by the Mundifios Group, the biggest yarn trader in Europe. The group’s daily trade touches 180 tons, with a yearly turnover of EUR100 million. During the textile crisis 30 years ago, companies like Mundifios scouted other markets for textile yarns. The majority of mills were forced to close, as Asian countries started to produce yarn at a cheaper price. Although our parent company exported only 30% of its trade, the executives realized the need to serve customers with an entire range of yarn in order to survive. The key to survival was to understand the market’s changing needs and anticipate future market trends. For example, climate change is having a profound effect on how people dress in different countries. So, to be ahead of the competition, the company needed to predict future trends and plan accordingly. We began our Nidyarn R&D initiative from scratch three years ago when we decided to create a brand-new spinning mill to cater to market demand for both Mundifios and Inovafil.
THE TEXTILE BUSINESS IN PORTUGAL ACCOUNTS FOR more than USD5.75 billion in exports. The home textile business, which we are in, is about USD920 million. The latter used to be a conservative one, as home textiles are traditionally not known to be as glamorous as high fashion or other segments of the industry. What we try to do is show that home textiles can also be fashionable. It is something that users must like the look and feel of, just like clothes. In recent years, people have been talking a great deal about home textiles being related to one’s well-being. It is important to be comfortable at home because that is where one spends at least 12 hours of the day. What we do is bring that concept to customers. The New York Times’ motto is “All the news that’s fit to print” and we want to do that for home textiles—“Textiles that fit your passion for life.” And when thinking about our competitive advantage, our location is crucial.
FOUNDED IN 1986 by myself and two other partners, we focused on classics and high-quality casualwear. I later partnered with a former colleague and moved into the military range. Throughout the 1990s, our main markets were the African Portuguese markets, such as Angola. It gave us good experience and income, and we managed to gain new resources to move forward. Protactical is a military brand we created in 2014 for which we develop special garments with innovative protection materials. We also apply for tenders for the military and police forces. With Protactical, we are on an R&D project for ballistics, together with University of Minho and two other industrial parties. The project is almost finished and is based on auxetic materials. Its aim is to have a high-end ballistic protection vest 100% made in Portugal, with a higher performance than anything currently on the market. We also want to produce a high-performance elbow and knee protection for combat shirts and trousers.
Portugal’s textile industry is being transformed through innovation, R&D, and digitalization.
A DECADE AGO, THE PORTUGUESE TEXTILE SECTOR WAS IN CRISIS and increasingly under threat from low-cost producers such as China, Bangladesh, and Vietnam. Drastic steps were needed in order to re-invent and add new dynamism to the historic industry. Textiles are undoubtedly a strategic sector for the Portuguese economy, representing 10% of total industrial exports and more than 15% of employment in the manufacturing industry. It is largely based out of Porto and surrounding industrial areas. To this day, it is controlled largely by a number of family-held businesses whose experience in the sector often goes back more than 100 years.
Fast forward to today, and Portugal has a booming textile and fashion culture that leverages the country’s industrial expertise. One of the most important entities that spearheaded the revitalization of the textile industry is the Portuguese Technological Center for the Textile and Clothing Industries (CITEVE). By the onset of the global financial crisis in 2008, Portuguese textile manufacturers realized they could no longer rely on the domestic market for growth since the country’s real GDP was shrinking rapidly. Textile companies were under tremendous pressure due to stagnating or non-existent local demand.
The solution was to find new export markets, from nearby European countries to the GCC, as far east as Japan and China, and westward to Latin America. But in order to make headway in these new and often challenging markets, Portuguese textile producers had to implement particularly efficient production processes by maximizing value addition and innovation. The General Manager of CITEVE, Eng. António Braz Costa, recognizes Portugal’s need to leverage the country's strong scientific and technological ecosystem to help boost the overall competitiveness of the sector.
Portugal, thus, set out to compete in the global textile industry on the basis of scientific innovation. Renowned academic institutions such as University of Minho set up R&D laboratories and worked together with Portugal’s leading textile companies to undertake a
process of continual innovation utilizing the latest technological advances in materials and nanotechnology. This led to success at a number of companies such as A. Sampaio and Sons and the Latino Group, which now produce next-generation fibers to make tactical uniforms for police forces and the military. A growing number of Portuguese companies have exhibited their products at homeland security fairs such as Milipol in Paris and ISPO in Munich, the leading trade fair for sports professionals, and won awards for uniquely innovative products.
These high-added-value textiles utilize a wide variety of properties including ballistic protection, cut- and fire-resistant fibers, and anti-microbial functions, as well as the incorporation of the latest electronic sensors that can provide soldiers life-saving, real-time information on the battlefield, or work clothing that can protect workers operating in potentially hostile environments such as offshore oil and gas rigs. Much of the success of Portuguese textile companies producing tactical items for the military or police forces around the world was previously gained by developing fibers for performance sports such as mountaineering and skiing.
Another defining characteristic of Portugal’s modern textile industry is a firm commitment to environmental sustainability. Portugal already has particularly stringent environmental regulations, but the new generation of Portuguese textile companies has set out to further reduce CO2 emissions, industrial waste, and effluent water. Sustainability is deeply ingrained in these companies’ business models, and many work with recycled polyester, cotton, and organic materials such as cork. Some even go as far as utilizing plastic recovered from the bottom of the ocean by fishermen. Companies such as TINTEX Textiles even have dedicated sustainability managers to ensure the full traceability of materials throughout the supply chain and produce fabrics with the lowest possible environmental impact.
The revamping of the textile industry elevates the sophistication of the sector and gives Portugal growing reach to new export markets. ✖
Can you provide some insights into the company’s establishment and how it supplies the high-end market?
SICI93 was established in 1993, largely based on my background in the textile industry. Our position has always been to find something new. In the early 1990s, companies in Portugal were extremely vertical and enclosed within themselves. While the private label market was going through changes, we had to concentrate on our clients—which soon became our modus operandi: focusing more on the client and less on production. We stopped being a manufacturing company and focused on services. When it comes to major brands, working with them is not a choice that one manages overnight. In our case, it was a long process of affirmation and realizing exactly how things work at this level. Big brands do not sell mere garments; there is a whole concept and history behind them. So we had to incorporate the values and strategic objectives of these brands into our own. At the end of the day, changes are constant, and fashion is the art of the ephemeral. We understand it and adapt internally. With clients there must be a great deal of emotional involvement so that in the end things work out.
Albertino Oliveira COMMERCIAL DIRECTOR, SEDACOR
What were some of the challenges in making cork products commercially viable and rapidly expanding production?
The first challenge we face with our product is that it is typically associated with the biggest market; cork stoppers for wine bottles. This is why we must communicate with other potential market areas that this great natural product has other excellent, competitive features that can help serve as a differentiating factor for other markets. As a medium-sized company, we use marketing analysis tools at our disposal and speak to suppliers, clients, universities, and technological centers about the beneficial features of cork. We also implement new technologies to produce innovative cork products for new markets. As a company with over 90 years of experience, we are traditional, but also look to the future to be less dependent on cork’s main market. We see great opportunities in areas such as fashion, textile decoration products, flooring, walls, and other areas where cork provides benefits such as sound and thermal insulation. When people around the world touch our product, they are often floored to hear it is cork. Many also do not know it is a highly hypoallergenic product and also extremely flexible. It matches the mindset of millennials. Using other technologies, we can integrate it with textiles, where sustainability, the circular economy, and recycling are already the reality.
Damel now produces some of the most modern products in Portugal. How did the company come to be?
In the 1980s, my father, a tailor in a textile company, established his own firm that was focused on producing jeans. The move to producing more technical products with a GORE-TEX license came when I joined the company in 1991. Since then, we have improved and completely overhauled our production; we followed the style of production from the US and Japan because it is more flexible. At present, we employ advanced techniques such as laser frames and seam sealing. We are able to produce any type of product, including garments for golf, skiing, sailing, hiking, motorsports, running, and cycling. We work to find the fabrics for the function of the final user. After hunting for the specific fabric across the world, we develop products in partnership with Portuguese companies to achieve a certain level of quality. Over the past two years, we have been manufacturing army wear; the finished products are currently under testing stage to ensure they provide the utmost comfort and function. The project was developed for the European Defense Agency (EDA) through a scientific approach, and was not about adding to our production line, but about what we could achieve using different seams.
Manuel Azevedo PRESIDENT, MANUEL AZEVEDO
What opportunity do you see in terms of providing socks for professional sports?
Providing for professional sports is important since it brings recognition, but the main benefits accrue to the brands. For example, being subcontracted by New Balance was very significant for us, not to mention the fact that we provided the socks for Liverpool for three years. In fact, a big part of our production is allocated to football socks. We also produce for the Puma brand and are also starting to produce professional football socks with other brands. When talking about innovation and technology for socks, some of it involves the knitting machines. We introduced new ways of knitting and adding new elements provided by separate systems. The most innovative characteristic of our product evolution has been in the study of the fitting. Sizing is important, as the volumetric aspects transform a regular sock into a great one depending on the raw materials. In the sock subsector of textiles, we are recognized as a great producer. We ensure fast delivery, though the markets that compete with Portugal offer extremely low prices.
What core sectors does your company supply?
Our company was founded by several factories that wanted to have their own dyeing factory in Portugal. From the beginning, we have worked with other companies, which was a great decision because we have developed a strong work ethic, and the quality of our production has increased. Certain companies have closed down because of the crisis, and there are two partners now. We work mainly with the clothing industry and companies that have labels and a level of quality above the normal standard. In addition, we work with many different articles, from small to large batches, including complicated garments that take a great deal of work to achieve quality results. We are known for small productions with high quality and value addition. Our clients are small and mainly in northern Europe. We do not
Agostinho Afonso GENERAL MANAGER, TEXTEIS PENEDO S.A.
What are some of the products you supply, and what challenges do you face in the industry?
Our main business is textiles, though we have several niche businesses we are currently developing. We invest heavily in innovation and R&D. We are always developing a new business somewhere in the world, as we export 99% of our production. In the last year, we finished one of our main R&D projects for textiles with lights. In the future, we expect to have the ability supply the market with curtains with lights. This is just one example of what we are working on, and we are always developing new products. We want to be ahead of the industry. We travel around the world, from exhibitions to stores. We track what happens in the world in order to uncover trends and learn how to promote the right ones with the right fabrics and designers. As a company, we have been exporting for most our history. 50% goes
After a successful 2018, the Portuguese automotive industry is gearing up for further growth.
IN 2017, THE PORTUGUESE ECONOMY ENJOYED ITS BEST YEAR SINCE 2000 AND GREW BY 2.7%. According to the Organization for Economic Co-operation and Development (OECD), the country’s economy will continue growing at the steady rate of 2-3% throughout 2019 and 2020. At the same time, according to the OECD, “the fiscal deficit is expected to disappear by 2020 and the debt-to-GDP ratio is on a firmly declining path.” Although Portugal, by and large, has a service economy that employs approximately 68% of the nation’s labor force, the country’s current economic landscape is setting the stage for the blooming of the industrial sector as well.
Portugal’s automotive industry, which in 2018 produced 177,000 vehicles, is one of the industries bound to prosper in the near future. Admittedly, Portugal is not traditionally regarded as a European auto-making powerhouse, but around 975 Portuguese companies are directly involved in the auto industry in one way or another, creating over 124,000 jobs. According to Mobinov, Portugal’s automobile cluster association, car parts manufacturers across Portugal produce over 10,000 distinct car parts, which are exported and put together on the assembly lines of international automakers such as BMW, Fiat, Ford, Renault, and Nissan, among others. According to the Association of Manufacturers for the Automobile Industry (AFIA), more than 230 manufacturers exported EUR8.8 billion worth of car parts in 2017 alone, ranging from items as low-tech as plastic, rubber, and composite parts to engine parts, gearboxes, and high-tech electronics. Portugal’s export of car components has been enjoying uninterrupted growth since 2012. The sector experienced a EUR1-billion growth in export revenues between 2016 and 2017, which is predicted to happen again in 2018. However, Portugal’s auto industry is not limited to the manufacturing of spare parts and accessories. As an EU member with a highly skilled workforce, the country can be a natural choice for car makers from Europe and beyond to set up their plants. Having realized this, Toyota/Caetano, Mitsubishi, Groupe PSA, and Volkswagen have established their respective factories in the country. Over 90% of the output of these factories are exported, mainly to
Each year, over 1,500 units of Toyota’s iconic 70 series Land Cruisers are produced exclusively for export in the Toyota Caetano Portugal S.A. facilities near Porto. Founded in 1962, Groupe PSA’s assembly plant in Mangualde is where 53,000 units of Citroën Berlingo and Peugeot Partner were manufactured in 2017, exhibiting an 8% increase YoY; in 2015, it was announced that with an investment of EUR50 million, another assembly line would be added to the PSA plant by end-2018. Mitsubishi is another transnational carmaker active in Portugal, and Mitsubishi FUSO trucks are manufactured in the city of Tramagal. Among all the car manufacturing facilities in Portugal, the largest and most prolific one is Volkswagen’s AutoEuropa plant in Palmela, near Lisbon. Beginning its production in 1995, the plant currently has an output of 110,000 vehicles per year, although the figure has, at times, been as high as 130,000. Volkswagen Eos was once the plant’s main output, but the model’s production was discontinued in 2015. Volkswagen Sharan, SEAT Alhambra, and Volkswagen T-Roc are assembled in AutoEuropa facilities as of 2018. Since the beginning of the production of Volkswagen T-Roc in 2017, Volkswagen’s MQB platform for modular design and production has been employed in the plant, which can facilitate the assembly of other Volkswagen models, drawing on the same modular platform in the coming years.
What is more, Portugal has adopted a welcoming attitude toward electric cars, not least by installing more than 1,300 charging points in major cities. As Europe’s leading producer of lithium, Portugal is an ideal location for the manufacturing of zero-emission cars. It should then come as no surprise that in 2013, Salvador Caetano Group was the first in the world to launch a fully electric bus. Similarly, in 2014, Mitsubishi FUSO announced the world’s first light-duty truck powered by electricity. Although such projects have not still resulted in massive production, they demonstrate that Portugal’s auto industry is trying to stay ahead of the curve and ready itself for manufacturing the next generation of vehicles. ✖
The automotive sector stimulates R&D and helps the Portuguese scientific ecosystem by promoting a series of innovative projects.
What are the main factors behind the growth of the automotive industry, and how has the sector evolved in terms of employment and value addition?
The cluster represents 6% of GDP and is an important part of the GNP, with over EUR11 billion. It employs over 75,000 workers and contributes approximately 16% of value addition in Portugal. A small number of companies have an important share, representing around 20% of the exports of Portuguese goods. The cluster is made up of 1,000 companies, including many large ones. There are five automakers, a pool of companies that are manufacturers, some 400 companies related to molds, and another 400 companies making components for the automobile industry. Of this entire pool of companies, 98% of production is exported. The automobile industry in Portugal is growing because the component makers to the sector have grow 7% per year for the last five years, which is more than in Europe, whose industry grew much less. The destination of Portuguese exports is mainly European, especially Spain and Germany, because Germany is the largest automobile producer in Europe, followed by Spain. There is also South America, which is a growing market, Mexico, and Brazil, where Grupo Simoldes has made an important investment.
What trans-sectoral synergies does the cluster benefit from?
The automotive sector stimulates R&D and helps the scientific ecosystem by promoting a series of innovative projects. The auto industry is a partner of the scientific system, not only universities but also polytechnics, similar to Europe. We need to ensure an easier flow from universities to the auto industry in terms of R&D. The automotive market is rapidly evolving, and we need cars that respond to those needs. But the industry’s timing does not necessarily match the timing of universities, so it is a learning process we are still developing.
José Couto PRESIDENT, MOBINOV & BOARD MEMBER, MICROPLASTICOS
What success stories exemplify the sector’s potential? Our success is connected to our capacity to do well; it is not just about pricing and costs because these international companies are looking for more than that. There must also be competitive advantages. When it comes to human resources, this is related to the quality of our development and ability to industrially transform any project. All these well-qualified people and companies can respond to the challenges from the world’s largest automotive players. They benefit us and make Portugal a target of interest in terms of global automotive industry investment. Some of our costs are lower than Europe’s, though this does not make a difference. Portugal might sometimes have a lower level of productivity in comparison to certain countries; but the productivity of our auto industry is almost double that of the rest of Portuguese industry. This means we have companies that are extremely competitive, as a result of which we are able to grow 7% per annum. The capacities that do not vanish with time are technology, expertise, and a commitment to quality production.
What is Microplasticos’ role in producing high-precision plastics for advanced industrial applications?
Microplasticos is able to meet the more complicated challenges from clients and invests a large amount of knowledge into projects. It can manage from the very conception of an idea, all the way to actually transforming it into a viable project. For a long time, Microplasticos has invested in R&D; hence, we are capable of responding to clients’ needs and try to be the best at that, which is our core business. We produce a wide variety of components and try to be better than our competitors. Our competition is in Europe, so we must focus on our competitive advantages and stay one step ahead with technology. ✖
Automotive sector comprises 6% of GDP and 20% of exports
BIO
José Couto has always been in the industrial sector and served as manager, member of the board, angel investor, and venture capitalist, and has extensive experience in business associations. At a regional level, he leads the Conselho Empresarial do Centro (the Business Council for the Central Region of Portugal) is a member of the board of the Confederation of Portuguese Businesses at the national one. Since 2016, he has been the president of the Board of Directors of MOBINOVAssociaçao do Cluster da Indústria Automóvel.
What have been some of the key achievements of Renault in Portugal?
With a bachelor’s from the University of Lyon and a master’s in economics from Sussex University, Crevola started his career at Renault in Portugal in 1994. Between 1996 and 2011, he served in different capacities in sales and marketing, including as executive assistant to the VicePresident of Group Renault for sales and marketing. In 2012, he became marketing director for Renault Poland and was later nominated marketing director for the East Europe Cluster. In 2014, he transferred to the South Cluster (Italy and Greece) and in 2017 was appointed general manager of Renault Portugal.
Having given birth to the automotive sector in Portugal, Renault has a strong history here. When the government decided to create an automotive industry in Portugal in 1977, Renault was chosen and built the first modern car manufacturing plant in the country, in Setubal, south of Lisbon. With this, we also created the entire ecosystem of the car industry in Portugal. At the time, Portugal was not a part of the EU, meaning we had a competitive advantage with tariffs. We rapidly grew a strong market share and built a strong dealership network. Since then, we have always had a larger presence than our competitors. When the market opened in the late 1980s, we lost our leadership (between 1992 and 1997) for a few years, but we were able to regain it in 1998 and never relinquished it again: Renault has been the market leader for 20 years in a row, and soon to be 21. Though we subsequently closed the Setubal plant, we still have an important plant in Cacia in the north, where we build gearboxes for the whole Renault-Nissan Alliance, some 700,000 a year with the help of 1,500 employees. This makes it the second most important automotive plant in Portugal. Renault has a full presence in Portugal with our plant, a national sales company, a financial services company, called RCI, and a retail company, Renault Retail Group, with facilities in Lisbon and Porto. We are leading in the market of personal and light commercial cars. Clio is the most sold car in Portugal and has maintained that status for six years since its launch in 2012. We currently have 22 dealers and almost 50 points throughout the country.
How do you assess the shift from conventional to electric vehicles?
It is a structural trend all over the world, but it is true that the Portuguese government has decided to push the electric ecosystem. The results are already impressive: Portugal is already the fourth electric market in Europe, accounting for 1.4% of
total sales. We are ahead of most European countries, thanks to a tax incentive system for electric cars, especially for fleets. Renault ended 2017 as a strong leader in the electric market, with almost 50% of market share, ahead of even Nissan.
The Renault-Nissan Alliance dates to 1999. How is this relevant to Alliance 2022?
The Alliance was born almost 20 years ago, and still has room for more synergies. That starts with platforms and industrial parts. There are so many engines, gearboxes, and car platforms that we share with Nissan, Infiniti and, in the future, Mitsubishi, which recently joined the Alliance. What is key now is the capacity to invest in technology: We are in a changing world, mirrored in the automotive sector. Maybe the next 10 years will have more changes than the last 50. We are about to have a deep change with electric cars, autonomous drivers, and connected services. These new technologies require a lot of investments. We are pretty sure only the big players will be able to invest to continue to have the best offer. As such, the Alliance, now the largest carmaker in the world, is in a perfect position to do so.
What are your priorities for the coming year?
2019 will be a significant year for Renault Portugal because we are renewing important models. The most important will be Clio; later in the year will come Captur. We will launch the new generations in 2019. We are also talking about new technologies coming to the surface more quickly. There will also be a renewal of other brand pillars with new technologies, especially electric cars. ✖
Having created the automotive industry in Portugal in the late 1970s, with 21 uninteruppted years as market leader, Renault is showing no signs of atrophying.
Fabrice Crevola CEO PORTUGAL, GROUPE RENAULT
“We are ahead of most European countries, thanks to a tax incentive system for electric cars, especially for fleets.”
Globally, the company is present in eight markets, with more than 25 brands. Can you elaborate on your parent company’s structure, operations, and achievements?
Our company is part of the Bergé Group, which is based in Spain and present in eight markets. In Europe, we have a presence in Portugal, Spain (including the Canary Islands), and Finland. In South America, we have a presence in Chile, Peru, Argentina, and Colombia. We are a distribution company, representing 26 brands in our current portfolio. We also have some retail operations, but most of our dealers are independently working as our partners. At present, we manage more than 500 dealers in eight markets. Our aim is to distribute 150,000 units in these markets by end2018. In Portugal, we have four companies: the distribution of Mitsubishi and Fuso is managed by one company, the distribution of Kia and Isuzu in two others, in addition to a company that provides services for all companies. Our yearly target for the Portuguese market is 12,000-13,000 cars.
How important is the Portuguese market for the overall group’s operations?
It is highly important for several reasons. It was the first operation outside of Spain and has grown significantly; about 30-40% of our European activity is now in Portugal. It is also vital because Kia and Mitsubishi are very relevant brands for Bergé in Portugal.
The Mitsubishi Outlander PHEV recently had a successful launch. How would you assess the shift of conventional vehicles to electric ones?
We represent Mitsubishi in five markets: Chile, Peru, Spain, Portugal, and Finland. Mitsubishi was the first company to introduce the PHEV technology into the market and made a huge effort doing so. Recently, a number of brands have been entering the European market with new technology. Initially, companies that wanted a green footprint were interested and became early adopters, but there was also a lot of lack of knowledge about the products and their usage and reliability. Now that customers are starting to understand the benefits of these technologies, it is becoming easier. Our volume has also significantly grown, and should continue to do so. These represented 7% of sales in 2018, a number we hope to double in 2019. European regulations being implemented in our market are also accelerating the adoption of PHEV technologies.
Francisco Geraldes MANAGING DIRECTOR, MITSUBISHI MOTORS
Is Mitsubishi developing better solutions for electric cars?
Mitsubishi is a strong partner in the Renault-Nissan Alliance, the group with the biggest sales of electric vehicles in the world. A lot of solutions are being developed within this, and Mitsubishi will participate in these and enjoy the efforts of the Alliance. With Mitsubishi and Fuso, we have quite a strong business in commercial vehicles based on the pickup and Fuso trucks, which represent almost 40% of our volume. Electric vehicles will progressively increase their share, though Mitsubishi will also remain focused on SUVs and pickups.
In 2017, the truck division of Mitsubishi and Fuso had a positive impact on the Portuguese economy. What future developments are in the pipeline for this plant?
Fuso has a plant in Portugal and is part of the Daimler Group. It produces the product that we sell in Europe and also exports special projects to the US as well as several countries in Africa. In Portugal, Fuso is highly relevant because it has had an industrial presence for a long time. Portugal is home to Fuso’s biggest market share in Europe, and we are proud to represent the brand and succeed with it. We have been selling cars for over 35 years and have sold more than 80,000 trucks in the market. Looking to the future, Fuso has been leading the development to make urban trucks 100% electric, and we have been participating in this project. At present, we are testing 10 vehicles as a part of Fuso’s global project, which is testing cars in New York, London, Amsterdam, Berlin, and Tokyo. The electrification of urban trucks has huge potential to have an impact on cities.
Was the Lisbon city hall looking for an electric tender, or did you seek them out?
We wanted to test the vehicles, and the government was keen to participate in the project. The technology is still not being sold commercially but it is keen to participate and have these cars as soon as possible. It came onboard as soon as we explained what we wanted to do. The fact that this leading technology for trucks in Fuso is being produced in Portugal is also relevant for all parties involved in the project.
What are your priorities for the coming year?
Our market has now come back to pre-crisis levels, and we are mature in Portuguese terms. We are optimistic for 2019, but are aware that it will not be significantly different than 2018. Within our portfolio, we see several opportunities to consolidate and grow our business, and that is what we will be focusing on in the coming year. ✖
By leading the push to make trucks 100% electric, Mitsubishi is securing its place in Portugal and Europe’s most popular categories.
Mitsubishi and Fuso profit for last year was EUR230 million
BIOFrancisco Geraldes began his career at Ford Lusitânia in 1995 as a director of marketing and communication. In 1999, he became managing director of Chrysler, Jeep, and Dodge at Chry Portugal SA and in 2011 was appointed managing director for Isuzu & Jeep at Imotors SA/Chry Portugal SA. He has been managing director of Mitsubishi Motors Portugal & Fuso Portugal and an administrator at Mitsubishi Bergé Portugal since 2015.
Since joining the European Space Agency in 2000, Portugal has not looked back.
How does AED Portugal provide a platform that facilitates networking between the strategic industries of aeronautics, aerospace, and defense?
JOSÉ CORDEIRO One of the most important factors was being a founding member of the European Aerospace Cluster Partnership (EACP). We also signed MoUs with other European clusters in Hamburg, Bavaria, Seville, Galicia, and Toulouse, among other relevant players. It is essential for us to attend main events around Europe.
JOÃO ROMANA We set out together with local clusters to support our networking efforts. At the recent ILA Berlin event, we planned B2B meetings beforehand, including a networking agenda among the Portuguese and German clusters. Such efforts apply to aeronautics, space, and defense. Joining the European Space Agency in 2000 gave Portugal a gateway to the industry. Back in 2000, there were less than 10 active companies in space, but in the last 10 years things have totally changed, and national investments in science in the last 20 years are now paying off. In defense, Portugal also has a long tradition of building capability in cooperation with NATO. In the scope of the European Research and Innovation Programs (FP6, FP7, H2020), Portugal has a record of
significant achievements in aeronautics (Clean Sky), space, and ICT. As a consequence, we now have companies that are world leaders in satellite ground control systems, providing most of the control systems for the global geostationary satellite market. It has been a remarkable progress. In aeronautics, similar progress took place, only faster and with a stronger economic impact. In fact, in 10 years Portugal has grown from a young MRO player to a mature medium-size supplier of most of the existent OEMs in the world market. The key push factor for the aeronautics boom was the decision of Embraer to install two facilities in the south of Portugal back in 2006. Everything has changed in the last 10 years, with many international aeronautic companies moving to Évora from Brazil, France, Spain, UK, and elsewhere. This exponential growth has left behind many gaps, which we are currently mapping. Training, the certification of SMEs, better supply chain structure, and a need for clustering industry for sizeable contracts, are several that have been identified.
What value addition is needed to accelerate the process going forward?
JR Presently the number of highly educated PhD students working in industry is residual (less than 5%), which tells us there is still a long way to go in terms of innova-
tion and knowledge transfer in the industry. We are also in the early stages of the process of bringing players together for increasing critical mass and addressing larger contracts. Technologically, the potential is high, with research centers and industry developing beyond the state of the art. Such centers are interesting enough to attract a wave of young professionals to the field.
JC The facts speak clearly: there are over 26,000 PhD students in our university, only 700 of which work in industry; we still have a long way to go.
What have been the most successful initiatives to raise the overall visibility of Portugal’s aerospace sector and promote its internationalization?
JR We have recently raised funds for 2020 from national and European programs to develop a strategy for 2022, build the respective action plan, and fund internationalization activities around the world. These add to the cluster’s membership fees. As a result of this combined funding we can now address Europe as well as Canada and the US. It goes without saying, these activities keep us extremely busy and keep our momentum going.
JC We also have also set up strategic objectives for the next seven years. The first is to double the present share of the Portuguese GDP to 3%. Another is to promote Portugal as an innovative destination and become a main player in these areas. This means we must participate in large events around the world and broadcast the competitiveness of Portugal among companies that seek to invest.
What spillover effects in other high-tech sectors does the AED cluster have? How does this contribute to the overall competitiveness of Portugal’s economy?
JR That is definitely happening. We see more mature industries, such as the automotive cluster, which is increasingly interested in joining the aeronautic and aerospace sectors. We also receive many IT, metallurgic, and automotive companies looking for opportunities in aerospace. The Portuguese metallurgical industry has a contribution of about 30% to our GDP, meaning there is huge potential out there, especially for hard metals, machining, and tooling. The qualifications and certification are a huge barrier to new comers, given that other sectors are less stringent than aeronautics. This is something that needs to be further paved in the future. ✖
Altran entered Portugal through an acquisition of four companies, based on its aggressive, growthbased strategy to invest. Intrigued by Portugal’s environment, we began a strategy of convergence and merged all the companies in 2005. It stayed like that until 2009, when Altran in Portugal established a consolidated brand, and I assumed the role of CEO. In terms of our evolution in the market, we have grown fourfold in the last couple of years. We did this time by investing and diversifying in several sectors. For example, we invested heavily in the telecoms engineering field. At present, Altran is recognized as a leading company that has partnered with different vendors and telecoms operators. Our success allowed us to create a good footprint in the financial sector and public administration, with specific solutions customized to our clients’ requests. When we talk about the local market, telecoms, media, financial services, and public administration are the chief sectors in which we are present. Our second major boost came from our pioneering of the group, starting with a near-shore initiative that began in 2013. We innovated because we started proactively working with some of our colleagues in other countries and delocalizing some projects. Our colleagues sell the projects in each country, and depending on the client requirements and maturity to localize, we distribute the work between the engineering processes and on-site and off-site activities. We were one of the first entities in the group to push this traction. As a result, we have nearly 700 engineering consultants dedicated to our international projects, and in Portugal the company has more than 1,850 consulting engineers. The company has almost 2,000 employees after taking into account the management and support functions; we have 700 employees in our global engineering center and 1,150 people in the local market.
Altran Portugal has university ties with Universidade NOVA de Lisboa’s “Big Data Academy.” What is this, and have you any other similar projects in the pipeline? We have a relationship with polytechnic universities and academia in general. When we entered the world of complex solutions and pioneered that domain, we saw it was critical to push the integration between the industry and academic ecosystem. More than recruiting recent graduates, we need to improve the process and cooperate with universities and polytechnics to customize the content to ease the integration of students into the professional world. With that in mind, we set up our internal academy, co-designed academies with universities and polytechnics, and worked with Universidade NOVA de Lisboa in the domain of complex analytics. We are also working with two polytechnics, Instituto Politécnico de Castelo Branco and Politécnico da Guarda, on designing content around software testing. The target is to customize tailor-made content together with industry players to allow students to enter the professional ecosystem at an early stage. Recently, we co-designed a telecom engineering course with Politécnico de Castelo Branco that consists of 1.5 years of theory and six months in the company. The world is innovating fast, and in order to help the unemployed population keep up with the changing world, we are co-developing a nine-month IEFE training program with the Institute of Employment and Professional Training. In the future, more companies will require skills rather than a degree. Of course, there needs to be a mix of certified skills while retaining the title of specialized professional. That is why we have been pushing for different formats, the first being training academies, since they complement subskills from different ecosystems. Despite all our initiatives over the years, we want to do more and build on levels of certified professionals. ✖
With a bachelor’s in computer science engineering from the faculty of Science and Technology at the New University of Lisbon, Reis holds an MBA from the AESE School of Management and Business. Beginning her pre-sales career at Xerox, in 1996 she joined a small group of entrepreneurs and founded Global NSA, launching activities in Portugal and Brazil focused on decision support systems. At the end of 1998, the company was acquired by the Altran Group. Reis is now CEO of Altran Portugal, integrating a working group that consolidates and develops the group’s strategic offerings in Portugal. In 2018, Altran Portugal celebrates its 20th anniversary, and has 1,800 employees and offices in Porto, Lisbon, and Fundão.
As specific skills grow more important than academic degrees, firms like Altran are leading the market in developing cutting edge educational programs for youth and employees alike.
Universidade NOVA de Lisboa’s “Big Data Academy” collaboration
Investing in the interior of the country with the new Global Engineering Center
Can you tell us about the operations of Powershield and the services you provide?
Powershield currently has two business units: human and electronic security. Today, almost 70% of our business is human security and 30% electronic. We want to balance that to make it more even because the human resources in Portugal for such work is difficult. There are no qualified people because the wages are extremely low. We have 1,100 employees in Portugal, including continental Portugal and Madeira, after four years of operations. Electronics are not just the future, but are omnipresent, and our clients demand this from us because we are mainly in the sector of distribution such as supermarkets. Everything will be automated, and because of that, we seek to do something different and put in more automation ourselves.
What sets Powershield apart from its competitors?
Because of our experience in Charon, a company with almost 2,500 employees, I saw that big companies do not work because processes are extremely slow, while companies like Powershield speak directly to clients to provide quick solutions. We have nine people in the structure and are extremely focused on the needs of our clients. Our response time is extremely short.
Francisco Tomás MANAGING DIRECTOR, SANT’ANNA TILES
The company got started in 1741 as a small pottery factory in Lisbon producing bricks and rooftops. With the earthquake of Lisbon in 1755, the demand for decorative tiles grew significantly due to the rebuilding of the city. At the end of the 18th century, we decided to follow the market and started producing glazed and decorative tiles and have not looked back ever since. We have always tried to achieve the highest artistic value in our products regarding drawings and techniques. Since the beginning of the last century, we have been investing in another countries. By 1920, we had sales agents in Angola, Brazil, New York, LA, and London.
Where do you export to?
We will close 2018 with exports at nearly 85%. Our main market is the US; half of our exports have gone to the US since the 1950s and 1960s. We had a fire in the factory in 1971, followed by the Portuguese revolution in 1974. Those were tough times for the factory, and some customers in the US offered us funds to help us keep the factory working.
Vasco Pimenta CEO, SPIN.WORKSWhat have been some important milestones of the company?
Gilberto Costa da Luz GENERAL MANAGER, TEXCOAT
What have been the company’s key achievements in Portugal?
The company was established in 2009 based on the expertise my partners and I had acquired in the construction market. In the last 10 years, TexCoat has focused on a specific niche, namely small construction projects and rehabilitation. The construction market no longer grows at the pace or volume it used to, and several large construction companies closed down, while many small companies established themselves in the market. This made us direct our business toward rehabilitation, and today we have a vast portfolio of clients. There is a great deal of work in the rehabilitation space. We increased our employees from 30 to 120 and cover the entire national territory and islands, not to mention Venezuela and Oman.
How do you see the market right now?
Our work has been based out of Portugal, and our contacts come to us. Our company structure is not rigid or hierarchical, which differentiates us. We do not have representatives abroad but respond to all enquiries. Business here is speeding up, which has prevented us from forming partnerships in other countries. Our main partners today are medium-sized enterprises, and we are focused on the area of rehabilitating buildings, offices, and stores.
The company was founded by six graduates from the aerospace engineering department at Lisbon Technical University who wanted to tackle problems across a variety of specialties. We had control, software, and structural engineering and a small team that could oversee complex problems. We secured a contract to manage the entire supply chain of a fairly complex project, which enabled us to demonstrate that we could deliver complex products. We started by getting involved in small technology development contracts focused on traditional European Space Agency applications for scientific missions and observations satellites. Recently there has been an important transformation in terms of space activities. Start-ups are building small rockets that significantly bring down the costs of sending things into space, and smaller companies can now integrate small satellites and do something meaningful with significantly less expensive technology.
How is your Infante space industry project coming along?
We are working with a group of construction companies in Portugal to build a complete micro satellite. We chose to develop an optical sensor, a small telescope. There is an emphasis on it being a compact and inexpensive instrument, since the satellite is small, and it will piggyback onto a larger mission.
What have been Salmon’s biggest achievements over the years?
It was set up in 1944 to import luxury goods such as portable radios, costume jewelry, and nylon stockings. It was just a small office in Lisbon, but over the years the company grew considerably and rode the wave of industrial growth in Portugal in the 1960s and pre-revolution 1970s. Since then, we have acquired a few companies and entered into joint ventures; currently, we only have two joint ventures, with OMYA and ASK Chemicals. We have been recovering steadily since 2011, our worst year, having grown 250%. We have hired more salespeople and are acquiring a certain position in sectors where our presence had diminished.
How have the company’s two joint ventures evolved?
We originally did water treatment and foundries with ASK, but today the focus is only on foundries. Salmon supplies all the services to ASK in terms of accounting, logistics, and staff. Its success predominately depends on the health of the automotive industry. With OMYA, our JV OMYA Mineral Portuguesa (OMP) focuses on two sectors: coatings/construction and plastics. In those two sectors, we cover around 85% of the market demand for ground calcium carbonate powder and have an extremely strong position in Portugal.
Julio Pascual GENERAL MANAGER, IMPERIAL TOBACCO PORTUGALHow would you assess the group’s recent performance?
Imperial Brands has five main lines of business, and Imperial Tobacco is one of them. Others include Premium Cigars, New Generation Products, and Logista. Imperial Brands owns 51% of Logista, a listed company in Spain. In Portugal, Logista distributes tobacco products from main manufacturers, and the company is managed independently from Imperial Tobacco. Regarding our group’s premium cigar business, Empor is the company in charge of running the business in Portugal. It is consistently innovating with high-quality products and leading the attractive segment of premium cigars.
How do tobacco giants like Imperial Tobacco successfully operate in a world newly conscious about health?
Quoting our CEO Alison Cooper, the product we sell may be controversial, but the way we do business is not. We are extremely compliant, and our code of conduct is very demanding. Tobacco is on most regulators’ radars, but never forget the eternal tension between health and finance departments. Our sector is one of the major contributors to the economies of the countries in which we operate. In Portugal, tax collection from the tobacco sector, excluding VAT, is EUR1.4 billion, seven times more than tax collected from alcohol.
A Via Verde toll gate on a highway in Aveiro. The system allows transit through highway tolls without the need to stop at a booth.
n recent years, Portugal has been in the spotlight as it aims to position itself as a premier IT hub in the EU. The government is deeply committed to investing in and supporting the sector, as was confirmed in our interview with Manuel Heitor, Minister of Science, Technology and Higher Education. “By 2030, approximately nine out of 10 citizens will be frequent users of the internet, and Portugal will increase the number IT experts in companies by 50%,” he told us.
And while Portugal has lofty ambitions, there is still much to do to promote innovation—according to one report, only 1% of companies have raised significant capital (more than EUR5 million) to fund technological development. Elsewhere, over 30% of job listings for computer engineers go unfilled for upward of two months, suggesting the pace of development in the sector is unmatched by the number of new tech graduates entering the workforce. It signals increasing competition for talent as the number of tech start-ups, as well as multinational companies, swells in Portugal. This reality is, however, likely to drive up wages, making the country more appealing to foreign workers.
A number of the interviewees we spoke to for this chapter also informed us that multinationals, taking advantage of Portugal’s small size, often run pilots across the country to test new technological developments, helping to create an innovative ecosystem and positioning the country as a technological testing ground. Events such as the Web Summit, which Portugal is set to host until 2028, have helped to create a colorful, vibrant atmosphere in Lisbon and beyond.
Innovative projects of late include an ATM network known as Multibanco, which increases access to financial and public services through machines nationwide, as well as a payment system known as Via Verde that allows transit through highway tolls without the need to stop at a booth—the system currently makes half a million transactions per day.
The global panorama of start-ups and international events continues to be colorful, thanks in no small part to conferences like Web Summit. Innovations from firms like Multibanco, as well as the fact that pre-paid mobile plans were first developed and introduced in Portugal, suggesting the country is likely to continue being a hotbed for new innovations for decades to come. ✖
Massive investments in specialized higher education, particularly in STEM, are making Portugal far more competitive in advanced economic categories across Europe.
What have been the main highlights and achievements of your mandate to date?
BIO
Manuel Heitor has been Minister of Science, Technology & Higher Education of Portugal since 2015. From 2005-2011, he served as Secretary of State for Science, Technology and Higher Education. He is a full-time professor at IST, the engineering school of the University of Lisbon, and founder and Director of IST’s Center for Innovation, Technology and Policy Research. In 2011-12, he was a visiting scholar at Harvard. He earned a PhD at Imperial College, London, in combustion research and did his post-doctoral training at the University of California San Diego.
There has been an effective process of European convergence since 2016. Our notable accomplishments include growing the budget allocation for public higher education institutions by 10% between 2016 and 2019 from EUR1.002 billion to EUR1.105 billion, with the total number of students growing by 5% between 2015 and 2018, from 356,000 to 373,000 in the public and private sectors. The number of students enrolled for the first time in public and private higher education institutions grew from around 87,000 in 2014/15 to more than 103,000 in 2018/19, including more than 9,000 students in short vocational cycles. In parallel with the implementation of the Study and Research in Portugal program, the number of foreign students increased by 48% from 2014-2015, representing about 50,000 students and 13% of those enrolled. Funding for the Science and Technology Foundation (FCT) increased by 24%, from EUR490 million in 2016 to EUR621 million in 2019. The number of new PhD grants supported annually has grown from 971 in 2015 to over 1,600 in 2018/2019, in parallel with the implementation of the Scientific Employment Stimulus Program, which includes the execution of at least 5,000 more doctoral researchers’ contracts until the end of the legislature. As well, the number of social scholarships in higher education has grown from around 64,000 in 2014/15 to more than 80,000 in 2018/19.
How do you see Portugal’s regional and global leadership in the IT start-up culture?
National short, medium, and long-term strategies for the development of digital skills were set out through the National Digital Skills Initiative, so that by 2030, approximately nine out of 10 citizens are frequent users of the internet. We also increased the number of IT experts in companies by 50%. These strategies include, among other aspects, providing support to creative communities in the area of inclusion and close interaction with the local and regional administrations; supporting teachers in the progressive and systematic modernization of the education system working closely with the Minis-
ter of Education and related central and regional administrations; establishing regional networks of qualification and digital specialization, namely through partnerships between polytechnics, local administration, and companies in West-Leiria, Cavado and Ave, Nordeste Transmontano-Bragança, Castelo Branco, and Setúbal-Palmela; the establishment of a national AI strategy, with the specific involvement of the public administration, R&D centers, and companies; and the development of advanced forms of computing, including the creation of the Minho Advanced Computing Center (MACC).
What is the balance between the private and public higher education sectors?
The number of doctoral researchers in companies conducting R&D activities benefiting from fiscal support has increased by 30% since 2015 and by more than 10% between 2016 and 2017, showing a clear fiscal policy in support of R&D and innovation. The number of R&D companies benefiting from financial assistance to hire doctoral researchers has increased by 37% since 2015, including some 290 companies in 2017. The hiring of researchers by companies grew by 11% between 2016 and 2017, while the number of researchers in the active population grew to 8.5% in 2017 compared to 8% in 2016 and 7.4% in 2015. The number of full-time researchers in higher education has grown by 9.5% since 2015. In addition, the territorial densification and institutional diversification associated with a polytechnic’s valorization and modernization strategy, as well as an innovation strategy and to support the growth of more and better jobs, included the creation of 21 new collaborative laboratories in 2018 under the scope of the Interface Program, after an international evaluation and collaboration between companies, R&D units, and higher education institutions. This includes a five-year public investment of around EUR50 million aimed at stimulating economic and social development in all areas of knowledge, from agricultural production to digital transformation of industry, and including critical sectors such as cement, production food, space, or forests, considering critical technologies such as AI. ✖
The world is more connected than ever before and the pace of change is bewildering. We deliver the best combination of technology and services to enable our clients to ful l the diverse needs of their customers. By fostering a deeply human and personal relationship with our clients, we want to improve the lives of people and organizations.
To what extent can ICT boost the competitiveness and modernization of the Portuguese economy?
The IT and ICT sectors are revolutionizing and disrupting every industry. The question is not if ICT will disrupt business, but when and how much it will change some particulars of the market. For example, in the last seven to eight years the media and entertainment sector in Portugal lost 40% of its advertising revenues. Digitization is basically a revolution; if we talk solely about technology-related transformations, we have had the agricultural, industrial, and now digital revolution. The difference is that the digital revolution transforms business and society in a much shorter timeframe than previous revolutions, which took hundreds of years. The first part of the digital revolution was the appearance of computers that could take over support functions for businesses. However, the real revolution started in the last 20 years when businesses were completely transformed due to the exponential growth of several variables brought about since 1958. If we applied this same rate of exponential technology growth to, for example, the automotive industry, a car that could travel at a maximum of 60mph in 1958 would reach Mars in a matter of seconds today. Things that were impossible 20 or 30 years ago are now easy as a result of the computing power to do them.
What impact did opening up APDC’s membership to other sectors of the economy beyond media and technology companies have on its membership base and activities?
APDC could not close itself off from other sectors because IT and communications technology is transforming these areas as well. It is extremely important for other players and sectors to talk with us. In addition, most of our members’ clients are in other sectors, not just in ICT and media.
The response we have had is extremely interesting. At our last congress in 2017, half the delegates and companies were from our sector while the other half were from others. This is a huge transformation for us. Now, we plan to give associate status to companies in other sectors that want to network with our members.
What is the importance and objectives of APDC’s annual Digital Business Congress?
This is an annual event with around 2,000 participants, typically high-level decision makers from a range of sectors. It is a crucial event where we discuss and review trends and the scope of the transformation taking place because of IT. We also have an exposition part to the conference where companies have a presence, including IT and ICT start-ups. We have an entrepreneurship chapter within APDC as a channel for communicating with these startups. In turn, start-ups use such events to look for investors and to keep up with developments in their field. They also look to APDC as a connection to corporations through specialized events.
Can you tell us more about APDC’s initiatives to help people compete in this new digital environment?
Skills are critical for this new environment, especially digital skills, which is why we are cooperating with the Portuguese government on its National Digital Competences Initiative (INCoDe.2030). This is a government program to empower Portugal with more IT knowledge and capacity across the entire population. The challenge for Portugal is not so much on the offer of IT services, since we already have a great network and many IT services; the problem is that usage is still low. Only around 60% of Portuguese people use the internet daily, and 26% do not use the internet at all. This 26% either lack the necessary IT skills or
money to buy basic IT equipment. In the case of skills, we have to rectify this limitation to ensure we not only have enough trained personnel in the country for IT-related jobs, but also for the population at large. I am currently the Chairman of the Forum for INCoDe.2030. Our mission is to create instruments for evaluation and give visibility to this initiative on an annual basis. We held the first conference in 2017 when it was launched to publicize the program and explain its aims. Each year the forum analyzes what INCoDe.2030 has achieved that year. The program also has an Executive Coordinator appointed by the Minister of Science. Regarding APDC’s Digital Academy, our associates needed a mechanism to train their own people, and in 2017 we prepared the courses and are now starting to sell them. These include short crash courses for executives who want to understand concepts like artificial intelligence. The other courses are for training company personnel. These programs are more structured and last around 600 hours. ✖
Rogério Carapuça has been President of APDC since January 2013 and is an administrator of several companies in the Novabase group. His professional career has always been linked to ICT. He was an assistant and professor at IST from 1981 to 1994. At Novabase, he was an administrator since 1994, Chairman of the Board of Directors between 1998 and 2015, and from 1998 to 2009 he accumulated the functions of Chairman of the Board and CEO. He has a degree in electrical engineering and a master’s and PhD in electrical and computer engineering from IST.
A key challenge going forward will be getting the 26% of Portuguese who do not use the internet connected to the digital world.
Bringing 4G to nearly the entirety of Portugal and boosting its operational KPIs, market share, and customer base, Altice entered 2019 with robust expectations.
What have been the main highlights since you were appointed as the company’s CEO?
1.5
Altice was known as PT before it was acquired in 2015. One of the most important things for us with the new team was to change the way we were communicating or being perceived in the market. We increased our levels of communication and recognition in the market since we are leaders in almost every segment of the industry. That was one of the key challenges we tackled, nine months after which our recognition and communication levels showed tremendous improvements. On a more business-related level, we faced continuing and new challenges. Since 2015, the company has invested heavily in infrastructure for fiber-optic deployment and mobile network enhancement, and continues to invest in infrastructure development.
With over 20 years of professional experience, Alexandre Fonseca has been CEO of Altice Portugal since 2017. He is also the Executive Manager for Altice Labs, the Portuguese-based technology research & development unit for Altice Group. He joined Altice in 2012, when the group entered Portugal. Previously, he was the CEO at ONI Portugal and ONI Mozambique, prior to which he was the CTO at Cabovisão. Between 1995 and 2007, he worked in the IT and telecommunications industries in senior management and management consulting positions for Coopers & Lybrant, PriceWaterhouseCoopers, and IBM. He holds a bachelor’s in computer science engineering from Lisbon University and a master's degree in sales and marketing management from TeamView Institute.
The mobile sector is being led by MEO with 7.9 million out of 10.3 million mobile customers. What is your strategy? Altice’s key strategy is to maintain a high ratio of investment in infrastructure because overall growth cannot be achieved unless we invest heavily in infrastructure development. Altice Portugal is the number-one investor with EUR1.2 billion invested over the last three fiscal years. It is due to our investments that our mobile network can cover 98.5% of the Portuguese population with 4G, a high number for European standards. Equally important, the same infrastructure enables 70% coverage for next generation 4G+ services; however, we want to be recognized not just for our investments in infrastructure but also for our high quality of service. To that end, we are enhancing customer experience and driving initiatives that allow people to have self-service and digital approaches to customer service interactions. In addition to that, our initiatives are focused on providing the best content, applications, and solutions for the B2B market; we aim to create a system that can be scaled for large enterprises and SMEs. Portugal’s business segment is largely comprised of small companies, so we cannot simply replicate a ser-
vice offered to a major Portuguese bank for a small accounting shop.
Altice is working with Huawei to make Portugal the European 5G leader. What can your customers expect from Altice in this regard?
We have divided the country into north and south and are working with Huawei in the south and Ericsson in the north. With both of them, we have established two individual programs, collectively named the Road to 5G. The project has a head start, as the current infrastructure covers 70% of the Portuguese population with 4G+, paving the path for an easy transition to 5G. We are now experimenting with technologies and CPEs with Huawei. Notably, we conducted the first live demo with live 5G equipment in 1H2018, and it was a huge success. The company is looking forward to the implementation of 5G on a national level. However, we are not as eager to implement 5G as regulators, governments, or technology manufacturers because we invested around EUR100 million in modernizing our mobile network in 2016 and first need to capitalize on that. We see 5G as a natural evolution that will come along in time and do not expect to have live commercial services before 2022. 5G is not about having more capacity—4G is sufficient for present demands— but about addressing a different set of challenges, such as density and the number of devices that can be connected within 1sqkm. I do not expect 5G to be massive for retail customers; it will be a good evolution for new sets of businesses that would incorporate the Internet of Things and Machine to Machine communication.
million TV customers in Portugal by July 2018
98.5% of the Portuguese population covered with 4G
Alexandre Fonseca CEO, ALTICE
“Overall growth cannot be achieved unless we invest heavily in infrastructure development.”
As one of the firm’s earliest European markets, Huawei’s growth has been symbiotic with Portugal’s digital transformation.
What are Huawei’s main operations and business lines in Portugal?
Portugal was one of the first countries for Huawei when it entered Europe. In 2005, we built Huawei’s first 3G mobile network in Europe, in Madeira. Afterward, we continued to support the telecom operators to build 4G & 4.5G and Fiber-To-The-Home networks, as well as submarine cables providing best-in-class telecommunications service to Portuguese consumers and enterprises. In the future, we will work on a connected intelligent world with three features: All Things Sensing (sensing the physical world, mapping it to digital signals); All Things Connected (all data will go online); All Things Intelligent (big data and AI will power our new applications, making all things intelligent). These advances will not be possible without leading ICT technologies, as ICT infrastructure will be the foundation of our future intelligent world. This is where Huawei seeks to add value.
Huawei will launch the MateBook series in Portugal. What are your expectations from the launch?
Traditionally, the laptop business is a ready sales business because there is already enough competition; however, when we entered this segment, we brought in many new ideas and innovations because Huawei is an expert in connectivity and the cloud. We have given the laptop business a new concept. The MateBook X is a powerful laptop that also has an elegant appearance and excellent features. It is extremely slim and has a long battery life, making it extremely convenient for business people.
Can you provide further details on Huawei’s project with Altice to deploy 5G networks in Portugal?
5G is a hot topic. Over the past few decades, we mainly sought to improve connectivity between people to people in the 2G, 3G, and 4G eras. With 5G, we are now extending that connectivity to machine to machine. This will bring significant changes in the way we live and work. 5G will bring ultra-high speed of up to 20Gbps, and its ultra-low latency will enable concepts such as autonomous driving. It will also allow us to connect millions of devices; however, it is important for the entire ecosystem to work together in creating a 5G environment. This includes telecom operators, solution
Chris Lu CEO, HUAWEI
providers like Huawei, and governmental entities like the Portuguese regulatory authority, ANACOM, as well as all different vertical and industries partners. Many enterprises will be able to combine their industry knowledge and data with ICT to reshape the way they produce and deliver their services. We are already working with our partners in Portugal and have launched the world’s first narrow-band IoT smart meter in the utilities segment. We are also working on smart water meters, smart parking, smart agriculture, smart waste management, and more. All these first require an extremely fast 5G-infrastructure network, as well as excellent collaboration in the whole ecosystem.
Are you partnering with Portuguese companies to develop your smart solutions?
Yes; for example, the world’s first narrow-band IoT smart meter is a design collaboration between Huawei and Janz, a Portuguese meter company that has many years of experience in the power meter field. Using Huawei’s IoT smart chip, meters can be connected to service providers like EDP. They can constantly transmit power usage data and detect any power failures; therefore, the service provider can manage the energy supply in the most efficient way. All this came from the innovation we did with our local partners. We have connectivity and cloud experts and, moving forward, need to work with partners that have expertise in other industries, such as utilities, manufacturing, transportation, tourism, and others. It requires a great deal of collaboration in the whole ecosystem to make these ideas work. For example, at the moment cities around the world are becoming smart and embracing a digital society to drive economic competitiveness and sustainability for the future. The digital platform will be the engine powering the smart city development by enabling the integration of big data, cloud, edge computing, AI, and IoT technologies, which are the foundation of a smart city. The development of a smart city, namely the integration of all these digital technologies that improves city governance and intelligence, could be a highly complex project. However, Huawei’s digital platform is highly efficient and open to facilitate collaboration with its Portuguese partner’s ecosystem, as it will be they who customize the ‘smart brain’ based on each city’s different development requirements. ✖
Top 10 European industrial R&D investors
180k employees globally
10% of revenues go to R&D
BIO
Chris Lu has been an executive manager at Huawei for 12 years. With a university background in management and economics and professional experience in global markets, he has deep insight into the ICT industry. He came to Europe in 2010 and worked at Huawei Germany and Huawei Netherlands before becoming the CEO of Huawei Portugal.
Portugal presents a unique range of opportunities for industrial giants to hone their skills, test out new technologies, and implement their broader 5G strategies on a smaller, more easily manageable scale.
Luis Miguel Silva CEO, ERICSSON PORTUGAL
DURING MY FIRST YEAR AS CEO, we adjusted our management and tried to create a strong, cohesive, and united team. We also made some changes to our governance model, focusing more on motivating our employees so they take pride in being part of a challenging project with a total focus on our clients through the quality service and innovation that Ericsson is known for. In terms of our efforts with Altice to bring 5G to Portugal, we have so far signed 42 MoUs with several operators worldwide for 5G development and tests. Of these, we have 11 in Europe, and Altice Labs, the innovation centre for Altice Group, is one of them. We have also partnered with Vodafone and launched the 5G Hub in June 2017. The lab undertakes R&D activities and has been conducting proof-of-concepts, trials, and demonstrations. One of the main goals of this collaboration is to jointly define the requirements and deployment scenarios for 5G wireless systems and a 5G-ready core based on a virtualized network architecture. At the end of 2017, in partnership with Altice in Aveiro and Vodafone in Lisbon, Ericsson demonstrated this technology in the country for the first time. The initiative brought all R&D knowledge into practice through real 5G infrastructure, use cases, development, and tests to network operators in Portugal, laying the foundation for the technology’s eventual deployment.
Paula Panarra COUNTRY MANAGER, MICROSOFT
MICROSOFT HAS BEEN PRESENT IN PORTUGAL FOR OVER 28 YEARS and has over 650 people working to live up to our goal of empowering every person and every organization on the planet to achieve more. With over 550 support engineers providing technical support, we operate one of seven worldwide technical support centers here. This is key to the business—assessing customer needs and providing agile solutions to answer them in the best way possible. Portugal was selected for its attractiveness long before it was popular to establish big tech companies in the country, and the path our clients and partners have taken through digital transformation processes is vital to this success. Tomorrow, every company will be an AI firm. This digital transformation journey cannot be an ad-hoc project, given the profound impact it has on organizations. But nor can decisions be a top-down affair. Nowadays, thinking about technology and innovation is inseparable from AI, which can also help optimize resources and internal process, better access companies’ needs, support data management, and help find new products that redefine an organization's business model. Microsoft's goal is to make AI accessible to and valuable for everyone by amplifying human capabilities. It is not a case of what technology can do for us, but what we can do with technology, which is why we infuse AI in everything we do to reinvent productivity and drive growth.
FOUNDED IN THE US IN 1911, IBM was the first among the information technology and communication companies to reach its centenary. In Portugal, IBM has just celebrated 80 years—eight decades of investing and innovating in the country. Portugal has unique conditions to attract investment and to be at the forefront of the current technological and digital transformation. For example, we can talk about our highly skilled professionals, the excellent IT and engineering educational training in our universities, the ease that our professionals have in speaking different languages, the high quality of technological infrastructure, or the competitive cost we have compared to certain central European countries. We have been investing in several centers in Portugal: the Infrastructure Outsourcing Delivery Center in Tagus Park, Oeiras, the Business Transformation Outsourcing Center in Braga, and the Application Management Services Center in Lisbon. And over the past five years, IBM has taken ambitious steps to reinforce its investment in Portugal through the creation of nearshoring service centers. At the Technological Innovation Center in Tomar, inaugurated in 2013, we employ around 350 people. As we registered a higher growth than initially expected, two years ago IBM inaugurated a complementary center, this time in Viseu. Both centers are mainly focused on the development of technological solutions in artificial intelligence, application maintenance services, banking, SAP, and IoT/smarter cities.
WITH AN IDEAL ECOSYSTEM FOR TECH COMPANIES, an economy that seems to be on the right track, and supportive policies adopted by the government, Portugal is trying to establish itself as a tech hub in southern Europe, luring many IT and ICT players. In 2016, Web Summit, Europe’s biggest tech event, relocated to Lisbon from its birthplace in Dublin. Lisbon competed with 20 other European cities to convince the event’s organizer that it was the right host.
According to the event’s organizers, Web Summit “gathers the founders and CEOs of technology companies, fast-growing startups, policymakers, and heads of state to ask a simple question: where to next?” As the event’s name suggests, technologies and services drawing on the internet are the main theme of the conference. Since its founding in 2010, speakers from pioneering tech companies have been among Web Summit’s regular attendees. Web Summit—sometimes referred to teasingly as Davos for geeks—has been hailed by the likes of Forbes and the New York Times as one of the leading technological gatherings on the planet. Indeed, the summit fills a real void: it gives some cohesion to a notoriously chaotic and fast-moving industry. Once a year, decision makers in the IT sector meet to figure out what is going on in the heads of their peers and make sure that everyone is on the same page. Those industry leaders and aspiring entrepreneurs who turn up for the conference each year have an excellent opportunity to build new connections across the sector, especially as the conference’s premises and pavilions are deliberately designed to foster interaction among attendees.
The Portuguese government played a key role in creating this opportunity by agreeing to pay EUR11 million to Web Summit each year—hardly a cumbersome investment given its estimated contribution of over EUR300 million a year to Portugal’s economy. There has been a notable increase in the number of participants since the event’s relocation. The company behind Web Summit has agreed to
keep it in Lisbon for at least 10 years, although the initial agreement was only for three editions, from 2016-2018.
Since 2016, Web Summit has brought to Lisbon the CEOs of some Fortune 500 companies as well as well-known figures from the world of politics: António Guterres, Secretary General of the United Nations and a native of the country, António Costa, Portugal’s serving Prime Minister, and Tony Blair, the former prime minister of the UK. However, figures from technological and scientific domains often cause greater excitement among the audience. The late Stephen Hawking’s surprise appearance in 2017—albeit via video conference—and his speech regarding the potentials and threats of artificial intelligence (AI) were most welcomed.
Aside from bringing politicians, IT giants, and scientific hotshots to Lisbon, Web Summit contributes to Portugal’s economy in quite a few ways; more often than not, international figures and angel investors attend it to speak to lesser-known attendees and size up their ideas beside delivering their speeches—an opportunity which Portuguese entrepreneurs and tech start-ups have been quick to capitalize on since 2016. Moreover, with over 2,000 journalists in attendance, Web Summit receives extensive coverage from elite media outlets such as the BBC and Euronews, which gives a chance for Portugal to promote its image as the host of such a rarified event.
The 2018 edition of Web Summit took place in Lisbon’s Altice Arena in early November. Among those in attendance were Microsoft’s Brad Smith, Booking.com’s Gillian Tans, and—rather alarmingly for those who remembered Hawking’s warning about the rise of AI from the previous year—Sophia The Robot from Hanson Robotics. Predictably, the conference had a smartphone app to keep Web Summit’s over 70,000 attendees and over 2,000 presenters informed about the agenda. The buzzwords of Web Summit 2018 included digital currencies, blockchain, and AI, concepts that also happen to be the focus of a number of Portuguese tech companies. ✖
Europe’s hottest annual tech conference has chosen to relocate from Dublin to Lisbon for the coming decade.Image: Paulo Magalhães
Can you please give us an overview of the evolution of Axians Portugal over the past two years, since the acquisition of the Novabase division?
We have recently finalized our integration in the group. Being part of VINCI world is more than just assimilating procedures, tools, systems, organization, or metrics; it is absorbing its culture, a culture of decentralized operations network with a great deal of autonomy in local business units, a culture which is extremely different from other large corporations that are much more centralized. VINCI is one of the 50 biggest companies in Europe, which means, we have operations in several areas, such as airports, highways, construction, concessions, and so on. Therefore, working in Axians under the VINCI Energies “umbrella” brings interesting synergies for ICT, as various opportunities can be addressed within the group. Our current step on this onboarding program is joining the VINCI innovation networks’. It’s been a smooth and very successful process. That said, in two years, we have won two innovation prizes at VINCI Energies so far. Actually, our integration in VINCI is such an accomplishment that we use to say that we have no longer employees but shareholders. VINCI has a program which transforms a typical employee into a shareholder and this is done by investing along with people. Thus, more than 60% of VINCI employees—almost 200,000 all over the world—are shareholders. 41% of Axians Portugal workers own VINCI’s shares already and we believe this figure will grow. We are an extremely strong group and we do have ambition to grow. Our main focus is the people who work with us and their well-being, though.
What does your portfolio of services and solutions include?
We go from on-premises ICT to the cloud and hybrid. We are also on top of the main hot topics like cybersecurity and privacy, Artificial Intelligence and bots, and have had several achievements in those areas, mainly in Banking and Insurance. We are also very strong in sectors like Public Administration, Education, Telco, Energy and so many others. In the Industry sector, for instance, we are working for fast improvement. In fact, we have started to invest a lot more in this field since last year.
VINCI Energies has plans to boost your presence abroad. In terms of internationalization, what are your plans?
We prefer to see international business in a different way: not as country A or country B, but in terms of the activities, solutions, and services that
By making its employees shareholders, Axians has a huge built-in advantage when competing around the world with a dedicated team.
Pedro Afonso CEO, AXIANS PORTUGAL & BOARD MEMBER, VINCI ENERGIES PORTUGAL
we can provide to customers. We always start with them: if we have three or four large customers, then, we can set up a local company to develop out of that. We do not see other countries or the world as a small village; we face each customer as a large country. In certain countries, we’ve started with some great clients, and after a while we have set up a company locally to develop that further. We supply services from Portugal to different cities remotely, such as Munich, Brussels and Luxembourg, among others.
What is the main challenge of doing business in Portugal?
The main challenge is to find skilled people. The market here is growing; at the same time, international opportunities are increasing as well. We should think about bringing excellent opportunities to Portugal, which to me is another huge challenge. I would like to introduce a concept— augmented productivity. When we do not have enough people available, we must “empower" the existing pool of talent with software, machines, bots and automation, to the end of having more efficient use of people's time and talents. Qualified people should focus on valuable activities and all those activities that can be automated should be automated then.
What are your main goals for 2019?
To seek talent inside and outside the company. This is truly an endless task. Overall, the future leaders, given the increasing pace of change in this DX economy, should focus on their moral intelligence, on top of their emotional and cognitive skills. Fostering solid values through education is the way to build relevant and long-lasting human relationships, for all that matters. For all other (minor) things, the market will dictate the path we shall take. ✖
41% of Axians Portugal employees are shareholders
BIO
With 20 years in leading roles, Pedro is currently leading and developing Axians in Portugal, Africa, and in some European and International Institutions. Board Member of VINCI Energies in Portugal, seats at the Axians South Committee. He is also member of the Strategic Council for the Digital Economy (CIP). Former student of Colégio Militar, he has an engineering degree in Computer Science, specialized in Computer Systems at Instituto Superior Técnico. He also has an Advanced Management Program from Universidade Católica Portuguesa and a degree in Entrepreneurship for Venture Capital and Design Thinking from Stanford University, California. He is a regular speaker at major conferences with an unique insight into Leadership, People, and Technology.
Since acquiring Aruba, HPE has seen double-digit growth in its networking area.
Carlos Leite MANAGING DIRECTOR, HEWLETT PACKARD ENTERPRISE (HPE) PORTUGAL
Can you give us a short overview of the evolution of HPE?
HPE is a new company, founded in 2015, as a result of a spin off, though we have the values and DNA of the “old” HP, with 75 years of innovative culture. The advantage of creating a separate company was that we’d accelerated our time-to-market and optimized our portfolio, from the edge to the cloud (including IT infrastructure, software, and services), which gave us the ability to focus on our value proposition of helping customers in their digital transformation journey. The company was well received by the market, and customer satisfaction is increasing in line with growth. We are in great shape, and I’m confident of a strong performance in the 2019 fiscal year.
What makes the local market unique, and which of HPE’s solutions generate the most sales in Portugal?
lio. We have the largest market share in servers and see growth there. We also see a great deal of growth coming from our Aruba acquisition, which creates double-digit growth in our networking area. In terms of storage, we are growing in the enterprise space. We have a solid presence in the SMB segment and are capturing market share with our new storage solutions. The growth in storage was also double-digit, while services also had strong results. Our strength with all of these offerings is the combination of our portfolio. We are only ones to have the edge-to-cloud strategy. Edge is everything that is not a data center, and with the Aruba acquisition, we have a strong portfolio. 75% of data does not go to the data center; it stays on the edge. We partner with Microsoft, ICP, and SIS to accomplish our AI products. We are dealing with extremely powerful IT solutions services.
BIO
As the General Director of Hewlett Packard Enterprise Portugal, Carlos Leite has been responsible for the Enterprise Group division since 2012. Previously, he held the position of commercial director of Mercado Empresarial. At HP since 2003, he has embraced the challenge of leading the server and storage business unit. His track record in sales management precedes his entry into HP, taking over the positions of sales and marketing director at Nexenter Portugal and Commercial Director at WorldCom. He has more than 25 years of experience in sales and management in multinationals in the IT field and has a degree in organization and company management.
Portugal is a mature country in terms of technology, and we have many early adopters. We can lead new initiatives because of our skilled workforce and disposition toward technologies. We have the right scale to be considered a country for pilots, because the costs are not that high if something goes wrong. So many companies are considering Portugal as a great location to create their competence and innovation centers. We started in the private space, though now the public sector is also open to investing. HPE offers IT solutions from the edge, to the cloud and the core, including servers, storage, and networking infrastructure, as well as software and services. We need to address solutions, because customers do not have the time or resources to assemble and maintain all their infrastructure. They want to receive easy-to-use packaged solutions that include hardware, software, and services, and that’s what we deliver. We keep our datacenter solutions sales strong and had a great double-digit growth in the edge area (i.e. everything that is not in the datacenter) since the reinforcement of our networking portfolio with the acquisition of the company Aruba.
How would you assess HPE’s financial performance in Portugal?
We are growing across our entire portfo-
What about the cloud? Are the Portuguese customers moving to public clouds?
Some customers will “stay” in their data centers due to the cost-benefit relationship. It is easy and secure to store data internally. For others, public clouds could be the best approach, such as with start-ups, new lines of business, or special projects. We see a multi-cloud environment in the future, both on private and public clouds that we call hybrid IT. Customers will have a different approach, with internal clouds with some automation and fast provisioning, as well as different public cloud providers. In fact, Portuguese customers are already approaching us to help them get a holistic view of all these clouds, independently of whether they are internal or external to the data center. They are also very interested in new ways of consuming IT, besides the public cloud. HPE is a pioneer in this area with its flexible capacity and GreenLake Solutions: we offer customers the possibility of a cloud like a consumption experience, but with the datacenter on the premises and the associated advantages of more control and security. Basically, we want to help customers to reduce risks and costs without lessening security. It is about increasing efficiency and access. ✖
Can you give us a brief synopsis of Accenture’s operations in Portugal?
We provide professional services from strategy and consulting to technology and intelligent operations, leveraging digital in all these areas. We work in the vast majority of the biggest national layers across every industry. We are 3,000 people with a strong focus on the local market, while leveraging the export opportunity of services to our international clients. In fact, Portugal has a unique position in terms of talent and competitiveness to explore global markets.
What is the significance of the Portuguese market for Accenture?
We are a mature but small market in terms of business size for Accenture globally, though strategically we are extremely important due to our increased global relevance, namely by exporting digital and technology services to our biggest clients worldwide. We also have a significant presence and penetration in the local market. The Portuguese economy is improving, and positive signs are helping our business growth. Therefore, Accenture has a unique opportunity to help organizations be more efficient and effective by addressing the digital paradigm. It is clear now that digital is a reality. Today, it is not possible to transform or create businesses without thinking in digital and technology from the get-go.
The company leads the strategy, consulting, digital, technology, and operations services market. How have you done this?
Our DNA is based on innovation and value creation. We incorporate digital into everything we do across the value chain to improve organizational performance. Transforming companies into digital and intelligent organizations is our focus. Accenture is a case study in its own digital transformation, having created new offerings, solutions, and services that became 60% of the global company’s business. During this process, our market cap increased by more than 10 times.
Aside from providing analytical software and consulting services, what other industries are you planning to target in the near future?
Our strategy in this market is to work within the biggest organizations in Portugal, providing an end-to-end service, from strategy and consulting to technology and operations, always leveraging digital. Today, we are working with 70% of PSI20 companies. Though we have good opportunities to continue growing in banking, retail, and transportation, we have also a strong competitive position in the communications and energy industries.
You are partnering with Microsoft for the ‘Building the Future’ summit in Lisbon. How important is this?
Today, Portugal is at the forefront of innovation and the start-up ecosystem. Web Summit will be in Lisbon for the next 10 years, and that’s a very good example of how innovation is ballooning across Portuguese organizations. Thus, having a good ecosystem of start-ups and digital native enterprises with a good entrepreneurial skill set can make an important difference to start incubating businesses from Portugal. These are intelligent organizations that think globally for international markets but are based in Portugal and powered by Portuguese talent.
Why were you chosen as the top employer in Portugal for the third year in a row?
It’s a strategic priority to be a company of the best talent. The culture of meritocracy we have attracts many talented people. Additionally, an increasing amount of people want to be a part of something with a sense of social purpose. Working at Accenture means you want to make the change happen and actively contribute to improve the way the world works and lives. We also have been named the top company on the Thomson Reuters Diversity & Inclusion Index, which recognizes the 100 most diverse and inclusive companies in the world. Diversity is a source of innovation, creativity, and competitive advantage and creates a workplace where everyone feels equally accepted with a real sense of belonging. ✖
BIO
The country managing director of Accenture Portugal, José Gonçalves was previously responsible for utilities in Portugal. He graduated in systems engineering from the University do Minho, and has several certifications in management, logistics, and technology. He joined Accenture in 1994 and has more than 15 years of experience in the oil and gas and utilities industries. Throughout his career, he has led several complex consulting and information technology processes focusing on business transformation, organizational design, process reengineering, and IT implementation.
Though small, the Portuguese market for exporting digital and technology services to some of the firm’s largest global clients is only growing.
“Our DNA is based on innovation and value creation.”
70% of the PSI20 companies are clients
Leaders in the digital transformation space
A culture of meritocracyAntónio Neto CEO, CYCLOID
Can you give us a brief synopsis of the company and its operations in Portugal?
The company was established in 2005 as part of the Telcabo Group, a network deployment company for infrastructure for telecoms operators, focusing on IT solutions with software integration. Six years ago, I was invited to be a board member of a group with operations in different countries such as Angola, Spain, Namibia, and Ireland. At the time, Cycloid was still a small software company working for Telcabo. When I left the group at the end of 2014, I acquired Cycloid, as it was a company I knew well. I poured all my dedication and enthusiasm into it. We only had five to eight employees, and today we have grown significantly and have achieved the extremely important goals we laid out beforehand.
What business areas is Cycloid developing in the market?
Our core is a mix of telecoms and IT. Telecoms need to be 99.9% reliable, which is in our DNA. We are shifting from a time where data was not interconnected to a present where all data is in real time. That is where we bring this spirit from telecom to the IT world. Our mission today is to have a smart, ultra-connected world.
Bruno Mota CEO & FOUNDER, BOLD INTERNATIONALHow do you help your clients plan, design, and evaluate the best IT solutions for their organizations?
We always try to be as close as we can to the client and understand their reality as much as we possibly can. We give them the best solution that fits whatever challenges they are facing. We then put our best technology people to work alongside the client and try to solve what needs to be solved. We then propose either a business or technology plan along with our vision regarding the solution. Today, we have been approached by many clients and have a wide variety of services. A growing number of clients come to us with challenges they do not know how to solve.
Is Portugal’s ICT sector being internationalized?
We have a strategy for internationalization. Our teams work from our offices or directly onsite in countries across Europe and elsewhere, such as North America. That is the reality of our nearshore business unit. We have growing numbers of clients mainly based in Europe and North America looking for a partner that can help them deliver their IT projects successfully, be it by working directly at their offices or, increasingly, through our offices as a nearshore partner.
Fernando Reino da Costa MANAGING PARTNER & PRESIDENT, UNIPARTNER IT SERVICES S.A.
How can technology services help organizations overcome business challenges?
Miguel Pina Martins FOUNDER & CEO, SCIENCE4YOU
How did Science4You begin?
Science4You started as my final degree project when I was in university, and 2018 marks 10 years for the company. I began in partnership with the faculty of sciences at my university, which helped me build a business plan. Then I started to raise money and in the first year alone managed to raise USD50,000. We made USD20 million in sales in 2017. In the last 10 years, we have found the right balance between education and fun: we have kept children entertained, and they are having fun whilst learning.
How important is it for children to play with tangible toys instead of video games or watch television?
Tangible toys are important, though video games are important as well. However, there are many capacities that are not learned in front of a screen. Creativity is something that is built away from a screen, as are creating relationships with parents and society and developing leadership skills. That is something we want to develop in children. We create different projects and experiments that the entire family can play. It is a toy that enables children to pass the time with their family and learn with a hands-on and experimental approach.
In the last few years we have seen the digital world evolve. Indeed, the digital transformation came with a clear message that technology is at the heart of today’s business innovation and customer interaction. The major reason is because technology is now, more than ever, widely available due to the cloud and mobility. And the biggest cloud providers, like Microsoft, are delivering major innovations that are easier and faster to implement. In this dynamic context, the main challenge for most organizations is to lead their business and transform by taking advantage of these technological innovations and not be left behind. For that, they need to optimize and even transform their operations and innovate their products and service offerings. Unipartner helps organizations along this digital transformation journey. Our system integration and consulting services cover the design and build, support the operations, and demand for continuous innovation.
How would you describe the evolution of Opensoft since it was founded in 2001?
In the beginning, the company was mainly focused on the public sector and developing software for tax and public administration. Our first projects were related to the development of a tax administration portal and a project that would receive income statements from the entire Portuguese population. Until today, we have been working on these projects, among several others, in different areas such as financial services, education, and public services. As the company grew, we started to gain international experience from projects in Brazil, Sweden, and elsewhere. Soon after, we increased our focus on Portuguese-speaking countries in Africa. Opensoft has been growing steadily and at present has 70 employees.
What is your strategy to maintain steady growth?
We depend mainly on the Portuguese economy. Although fluctuation is a problem, we are adopting a niche proposition. We are not addressing the whole market but have a value proposition that targets companies that are usually stable and can pass through fluctuations without facing extreme problems. What differentiates us from our competitors is our expertise in developing a special type of business-critical application.
Zuzana Fabianová Janeiro CEO, WONDERCOM
What are some of your major recent achievements?
In 2018, we set out to grow by 10%. The biggest potential for market growth is the ICT market, an area where we cover communication infrastructure, collaboration and video infrastructure, security, data center and virtualization, software development, and system integration. We have interesting projects with all our clients and, undoubtedly, NOS and Vodafone are two of our most important clients. Similarly, we work with US-based Verizon and UK-based Colt to provide implementation and support to their clients in Portugal. We also provide specialized field service and consulting for manufacturers like Bosh, Chek Point, Cisco, Fortinet, Huawei, Schneider Electric and integrators like Axians, Glintt, Regra, and Thales and assist them with the implementation and maintenance of different systems across Portugal. Our field service consists of more than 600 internal and external professionals, and our team works across the country. We can carry out more than 200,000 requests for intervention every year across Europe.
Can you give us an overview of the history of Beta-i?
Can you tell us how Blue Screen was established in software and IT? The company was established in 2000 as a small firm with no outside investment. We began growing our client network based on development and implementing systems, growth that came from customer references without any commercial or marketing activities. We got attention from fairly large companies and multinationals. Naturally, we began with their subsidiaries in Portugal and word spread, so we started working for other countries, namely Spain, Italy, and Brazil. Soon our work in these southern countries started to gain the attention of northern countries. We introduced agile methodologies and technology, namely low-code, a huge factor in the digital transformation of companies, and gained the attention of a wider variety of customers in much larger companies than our own.
Carlos Vaz de Oliveira FOUNDER & MANAGING PARTNER, BLUE SCREEN
The UK has a way of doing business that is difficult for a Portuguese company or any European one to operate without being in the country. We know this from our own experience and from colleagues who created companies like ours. The Scandinavian countries are far more accepting and realize it is a great idea to have a development partner in Portugal.
Beta-i was created as a non-profit in 2009 during the crisis with the belief that Portugal, especially Lisbon, could become a major hub for innovation and startups. It was led by individuals with an international background. We have been supporting the development of tech start-ups here by doing capacity building for next generation entrepreneurs. We have also been attracting entrepreneurs from abroad through events and accelerators in order to create a community. After that, many start-ups started coming to Portugal. We also became a partner for big corporations involved in digital transformations. With startups at the European level, most are B2B or B2C, so partnering with corporations makes sense. When you create an ecosystem, it must have talent and a change in the culture. About 10 years ago, there was no real culture of entrepreneurship, but today there is. The biggest challenge is that many Portuguese lack an international mindset, which is natural because we are a small country. We also needed investment and thus created a venture capital company. We now have an EUR11-million fund and seek to be one of the first investors in early-stage start-ups in Portugal.
As a small, homogenous market dominated by two cities, technological and logistical advances are easy to implement in Portugal, making the country a unique and ideal incubator for many advances in the field.
What have been some of your key achievements in Portugal?
José Esfola MANAGING DIRECTOR, XEROX PORTUGAL
JOSÉ CORREIA In recent years, HP Portugal has had a positive performance. In 2018, we saw double-digit growth, repeating what we did in 2017. After the split of the company in 2015, we entered an intense innovation phase. Due to the separation, the company became much more focused on the core business, which allowed it to invest in more innovation. That has resulted in products that are well accepted by our customers, increasing our leadership position over the past two years. Considering that Portugal is passing through a positive economic cycle, the overall IT business, in particular the PC and printer business, are seeing considerable growth, and HP is taking advantage of that to the best of its abilities.
JOSÉ ESFOLA We got established here in 1965, and there have been many changes in terms of the way we operate and do business. We transitioned from the copy world to that of digital transformation. We are generally known as an innovative company and are ahead of other companies in the way we do business and interact with customers and partners. We have 120 employees at Xerox Portugal. We also have another entity here, a service center that serves more than 18 countries and has over 250 employees. The business we manage around services and hardware is worth close to EUR60 million. On top of our managed print services and graphic arts offers, we do digitization services and develop software and applications for banks and other institutions. We are heavily involved in the digital transformation.
What makes the Portuguese market unique?
JC In some ways, Portugal is unique, and being a small market gives us certain advantages. Moreover, everything happens faster here than in other mature markets.
In the 1990s, Portugal proved itself as an early adopter of technology, and since Portugal’s two biggest cities represent the majority of the population, we can put strong infrastructure in place that allows us to have one of the most advanced telecommunications networks in the world. All this has given us and other companies the chance to see Portugal as a profitable and manageable country in which to introduce new technology. We can easily manage certain aspects of the business here, simply because it is a smaller and homogeneous market. Our comparative performance is correlated with what you see globally. Remarkably, in 2018 HP was able to increase its market leadership for the overall PC business in Portugal, achieving the position of market leader for consumer business for the first time, something we had achieved long ago in the professional segment. Though we expect the PC consumer business to decrease by around 15% in 2018, our projected growth is more than 20% in this business segment. We are taking great advantage of our technology and position in the market, allowing us to lead in five of the six categories we operate in Portugal.
JE In Portugal, we are the market leader in our field—managed print services. Recent data from IDC shows that in color multifunction devices, we have around 40% of market share. We represent a solid operation in Portugal, moving from a direct business to an indirect model with less cost and a better service for our customers. We have exported a great deal of knowledge of this to other Xerox operations. In general, we have customers in every industry, and roughly 70% of our business is with SMEs. People think we only service major companies, but we work extensively with SMEs, which is why we have a huge market share. We do this through indirect channels. We may not have customers in every business area, but every company in the country uses something from Xerox. ✖
As the first banking software firm in the country, Asseco PST is at the forefront of Portugal’s digital revolution.
What are some key achievements and milestones for the company in Portugal?
Our first key milestone was that we were the first and only core banking software firm ever founded in Portugal. Another key achievement is that two years after our inception in 1988, we became an international firm. From the beginning, we have been focused on pursuing an active international expansion.
What are the main directions and areas of focus for the group’s R&D efforts?
There are a variety of focuses, including the Internet of Things, digitalization, AI, cybersecurity, and many other areas. Our aim is to continue working actively in these areas and continue our investment in order to capture the opportunities that arise as these technologies become more widely implemented.
How would you assess the company’s financial performance?
In Portugal, we have been doing extremely well for the past several years, and this is also true globally. If we were to dissect our latest turnover levels, we have to remember that even though Asseco PST is based in Portugal, more than 50% of its revenues come from overseas. Besides Portugal, we also have operations in Angola, Mozambique, Cape Verde, São Tomé and Príncipe, Namibia, Malta, and East Timor.
Which line of banking IT services generate the most revenue?
If you look at our entire portfolio, you see that we are an end-to-end provider for banks. Some of these banks have been with us for a long time, and we provide products and services that range from core banking systems to internet banking and mobile apps. Establishing and running the core banking systems is naturally an area of heavy investment, particularly because regulation has a
Daniel Araújo,large impact on this area, and there are constant changes occurring. Digital transformation projects have also become a very important part of our offer and a significant source of our company revenue.
What opportunities do you see in the IT sector in Portugal?
We have witnessed several changes in the Portuguese tech sector over the last five years. Big players have all moved into the country, which puts a huge demand on talent. The fact that the Portuguese economy is not producing as many software engineers as the market demands only increases this pressure. We were originally founded in Funchal, Madeira, and we still keep our main software development center there. We have around 150 employees in Funchal and approximately 200 in Lisbon. As far as opportunities are concerned, in Portugal, like in many other western European countries, there are many opportunities related to digital transformation projects. GDPR has also been a great opportunity this year. In the financial sector in particular, there will be opportunities in fields related to open banking and PSD2.
How would you evaluate the talent evolving through Asseco Academy?
You have to remember why we created the academy in the first place. This was focused more on the Portuguese-speaking markets we operate in rather than Portugal itself. While there is a shortage of qualified talent in Portugal, there is an ever-greater shortage in some of the other markets where we also operate. We decided to create the academy in order to engage with the sector as best we could in order to promote the available talent. This enabled us to help more people qualify so more opportunities could be developed. Overall, we consider this program to be an excellent success. ✖
350 employees in Portugal
BIO
As CEO of Asseco PST, an IT company specialized in the development of banking software and a benchmark in the creation of technological and knowledge solutions, Daniel Araújo has been leading the company since 2013, when it was still called EXICTOS. Born in Luanda, Angola, he holds a bachelor’s in computer and telecommunications engineering, a master’s in network and telecommunications engineering from the University of Pennsylvania, and an MBA from IESE Business School at the University of Navarra.
Though a mature economy in many regards, healthy government support and a broadly nimble environment make Portugal an excellent base for AI in the next two decades.
Rui Paiva GENERAL MANAGER, WEDO TECHNOLOGIESWEDO TECHNOLOGIES WAS FOUNDED IN 2001, and our first customer outside of Portugal was in Brazil. Today, 95% of our business is outside of Portugal. We have customers in around 20 countries and offices in 10. WeDo Technologies has 600 employees from 20 nationalities. We work mainly for the telecommunications market, and our customers are companies in this field. We have around 200 customers worldwide whom we work with to increase their revenues and fight fraud. While we also have customers outside the sector, most of our work is in telecoms. We have tested our software on other industry verticals, such as 7-Eleven, Best Buy, and Sberbank, and have been able to deliver highly successful projects with a strong return on investment. We wanted to prove that our software can be used in other markets, for which we already received market validation. Going forward, this can be a promising growth avenue.
António Miguel Ferreira MANAGING DIRECTOR, CLARANET
WE STARTED INVESTING IN OPENING DATA centers and building computer and storage platforms where our customers could host their applications and data. We were the first private internet service provider in Portugal back in 1995. Claranet entered the market by acquisition in 2005. We completely shifted our business toward IT services rather than telecommunications and are now one of the three largest IT service providers in Portugal. We now have a business worth around EUR100 million in revenue in Portugal alone, with 600 people, four data centers, and partners of the three hyperscale public cloud providers: Microsoft Azure, Amazon Web Services, and Google Cloud. Microsoft is a major and important partner for us, not just in cloud services, but also in more traditional IT services. We host data and applications for our customers and manage those platforms on their behalf. We are their IT service arm, and can host between our data centers on Azure, Amazon, or Google.
Ricardo Pires Silva EXECUTIVE DIRECTOR, SAS PORTUGAL
ON THE GLOBAL LEVEL, SAS HAS 14,000 EMPLOYEES in more than 100 countries. We are an analytics leader, and though it is a challenge for us to keep analytics popular, we have been doing this since 1976. Contrary to popular belief, SAS has been using AI for 40 years. Although there was not enough data or computer processing capacity to make it possible in the past, the algorithms we use today were mostly written four decades ago. A factor that continues to make SAS a great place to work is that it is still a private company. As a multinational, we do have pressures and quarters, but we are able to think long term without pressure from shareholders to obtain dividends. Therefore, SAS has been able to have the patience to wait for returns and freedom in decision-making. We grew our main operations in finance, banking, and insurance, the latter of which makes up half of our business. And when the democratization of analytics began, we started broadening our solutions to other markets.
Bernardo Correia COUNTRY MANAGER, GOOGLEGOOGLE HAS BEEN IN PORTUGAL FOR ALMOST 15 YEARS and has traditionally reflected the size of the Portuguese economy and the opportunities available. That said, we are proud of having expanding significantly in the recent past. Two important milestones in our journey in Portugal were the acquisition of Digisfer, a Portuguese startup incorporated through Google Street View, in 2015 and the launch of Atelier Digital, Google’s digital skills training program, which has now trained over 35,000 people in Portugal. The company’s milestone for summer 2018 was an international service center in Oeiras announced in conjunction with the Portuguese prime minister. Google looks at Portugal not just through the lens of the domestic market, but primarily as an international hub for talent and a service distribution center for Europe, the Middle East, and Africa. Some of our best brains in the field of AI originate from Portugal.
There is Grupo Impresa and there is SIC, the company’s most relevant part, thanks to the country’s thriving TV business. Impresa as a holding was launched 45 years ago in January 1973, but first started as a newspaper, Expresso, that began during the Portuguese dictatorship. At the time, it was a huge risk to use free speech, and there was a lot of censorship. Fortunately, a year later, Portugal became a democracy. In the 1980s, we were able to buy some magazines and became a publishing company in the 1990s. SIC was launched in 1992 and became the pioneer in its industry. Although it wasn’t launched as a start-up due to its large and expensive launch, it was a pioneering operation as the first privately held TV station in Portugal. We had to be disruptive in terms of the way we operated, and due to our efforts, the channel quickly became the leader in the market in terms of ratings and shares within four years. Although we lost our leading status after maintaining it for five to six years, we are still leaders in commercial targets: the most affluent families turn to our channel, which is extremely important because they possess the purchasing power that advertisers want to tap into.
What strategy do you have to refocus the business on audiovisual and digital segments?
We had a large publishing business up until the end of 2017. When I became CEO in March 2016, the strategic plan in place was ending; therefore, I decided to hire a consultant to help us develop a new plan. One thing we had always felt was that the publishing business in particular, in Europe, the US, and Australia, is difficult. We had 14 publishing titles, and decided to sell all of them except our original newspaper, Expresso, and a music magazine. We decided not to sell it because we wanted to capture the younger target market; however, we stopped printing it and converted it to an entirely digital publication. It was hard to sell off our titles because it meant losing 200 people and 12 products; however, we had to do it because the contribution of all these brands combined was insignificant to our EBITDA. Expresso is an oasis here in the publishing business; it has a 36% share of the advertising market in Portugal. It has the largest circulation in Portugal, although print sales are falling. We will not close the paper version, although
Though a media pioneer and first-comer in many aspects of Portuguese media, the group is managing to reinvent itself in order to stay relevant to national tastes.
our growth is focused on the digital version. We are well ahead of the rest of the market, selling 25,000 digital copies of the newspaper every week. We sell 86,000 of Expresso’s weekly publications.
Impresa closed 1H2018 with EUR2.5 million, 30 times higher than figures in 1H2017. To what would you attribute that success?
It has been over 20 months since the 2017-2019 strategic plan was put into place, and so far, it has produced tremendous results. Selling the publications was important, in addition to reducing our fixed costs. Similarly, we had some programming cuts due to shows that were not getting a good return on investment. We had no opportunity to increase the return because many of them were foreign programs, such as Brazilian telenovelas. They were successful in the past in our programming slots, but consumers habits have since evolved. Another reason was our increase in advertising revenue, which related to our performance and ratings. It also had to do with the World Cup in 2018 as we had some of the matches alongside RTP. We developed new entertainment and news shows around the World Cup, and advertisers were eager to work with us.
There are different challenges we face. For starters, we have competition from international players; given that the media landscape is now global, there is no level playing field because the rules that apply to established media players in the past don’t apply to Netflix, Google, or Facebook. Nonetheless, local quality content is something that we are investing in, not just in terms of telenovelas, but in news and other fiction. When we start developing fictional products, we are always thinking about how they can be exported abroad—stories with a global appeal. For Dubai, for example, we have to edit and need to make sure that certain content is adapted according to local preferences. We are doing it systematically rather than ad-hoc. Our main goal is to move into our new building, an historical milestone since it means SIC will be in the same building as Expresso, something that has never happened in the company’s 45 years of history. Our goal is to create synergies in different areas, improve operations, and boost creativity and motivation. ✖
years leading the sector 86k
Expresso newspapers sold every week
BIO
Francisco Pedro Balsemão has been CEO of Impresa, the largest media company in Portugal, since March 2016.
Prior to that, he was Impresa’s Executive Director and COO responsible for HR, legal affairs, and sustainability. He got his law degree from Universidade Nova de Lisboa and has a master’s in law from Oxford.
He also undertook a general course in management at the Nova School of Business and Economics and the Kellogg School of Management.
Beginning as an associate at Linklaters in 2003, he later became an HR consultant for Heidrick & Struggles in 2008, before joining Impresa in 2009 as Human Resources Director. He was also an assistant adviser to the Portuguese Mission to the UN.
Though print revenues are dropping in Portugal, as everywhere else, radio and TV are holding steady and digital is on a long upward tick, forcing firms to create better content by the week.
Pedro Duarte PRESIDENT, STRATEGIC COUNCIL FOR DIGITAL ECONOMY (SCDE)
MEMBERS OF THE SCDE ARE SOME OF THE most relevant global technology companies in Portugal today, many of which are excellent case studies in this new digital world. Some of them are start-ups that later became global in their activities. We also have academic members that focus on these issues from the University of Lisbon to others in Porto, Aveiro, and elsewhere. In general, we have a far more decentralized approach. For our work, it is crucial that SCDE has the perspective of someone with experience in the public sector. Their experience, feedback, and input are particularly useful for us. We are a diverse group with a great deal of different perspectives and approaches. At the end of the day, we all have the same objective, which is to make Portugal a more pro-digital country. In that sense, we aim to promote economic development in the country as well as a better social balance. When it comes to making the necessary changes, these can, and should be, made in Portugal. All partnerships are therefore relevant. The biggest challenge is to have a wider adoption of technology by the entire population working together. Research centers are extremely useful, as are associations with industry, to work more closely with people in the field. We need to be there and better linked with the structure of the real economy.
Victor Ribeiro PRESIDENT & CEO, GLOBAL MEDIA GROUP
OUR GROUP WENT THROUGH A turnaround in the past five years; when the management team and I entered in 2014, we were really driven by the need to either go up or go bust. We had no choice but to reinvent ourselves. We closed down certain unsuccessful publications and gave all our brands a digital identity by investing in that specific field. The results were fantastic, and we are pleased with the multi-brand strategy. Instead of having a single strong umbrella brand, we have a relatively anonymous umbrella with Global Media Group, but with extremely strong individual supporting brands. Web users could not care less about umbrella brands; they only want a great experience and the right content. We invested in brands, content, and distribution, and started doing basic things such as configuring our sites not only for PCs, but tablets and mobile phones, and improving the quality of our teams. After the turnaround, people accepted the new digital era because it is clearly all about producing excellent content. In general, the trick with digital transformation is doing it right. The monetization of digital is not going as desired. Print media revenue is falling, while digital and radio are only slightly growing. TV is also stagnating. Monetization is a tough business because we cannot compete with the largest social networks, but instead have to produce excellent content and attract a great deal of traffic.
Irene Mia GLOBAL EDITORIAL DIRECTOR, THOUGHT LEADERSHIP, ECONOMIST GROUPPORTUGAL HAS MADE IMPORTANT STRIDES IN terms of reinforcing its competitive fundamentals while also putting its house in order from a macroeconomic point of view. The economy’s return to growth has boosted market opportunities, while structural reforms have improved the efficiency of its markets, including labour. Red tape has also been eased, and basic drivers of competitiveness, such as infrastructure and primary education, are also in good shape. However, political stability and effectiveness could be improved. The current political setting, with a minority administration, is more prone to disruptive policy changes. What is more, despite a stronger fiscal position and better GDP growth, the country remains vulnerable to market turbulence, and the banking sector continues to be affected by numerous weaknesses. For Portugal to sustain growth over time, generating innovation will become increasingly important. Reinforcing the ecosystem for that will be key, including putting in place a conducive education and training system, generating synergies between academia and industry, investing in R&D, and improving market efficiencies at every level. Portugal is 33rd out of 82 countries in 2017-21 in our Business Environment Rankings, which assesses countries’ attractiveness for investors. In our European sample, it ranks 15th out of 18, which signals room for improvement.
Leading firms are mastering the art of data research and IT solutions, among many others, but Portugal will need a smart government and educational system if society is to keep up with disruptive progress.
What is your overall role in the general IT landscape in Portugal?
GABRIEL COIMBRA There are many challenges for firms in Portugal and around the world. The expansion of the sector at the macroeconomic level signals a new digital transformation (DX) economy. Enterprises must facilitate DX through their use of third platform technologies to create value and competitive advantage through new offerings, business models, and relationships. In order to achieve these goals, businesses should focus on using third platform tools to transform their decision-making and experience delivery. In this context, businesses need a thorough understanding of third platform technologies to capitalize on improved decision-making and deliver enhanced customized experiences to stakeholders. The rapid acceleration of this technology adoption means that organizations need to actively looking at ways to deliver this transformation.
RUBÉN BARREIROS I opened Gartner operations in Portugal in December 2005, after ending a distributor contract in Iberia with Profit. Gartner took an important step in deciding to go straight to all global markets, thus opening operations directly in Iberia. Since then, Portugal has been part of the Iberia region reporting to Madrid, where we now have more than 80 people. Gartner has been seeing double-digit growth worldwide for the last 30 quarters, and Gartner Portugal has also been grow-
ing. We have acquired companies along the way, such as Meta Group in 2005, AMR & Burton Group, Inc. in 2009, IDEAS International in 2012, Marketvisio in 2014, Nubera in 2015, Machina Research in 2016 and, more recently, CEB. With the addition of the latter, we are uniquely positioned to accelerate our growth. Our comprehensive services align to the needs of virtually every functional business leader, including information technology, supply chain, marketing, human resources, sales, finance, and legal. As a result, Gartner is one of the largest advisory companies worldwide, and our strategy is to grow via acquisition as well as organic growth.
EDUARDO MASTRANZA We provide executive management support for decision-making, but also have other services for other company functions, such as HR. That said, the most developed part of our business is IT and digitalization, while we also have other services for managers and technical teams. This helps everyone in the company, not only those at the C level.
How do you utilize new technologies to help your clients?
GC IDC helps ICT companies understand market trends and opportunities. For other sectors, such as banking, retail, manufacturing, and public administration, we help them navigate the digital transformation era with a portfolio of decision-making methodologies that enable them to make more informed
strategic decisions and better understand technological trends, business requirements, and technology options. But we are also a data-centric research company. We crunch a great deal of data on IT and digital markets and analyze it using advanced techniques such as machine learning and advanced statistics to understand trends in technology and build test models to help companies understand how technology changes the entire economy. We also advise companies on how to monetize data, build information architecture, security and privacy strategies, as well as new business strategies around data.
EM Research is what we do, so we invest all of it in this area. We do not do applications but have our own tools, such as deploying AI-aided agents that help clients access the most valuable content. As part of our offering, we have a portal with all our research content. This significantly improves the value our members receive from their subscription. We also do all sorts of media and try to go to market with different aspects. Apart from events, we also have podcasts and webcasts; we cover the entire spectrum to deliver content.
RB We also do surveys such as the CEO and CIO surveys, where we ask them about their mission critical priorities, and gain extensive insight into what will be the key investments for the following years. ✖
The Portuguese transportation market relies on its solid road, air, rail, and port systems. Since the 1930s, its road network has increased exponentially. Although some sections were built in the 1960s and 1970s, it was not until the late 1980s and 1990s that large-scale highways were built. The Portuguese motorway network is now highly developed and covers nearly the entire national territory, connecting the 1,794-km coastline with the main cities of the interior across a total network of 3,000km, with various connections to Spanish motorways along the border. This modern network includes a variety of toll systems, like the state-of-the-art ViaVerde, which speeds up the process of entering a highway without the need to slow down or stop at a booth. Electronic toll systems are gradually being rolled out across the country.
The public transportation sector focuses on the main metropolitan areas, with the country’s first metro system having opened in Lisbon in 1959. The rail network interconnects the bigger cities and provides good connections to Spain, mainly for Iberian freight distribution. The airports provide international connections
to various European and intercontinental destinations from Porto, Lisbon, and Faro.
The network of sea ports, due to the country’s geo-strategic location, gives Portugal a prominent status in the international trade logistics chain. Featuring large European ports of Atlantic orientation and a direct port for the Iberian market, Portugal’s maritime infrastructure is vital for its economy. For example, the Port of Lisbon is the backbone of its maritime tourism, as the main cruise lines connect Portugal with the Mediterranean and worldwide destinations. The Port of Sines, meanwhile, is a deepwater port and a national leader in the quantity of goods moved. Equipped with modern, specialized terminals, it can move a large variety of goods, is open to the sea, and has excellent maritime access to the Iberian railway system.
Logistics services in Portugal also have an extremely broad scale, from giant multinational companies to small family businesses across the entire country, allowing goods to be moved rapidly and efficiently, contributing to the Portuguese economy, and providing support for continued growth. ✖
14.5% million passengers in 2017
50% owned by the state
What major transformations and milestones has TAP seen in the past few years?
As one of the most successful PPPs in history, TAP has captured as many Portuguese hearts as it has foreign destinations.
Miguel Frasquilho CHAIRMAN OF THE BOARD, TAP AIR PORTUGAL
BIO
With a bachelor’s in economics from Católica Lisbon School of Business & Economics and a master’s in economic theory from the Nova School of Business & Economics, Miguel Frasquilho is chairman of the board of TAP Air Portugal Group, a visiting professor at Católica Lisbon School of Business & Economics, and president of the advisory board at the Portuguese Digital Economy Association. He was previously chairman and CEO of the Portuguese Trade and Investment Agency, a Member of Parliament for the Social Democratic Party, and Secretary of State for Treasury and Finance of the XV constitutional government, among others. He has also authored or co-authored a number of books and articles.
TAP Air Portugal was owned by the state until 2015. Due to restrictions in the European framework, it was not a profitable company, and the state could not capitalize it. Between 2009 and 2015, Portugal had a tough time, and after the bailout of 2011-14, we had a difficult task convincing investors we were worth investing in. Conversations surrounding the privatization of TAP solidified in 2015 because of Portugal’s agreement with the troika of the IMF, European Commission, and European Central Bank (ECB). TAP was subsequently privatized, and the shareholder agreement was reconfigured so the state could remain a shareholder. TAP is a successful example of a public-private partnership (PPP) in which 50% is owned by the state and 50% by private shareholders. It is a company that is extremely dear to Portuguese people; everyone feels as though they are a partial owner. This ensures a great environment and atmosphere within the company. It is also great outside because it leaves no room for rumors and creates a calm environment for the company to operate in. Since the privatization, we have been pursuing an ambitious strategic plan that includes renovating and expanding our fleet, reaching a lot more destinations, whether in Europe, North America, South America, or Africa, and, consequently, carrying more passengers.
Can you provide an overview of your key routes and new aircraft?
Our fleet is currently composed of 90 planes, and the plan is to have 120 or 125 in four or five years. We have also added many new routes. We have an important position in Latin America, mainly in Brazil; we are the most important European carrier connecting Europe to Brazil and have roughly one-third
of the market. We serve 10 destinations in Brazil and will serve 12 in one or two years’ time. We will also significantly expand our operation in North America and are more than doubling our destinations in the US. In Canada, we fly to Toronto. We will also expand in Africa and Europe. From 2019, we plan to fly to Washington, Chicago, Tel Aviv, Montreal, and San Francisco. In Europe, we will fly from Lisbon to Tenerife, Dublin, Basel, and Naples, and from Porto to Brussels, Lyon, and Munich. In the coming years, we will have plenty more destinations. TAP is growing significantly, and we are benefiting from and contributing to Portugal’s global popularity. We are experiencing growth pains and need to recruit more pilots and cabin crew and order new planes. There will also come a point when we will need better infrastructure, as we have already been and will continue to suffer from bottlenecks in the airport, since we are responsible for more than 50% of its traffic. There are plans to expand Lisbon Airport by opening a new terminal in 2021, but until then we need improvements in the current infrastructure (facilities, parking for planes, runways, among others), as we want to continue to grow and transport more passengers. In 2017, we reached a new high of 14.5 million passengers, and in 2018 hope to achieve 16 million. We are growing at a great pace, but need the infrastructure to become more productive.
We seek to continue to grow with quality and better serve our customers. That is what we are most focused on, and with the arrival of the new aircraft, our onboard and airport service will be much more efficient. This will spare customers a great deal of trouble and bureaucracy. We will also look at technological advances where necessary. We are on the right track. ✖
From a much-needed niche to a global player, Netjets has utilized Portugal’s competitive advantages to bring value to the country and the entire continent.
What have been some of Netjets’ milestones in its 22 years of operations in Portugal?
In hindsight, establishing Netjets in Portugal was a highly successful decision, as evident from the fact that the company’s entire operations are now run from Portugal; the synergies we have had here have been outright fantastic. At present, all our aircraft are registered as “CS,” which is the Portuguese registration. The local talent has been equally paramount to our success. Ever since we started our operations in Portugal we have felt at home; the country is receptive to internationalism and the Portuguese speak foreign languages eloquently and are very hospitable. Our European operations and training center are based in Lisbon, and at present we have around 500 employees working here.
How would you assess the European business environment?
The private aviation concept was born in the US, and it is a common business tool there. Although the US is the pioneer and leader of the industry, Europe is close behind. Over time, people have come to understand that if a company wants to be quick, efficient, and capable of reacting at the pace demanded by the business world, it needs a solution such as ours. Quite remarkably, even though shared ownership is currently a popular model across various industries, NetJets pioneered this concept introducing this approach in the aviation industry over 30 years ago.
What strategies does the company want to develop in the medium term?
We are well established in more mature markets, and there is huge demand in terms of market penetration in smaller economies as well. Similarly, NetJets is the perfect solution for companies looking for a robust and reliable travel solution. Our work is to continue growing our market penetration in Europe. There is a natural maturity cycle, and some European countries have yet to reach the level of acceptance this type of service has witnessed in countries such as the US or Brazil, where executive aviation has become a necessary tool. However, we still see huge growth potential in Europe for NetJets.
Marta de la Rocha REGIONAL VICE PRESIDENT FOR SOUTHERN EUROPE, NETJETSHow do you recruit human talent in Portugal?
Approximately 60% of the staff members in the office are Portuguese. We try to hire the highest level of talent among our crew members. All pilots join NetJets as Co-Pilots and are required to have a minimum of 1,500 hours experience under their belts. Moreover, the company requires captains to have over 3,000 hours flight time, and our training is double that of the industry standard. So, we not only try to recruit the right people, but we give them all the tools to remain the best in aviation. Importantly, our pilots only fly one aircraft type because we want their reactions to be instinctive and for them to be fully knowledgeable of the aircraft they are flying.
What’s your outlook for the Portuguese and European aviation sectors, and do you have any expansion plans?
Portugal is going through a special time. Of late, all the right pieces have come together to create a special opportunity, and Portugal has launched some initiatives that have made the country appealing internationally. Indeed, the country is very innovative and forward thinking. Some of the highlights are the start-up movement we are currently witnessing, the government’s actions and initiatives, and the welcoming nature and openness of Portuguese people to other nationalities and cultures. Moving forward, we are curious to see how changes across Europe will affect Portugal. Rest assured, the opportunity for growth is there. We are already witnessing growth.
What is the global value of this market?
We are now the safest and largest player in the global market. We have 700 aircraft worldwide, which makes us the fifth-largest airline in the world, but because we focus exclusively on private aviation, we are the biggest in the sector. These figures allow for a genuinely attractive alternative to the solutions available in the market; we offer all the guarantees and advantages of owning a private plane, but with none of the inconveniences. Added to which, we guarantee an available plane within 10 hours, have an unwavering focus on safety, and very demanding service expectations, each of which are possible thanks to the economy of scale we have created through 50 years of experience. We stand second to none in the industry. ✖
BIO
Marta de la Rocha studied journalism at the University of the West of England, in Bristol, and specialized in marketing at the Catholic University of Portugal, in Lisbon. After starting her career working in the Public Relations team at Starwood Hotels and Resorts, in 2005, she joined NetJets. In 2012, she was appointed as Vice President for NetJets Europe, looking after all sales activity in Spain & Portugal. In 2018 she took over the role of Regional Vice President for Southern Europe.
Portugal has seen its air traffic figures increase by as much as 80% in the last five years. As a result, its transportation infrastructure, and Lisbon’s airport in particular, cannot cope with the rising numbers. A new airport project that will turn a military base into a commercial airport is now under discussion to bring much-needed relief to air traffic.
WHEN HUMBERTO DELGADO AIRPORT, THEN KNOWN AS LISBON INTERNATIONAL AIRPORT, WAS INAUGURATED OVER 70 YEARS AGO, it stood far from the city limits of the time, surrounded by nature. The reality today is quite different, as Lisbon continues to grow, making the airport a near-city center facility.
The limitations of the airport have been under the spotlight for years, with a botched project for a new airport in Alcochete proposed in 2008 by the government of former Prime Minister Jose Socrates. There were many reasons why the Alcochete project never moved forward, either due to political or environmental concerns, but it was the economic crisis that hit the country in 2009 that shelved most of the planned mega-infrastructure projects.
As debated as the construction of a second airport may have been, no one could have predicted just how quickly Humberto Delgado airport would reach its maximum capacity. According to Francisco Pita, Chief Commercial Officer at the airport manager ANA, “no one could have predicted what has happened. We got to 2018 with 10 million more passengers. We will close the year with 29 million passengers. That is 10 million more than the predictions 10 years ago.”
The airport’s maximum capacity is set at 30 million passengers per year, and estimates indicate that a lack of physical capability during peak periods cost the airport and the city as many as 1.8 million visitors in 2018 alone.
To respond to this continued growth, the current government has pledged to move forward with the conversion of the Montijo military airport base into a new civilian airport, located across the Tagus river but at a relatively close distance from the city center. The project is being pushed by ANA, which is owned by the French group Vinci, with the support of the Portuguese government.
While the cost for the airport has not been officially published, most estimates point to as much as EUR1 billion, an investment said to be financed solely by ANA. Initially, as was the case in
many European cities, the second airport was meant to cater to low-cost airlines. That, however, no longer seems to be the case. To the press, ANA has stated that the Montijo airport will instead offer high-end services for airlines offering direct flights to Lisbon from the rest of Europe, and that it was not designed with low-cost airlines in mind. Solutions to speed the transfers between the new airport and city center are also being planned.
ANA has already reached an agreement of principle with the Portuguese armed forces to turn the military base into a mixed military/civilian facility. The EH101 helicopter fleet and C295 cargo aircraft belonging to the Air Force will be relocated to other bases, while the Navy Lynx helicopters and new KC390 aircraft (which will arrive in Portugal in 2021) will be housed at the new airport, sharing it with commercial flights.
In terms of capacity, ANA predicts the current Humberto Delgado airport will be able to process 48 movements (inbound and outbound) per hour and be able to add another 24 at Montijo, raising the total to 72 movements per hour. According to ANA’s estimates, this increase should be enough to deal with growing demand until 2050, with a total capacity of 50 million passengers per year. If all goes according to plan, the Montijo airport conversion will be finished by late 2021 and open for commercial operations in 2022.
For now, the only missing piece is the environmental impact assessment study that ANA has pledged to deliver before end2018. The base is located within the limits of the Tagus Estuary Natural Reserve, home to a sensitive ecosystem, which has raised concerns and protests from some social and environmental associations. But with several airlines, including the national airline TAP and European low-cost operator EasyJet, pointing out the limitations of the Humberto Delgado airport as a restraint to the growth of their business in the Portuguese market, finding a middle ground that will meet the interests of all concerned parties will be a difficult challenge. ✖
TERMINALS
WITH HUMBERTO DELGADO AIRPORT BEGINNING TO REACH CAPACITY, ANA AIRPORTS HAS BEGUN THE CONVERSION OF MONTIJO MILITARY AIRPORT TO MEET THE CITY’S AIR TRANSPORT DEMANDS FOR THE NEXT 30 YEARS.
HUMBERTO DELGADO AIRPORT
PREDICTED PASSENGERS 19 MILLION
MILLION
PASSENGER CAPACITY 30 MILLION
MILITARY AIRPORT
PASSENGER CAPACITY 20 MILLION
BEGINS COMMERCIAL OPERATIONS:
CONVERSION COMPLETION DATE:
Global firms are taking the logistics expertise they honed over many years in their domestic markets and around the world and implementing it with impressive results in Portugal.
Olivier Establet CEO, DPD CHRONOPOST
DPD GROUP WAS ONE OF THE FIRST TO INVEST IN PORTUGAL. In 1997, we made an investment in Jet Services, a family-owned French company with 20 subsidiaries around the world. This was the beginning of the international strategy of the La Poste group outside France. Around 20 years ago, the group realized postal activity would fall and started diversifying into both parcels and banking activities. It later founded the Postal Bank (La Banque Postale), a French business, in addition to a holding company called GeoPost for the parcel business. The first acquisition of GeoPost in the La Poste group was Jet Services, and Portugal was one of the 20 subsidiaries. Portuguese operations started in 1987 before being bought by La Poste in 1997. Back then, La Poste was already an international player competing with the Portuguese Post. We grew organically by being the first company to offer next-morning deliveries and full domestic parcel tracking. Similarly, we were the first to launch cash-on-delivery service. At present, we have 600 parcel shops across Portugal, making us the number-one postal company by a fair margin. Parallel to this strategy of innovation and organic growth, we made some acquisitions in Portugal. One of our biggest achievements in the past five years was acquiring SEUR, the number-one Spanish company. Similarly, we acquired two more companies in Portugal. Including these, the DPD Group ranks first in Portugal with around EUR70 million revenue, 18 million parcels per year, and more than 1,000 employees.
Miguel Mesquita CEO PORTUGAL, BOLLORÉ
IN 1982. In 2016, it was rebranded as Bolloré Logistics to have a better connection to the Bolloré group. The latter was established in 1822 and is today ranked among the top 500 companies worldwide. Divided into three fields of activity, transport logistics, medial, and electricity storage solutions, it generates more than EUR18 billion in turnover and is present in 130 countries with 82,000 employees worldwide. In Portugal, the company’s primary activity is in transport and logistics and managed from its three offices in Lisbon and Porto with more than 100 full-time employees and generating more than EUR24 million in turnover. The company’s Portugal’s portfolio includes air, sea, road, and logistics services. Currently, the company has more than 2,300 active customers, 82% of which are of Portuguese origin. Our main markets are Angola, São Tomé, Timor, and the US, especially when it comes to our main sectors of activity—food and beverage, aerospace, healthcare, special projects, and defense—which together represent more than 80% of the company’s turnover. We do not, as a rule, receive any governmental support, thought we frequently engage in public tenders, especially to support the Portuguese military in their logistic operations overseas. In order to boost transport and logistics activity in Portugal, the country needs to take better strategic advantage of its location, territorial waters, and manpower. Due to its historical connection to the sea and adaptability of its people, Portugal should be the first and last point of entry of Europe.
Jorge Possollo GENERAL MANAGER, GEFCOTHE COMPANY STARTED IN 1992, AND IN THE FIRST 10 YEARS, we relied heavily on outsourcing intermediary services to third parties. We subsequently started to develop our own skills in the automotive and logistics industries and create value ourselves for customers. We started mostly in the automotive industry here, namely finished vehicle logistics and spare parts for the PSA brand. We then expanded to other areas during our second decade here such as air, sea, and road, and continued in automotive logistics development with car parking compounds. We developed new special services such as the GEFCO Special, a tailor made ultra-urgent service designed to tackle customers’ most urgent needs. I am pleased with that development over the last two years. We now have our own car-parking compound and have invested in infrastructure that will allow us to develop further coverage across the country. The GEFCO Group had a fairly successful performance over the last few years, and GEFCO Portugal was no exception. Our clients benefit from the extensive experience that RZD, which owns 75% of our company, has in the train transport industry, which is a plus for GEFCO because we did not have such expertise before. It is also exciting for our employees to know that companies as important as RZD in Russia would like a share of GEFCO. RZD’s acquisition was in 2012, and the company has improved its results and is worth more since then.
What are the highlights of DHL’s Portugal operations?
DHL has been in Portugal since 1982. At that time, the operation began with half a dozen people, but as the need for DHL’s services grew, so did our operations. At present, DHL grows in a consistent and well-established way, maintaining an infrastructural network that allows us to be increasingly effective in what we do. After 36 years in Portugal, the company has grown from half a dozen employees to 500 specialists working directly with DHL.
What can the group learn from the Portuguese market?
In 2017, we grew by approximately 23%, and we expect double-digit growth in 2018 as well. It is difficult to grow more than 10%, but we are on a strong growth path, much of it because of startups and e-commerce, both of which have turned out to be great engines. On the other hand, traditional industries such as automotive, textiles, and footwear also continue to spur our expansion.
How do you expect logistics to evolve through the digital revolution?
With globalization, logistics will be increasingly present due to the rise of the B2C segment. Similarly, as e-commerce becomes rampant, transport companies, especially international transport ones, will play a larger role in the whole process. We are highly committed to having an increasingly digital response. For example, at the level of our customer service, we are investing to ensure that customers have a digital experience with DHL, and that all functions that allow customers to interact with us through a smartphone are efficient. Moving forward, our focus is to fulfil the needs of the market.
How would you characterize the current transportation segment in Portugal?
There are companies that are slightly further ahead than others, and DHL is at the front as the company that has perhaps invested the most in technology. At the same time, there are companies that are continuing with a large technological deficit, and the market will eventually filter those out in an almost natural way.
What are your human resource requirements, and how do you retain your talent?
I was appointed CEO in March 2018, and it is extremely important to me that the company be approachable and invest the necessary means to provide specialized training to people in order to retain them. We have been investing in creating an excellent working environment. Based on that, our aim is to provide career opportunities to our people, either because they have a great academic curriculum or because they have demonstrated results within the company.
What are DHL’s main goals and priorities for 2019?
In the short term, our challenge is to build a platform at Lisbon Airport. We have signed an agreement with ANA and are currently in the licensing phase. DHL’s commitment is around EUR40 million for a 25-year contract with ANA, with the possibility of extending it up to 40 years. It will be a challenging project because we will be implementing the best technology; this is also a clear signal from the group that Portugal is a country that is starting to support all the investments it is making. In Portugal, the biggest investment we have planned is this one. We do also have smaller projects with the purpose of remodeling or expanding other facilities here. ✖
José António Reis MANAGING DIRECTOR, DHL EXPRESS PORTUGAL BIO23%
More than 500 employees
José António Reis has been in his current role since March 2018. With previous experience in financial analysis, he joined the company in 1996. After working in finance, he headed business development and the customer service department. In his more than 23 years here, he has developed a deep understanding of the company’s operations, structure, system, and processes. He holds a degree in business administration.
At the forefront of firms constantly investing in technological advances, DHL’s growth in the country has been as steady as it has been smooth.EUR40million contract with ANA to build a new platform at Lisbon Airport growth in 2017
Yilport was founded only 15 years ago but the company has grown to become the 12th-best terminal operator in the world and aspires to be among the top 10 by 2025.
What is the background of Yilport and its key milestones?t
Yilport is a part of the Yildirim Group in Turkey, which is a major player in several fields and sectors, especially fertilizers, mining, and shipping. Robert Yuksel Yildirim founded Yilport when he started port management with several ports in Turkey in 2004 and 2005. That was the beginning of the company’s port management operations and over the years, several acquisitions have taken place, starting with ports in Norway and Sweden. The company also has a port in Malta, and more recently, the group expanded to Portugal by acquiring a company that has a total of eight terminals in Portugal and Spain. Moreover, we also have a presence in Peru, Ecuador, and Guatemala. The strategy of the group is to grow, and the model is to be among the top 10 terminal operators in the world by 2025. Currently, we are ranked number 12.
How would you evaluate the Portuguese market?
The Portuguese market is growing every year and our terminals are well placed to serve the gateway market. Therefore, we support the growth of our terminals and international commerce.
have created a global operation center, through which we can maximize service quality for each customer and deal with one single system. This will improve efficiency and provide us with better opportunities to offer better services.
What are the challenges of investing in Portugal’s blue economy?
It is not an exceptionally difficult process compared to other parts in the world, but it still requires detailed planning and good collaboration between all the parties to get the best results. We have excellent relationship with our various stakeholders, such as port authorities, municipalities, the central government, and several banks and institutions.
What are your human resource requirements in Portugal, and how do you tackle it?
Richard Mitchell completed his education in business studies in Scotland and started his career at Ben Line, Edinburgh in 1979. He later joined Maersk Line in 1987 and was in the APMM Group until 2017. During this period, he gained experience in sales, marketing, operations, logistics, and general management. His last assignment was as managing director of the APMT facility in Luanda, Angola. He’s currently general manager of Yilport Iberia and responsible for eight terminals.
The Yildirim Group acquired the portfolio three years ago and created a regional office that enabled it to invest in equipment, yard, land, ports, and systems. Most of the terminals we took over were in need of renovation and new equipment. Our immediate challenge is to modernize the infrastructure and update the equipment, in line with our philosophy to look after our customers and cater to their developing needs. This is further supported by new IT systems, which will ensure good communication between all actors, such as shipping lines, ports, custom authorities, clearing agents, and end users. By operating as a single business unit, we share the best operational, financial, technical, and safety practices; safety is high on our list of priorities. Notably, the group has seven ports in Portugal and offers its customers a chance to come to different ports and get accommodated in different ways. We
We are quite a young organization that has grown tremendously over the last three years. The group has a large team in Turkey that is still growing and developing experience and expertise. We require people working in the organization to be quick learners, and to that end, we have established strong development and training programs. There has also been a recruitment drive for senior positions so we can have a mixture of young talent and people with experience. Overall, enthusiasm for the company is quite refreshing and motivating.
What measures need to be taken to become more eco-friendly?
We have a strong drive to make each terminal as environmentally efficient as possible by developing an operation with modern eco-friendly machinery and automation.
What is your vision and main priorities for the coming year?
We have a strong focus on improving safety measures and procedures and implementing new financial and HR systems as well as a new operating system to manage the ports. Importantly, the fundamentals of the business and the port value propositions are strong. What is important is to spend time with customers and find some good solutions to ensure they want to come back to our terminals. ✖
“We have a strong drive to make each terminal as environmentally efficient as possible by developing an operation with modern, eco-friendly machinery and automation.”
CHEP is keeping sustainability and disruptive technologies at the core of its operations in over 55 countries to revolutionize the supply chain and logistics sector.
What have been the milestones of CHEP Portugal since its establishment?
In Portugal, we have the same approach that we utilize in any other country. We entered the country 25 years ago and were the first ones to bring the pooling system to Portugal. We offer customers a service that is more efficient, sustainable, and secure than the rest of the competition. We started as pallet providers, but subsequently realized our customers have a much wider variety of needs. Sustainability is also key, and we emphasize it in all our operations. In Portugal, this has been the main strength that CHEP has brought to the market.
What is the importance of Portugal for CHEP’s global activities?
CHEP is in over 55 countries, and the volume and revenue of its Portugal chapter are no longer small. From a logistics perspective, Portugal is a challenge that offers certain knowledge developments that can be applied across the entire logistics chain. The dense network we implemented in Portugal allows us to quickly respond to our customers’ demands, which is why there are many small transport companies with local knowledge. We can enter spaces using a system that other companies cannot due to their size. Thus, Portugal has been contributing to CHEP’s understanding of how a global company can work effectively at a local scale.
How would you assess the level of innovation in the sector?
CHEP is part of the Brambles Group, which has invested over USD10 million in BXB Digital, a company that Brambles created to develop technologies and analytics to benefit the business. By investing in BXB Digital, the group is focusing on the future. As a market leader and a point of reference, we want to lead the supply chain revolution by using the IoT, big data, and other digital technologies, contributing to the improvement of productivity and driving the competitiveness of the market. The supply chain and logistics sectors have a gap in terms of technological innovation, which CHEP wants to fill.
What measures has the company taken toward an eco-friendlier future?
In terms of sustainability, our business model is heavily focused on recycling. By sharing and reusing our products, customers reduce the need for natural resources and the generation of CO2 and waste. We also offer innovative sustainable solutions to our clients, like Carbon Neutral products. We measure the carbon footprint savings that a specific customer achieves by working with CHEP. For the remaining CO2 emissions, we have partnered with Natural Capital Partners who provide projects that capture the same amount of CO2 generated in our customers’ supply chains, which can then be compensated with different actions. 100% of the timber used in our European pallets comes from certified sources (FSC or PEFC Chain of Custody certified).
What are your main goals and priorities heading into 2019?
The main goal is to make sure our customers and potential customers understand how CHEP is able to help grow their business. The past five years have been the most revolutionary in the industry, and we are still only at the beginning of the supply chain revolution. Due to this transformation, there are still players in the market that do not know what CHEP is able to provide. We need to make sure our team has the right resources to truly underscore what we can deliver to customers. CHEP looks at customers’ needs and the needs of the broader industry, which allows it to continue feeding transformation. For example, our ‘blue-click’ quarter pallet is a simple yet revolutionary transformation that has allowed us to truly change the way the industry works promotions instore—inclusively, our assets can be intelligent to the point of receiving and sending data in real time and interacting with end-customers. On top of this, our Collaborative Transport Solutions are revolutionizing the way our customers and partners move their goods in Europe. CHEP has extraordinary vision and has demonstrated that it seeks to look out for communities and peoples, as well as the planet. ✖
Invested
USD10 million in BXB Digital
25 years in Portugal
BIO
Filipa Ferreira Mendes joined CHEP as Country General Manager of Portugal in June 2018. Prior to joining CHEP, she led teams for over 17 years in the FMCG and distribution markets. She was a senior consultant for the non-oil business at Repsol Portugal after being director at Fnac Portugal, managing and growing the books, toys, stationery, and magazines segments. During her professional career, she played standout roles in the purchasing department of Makro, as Sales Director of Sonae, and in developing market strategies for Compal. Mendes has a degree in economics from Nova School of Business and Economics and has completed the Management and Leadership Program at AESE Business School.
How are new technologies impacting the automotive sector?
More people are booking via their smartphones instead of desktops. Everything must be digital, especially in the travel sector, where the uptake for online services and e-commerce is rapid. The industry needs to invest further in the digitalization of customer experience. In the future, all the different transportation options in the country will start to communicate with each other, creating opportunities for all actors to work together.
Which of the vehicles that Hertz offers see the highest demand?
About half of our fleet is in the economic segment, which is more or less a reflection of the overall car market. We have a high-quality fleet, with roughly one-third being German-made. We are witnessing a growth trend in higher-end cars from tourism markets in Latin America, the US, and Asia. We have some exclusive deals with, Jaguar Land Rover, and Fiat. On the motorcycle side, we have a project that was conceived in Portugal under the Hertz brand. We work with BMW for motorbikes to present customers with a premium experience that involves receiving an inclusive product with hotels, routes, and tour leaders. We have identified a niche opportunity and are expanding our concept to other countries such as France, Italy, and Spain.
What have been some of the milestones of ITS Portugal?
When we started operations in 2009, Portugal was the only European country without an ITS association. The association has since its beginning stated the need for multimodality and assured that the board has representatives from different transport modes as well as from industry and R&D. Initially, it was ANA Portugal for air transport, Infraestruturas de Portugal for rail transport, BRISA for road transport, EFACEC for industry, and INESCTEC for R&D. Later, we added Lisbon Port for the maritime transport and Toyota Caetano Portugal for the automobile industry. Finally, we joined Logistema, representing logistics. Thereafter, we tried to grow the Portuguese ITS by managing different areas in terms of different modes and tackling issues we felt were important for the development of systems and the market, like urban mobility and cooperative systems.
What are the main growth areas in the transportation segment?
Portugal has seen significant growth in the past years and the significant development in the air and maritime sectors, as well as logistics for the transportation of goods. Moving forward, there will be a major change in the road systems because of cooperative systems and the rise of driverless vehicles.
What are some of the company's milestones in Portugal?
When LPR started its operations 17 years ago, the pool pallet market was not that developed. Over the years, LPR has managed to change that and today, pallets are seen as important to the logistics and supply chain sector. On the back of this success, LPR has been growing by about 10% per annum. We started with less than 100,000 movements per year, and now we are registering more than 15 million movements a year.
What are the key growth areas in the Portuguese market?
For us, it is quite clearly the FMCG sector. Even during the economic crisis, we did not feel the effects because consumers moving from global brands to local ones still required LPR to supply the pallets. Later on, the economic recovery also led to a rise in consumption levels and subsequently, LPR has been growing as well.
What sets LPR apart from other companies in the logistics field?
We have two factors that differentiate us in the market. Quality is one of our distinguishing factors. For example, we only use solid wood for our pallets and not composite materials. The other factor is the service we provide, and this is about our people. This is why we have had a 98% staff retention rate over the last 17 years.
What have been the main milestones for Marship since its establishment in 2015?
Maratlas started to grow mainly as a dry cargo broker. We established ourselves as a Portuguese broker mainly working and concentrating on Portuguese charterers. I started with one client, and by the time we joined forces with Ership, we had 47. I saw the joint venture with Ership as a chance to do something new in Portugal: a ship broker that works on dry cargo, tankers, bunkers and project cargos, and S&P. Partnering with a century-old company gave us strength and support. We now have insurance worth EUR3.5 billion, maritime lawyers, a huge technical department, and membership in BIMCO.
Could you tell us about your clients?
We are working with Thorco, a vessel owner, to develop a segment in Portugal that we were not getting into much: projects and parcels cargo. We signed an agreement with Thorco’s Spain office for the next three years to look at how we can develop in this segment in Portugal.
What are your goals and priorities for 2019?
The main goals are to establish a national broker with international reputation, where we are strong in all the commercial areas of shipping, develop the company in a way that meets our clients’ needs, and provide a tailored service to the client.
Collaborative Transport Solutions
Reduce empty kilometers and CO2 emissions.
Big Data Solutions
CHEP Retail Index helps companies in their strategic decision-making. A unique index in the market that forecasts the consumption in Retail on a quarterly basis.
Proximity Marketing Solutions
Promoting sales increase and a better shopping experience for final customers. At point of sale the customer can receive personalized promotional messages on his smartphone.
With countless relics, such as the Castle of Belmonte, Portugal has a rich architectural history
The Portuguese real estate and construction sector is a hive of activity, driven by a stable economy and increased inward investment. Prices are booming across the country, especially in Lisbon and Porto. Across metropolitan areas, we also witnessing an increased rate of restoration, a phenomenon we discussed with Martim Tomé, Director of Tecniarte, for this chapter. Yet, there is much more to explore in this sector, which maintained positive growth throughout 2018. Indeed, construction activity increased 3.5% in 2018 over the previous year, and a higher figure of 5% is expected in 2019, helped along by growth of 7% in the residential area and 2.8% in the non-residential segment.
At present, Europeans from countries such as the UK, France, and Spain make up the majority of foreign investors, both individual and corporate, and firms especially are moving to the country at an unprecedented rate. This trend has led to short supply in terms of office space. This has led some companies to seek out alternatives. For example, IT start-ups have been observed moving into
non-traditional office premises, including warehouses and old factories.
In line with estimates, the evolution of employment in the construction and real estate sector has been positive over the year, showing an increase of 1.8% until September 2018, which means more than 5,300 workers than in the same period of 2017. The construction sector employed more than 300,000 workers in the first nine months of 2018, representing 6.4% of total employment in the economy and 7% of total GDP in this period.
Trending topics to also rear their heads in the context of this sector included AI and IoT. Rita Moura, Oresident of the Plataforma Tecnológica Portuguesa da Construçao, explained to us in an interview that such technology can allow the gathering of a great amount of information that can prove invaluable to the construction sector.
Given Portugal’s recent emergence from downturn, its popularity with expats, and improving business environment, there is no reason to believe the real estate and construction sectors won’t continue to grow going forward. ✖
PTPC is incorporating sustainability and digital technologies to add further value to the sector.
How do PTPC and Cluster AEC maximizes innovation and boost the overall competitiveness of Portugal’s construction industry?
In Portugal, people have excellent ICT skills and must be brought into the construction sphere. PTPC is in talks with other partners in the ICT field to add value to construction. We not only think about the physical part of construction, but also the information connected with infrastructure. We intend to work with companies in the ICT and communications systems sector to enter the field of smart structures. For example, it is possible to place sensors to monetize and measure functions and generate information. AI and the IoT are extremely relevant in this context. We are doing everything we can to extract the appropriate profit and contribute to society through the use of technology.
How do you work to ensure the best possible synergies between associations, technical institutes, and private players in the construction and infrastructure sector?
What are the objectives behind the PTPC proposed think tank?
We are in the process of developing the idea and are producing a proposal to discuss with the government. Infrastructure development is vital for the country and should be prioritized. We are involving many experts from PTPC and Cluster AEC to make the proposal interesting, including information for potential investors about the value and feasibility of possible projects.
What are your expectations for the performance of Portugal’s economy?
Rita Moura obtained a degree in civil engineering from Instituto Superior Técnico of Universidade Técnica de Lisboa. Moura has worked for the Teixeira Duarte Group since 1986 and is currently responsible for its rehabilitation studies and projects. She also coordinates structural inspection and research and development activities, duties that she previously performed as studies and projects manager at BEL, S.A., until its merger with Teixeira Duarte – Engenharia e Construções, S.A. She is the president of the Portuguese Construction Technology Platform (PTPC); member of the Council Board of ENCORD; and member of the board of the Portuguese Association of Structural Engineering (APEE), among others. She has had more than 50 technical articles published by the national and international press and has organized more than 20 technical conferences.
PTPC’s starting point was major construction companies, though it also rapidly brings in designers, consultants, universities, start-ups, SMEs, and various associations. We look beyond the construction industry and create relationships with companies from other sectors such as ICT companies and their cluster in Portugal. We work with many players also outside the construction sector as well as associations and public entities.
How do you boost sustainability in the construction industry to minimize the impact on the environment?
Sustainability is a crucial issue for the construction sector. Our industry is the number-one consumer of natural resources from the outset of any building project, and we are directly or indirectly responsible for around 40% of CO2 emissions. Sustainability is not something new for the construction industry; it is part of its DNA. If we want to be competitive, it is essential to make excellent use of natural resources, recycle, minimize waste, and use less energy in construction. We have to be sustainable; this is the number-one issue for the construction industry.
Regarding long-term investments, the infrastructure sector is promising. We have a great deal of activity in the real estate sector and prices are booming, mainly in Lisbon and Porto. However, there is also significant potential in tourism in other parts of the country. The government rightly wants to increase investment in industry in general, and such investments are essential because we do not want to have an economy based solely on tourism. At present, Portugal is ready to receive more investment in industry because it has an excellent transportation network and digital connectivity.
What are some of your top priorities for PTPC in the coming years to continue to support the construction industry’s development?
We need to work more with architects because PTPC is a managing entity of Cluster AEC, which leads in architecture, engineering, and construction. Another focus is being up to date in digital technology and having a digital attitude. We need flexible companies that can respond to their clients’ needs. This means we have to work with start-ups in a different way to help our companies during this digital transformation. This disruption is both a challenge and an opportunity for our industry and we have to open it up. We are focused on Industry 4.0 and on the circular economy and have to apply all our expertise to this. Universities are working closely with PTPC, which we are also pleased with. We have all the conditions to succeed, including a country with excellent potential, and are extremely ambitious with our plans. ✖
With all types of infrastructure projects under its belt, Odebrecht is focused on winning future public tenders in Portugal and competing with China’s stake in construction sectors across Africa.
Could you elaborate on the performance and main highlights of the company?
Odebrecht’s successful trajectory in Portugal started in 1989, when it acquired Bento Pedroso Construções. Since the 1990s, when Portugal was experiencing a boom in terms of infrastructure development, we have been involved in the construction of landmarks such as the Vasco Da Gama Bridge, the Gare do Oriente Station, nearly 500km of roads and highways, approximately 10km of metro lines, several underground stations in Lisbon and Porto, and 150km of railways, as well as important hydroelectric power projects, such as Alqueva Dam, one of the biggest dams in the Iberian Peninsula that created the largest artificial lake in Europe and an irrigation network covering 110,000ha, and the Baixo Sabor Dam, an iconic project recognized not only for its engineering and design, but also for Odebrecht’s efforts in terms of sustainability and preserving important archeological findings. Since its foundation, Odebrecht has worked on several other projects, including industrial infrastructures, water and sewage treatment plants, and airports.
How would you evaluate Portugal’s performance among the group’s portfolio?
Apart from its successful trajectory, our operation in Portugal represents an intangible asset in terms of providing highly qualified human resources for Odebrecht’s operations in other countries. Over the last 20 years, engineers, managers, and people with different qualifications have been assigned to projects in the Middle East, Africa, and Latin America. The professional capabilities of Portuguese people aligned with their adaptability to different environments and conditions make them indispensable resources to the company’s global operations.
What projects are you currently working on, and do you have anything in the pipeline?
Except for the Baixo Sabor Dam and Baixo Tejo
CEO,Highway, which are still under the period of guarantee, and, therefore, require a certain level of activity, we are 100% concentrated on competing in the new public tenders to be launched in Portugal, such as those for the construction of metro projects in Lisbon and Porto. Due to the technical challenges inherent to such projects, we believe that Odebrecht, a world leader in metro and tunnels excavation works, possesses the required experience and expertise to submit competitive technical and commercial proposals.
What is your strategy to maintain your high quality of human talent?
We seek to conquer new construction projects, either in Portugal, where our focus is on public tenders, or Africa, where we maintain permanent offices in four countries—Ghana, Mozambique, Angola, and South Africa—and are highly active in terms of business development and assessing opportunities in new markets such as Zambia, Tanzania, and countries belonging to Southern African Development Community (SADC). If we are successful in our business development efforts, the Portuguese workforce will play a pivotal role in the execution of future projects.
What are your main goals and priorities for 2019?
The main goal is definitively to win new construction projects in Portugal and Africa. The quest for backlog is a constant challenge to a contractor. Particularly in relation to Africa, our plan is to consolidate our operation in East Africa, in countries such as Ethiopia, Kenya, Uganda, and Tanzania, where the construction sector has been growing at a steady rate of more than 7% a year over the last decade or so. In order to compete with Chinese companies, whose stake in construction sectors across Africa reaches more than 60%, establishing a local and effective presence across the region is of paramount importance. ✖
Large-scale projects like metro expansion in Lisbon and Porto Assigning Portuguese talent to African countries Completed Baixo Sabor hydropower dam
BIO
Esteban Adolfo Trouet graduated in 1999 as a civil engineer from the Catholic University of Córdoba. In 2004, he earned an MBA with a focus on project management from the Getúlio Vargas Foundation in Sao Paulo, Brazil. He worked for about 10 years on the construction of several infrastructure projects around Latin America. In 2018, after the restructuration of Odebrecht Engineer and Construction, he was selected to be the Regional Director of Odebrecht EMEA.
The success story of Parque das Nações has set an example of sustainable development by turning a wasteland into a fashionable district frequented by both tourists and locals.
LIKE ALMOST EVERYTHING ELSE IN PORTUGAL, the story of Parque das Nações is intertwined with the country’s legendary tradition of seafaring. In 1998, the site today known as Parque das Nações—previously an underdeveloped industrial zone—was chosen to host a world fair, nicknamed Expo 98, with the theme of oceans and Portugal’s maritime past. Most of Parque das Nações’ infrastructure, such as the Vasca da Gama bridge and the Oriente Station, were originally constructed to host the Expo 98. Today, Parque das Nações in its reincarnated form counts as the newest district of Lisbon, though it is some distance from the city center.
Since its transformation at the end of Expo 98, which lasted for six months, the district has been hugely popular with tourists and locals alike. Far removed from the stereotypical image of Portugal, Parque das Nações is now famous for its ultramodern façade. The Pavilion of Portugal, Oceanarium, and Altice Arena are other metamorphosed facilities with futuristic designs which date back to 1998. Aside from avant-garde architecture, the region has a lot to offer epicureans in the form of fine eateries, bars, casinos, and clubs, and the district is easily accessible via the Oriente Station.
Yet, it is hardly by chance that a previously underdeveloped area in the northeast of Lisbon has turned into a cosmopolitan neighborhood. Lisbon’s urban planners were afraid that the site would fall into disrepair once the fair was over—as is often the case after such events—and had been contemplating the idea of transforming the region into a residential and commercial district of some sort right almost a decade before Expo 98. To avoid incurring any unnecessary costs, the authorities presold every major facility and building well before the expo.
Designed by Peter Chermayeff, the Lisbon Oceanarium is one of the most iconic elements of Parque das Nações and one of the largest aquariums in Europe. Its conceptual design makes reference utopi-
an harmony between human civilization and the ocean. During the Expo 98, the facility was called the Oceans Pavilion, and turned out to be one of the main attractions of the event. As of 2018, over 400 species, including fish, sharks, seabirds, penguins, jellyfish, and marine plants are housed in the restructured Oceanarium, which is visited by over a million people each year.
Altice Arena—Lisbon’s number-one event center of these days—is another memento of Expo 98. Prior to the construction of the arena— referred to during the expo as the Pavilion of Utopia—Portugal lacked a versatile event center capable of accommodating more than 4,000 individuals. Designed by Portuguese architect Regino Cruz, the arena’s shape is vaguely reminiscent of the popular depiction of UFOs. Its name and ownership have changed a couple of times over the years, and is currently owned by Altice Europe, a Netherlands-based telecom giant.
To give some Portuguese qualities to the district and avoid ending up with a set of futuristic but soulless buildings, the architects made symbolic references to Portugal’s maritime identity. Vasco da Gama, the Portuguese explorer who reached India by sea from Europe for the first time, has a landmark bridge, a multilevel mall, and a skyscraper named after himself, among other things. Indeed, Centro Vasco da Gama is regarded as one of Parque das Nações’ must-sees. Whether we call it Parque das Nações or—as many residents of Lisbon do—the Expo, the project has been a major success story in Portugal’s construction sector, showing the world that Portugal was a full-fledged modern western economy ready to join the eurozone.
Almost two decades after the event, its location has become one of the trendiest districts in southern Europe and the envy of many European cities. Some even go as far as calling the Expo 98 a turning point in Portugal’s contemporary history and the point when Portugal truly joined the top tier of world economies. ✖
Portugal’s construction and real estate sectors are rallying on the back of a multi-year growth trend, enticing both experienced and new investors.
WE ARE COMPLETELY FOCUSED ON THE REAL ESTATE SECTOR and not interested in doing public projects. Generally, construction is not known as a professional sector and this is exactly what we set out to change. When we started, the real estate and construction market was still in crisis, but we didn’t give in to market sentiment. We had a background in construction and real estate development and knew how to organize a construction company as our team had previously worked with the biggest construction companies. We started with four people and by 2014, we had grown to 14 people. 2015 ended with 35 people, 2016 with almost 50, 2017 with 60, and at present, 70 people are part of the company. On average, we have 15 sites under construction, and each site requires around 70 people per day, meaning almost 1,000 people are working daily on our projects. In 2019, we hope to achieve EUR50 million in invoices, which will be a growth from EUR32.5 million in 2018. MAP is renowned in the private sector, with average contracts between EUR3 and EUR8 million. The entire team is ambitious and focused to work on the Portuguese market, because we want to keep delivering a good product to maintain our positive growth rate. Once our growth in Portugal is stable, we will look for opportunities in other markets in North Africa, Latin America, and Dubai. For example, MAP was invited as one of the three companies to build the Portuguese pavilion in Dubai’s Expo 2020, and we are waiting to see if that goes through.
URBAN REHABILITATION SECTOR IS THE CORE BUSINESS OF TECNIARTE, though we also do all kinds of construction, such as offices, hotels, schools, and hospitals. We have grown significantly since 2003, passing the USD2-million turnover mark to reach USD20 million per year. We no longer want to grow because we want to pay more attention to our main business. For our projects in the old town areas of Lisbon, 60-70% are foreign investors; however, an area that is residential will have a more mixed ratio of investors. The whole market is not moving merely due to foreign investment; Portuguese investors are investing as well. In terms of expansion, we are only looking at Angola. We have been in Angola as a subsidiary of Tecniarte with two different businesses, working in the private sector in rehabilitation because there are many residential projects that need to be rehabilitated there. We do not work directly for the government or the private sector, but for multinationals that are involved with government projects. Our yearly turnover in Angola is around USD10 million, and we expect that to grow in 2019. The main goal is working on maintaining USD20 million in turnover and on improving our profitability margin. Internally, we want to work with our teams to become more efficient, professional, and doing things the right way. We also want to change the mindset in the sector to work at a higher level of quality.
SOTECNISOL IS A GROUP OF COMPANIES and its activities are fairly diverse because it works in the renewable energy, water, agriculture, and metals sectors. After growing in Mozambique, we expanded into Algeria since it also has strong connections with Portugal. We also began to work in Côte d'Ivoire and seek to further expand into Latin America. In Portugal, we are the largest olive producer and we continue to make investments in terms of innovation in the olive sector. We want to foster northern Portugal’s economic development because it is a poor region. For Portugal’s solar industry, the main driver at the moment is mobility. As an engineering, procurement, and construction (EPC) company, we carry out the construction and development of large solar projects. Every year, we make investments and look for new opportunities with different investors to invest in Portuguese photovoltaic projects. In terms of innovation and digitalization, we were one of the first companies to use e-commerce platforms. We changed our profile and are now an e-commerce platform working for both B2B and B2C markets. Equally important, we now have a social media management, web designers, and IT support staff. We are a company supported by IT solutions and are continuously changing our profile for a rapidly evolving world. Moving forward, we are looking into scalability of all the projects we are involved in.
What is the importance of the construction and real estate sectors for the Portuguese economy?
The current advancements in the real estate sector hold great importance for the Portuguese economy; it has been completely transformed, especially over the last four years. Portugal needed a facelift by rehabilitating historical buildings and constructing new ones. The change in the sector has produced new jobs on a daily basis. It is vital to maintain the dynamism we are seeing today in the market.
What have been some of the major projects that Temple Global has undertaken in recent years?
It has been a journey where we have invested in several sectors. Although its core business is within the real estate sector, Temple Global is originally a family business that was established over 50 years ago. Around 20 years ago, we became one of the first Portuguese groups to look into China, after which we acquired a license for a cement factory. We stand out in the real estate sector on the back of our past and future projects. We have earned our credibility because we position ourselves in the market with the highest quality standards. We work with the best construction companies in premium locations, and we try to reach high-profile clients with top products. In terms of the rehabilitation work, Temple Global was the first company to undertake it. It was only in 2012 that Lisbon’s regulations allowed for faster and more dynamic rehabilitation.
How has Temple Global maintained its role as a pioneer in the sector?
Due to our network across the world, we are able to study other market models and techniques and implement them in Portugal. The location of projects is another crucial part where we excel through our contacts and expertise; by working with the best construction companies, we have developed strong partnerships.
In your dual role as CEO of Lince Capital, how do you work to capitalize on investment opportunities in the real estate sector?
Due to continuous learning and expansion, the company is subdivided into three different groups. One is services, which provides everything associated with real estate, along with two management companies that set up real estate and private equity funds as investment vehicles. Since these are regulated, tax efficient, and guarantee a certain security to investors, they are the best means to conduct real estate business in Portugal. Then, there is a development group that works on future growth and market trends. The key to this subdivision within the company is that all the companies operate independently. Such a setup also allows us to act quickly in case of a recession.
What sector or sub sectors of the Portuguese real estate market present the best opportunities for future investment?
Previously, the Portuguese market did not fully open itself to foreign exposure, new ideas, and new businesses. Portugal is in a unique group of countries that offers a great quality of life that is affordable. In addition, the country has recently attracted an increasing number of tourists. We are also eyeing great potential in spreading the concept of co-working spaces in Portugal because of the large number of small- and medium-sized companies. Instead of paying for a huge space, co-working spaces enable companies to adapt to their needs and avoid spending unnecessary capital. Portugal offers a vast number of opportunities; however, similar to all other markets, investors must know who they are working with and how to market their final product.
What are your expectations for Temple Global's performance over the next two years and what are the top priorities?
There are instances when international capital leaves the market after reaching some success; Portugal has a low capital retention rate, and this is a gap that Temple Global strives to fill. With our two management companies, we want to build a strong management group—one that is a solid asset manager. We want to establish Temple Global as a Portuguese developer that can truly compete with the international capital and companies. ✖
“Portugal has a low capital retention rate, and this is a gap that Temple Global strives to fill.”
Having achieved unmatched credibility on the back of successful projects, Temple Global aims to establish itself as a Portuguese developer that can compete internationally.
Vasco Pereira Coutinho CEO/PRESIDENT OF THE BOARD, TEMPLE GLOBAL AND LINCE CAPITALJosé Cardoso Botelho MANAGING DIRECTOR, VANGUARD PROPERTIES
Arthur Moreno FOUNDER, STONE CAPITAL
The unique nature of all of Vanguard Properties’ and Stone Capital’s projects shows that Portugal’s real estate sector is in safe hands.
How would you evaluate the company’s performance and operations?
JOSÉ CARDOSO BOTELHO We started Vanguard Properties in 4Q2015 to invest in the Portuguese real estate sector. At present, we appraise opportunities across Portugal, though the first deals were concluded in Lisbon and then Algarve and Comporta. We focus on areas where it is pleasant and easy to live with great prospects. We invested in Castilho 203, which is conceivably the most high-end residential building under construction in Lisbon. We will also build the largest residential tower in Portugal, named Infinity, in Campolide, Lisbon. Other than that, we bought three developments in Algarve, one of them, Bayline, located just 50m from a 6-km beach. Moreover, we purchased an amazing 350-ha plot in Muda, Comporta, to develop a 200-plot village surrounded by 42 farms. Each plot is around 5ha, and one can build a house of up to 500sqm. We are the leader of a consortium that signed in September 2018 a sale and purchase agreement to acquire the famous Comporta Dunes and Comporta Links, perhaps the trendiest present and future spot in Portugal and Europe. All together, we have about 1.05 million sqm of construction in Portugal. Our main shareholder is Claude Berda, which is also one of the largest
owners of residential apartments and developers in Switzerland.
ARTHUR MORENO My brother and I started Stone Capital in 2011 after realizing there was significant potential to renovate the city center of Lisbon, where many buildings, some of which, located in prime neighborhoods and with beautiful architectural value, were still standing in a poor state. Even though Portugal was in the middle of one of its worst economic crises, we thought that there was still an opportunity to refurbish ill-maintained buildings by focusing on outstanding assets in the best areas of Lisbon, as we have always believed in the inherent value of this type of asset in the long run. This strategy has paid off, and our business has grown successfully and at a rapid pace since. We now have more than 40 projects in different phases representing more than EUR500 million in investments. We launched a couple years before the recent uptrend of the Portuguese real estate market and managed to create a strong brand based on an extensive portfolio of landmark assets. We have set up an excellent team of highly recognized professionals and have gathered invaluable goodwill with the authorities because they have valued our commitment to developing and building beautiful projects since day one.
How would you describe your target market?
JCB In the beginning, we were interested in developing projects for foreigners. Later, with the recovery of the Portuguese economy, locals have become a key segment. Typically, we are approached by Brazilians, French, Swiss, Italians, Turks, and South Africans. We see an increasing number of foreign buyers, namely people who do not just want to invest but want to live here. Increasingly, when people look to relocate, Europe is the only place they are looking at, and Portugal is the popular choice.
What is attractive about the Portuguese real estate market for foreign investors?
AM Portugal offers a great location within Europe and is less prone to some of the social problems that face other parts of Europe. Even though prices have been rising fast, we still see an upside in the market, both in terms of capital appreciation and yields. This is especially true for the products we are focusing on, which are at the higher-end of the market with distinctive characteristics and are therefore safer investments in the long run.
What trends do you identify in the local real estate market, and how do you find solutions in response to shifting demands?
JCB For our most important development, which will be in the Comporta area, people are increasingly careful about sustainability. Therefore, our project is designed taking in consideration three axes: sea, land, and community. On the community side, we want to create jobs, promote local productions and invest in art, culture and education.
AM The upward trend in prime real estate in Lisbon has made it difficult for lower-income households to find affordable living options. To counter this trend, the Lisbon City Hall has prioritized the development of social housing programs. Being aware of our responsibility as developers, we have decided to take part in this initiative and have won the first tender. We are convinced that it is important to have a strong social mix within the city to ensure that Lisbon’s authenticity is not lost, and this program is an excellent opportunity to concretely foster this idea. ✖
Portugal emerged from its sovereign debt crisis as the poster child for the success of European austerity measures. Part of its economic growth came from strong foreign investment in the real estate market, boosted by its Golden Visa policy.
OCTOBER 2018 RECORDED EUR74 MILLION IN FOREIGN INVESTMENT COMING TO PORTUGAL through its Residence Permit for Investment Activity scheme, better known as the Golden Visa program. This was twice as much as the previous month and the highest monthly investment level so far since the program first began.
The Golden Visa program is a fast-track system to obtain residence permits, and potentially citizenship, for high-income people who invest into the Portuguese market. It was launched in October 2012, as Portugal found itself at the height of its sovereign debt crisis with a stagnated internal real estate market. The program grants residence permits to foreigners that invest over half a million euros in the real estate market, a million euros in the wider economy, or create 10 or more jobs in the country. If in 2012 only two visas were given under the program, in the first 10 months of 2018 alone, the Portuguese government has issued over 1,100 such documents. Since the scheme began, over 6,500 people have been granted a visa, with further 11,370 residence permits being granted to family members of the investors.
As expected, the sources of these investments are highly skewed toward nations with major investment interests in Europe. China has a clear lead, with nearly 4,000 residence permits issued to Chinese citizens. At 608 visas, Brazilians came in second place, followed by South Africa, Turkey and Russia in third, fourth, and fifth place with just over 200 visas issued each.
The Portuguese visa offer has been of particular appeal to international investors. The country has one of the best passports in the world, allowing travel to 186 out of 199 countries. Furthermore, its openness to allow these investments to focus on real estate makes the whole process not only cheaper but more streamlined. As a result, 95% of the people who were granted visas under the program chose to buy real estate rather than starting new businesses or investing in the wid-
er economy. Out of EUR4.078 billion invested in Portugal through the program since 2012, investment in real estate accounted for EUR3.7 billion, while EUR380 million came from capital transfers.
The program has certainly helped revive the Portuguese real estate sector and has contributed to many derelict buildings being refurbished, mainly across Porto and Lisbon, but it has also received some backlash. For one, the rush for real estate in the main urban centers, that in 2012 was completely stagnant, coupled with explosive tourism rates and the advent of short-term house rental companies like Airbnb, has created skyrocketing competition for housing in the country’s two main cities, with housing prices climbing consistently on double digits per quarter. The latest figures, from the second quarter of 2018, show that real estate prices in Portugal grew by 11.2% during the threemonth period, nearly three times higher than the European average of 4.3%. The rate is even higher in the country’s biggest urban centers. This has caused considerable social issues with Portuguese residents that struggle to find accommodation or afford the rising rents and house prices.
Beyond the social issue, European leaders are growing increasingly concerned with the Golden Visa concept due to security concerns. Independent reports have suggested that the vetting process used to evaluate these visa requirements is lax and inadequate to ensure that criminal offenders are not granted residence in the European space, a problem further exacerbated by the fact that most applicants are Russian or Chinese, countries where border officials have trouble performing background checks without having language skills or specific expertise. In response to these concerns, the Portuguese government recently introduced an amendment to the 2019 State Budget, requesting home-country tax identification and residency number for any Golden Visa application, an amendment likely to pass. ✖
Cushman & Wakefield Portugal has come a long way after acquiring a local company three decades ago, facilitating institutional investors and large companies surrounding Portugal’s real estate sphere.
Eric van Leuven HEAD OF PORTUGAL, CUSHMAN & WAKEFIELD
How would you evaluate the company’s performance and operations in the last 30 years?
I set up my own business with the help of an experienced estate agent in 1987. It was the first foreign business in Portugal catered mainly to Anglo Saxon buyers who wanted to buy real estate in Portugal. When multinational Healey & Baker made an offer to buy the business, I initially declined but as other multinationals set up in Portugal, I sold the company to Healey & Baker (which was later acquired by Cushman & Wakefield). We became a completely different business with a high focus on professional services such as valuation, property management, and more, though with a continued focus on transactional business. The support of an international organization and everything that comes with it—the brand, recognition, and client list—is incomparable.
Cushman & Wakefield was exclusively instructed to sell some Caixa Geral de Depósitos (CGD) properties in Lisbon. What other projects is Cushman & Wakefield currently working on?
The CGD building in Baixa is one of our flagship instructions, though it is a bigger portfolio with land in Porto, the Algarve, Palmela, and Lisbon. We do a great deal of office leasing work; one of our biggest transactions was the forward sale in early 2018 of a building that has yet to be built in Expo for Ageas, the insurance company. We are active in numerous sectors, including industrial and retail, especially stores on the high street. We are extremely active in Porto as well. One area that we specialize in is the sale of supermarkets, which is a popular investment medium because they offer usually long leases and attractive returns.
What trends do you see in the real estate sector, and how do solutions shift according to demands and needs?
We must look at that according to the sector because it is not the same for stores as it is for warehouses. There is a real boom in shopping centers in Portugal, which has some of the best malls in Europe. Another trend is that the high street has become extremely active. The lease legislation that changed in 2012 significantly contributed to this, as did tourism and the arrival of luxury retail. We have a database of all retail deals for the last few years, and 60% of retail transactions is in the food and beverage sector. In terms of investment, we see a completely different set of buyers when compared to the previous peak in 2007. The two main classes of players then would be Portuguese and German property funds, plus the odd British, Dutch, and German non-fund player. At present, we see a wide range of nationalities buying all different asset classes—from extremely opportunistic hedge funds from the US to core players and German funds that will pay high prices if they can buy something which is secure, newly built, on a long lease, and so on. In between, there is a whole spectrum of risk premiums. These are opportunities for the more adventurous investors and those looking for scale.
What is your vision and priority for the coming year?
Portugal did a great deal of work on the fundamentals as a result of the structural reforms imposed on it. This was to get public finances in order and reduce the deficit; however, in the longer term it has made Portugal more competitive and stable; removed the privileges of certain
classes and professions; made the labor law more flexible, the state smaller, and the judicial system faster; and improved the lease law, which is extremely important for our industry. As a result, the structure of the real estate market is much healthier, as it is less dependent on bank finance. There will be a crisis, though no one knows when it will hit; however, Portugal is much better prepared today than it was 10 years ago. ✖
BIO
Eric van Leuven is Executive Partner and the Head of Cushman & Wakefield in Portugal, leading a team of 85 professionals in consultancy and real estate brokerage, as well as participating more directly in investment services and promotion of shopping centers. As a member of Cushman & Wakefield’s EMEA Board from 2007 to 2012, he chaired the local boards of the firm’s offices in Poland, Hungary, Czech Republic, Slovakia, Romania, and Greece. He is currently a member of the firm’s European Executive Council. He is currently Vice-President of ACAI (the Portuguese Association of Property Consultants and Valuers) and of the Dutch-Portuguese Chamber of Commerce.
Companies that entered the Portuguese market early and evolved through various market cycles are the ones reaping the most rewards.
I LAUNCHED B. PRIME IN 2009 at the peak of the financial and real estate crisis. Since then, B. Prime has grown and become active in all segments of commercial real estate. Initially, we focused mainly on our offices agency business because that was our core business. From there, we developed new business areas such as investment, valuation, interior design, and asset and property management. One of the main goals we have achieved is being in a good position to retain our international clients because we are able to cover all their real estate needs; around 85% of our turnover is from international clients. At present, the office market is quite limited in terms of supply, which is one of the main challenges. The crisis halted construction activities but it is slowly resuming. Over the years, we have been responsible for marketing most parts of the office buildings in the Expo area. We are known for having a strong relationship with the historic areas in Chiado and downtown and have also been involved in the most important deals, including the 2017 deal for Google's Portugal headquarters. What differentiates Portugal's real estate market is high-quality assets. Portugal is a mature economy that is attractive and dynamic. Equally important, while Lisbon is a European capital, it offers higher returns compared to other capital cities. The rents are quite low and returns are still higher compared to countries like Spain, France, Italy, the Netherlands, and Belgium.
Francisco Horta e Costa GENERAL MANAGER, CBRE PORTUGALCBRE OPENED IN PORTUGAL IN 1988 and has witnessed multiple cycles, in particular the crisis between 2009 and 2012; however, we have been breaking records from 2014 onward. In 2018, we will have our third record year in a row; our revenue in 2018 is six times larger than what it was five years ago. Also, our staff has increased from around 30 people in 2013 to 160 in 2018. We have diversified our business through new business lines in Portugal, such as having a dedicated hotels team. Similarly, CBRE has a dedicated capital advisors team since September 2017, and capital advisors is an area within capital markets that dedicates to corporate financial side of real estate. Moreover, CBRE does some debt advisory, equity placement, and M&A. We also do equity placement and have a big building consultancy team composed of architects and engineers for consultancy services. Over the years, CBRE has become leaders in project management of offices in the Portuguese market. In the retail sector, the company plays an important role in the refurbishment of shopping centers. We also have our asset services business line, and it has grown exponentially over the last three-four years. At present, we manage almost 1.2 million sqm of properties across all sectors except hotels and residential. The goal is always to grow. The market’s fundamentals are quite interesting and healthy. We want to consolidate our new business lines such as hotels or capital advisors. Our priority in 2019 is not to expand our team but to incorporate technology because the real estate sector has been slow in implementing technology.
Pedro Lancastre GENERAL MANAGER, JLL PORTUGAL
JLL STARTED AS A RETAIL CONSULTANCY COMPANY during the boom of shopping centers. After 2007, we started to look at other areas of real estate, especially offices. Since JLL was focused on commercial real estate, we started covering the entire commercial realm. From 1997-2007, our labor force grew from one to 35, which was followed by four difficult years due to the recession. In 2014, we acquired Avenida da Liberdade, a construction company that specializes in retail. JLL constructed all the shops, and the project was a big success. Later in 2015, we bought a residential company called Cobertura. So far, we have multiplied our business by 10 times and our workforce by eight. In doing so, JLL’s volume of annual transactions has skyrocketed from EUR5 million to EUR60 million. We are the only company that covers all the segments and sells a 360-degree scope of work. We have 100 people working for the residential segment and 200 working for the commercial segment. JLL Portugal is about the size of JLL Italy, although we were more similar to JLL Hungary when we started. The new lease law in 2013 triggered Portugal’s success story. The government made some important reforms in terms of golden visa and non-habitual residence. Over the last 12 months, JLL has done business with 53 different nationalities. In October 2018, we worked with 23 different nationalities. In the commercial sector, the biggest investors are from the US, the UK, France, Spain, and some from Asia. In terms of residential, the main ones are Brazil, France, Turkey, and Scandinavia.
SOURCE: CIA WORLD FACTBOOK AND US LIBRARY OF CONGRESS
SOURCE: EUROPEAN COMMISSION
For this chapter, we decided to touch on national products, including wine, olive oil, and other country-specific goods. As visitors to Portugal will attest, the country boasts much natural beauty, with cultivated land and forests covering more than 75% of the land. Developments in this industry, thus, have an important role to play in maintaining the country’s environmental and landscape characteristics as diverse as possible.
And in Portugal, as all over the world, agriculture has undergone enormous change in recent decades. Today, agriculture is all about smart sensors, GPS, tablets, and other gadgets loaded with technology. Technology has afforded producers new levels of efficiency, especially important as margins become squeezed due to lower prices at retail and higher production costs, partially a result of new environmental concerns.
Pedro Queiroz from the Federation of the Portuguese Agri-Food Industry (FIPA), who we interviewed for this chapter, focused on the scale of the food and drink industry in Portugal. “This sector currently sees turnover of about EUR16 billion per year,” he told us. Queiroz, along with other sector participants interviewed for this chapter, also broadly agree that without focusing somewhat on sustainability and the environment, they cannot build sustainable businesses due to the growing demand among the public for organic, environmentally friendly products.
In that vein, we heard from Jorge de Melo, CEO of the Sovena Group, that the agribusiness hold-
ing firm, one of the largest in Portugal, is dedicated to developing recycling and reuse processes, an initiative it is focusing on not just in Portugal, but in seven different countries across four continents.
During our interviews with industry leaders, we learned of the powerful role technology will continue to play, such as smart sensors that can alert agricultural workers as to the right moment to irrigate.
Portugal also has a booming fisheries industry and a robust canned products sector that export within Europe and all over the world. The highest demand for locally grown agri-food products in the country is for wheat, barley, corn, rice, potatoes, grapes, olives, and tomatoes.
In terms of forestry, there is a strong demand for paper and cork, with species in particularly high demand including eucalyptus and oak.
Health trends sweeping the Western world have also not escaped Portugal, and local firms are striving to keep up with modern trends. Paolo Fagnoni, CEO of Nestlé Portugal, told us the firm is working hard to significantly reduce the amount of sugar used across its portfolio, slashing 2,750 tons of the white stuff from its product portfolio, an amount equivalent to 11 billion calories. The firm also aims to educate people regarding the choices they take while choosing products in supermarkets.
The future of agriculture in Portugal, then, has never had such a healthy, environmentally protective outlook. ✖
Portugal’s economic recovery has seen its F&B sector emerge with annual turnovers of EUR16 billion, thanks to FIPA’s undeterred focus on stable policies, excellent nutrition standards, and sustainability.
Pedro Queiroz GENERAL MANAGER, FEDERATION OF THE PORTUGUESE AGRI-FOOD
What steps has FIPA taken to foster the competitiveness of the local food industry?
The food and drink industry in Portugal currently sees turnover of about EUR16 billion per year. FIPA represents about 85% of the entire food industry; we have branch associations, large national companies, and multinationals. We are a lobbying organization, and our main goal is to deal with stakeholders in government, non-profit organizations, and other associations. We have several ministries to deal with; in the past, we worked closely with the Ministry of Agriculture, though now we also work with the ministries of health, economy, environment, and finance on various aspects. Our networking is our greatest asset. We are recognized as the voice of the sector and follow all the developments.
such as vegetables and fruit, for example. We have excellent technology in our factories and modern processes. When we entered the EU, we needed to adapt to new regulations and were behind many countries in Europe. However, today our new factories are world-class in technology. We have great human resources, and our universities offer outstanding education in the food industry and agronomics. As a small country, we have the creativity and know-how to take advantage of excellent raw materials; it is vital to have a great end product.
What are FIPA’s top objectives and priorities for 2019?
Food industry worth over EUR16
billion a year
BIO
Pedro Queiroz has extensive experience as a trainer in the area of food security management systems, having collaborated on several national and European research and development projects. Apart from being general manager of FIPA, Queiroz is a member of the Committee of Directors General of FoodDrinkEurope. He has degrees in biochemistry engineering and biotechnology engineering.
How does FIPA enable the food industry to capture a greater international market share? There are two major issues for our federation, and one is the competitiveness of our sector. With that in mind, our main pillars are innovation and exports. The global financial crisis hit certain sectors hard, and they realized the only solution was to grow exports. The boom in exports came after 2012, and in the last five years exports have grown by over 10% annually. It is not only about selecting products and exporting them; there are also trade barriers and logistics problems that need to be resolved. To that end, FIPA was extremely engaged in devising a strategy for the food and drink industry in Portugal to boost exports. We are engaged with the national competitiveness cluster that provides all the tools for international fairs, deals with trading issues, and picks our companies in an organized way. Notably, FIPA created what we call technical scientific mediators to create a link between universities and companies to transfer knowledge and solutions.
What are some of the biggest competitive advantages of Portugal’s food industry? Portugal has great raw materials in areas
We are pleased that Portugal is emerging from the crisis and recovering. We are currently dealing with several important issues. We have a major challenge with competitiveness and are working to ensure a more competitive food industry. However, there is instability in policies. For example, fiscal and labor policies are not predictable. If we want to grow with confidence and attract more foreign investment, we need to improve. One of the main challenges for FIPA is asking for more predictable policies. What is important is to be part of the dialogue on nutrition and creating an environment where dialogue can thrive. Our second-biggest challenge is being part of the evolution in society regarding consumer behavior and nutrition. Third, we have to maintain the reputation of FIPA and the industry. Sometimes, a negative perception about us is cultivated by health professionals, nutritionists, doctors, and more recently politicians. The fourth challenged is sustainability. Portugal and Europe as a whole will face more challenges regarding sustainability, packaging, pollution, and waste. We are dealing with the main circular economy, and it is a big challenge for us. We need to know what to do about food waste, packaging materials, logistics circuits, and reducing our carbon footprint. Addressing all these challenges will bring greater competitiveness to our industry. ✖
Paolo Fagnoni joined the Nestlé Group in 1991, beginning with roles in marketing and sales in several business units and then taking the lead in the petcare business at Nestlé Purina Italy in 2000. After 12 years in Italy, he was appointed Regional Director for Germany and Austria in 2003. Two years later, he was given responsibilities for Nestlé’s Petcare business in Switzerland, the Netherlands, Poland, Hungary, the Czech Republic, and Slovakia. In 2008, Fagnoni assumed the role of Business Executive Manager of Nestlé’s Culinary Food business before becoming Regional & Category Manager for Nestlé EMENA Zone at Nestlé’s headquarters in Vevey, Switzerland. Since January 2018, Fagnoni is CEO of Nestlé Portugal, managing a portfolio of more than 90 brands.
Putting its stakeholders’ interests, especially those of its consumers, at the center has enabled Nestlé to become the biggest player in Portugal’s FCMG sector and retain invaluable human talent in the increasingly sought-after market.
Can you give us an overview of the evolution of Nestlé Portugal?
The evolution of Nestlé Portugal is in a certain sense similar to the growth and evolution of Nestlé as a global company. Nestlé started in Portugal with a dairy business in 1923, and from there, the company evolved organically and through acquisitions, launches, and new categories to become the multi-category, multinational multi-brand company it is today. Nestlé has developed several local brands and products to answer the Portuguese consumers’ needs. These include brands and products that became local jewels like Cerelac, Nestum, Mokambo, and Buondi, together with international products such as Nespresso, Nestlé Purina, and Nestlé Health Science. Food is a significant part of our portfolio and history, though we are also keen on the dimensions of health and wellness.
Where do you see opportunities for the population to become healthier?
We want to enhance the quality of life and contribute to a better future. Becoming healthier is a broad ambition because it is multifactorial; it is related to the food you eat but also to your lifestyle. Nestlé produces food and beverages that aim to improve the quality of life of individuals and their families. Moreover, we constantly strive to provide consumers with the best nutritional solutions, choosing the best ingredients, applying the latest scientific knowledge to the formulation, and providing solutions that are convenient to suit the different needs of each consumer according to age, physical condition, personal taste, and lifestyle. Reducing sugar is one of the areas we are active in across all categories; in Portugal specifically, we have been working extensively on significantly reducing the amount of sugar across our portfolio. Between 2013 and 2017, Nestlé reduced 2,750 tons of sugar from its products, equivalent to 11 billion calories. Similarly, we have reduced salt and saturated fat and developed a gluten-free product range as well as a bio/natural range of products across categories.
How do you contribute to the social development of healthier foods?
Being the most relevant food company, it is our duty to inspire people, share our knowledge in nutrition, health and wellness, and lead discussions about food. Since 1999, we have been working together with the Ministry of Education to enable teachers from pre and elementary schools to teach basic nutrition concepts to students. Nestlé was also a pioneer in developing and introducing new labeling schemes aimed to provide consumers with better nutritional information that help them make informed choices. Another aspect are the partnerships we have been developing with our clients to broadly spread educational messages to the consumers about balanced diets; these partnerships are fundamental as Nestlé alone does not have the means to solely impact its millions of consumers. Nestlé is highly active in supporting government efforts to improve the nutritional quality of foods, advocating for the improvement of nutritional profile of products and for the establishment of high standards across the food industry.
How would you rate the level of human talent in your sector, and what are your strategies to retain the best talent?
Portugal is increasingly becoming an active market and as a result, there is tremendous competition in terms of recruiting talent. At Nestlé Portugal, we have a low level of turnover as compared to other countries. Working at Nestlé is the opportunity to drive the market growth and be part of a company that provides state-of-the-art nutrition and takes good care of Portuguese consumers’ preferences and nutrition needs. Our people will drive the change and help shape the future by participating in innovative programs such as “Fora da Casca,” developed in partnership with Nova Business School. At Nestlé, people can enjoy a digital environment and a flexible way of work that allows a better work/life balance as well as other benefits like educational support, medical assistance, and health and wellness guidance, among others. ✖
“At Nestlé, people can enjoy a digital environment and a flexible way of work that allows a better work/life balance.”
Sovena Group’s well-thought-out strategies have made it one of the largest olive oil companies in the world and the largest packer of oils and olive oils in Iberia.
What have been the company’s milestones and achievements in the last few years?
We are part of a family business group that has concentrated its efforts in the edible oil sector in the last few years and become one of the largest olive oil companies in the world. At present, we have direct operations in seven countries across four continents, and we export to more than 70 others. We employ more than 1,300 people and own the largest private olive grove at more than 15,000ha. Our mission is to bring olive oil to everyone, and for that we execute different strategies in different markets.
How have you expanded your presence internationally?
The international expansion of Sovena began in 2002 with the acquisition of an company in Spain, a market that made perfect sense because it was the world's leading producer of olive oil. From there we began to develop the export business. We acquired an olive oil brand with a strong reputation in Brazil—Andorinha—and today we are one of the biggest companies to operate in the olive oil business in the country. The US market represents about 10% of global consumption of olive oil, so we considered being strategic there with a local physical presence. Thus, in 2005, we acquired a position in a company—East Coast Olive Oil—and we are currently working with major US-based retail and full-service chains. In order to achieve greater control over the olive oil value chain, in 2007 we took an important step in our strategy with a focus on olive groves. At present, we have 15,000ha divided between Portugal, Spain, and Morocco. Sovena has become one of the largest companies in the world in the olive oil business and is the largest packer of oils and olive oils in Iberia. To accomplish this, the company’s industrial units in Portugal, Spain, the US, and Tunisia played decisive roles.
Do you plan to enter other new markets?
50% of our revenue comes from Portugal and Spain, while the other half comes from around the world. 2018 will be a successful year, with group turnover of around EUR1.5 billion. Our base is in Portugal, but we view ourselves more as an international company. For example, we are the largest player in the French market and are growing our presence in important markets like Germany. Other countries that do not traditionally have high olive oil consumption levels, like China, are also our targets. We have a JV with an important local group in China, and in the midterm, China will be an important market for the consumption of olive oil.
Can you tell us more about your strategy of combining your global scope and local presence?
In Portugal, we are extremely focused on our brands, Fula (vegetable oil) and Oliveira da Serra (olive oil). The same goes for the Brazilian market, where we are present with our olive oil brand Andorinha. In Spain, we are developing other brands, like Soleada and Fontasol, while in the US, we have a local presence with our brand Olivari. The consumers in these various regions have different expectations, which is why we tailor our operations to each specific market.
What measures does the company consider to be eco-friendlier in its operations?
In 2019, we will have one more annual sustainability report, and as we are a diverse company in terms of operations, we have had different projects in different areas. We are in the process of developing more recycling and reuse processes. The agricultural project of the firm is an important project in terms of its eco-friendly strategy. The amount of CO2 that we capture from the atmosphere via our 15 million trees is extremely significant. This is the main driver of our work to reduce our footprint, though we have operations in many other areas. ✖
Jorge de Melo CEO, SOVENA GROUP15M olive trees
EUR1.5 billion in total turnover for 2018
15,000ha in Portugal, Spain, and Morocco
BIO
Jorge de Melo has a degree in management and business administration from Universidade Católica Portuguesa and has attended several postgraduate courses in the same field. He has a strong experience in business, consulting, and management in the consumer sector both in Portugal and the US. He assumed his current role as CEO of Sovena Group at the beginning of 2018.
Portugal has made a comeback not only as the world’s leading manufacturer of cork stoppers, but also as a legitimate winemaker in the global market.
UNCORKING A PROPER BOTTLE OF WINE is always accompanied by what many people feel is one of the most satisfying sounds on earth. That specific satisfaction, however, was in recent years threatened by the arrival of alternative stoppers made out of plastic and aluminum. In the name of good taste and style, the cork industry, largely based in Portugal, is standing its ground. The industry argues that nothing except a piece of cork can do the trick. When it comes to wine, so the sentiment goes, one is not merely after practicality, but tradition and style. After some ups and downs over the years, corks have made a comeback and are now reclaiming their status as the ultimate guardians of wine bottles.
Regardless of cork stoppers’ aesthetic merits over plastic and aluminum, the production of cork is a billion-dollar industry in its own right. Portugal, the world’s leading producer, earns approximately USD1 billion per year from the export of cork, and the industry is responsible for 15,000-20,000 direct and indirect jobs in the country. Portugal owes its status as the world’s biggest producer of cork stoppers to over 1.8 million acres of cork oak forests stretched along its western and southern coasts.
Founded in 1870, Corticeira Amorim is thought to be the world’s largest producer. The company played a crucial role in the re-popularization of cork in recent years by minimizing the undermining effects that, according to some winemakers, cork has on the taste and smell of bottled wine. The industry is now employing advanced screening and processing methods to make cork stoppers as neutral as possible. The company believes that cork manufacturing is one of the eco-friendliest industries in the world, because cork oak forests, which are kept healthy and thriving with the help of the industry, are effective absorbers of greenhouse gases.
Although Portuguese cork is for the most part exported, particularly to the US, it is also used by local winemakers. Portugal is hardly
a new member of the winemaker’s club; it has been exporting wine since Roman times. In the early 18th century, Portuguese wine was appreciated in England, among other places. Indeed, the winemaking tradition of Portugal is as sophisticated as those of France and Italy, and some regions of Portugal have had appellation systems in place for centuries.
In addition to the UNESCO-protected Douro Valley, Minho, Dão, and Bairrada are regarded as wine-producing regions of Portugal. Thanks to grape varieties such as Touriga Nacional, Touriga Franca, Alvarinho, and Tinta Roriz and a general dislike for using non-Iberian grapes, Portugal has established itself as a reputable winemaker around the world. Port wine and vinho verde are in high demand in global markets, with port accounting for over 40% of Portugal’s wine exports.
According to Portugal’s Institute of Vine and Wine (IVV), the country exported over USD885 million worth of wine in 2017, a 7.5% growth. And the largest increase came from emerging markets; Brazil and Angola each spent over USD50 million in 2017 on Portuguese wine. However, France continues to be the biggest customer of Portugal’s wine—importing approximately USD125 million worth per year—followed by the UK and the US. Although Portugal is already among the top 20 producers in the world, if the country wants to make a name for itself as a major player in the sector, marketing should be taken more seriously. Many winemakers across the country are small family businesses that cannot possibly launch marketing campaigns in the target countries. As such, having an exporters’ association of some sort could be a very effective measure. Since 1997, this role has been fulfilled by ViniPortugal, whose aim is to promote the image of Portugal as a wine producing country par excellence by advancing its unique selection of vineyards and varieties. ✖
The UNESCO-protected Douro Valley, a region renowned for viticulture
The Portuguese healthcare system has both public and private elements, and the interviewees in this chapter were handpicked in order to highlight the myriad services available across the country.
The National Health Service (SNS) is Portugal’s equivalent of the UK’s NHS, a topic we went into detail on with Minister of Health Marta Temido, whose interview is featured later in this chapter. She reminded us that, since 1979 and the inception of the SNS, Portugal has faced a deep epidemiological, demographical, and social transition. She also pointed out that SNS must find innovative and efficient ways to continue to provide care and maintain its universal coverage policy.
The service is funded by the taxpayer, yet is not entirely free at point of use thanks to a consultation charge. The system boasts a high level of modernization, including a wide-ranging IT backbone that plays the main role, uniquely storing different kinds of health information.
Another method of obtaining healthcare is through a special social health insurance scheme, which covers some 25% of the population and allows access to private care. The final method is voluntary private health insurance, which is the preferred system for 10% of the population
Portugal’s health expertise is also in demand worldwide, with the country exporting health goods and services worth EUR1.398 billion last
year, a growth of 123% compared to a decade ago. Technological developments are also having an impact domestically, as robotics, AI, machine learning, and IoT look set to transform the sector moving forward. Portugal is also experiencing a boom in the field of research, creating a direct impact on how people are treated in hospitals. Indeed, Teresa Brantuas of Allianz Portugal told us for this chapter that healthcare is the line of business where this evolution will have the greatest impact.
Furthermore, Portugal is a competitive partner in R&D, in areas such as neurosciences, cancer, immunology, regenerative medicine, and nanomedicine. Portuguese scientific production in the areas of medical and health sciences (clinical medicine, basic medicine, and health sciences), life sciences, and medical engineering grew by 88% between 2008 and 2014, reaching more than 8,000 publications. Thanks to the quality of its research infrastructure, Portugal positions itself as a competitive partner in specialized scientific, technological, and analytical services, as well as an attractive destination for clinical trials. New hospitals are being built via the PPP model, with a great outlook for the future.
Through problems that justify critical reactions, Portugal has been able to implement specific strategies for action, with clear and internationally recognized results. ✖
BIO
Marta Temido, the current health minister, was previously the Deputy Director of the Instituto de Higiene e Medicina Tropical of the Universidade Nova de Lisboa and President of the Executive Board of the Administração Central do Sistema de Saúde, I.P. She holds a PhD in international health, health and development policies from the Instituto de Higiene e Medicina Tropical of the Universidade Nova de Lisboa and a master’s in management and health economics from Faculdade de Economia da Universidade de Coimbra. She also holds a postgraduate degree in hospital management from Escola Nacional de Saúde Pública of the Universidade Nova de Lisboa and a law degree from the Faculdade de Direito da Universidade de Coimbra.
The Ministry of Health seeks to combine innovation and technology with improving access to quality care to raise healthcare to another level.
Marta Temido MINISTER OF HEALTHHow would you evaluate the implementation of the national healthcare scheme in Portugal?
Portugal has made significant progress in both reducing mortality rates and increasing life expectancy at birth in the last 40 years. The introduction of a universal immunization program and the expansion of healthcare services along with improvements in general living conditions have led to reductions in infant mortality rate and a steady increase in life expectancy. Today, Portugal is among the countries with the lowest infant and maternal mortality rates. Over the last 40 years, there was also a shift in the epidemiological features of the Portuguese population, with the increase of non-communicable diseases, namely cancers, circulatory diseases, musculoskeletal disorders, and mental and behavioral disorders.
The Portuguese National Health Service (NHS) has contributed to better health status through solid health gains. Nevertheless, as a new era approaches, the challenges to be faced and addressed by the NHS are different and more complex than ever before. For the next 40 years, the NHS has to find innovative and efficient ways to continue to provide healthcare to the population.
How do you assess the synergies between public and private healthcare facilities?
In Portugal, the private sector always played a role in the provision of healthcare services in specific areas. The relationship between the public and private areas is of complementarity though also to some effect competitive; in fact, the Basic Law of 1990 envisaged a competitive relationship between both sectors. Traditionally, the private sector provides care in some of the most lucrative areas and where the public sector fails to provide full or timely coverage, as is the case of medical specialist appointments, elective surgery, and medical exams. In the last two decades, the provision of healthcare services by the private sector has shifted from small medical cabinets, geographically spread, and more abundant in urban areas to variable size, well-equipped, high-quality clinics, and small hospitals where medical specialists are concentrated and specialized, and medical exams are readily
available. This happened alongside the increase in the percentage of the population covered by a voluntary health insurance, estimated to be 20% in 2014. There are great examples of the relationship between the private and public sectors in the provision of care, such as the dental voucher, where the government contracts with private providers for specific oral care screenings and treatments for vulnerable groups of the population, or the provision of specific services in community pharmacies that are privately owned and well spread throughout the country. These services are aligned with the national health priorities and programs, namely at the primary healthcare level. Despite the great examples and the existing relationship between the private and the public sectors, there is a need to better define the boundaries between the two sectors, increasing transparency and clarifying funding and stewardship roles.
How do you envision attracting investment into the medical equipment and pharmaceutical sectors?
The Ministry of Health is always focused on attracting innovation into the health system, responding to patients’ needs, and training. We will maintain and encourage the adequate access of medicines and medical devices for citizens and professionals’ safe and rational use of new health technologies, fighting waste, and contributing to the sustainability of the whole system. For example, we have successfully introduced policies for the introduction and stimulation of generic and biosimilar medicines, making them accessible to the population and at the same time improving citizens’ access to therapeutic innovation. NHS also ensures the availability of the latest scientific and technological state-of-the-art medical devices and differentiated products that save lives or significantly improve the quality of life of patients. While improving the access to these innovative products, we have to ensure the health system’s sustainability, improving the definition and uniformity of the products’ characteristics, adjusting the acquisition processes to the effective needs of the institutions, and improving market surveillance and traceability, for example. ✖
Fifteen years have passed since Portugal first tried out the public-private partnership model for its new hospitals and, in contrast to similar models applied in other sectors, the signs of success are easy to spot.
IN NOVEMBER 2018, the clinical benchmarking company IASIST announced the winners of its "Top 5 - The Excellence of Portuguese Hospitals" awards. There were 10 different categories divided by size of the hospital and different clinical practices, based on the evaluation of over 8 million clinical cases of patients discharged from Portuguese hospitals in 2017. The results yielded causes for celebration amongst privately managed state institutions. Out of the four PPP hospitals across the country, Cascais and Braga were considered the best in their size category, while Loures and Vila Franca de Xira were well placed in the top three of their own categories. Cascais went on to win another two awards in the excellence in respiratory clinical care and cardiovascular clinical care.
These are promising results for a model that has seen so much criticism over the years. First devised for the health sector in 2002, under legal decree 185/2002, the PPP model was designed to promote the construction of new hospitals (avoiding budget and temporal slips), pass on the massive investments to the private sector (mitigating investment risk for the states), and gain efficiencies and savings in patient care for the state.
Portugal has had extremely bad experiences with this model in the past, which was used extensively to promote the construction of the country’s modern highways and roads. Across the board, the
design of these initial agreements was proven flawed and highly detrimental to the state. Wary of facing similar issues and yet in need of private investment to improve its healthcare network, the government devised a different strategy for this particular sector. Instead of a key-in-hand contract, the hospital PPP would be divided in two different PPP contracts, one for the construction and maintenance of the building, and another for the actual management of the clinical service. This was designed to limit the tendency by private companies to submit unsustainably large and expensive projects with the intention of winning the public bidding and then recover the investment from the profits and cost reduction in the clinical management part of the contract (with potentially damaging consequences for the quality of the service). This has made the projects more manageable and sustainable.
The model is not without costs for the national coffers. After all, private management companies charge fees for their services, and the capital fronted by the private players for the development of the projects by the private players also comes at a premium for the state. In 2017, the government funneled EUR447.5 million into PPP hospitals. In 2018, the estimate predicts an increase to EUR471 million. This shows significant growth from the EUR401 million these projects cost the national budget in 2013. These figures have prompt-
ed some parliament members, mainly from the Left Block party, to claim the PPP model has not succeeded, and that management should be brought back to the public sector, where patient care, not profit, is the driving variable in a hospital’s management. However, according to studies on these facilities’ efficiency, the constant increase year-on-year in investment by the state is not pegged to flaws in management of the clinical care services or the building’s management, but the considerable increase in these hospitals. In fact, PPP hospitals, in whichever category or size, have proven to have a considerably lower cost per patient than their counterparts working under public management, when compared with hospitals of similar type and size. According to a 2016 study by the Lisbon Catholic University, PPP hospitals, on average, save the national coffers 20%
per patient, which amounts to around EUR70 million per year (compared public cost for the four hospitals). Further, these hospitals have raised the bar in terms of the quality of treatment for patients in Portugal, with the Cascais Hospital being the only in the country, and one of three in Europe, qualified as Level 7 by HIMSS Analytics, making it one of the most technologically advanced in the continent.
Today, there are 1,618 beds, 35 operating rooms, and 169 consultation offices operating under the PPP regime. Estimates indicate the private sector has invested up to EUR460 million in new hospitals and equipment in Portugal, a figure that will rise when the fifth hospital contracted under the PPP regime, the Lisbon Oriental Hospital, starts operating in 2023. There are currently no other planned hospitals under this regime. ✖
More than 50 specialists in clinical pathology and genetics
More than
450 blood collection centers nationwide
Over
6k patients per day nationwide
More than
15 laboratories in Portugal
More than 80 employees
Grupo Germano de Sousa’s success can best be summed up by its understanding that science and medicine only really progress when technological development is combined with a deeper respect for human values and professional ethics.
Grupo Germano de Sousa was established more than 43 years ago. Can you describe the main achievements and activities of the company?
BIO
Germano de Sousa is a doctor of medicine with a specialization in clinical pathology. He is CEO and Clinical Director of the Centro de Medicina Laboratorial Germano de Sousa. Prior to his current positions, he was a former associate biochemistry professor and regent of the master course in chemical pathology at Nova Medical School as well as former head of the clinical pathology department at Fernando Fonseca Hospital. He has been active in his field as former president of the Portuguese Society of Clinical Pathology, the Portuguese Medical Association, and the Portuguese Society of Osteoporosis. Since 2005, he has been a member of the New York Academy of Sciences.
For more than 40 years, we have placed ourselves at the service of our patients. The company’s initial focus was on hematology, biochemistry, microbiology, and immunology. In 2009, we built a lab in the field of genetics. After that, in 2014, we shifted our building from Lisbon to our present location due to the increasing business operations that demanded more space. In the field of oncogenomic, the study of genes and malignant tumors, we have developed a highly skilled team since 2015. During this time, I invited three high-performance researchers to work with us in oncology. This area is extremely important because the main goal of our study is the type of mutations and fusions of genes found in both solid and liquid tumor biopsies. Therefore, our studies can help our fellow colleagues perform better diagnosis and therapeutics. It is an important achievement of our company’s history because it was the pioneer in Portugal for liquid biopsy. We also study predictive risk in cancer, namely in breast, prostate, and colon cancers, among others. A percentage of the global population will definitely have cancer, and we are attempting to stop it in its early stages. The future is now and we are extremely pleased with our contribution in the precision medicine model.
You are collaborating with the medical faculties at Universidade Católica Portuguesa and Universidade Nova de Lisboa. Could you please explain the details of these collaborations?
In terms of teaching, we are connected to medical and biomedical students with a positive relation in laboratory medicine. Grupo Germano de Sousa has considerable influence on the future physicians of Portugal since it collaborates with Universidade Católica in a post-graduation laboratory medicine course and with Nova Medical School in immu-
nology course. Notably, we have connections with other research institutions and foreign laboratories. Our company is known for its high-qualified doctors specializing in each area of clinical pathology, anatomic pathology, and genetics. We also have an active participation in international research groups.
Do you have collaborations with other laboratories around the world?
At present, the group is more than a network of clinical pathologies laboratories across Portugal. It is also a research center and a partner for institutions around the world, with whom we share clinical and technological knowledge in a wide variety of areas such as genetics, autoimmunity, molecular biology and oncological diagnosis. In terms of the group’s future, we want to do better in Mozambique, where we already have a partnership. Moreover, we analyze biological products that come from labs in Spain, Angola, and Saudi Arabia, and we are currently partnering with laboratories in northwest Africa.
What are the main challenges for growth for private health companies? What are the main priorities for your group in the next coming years?
We have 10 million Portuguese people, and only 30% are treated by private health companies. Our purpose is to make diagnosis available for every patient that needs a good healthcare support. Innovation, quality, and precision have always been our motto. Therefore, we will continue with developments and challenges in medicine. We will continue to invest in modernity and diversity in terms of techniques and equipment to keep up with the latest requirements in medicine. We understand that science and medicine only really progress when technological development is combined with a deeper respect for human values and professional ethics. ✖
BIO
Sérgio Reis Soares is director of the IVI RMA Lisbon, Portugal. He completed medical school, and residency in obstetrics and gynaecology at the Universidade Federal de Minas Gerais, Belo Horizonte, Brazil, where he also obtained a master's degree in gynaecology. He also obtained a PhD in cellular biology, physiology, and immunology from the Universitat Autònoma de Barcelona, Spain. After that, he spent five years at the IVI Valencia, working on his postdoctoral specialization.
It took years, but IVI has established itself as a market leader in Portugal and is now focused on providing high-tech medicine at the lowest possible cost.
Could you please give us an introduction to the company and its main achievements?
SÉRGIO REIS SOARES IVI was founded in 1990 in Valencia and was the first European clinic exclusively dedicated to human reproduction. It rapidly became a field reference and marker leader in Spain. The intention was to eventually become global leaders both in terms of clinic results and research, and the clinic started global expansion in 2003 with IVI Mexico and then Portugal, Chile, Argentina, Panama, the Middle East, the UK, and Italy. Another large step in terms of global expansion was the merger with the Reproductive Medicine Associates of New Jersey in May 2017. Eight clinics have already opened in the US, and business is going extremely well. We started in Portugal just before the 2008 crisis, and with a great deal of effort, we have become market leaders in Portugal. An important shift occurred in 2016, when the Portuguese population started to feel some economic relief. Thereafter, 2017 and 2018 were especially great. We were in a privileged position and invested in developing research at IVI Lisbon, as we wanted this center to generate scientific knowledge.
ologist may not be able to detect when assessing at specific timepoints only. In Portugal, those who can perform research have the means and patients but lack the general know-how to perform it. To that extent, we purposely did not initiate many of the projects we had planned and are, instead, collaborating with other national centers on having more site performing research. Our ongoing projects with private funding started in 2018; at the same time, government-funded organizations are also keen to finance research.
What is your interpretation of the current health sector in Portugal?
Samuel dos Santos-Ribeiro SCIENTIFIC COORDINATOR, IVI LISBONBIO
Samuel dos Santos-Ribeiro obtained his medical degree from Nova Medical School in Lisbon, concluding his training in obstetrics/gynecology at Hospital Santa Maria. He completed the Clinical Scholars Research Training (Harvard Medical School) and a research program at Universitair Ziekenhuis Brussel with his PhD thesis focusing primarily on the optimization of endometrial receptivity. He is currently the Scientific Coordinator at IVIRMA Lisbon and an Invited Professor at the faculty of medicine of the University of Lisbon. The primary focus of his ongoing research is the relationship between infertility treatments and endometrial receptivity.
What kind of help do you see from machine learning?
SAMUEL DOS SANTOS-RIBEIRO At present, machine learning is a huge topic. It first started in the field of oncology as an attempt to predict who would respond to a specific type of chemotherapy or have a higher chance of survival. We are attempting the same in assisted reproduction exploring multiple avenues. The first approach is trying to determine accurately whether an endometrium is receptive prior to embryo transfer. A second is in the development of algorithms that can continuously assess embryo development. This latter strategy will have a substantial translational application into every day clinical practice if we are able to accurately film the whole developmental process of the embryos produced, as we need to evaluate many different characteristics that an embry-
SRS Though we have had an improvement, health services still suffer from limitations. Sometimes there is an 18-month wait for treatment at public units, and not everyone can afford private treatment. Even though we are unable to change the economic situation, we are trying to provide high technology medicine at the lowest possible cost. We also see challenging situations in terms of education, as the general population has little information regarding reproductive health care in terms of life habits that may have an impact on future reproductive performance. We have been trying to spread this information via webinars, campaigns, and courses. In terms of social responsibility, for years, IVI has been offering absolutely free cryopreservation of the eggs or sperm of patients who are about to begin oncological treatment.
What are your main priorities and goals for 2019?
SRS One of our priorities is the patient experience program, which we are investing in significantly to automate many of the steps from the moment the patient enters the clinic. There are a number of stages during the process that can be simplified, and our goal as always is to improve in terms of the clinical outcome and care that is given to the patient, not only technically but also in the human sense. ✖
What are the main activities of the company?
We have two main businesses. One is the Saúde Prime brand, a B2C brand where we sell health plans, health insurance, and financing for health. Our second business unit is a B2B-oriented service where we help other insurance companies and manage their health insurance policies. We work with large institutions in the Portuguese market such as Victoria Seguros, Banco Santander, EDP, among others, and manage their health clients and health portfolios.
What opportunities do you see in the expansion of your network?
In Portugal, the network is fairly established, and we have excellent national coverage working with the best providers. We are now expanding to other countries and entering new markets. We choose countries where there is specific growth in the market of health insurance, such as Poland, Romania, Ecuador, and Colombia.
Do your local partners provide access to the hospitals?
Yes, though it depends on the countries. In Poland and Romania, we deal directly with the medical providers to build our own medical network. In Ecuador, we acquired a small company that was already established in the market. In Colombia, we are opening a subsidiary, although we will not build our own medical network, as there are many already established.
Can you elaborate on your dedicated tourism solution?
Portugal is growing significantly in terms of tourism, and health is a major concern when someone is travelling to a foreign country. We developed an app that gives tourists access to our medical network. Through this, we are introducing a 24-hour medical support service.
Are people shifting from public solutions to the private?
Yes, there has been stable growth in this direction. Even during tough times, the health insurance business was the only insurance product that grew year after year.
What have been the main achievements of the company?
The company is focused on innovation, which, along with quality service, is the reason behind its success. The two biggest companies in the world of implants are Nobel Biocare and Straumann, and a significant percentage of their products were developed by us. We are not just a dental company; we develop products, surgical techniques, and prosthetic techniques. We have developed two major products that every company related to dentistry is now using. One is the All-on-4 surgical procedure, a specific surgical procedure for people without teeth. We have also developed the Cap Gum technology for mouth reconstruction and have a total of 16 patents, among them several surgical and prosthetic techniques. Moreover, since we are present in 22 countries, we are the biggest dental company in the world in terms of geographic footprint. Our medical side is small; we basically focus on anti-aging and plastic surgery.
What expansion opportunities do you see?
We expect over EUR100 million in revenue, and this is for every country with the exception of China, because in China alone we are already bringing in about EUR50 million. In 2019, we expect to make EUR186 million, with EUR100 million from China alone.
Do you have any universities ties?
We run a MALO CLINIC Education department and have educational programs in 22 countries. We also have a 2,000-sqm education department at our headquarters. Notably, we receive over 3,000 international students every year.
Joaquim Jimenez CEO, SORISA
What are some of the key achievements of the company?
The biggest achievement has been our growth over the last 38 years. In 2004, we received an award from Magazine Exam for being the best commercial company in Portugal. We are the biggest company in the market segments that we operate in; it is difficult to find a company in Portugal that operates in as many segments as we do. We employ a BRB approach in the technical segments regarding esthetics and physiotherapy. In relation to physiotherapy, we work with hospitals and private clinics as well as private doctors. For many years, physiotherapy was only a technical market connected to the medical market through physical therapy. Sorisa started working with it on a larger scale to conduct market research, provide service, and complete its product range. We operate in both the technical and medical segments. Similarly, we work with technicians in the market, but we also work with medical esthetics. Managing big data bases, contacts, customers, markets, and products has been the biggest achievement for us.
What are the main challenges for Sorisa in Portugal, and how does it view the wellness sector in Portugal?
Portugal is a satellite country in Europe that does not have a major fitness producer. We suffer from international trends in the wellness market. Wellness has become part of our daily business as an increasing number of people are becoming aware of it. In the future, any mid-sized company should have wellness rooms and policies. In terms of technology, wellness facilities are looking at using new technologies to communicate with people at home to generate more traction. As a result, the number of health clubs will increase, and the concept will spread to other areas of the economy.
The strengthening of qualifications among the Portuguese population is the main strategic challenge directing and defining the needs of the education sector in recent years. As an EU country, Portugal reformed its university structure in the mid-2000s in line with the Bologna Process, established to ensure the free and easy movement of students.
These priorities fall within a framework recognizing education and training as irreplaceable factors for economic and technological development, social cohesion, personal development, and the full exercise of Portuguese or EU citizenship. Paulo Jorge Ferreira, Rector of Universidade de Aveiro, explained to us in an interview featured in this chapter, that the institution currently hosts 90 different nationalities. In 2018, it received Erasmus students from 38 countries. Similar to elsewhere, the number of international students is growing, and we expect this trend to continue and intensify in the coming years.
However, despite strong efforts so far, Portugal still has a structural shortfall in training and qualification, which requires a clear and persistent commitment to solving the problems that have prevented convergence with current EU standards, such as school failure and high dropout rates, as well as the qualification deficit present among the working population.
In the last 20 years, Portugal, similar to other European countries, has defined a basic education of nine years, organized into three cycles of education. Higher education can be taught in polytechnics or universities in the “three plus two” years system, earning students a bachelor’s or master’s degree, respectively. In Portugal, there are now 11 collaborative labs that are utilizing fresh graduate students’ innovative ideas and work tightly with various industries on real-world issues. The idea is to allow these collaborative labs to help the development of regions that are not under the direct influence of the big cities, like Castelo Branco, or, for example, Covilhã, explained by João Sàágua, the rector of the Nova University of Lisbon. Higher education is provided by the state, but there are special exceptions like public-private partnerships or religious universities.
On the other hand, private universities or MBA business schools also play a very big role in the sector, diversifying the whole educational system and partnering with institutions and companies that help to identify skill gaps. Our interviewees in this chapter were hand-picked to provide readers with a comprehensive overview of the sector and the players at work within it. ✖
let there BE LIGHT
Having pioneered the introduction of multiple subject areas to Portugal’s tertiary education scene, Universidade Católica is aspiring to establish the country’s first private medical school and introduce cutting-edge digital transformation.
Can you describe the main achievements of the institute?
The university was founded in 1967 as the fourth university in the country overall and the first not fully founded by the state. It was founded through an international agreement between The Holy See and Portugal. One of our schools, the school of theology, is accredited by the Holy See, and all other schools teach civil subjects and are accredited by the national agency. There are four major areas of achievement. First is the innovation of the cycles of study, relating to new subject areas that we introduced to Portugal’s education sector. For example, Universidade Católica was the first to introduce a management degree. It was also the first university to enter the Financial Times rankings and to date, the university continues to lead the rankings. Another area that was introduced by Universidade Católica in Portugal was biotech, by creating the first school of biotechnology in the country. We are celebrating its 35th anniversary with an investment of USD50 million in partnership with Amaris, a US-based company from San Francisco, to create a joint project in the field of renewables. Similarly, the university is renowned to create an international track of education in law with LLM degrees in English and is the only university to date to provide this qualification with the US and the UK model. Another important driver of our success was internationalization. At present, we have 29 degrees that are fully taught in English, including management, economics, biotech, culture studies, creative arts, media and communication, political science, and law. The third element of our success is the success of our alumni. Universities do not exist on a self-referential loop for the development of faculty and the institution; they exist because of students, and we want to train these students and turn them into leaders of tomorrow.
Universidade Católica has a broad variety of offered courses. Are there any new courses planned?
We are planning a new degree in medicine and are organizing our offerings in life sciences. Additionally, we have new projects for dual undergraduate
degrees, having already introducing a dual degree in law and business at our Porto campus. We are expanding this model now into management, bio engineering, law, and psychology.
According to The Financial Times, Universidade Católica has one of the top 20 best MBA programs in Europe. What have you integrated in your offerings to strengthen competitiveness levels?
Isabel Capeloa Gil RECTOR, UNIVERSIDADE CATÓLICA BIO
The executive masters’ degrees are one of our flagship programs. Universidade Católica has been involved in executive education since the business school was created, and ithas the trust of the Portuguese market and companies. The programs are now expanding to an international level, becoming more ambitious and attracting international students and companies. We have an extremely ambitious program with Sands China that is being taught in both Lisbon and Macau. Similarly, we have programs with the Keller School of Management and Business Education, Sloan, MIT, and Nova University. Our strategy is focused on expanding our attractiveness to international companies that are considering Portugal as a hub for investment.
What did it mean for the university to win the Order of Public Instruction, and how does this contribute to its goals for the coming years?
It is a recognition of Universidade Católica’s contribution to the development of Portugal’s social, economic, and cultural dimensions. It is a recognition of not just what we have done in the past but also much more of what we can do in the future. We have three goals for the future: our ongoing infrastructural development, launching the first private medical school project in Portugal, and digital transformation via an initiative called Católica 4.0. This will overhaul not only the IT infrastructure but also create a truly intelligent campus with machine interaction and give us more robust information through big data. Notably, we will also introduce an increasing scale blended learning, enabling our students to be more mobile. ✖
4.0 Opening the
1st private medical school
35 years in biotech research
Isabel Capeloa Gil is a full professor of culture studies and the current Rector of Catholic University of Portugal. She holds a BA in modern languages and literatures from the University of Lisbon and an M.A. in German studies from the same university, as well as a PhD in German language and culture from UCP. She was Guest Professor in Germany (Saarbruecken, Munich), the UK, Ireland (National University of Ireland), Italy (Univ. Ca Foscari, Venice), Brazil (PUC-Rio), and the US (U. Pennsylvania and U. Stanford). She is furthermore an Honorary Fellow at the School of Advanced Studies of the University of London. From 2005-2012, she was the Dean of the faculty of human sciences at UCP. She was a founder of The Lisbon Consortium network and leads the International Doctoral Degree Program in Culture Studies. She is also a senior researcher and founder of the Research Centre for Communication and Culture.
Nova is a young university, but with research collaborations with top institutions like Oxford, Cambridge, and Imperial College, it seems like it has cracked the code to success.
João Sàágua RECTOR, NOVA UNIVERSITY
27.1% research income from private sources
15th best in Europe among young universities
(QS Top 50 under 50)
Among 50 best universities in the world under 50 years old
(QS Top 50 under 50)
Can you describe the main achievements and milestones of the institution?
BIO
João Sàágua is the Rector of Nova University. With a PhD in contemporary philosophy, he is a professor at the faculty of social sciences and humanities. Sàágua has been teaching at Nova since 1980, accumulating experience at all levels— undergraduate, masters, and doctoral—in Portugal and abroad. In addition to intensive teaching and research activities, he has held several management positions, notably as director of Nova’s Faculty of Social Sciences and Humanities between 2005 and 2013, and as President of the Scientific Council between 2009 and 2013. From 2014 to 2017, he also held the post of ViceRector for Nova’s academic and international relations areas.
Although the university was established shortly before the revolution, it started operating properly after the revolution. This is important, because the founding fathers and mothers were Portuguese academics who had been working mainly in Europe and the US, bringing their experience to Nova University. This is reflected in the university’s international standing; soon after its foundation, international conferences and meetings started taking place in the university, and various joint cooperation agreements were signed with other international institutions. Another important differentiator of Nova University is the close proximity between students and faculty members. One of the university’s milestone is shifting from a public university to a public foundation. Being a public foundation requires us to raise 50% of the required budget through private means, which gives an idea of the university’s relationship with the business community and competitive research money. This status means that many laws that apply to public universities do not apply to us. Therefore, we can hire an academic and offer a private contract, which means we can differentiate salaries and offer different clauses concerning teaching and research roles. Equally important, this allows Nova University to take advantage of its revenues and use it to hire talented international faculty. At present, there are only five such universities in Portugal.
What are some of your main partnerships with the private sector, and how have these evolved over the years?
We have institutional relations and protocols with almost every corporation that matters at the national level. Similarly, we have formed interesting relationships with several international corporations. Nova University is a comprehensive university with a business school, law school, medical school, a science and technology school. Different companies collaborate with different schools in several areas of joint interests. Interestingly, we recently started to develop an idea for collaborative laboratories. These labs are created with the goal of alleviating sustainable development bottlenecks
within corporations. In order to overcome these bottlenecks, firms can either hire more people and do it in-house or partner with universities and create collaborative labs. These labs have an agenda set by corporations, and the solutions are collaboratively developed with academics. In Portugal, there are 11 collaborative labs, and we participate in nine. The idea is to allow these collaborative labs to help the development of regions that are not under the direct influence of the big cities. One of our labs is focused on agriculture, the Mediterranean diet, plant diseases, and plagues.
Which educational factors are contributing to the falling unemployment in Portugal, and how do you help graduates find jobs in their fields?
There are several factors that influence the decline in the unemployment rate. Some of it has to do with the level of education of young Portuguese people. In terms of helping graduates find jobs, all our schools have a student placement office with highly skilled non-academic staff that helps students find jobs. Moreover, the university prepares students to have contact with the labor market long before they graduate. This is part of how we reformed the university based on the Bologna process. Additionally, we have people from corporations participating in our regular courses at all levels. Furthermore, since Nova University enjoys international recognition, we have also had a great deal of success placing students at an international level. Our students travel through exchange programs for instance, and we make sure that our partner universities abroad can provide connections with local universities.
What are Nova University’s goals and priorities?
We are a young university, but we have several research groups connecting with international research groups and overseeing substantial projects. We have research partnerships with top-ranked institutions such as Oxford, Cambridge, and Imperial College. Between 2003 and 2018, 50.4% of our research was in collaboration with other universities. This is a huge percentage, and it is more indicative of our international profile than many of our other statistics. ✖
Atlantica University differentiates through its company-university model and an MBA program in partnership with the University of California, Berkley, among other initiatives, to produce practical theoreticians.
The Atlantica University was created 23 years ago. What have been its main achievements and goals?
Four years ago, the Carbures group decided to invest in Atlantica University to develop a training and research project through the creation of new studies to enhance the fundamental know-how of Carbures: engineering, aeronautics, and materials. The model has changed radically during these four years because it integrates the company’s vision within the university; our differentiator is the company-university model. The company is the manager of research and training. The requests, orientation, and structuring begin at the company, in such a way that the university is an instrument that goes hand in hand with the company. Training that is not supported by a company and does not cover the company itself will produce good professionals but not practical theoreticians. The connection with the company allows us to establish programs and curricular units close to the company’s reality. An example is the creation of the School of Engineering, which in turn has three areas of focus: aeronautics, materials, and management and production. Carbures needed to focus on the creation of future engineers of the company. To that end, we created an alternative program of studies adapted to the company through operational stays: co-regular practices. All students at all levels pass through the manufacturing plants of Carbures and Airbus in Spain twice a year. The convergence between Airbus and Carbures needs engineers and complementary studies, and we can create a different professional role in that regard. Through this, the students develop an experience that is unique in Portugal.
Do aeronautics students go to Spain or local companies?
A large percentage of the students go to work at Carbures because they have a theoretical-practical background that offers different things. The model encourages the approach of the company to the university, fosters differential and operational training, creates a cycle of training for Carbures engineers to be trained through Atlantica with up-to-date information, and creates a feedback cycle because the curricula of engineering
are made from the real needs of an engineer in aeronautics or composite materials. This model encourages technical professional competence as well as the transmission of knowledge. Moving forward, we will start another line of research with the Carbures Foundation to develop concrete products in the area of composite materials. The Atlantica University is an instrument of the company to cover its social, welfare, and specialized training areas, which in turn allows the university to grow with specialized training as well as new know-how and real knowledge transmission.
What projects have been developed with other international institutions?
The Atlantica University has signed agreements with other institutions during the last four years. The fundamental driving force for the development of new agreements is the Carbures Foundation. The Carbures Foundation intends to promote and strengthen the Carbures brand, which was born in the university. We created a consortium between Carbures, Carbures Foundation, and Atlantica for the applied engineering in aeronautics and materials. This consortium opens the possibility of developing research delegations of Atlantica in the US to generate applied research agreements and partnerships.
What percentage of local and international students does Atlantica have?
We have around 2,300 students in total, and international students make up 30% of that. While Spanish and French students are common in the health area, Italian students have higher presence in the area of engineering and management. Moreover, we have students from Tanzania, Gambia, Angola, Mozambique, and Brazil.
How does your partnership with Berkley work?
This project was awarded to us by a Spanish company that has an agreement with Berkley. Students can spend four to fifth months doing their master’s degree in Berkley and choose their desired course. At the end of the program, students can work in a company of choice in Silicon Valley for a year. ✖
23 years of experience
30% of students are international
BIO
Carlos Guillén Gestoso is a professor of work and organizational psychology and is currently an Associate Professor at the University of Bologna, Italy. Between 2009 and 2017, he was President of Carbures SA and has been the Counselor Carbures Group Board since 2008. He is Director of the Spanish Observatory for Social Responsibility and Organizations, as well as Director of the Portuguese Observatory for Social and Business Responsibility. He combines these functions with the Presidency of the EIA Group, Portugal, and Carbures Foundation, Spain and is responsible for the Research of Labor Sciences Group.
AESE and ISEG are keeping leadership and sustainability at the center and forming partnerships with educational institutes across the world to create leaders of the future.
What have been your main achievements and milestones?
MARIA DE FÁTIMA CARIOCA AESE is the oldest business school in Portugal. It was established, in 1982, as a private, notfor-profit association and has provided executive programs ever since. Our focus is on executive education, and our first program was the top management program called Programa de Alta Direção de Empresas (PADE), which is now in its 44th edition. More programs have also been added to our portfolio. One of our milestones was in 2000, when we began the Executive MBA, which is now in its 18th year. As a business school, we are focused on leadership and management education. Our main achievement is being the only school in Portugal that is a standalone business school. Another important distinctive factor of AESE’s ethos is that it was established as a joint project between business leaders and entrepreneurs and international business schools. Everyone who works at AES—participants, sponsors, and alumni—believe in its mission of building a humane society through the transformation of business leaders. The biggest outcome of the school is it 6,000-plus alumni, comprised of businesspeople, owners of enterprise, C-level executives, managing directors, and team leaders. Many of them strive to make an
impact on society with new ideas, initiatives, and business, but with a social purpose.
CLARA RAPOSO ISEG was the first school of economics and management to be founded in Portugal. ISEG’s current designation as a proper school and a university dates back to 1911, our founding year. We are a business school, but we are not exclusively a business school in the sense that we not only have a department of management but also a strong economics department. Moreover, the university has departments of social sciences (comprising sociology, law, and history) and mathematics. A strong feature of our culture that has developed over the years is our commitment to diversity. ISEG preaches plurality; we take scientific research seriously, and everyone at the university is well opinionated. We have students and faculty from different educational backgrounds and different schools of thought. We encourage debate and create a space to learn theory and take different points of view. A few years ago, we felt we weren’t perhaps as trendy as other schools that focused on specific areas of business because we kept a full coverage of several different topics; however, at present, we believe millennials and their new approach to life makes us truly modern. Keeping that in mind, we recently updated our motto from “Open
minds for a changing world” to “Open minds for a better world.” Notably, there are numerous success stories of our students going on to becoming leaders.
What opportunities do you see in expansion partnerships in other markets?
MDFC We are part of the IESE network. We are connected with 23 schools all over the world, from Europe, Latin America to Africa and Asia. Apart from that, we have many partnerships typically related to the programs we deliver. These include IIMA from Ahmedabad in India, American schools, the Krakow School of Business in Poland, and the Donau Business School in Austria. We also have joint research programs or projects. Another strategic path involves Portuguese-speaking countries, where we are planning to expand.
How does the AACSB recognition benefit the school?
CR It makes it easier for international students to recognize us. It is important to go through the accreditation process with AACSB because it allow us to identify our strengths and weaknesses, as well as our opportunities to improve. The university sees it as a highly important mechanism to attract international audiences; only 5% of business schools in the world have achieved this recognition.
What are AESE’s future plans?
MDFC We will be discussing a great deal about future business models and the future of work. In 2019, as a consequence, we expect to strengthen the programs accordingly. For example, AI, robotization, and blockchain are three subjects that we have to embed in our programs. It is important for business models to understand how they can profit from technology and science evolution.
Do you have any joint programs with other universities?
CR We have a new double-degree undergraduate program in our finance department with Kozminski University, a triple-crown accredited institution in Poland. For the master’s in actuarial science, since our school has a strong department in the area of risk and insurance, we have a partnership with the British Institute and Faculty of Actuaries, allowing our students to get exemptions for exams to become actuaries in the UK. In addition, we have several partner universities across the world for all programs. ✖
Can you tell us more about your commitment to excellence in fields such as architecture, science, engineering, and technology?
Instituto Superior Técnico was established more than 100 years ago to play a role in knowledge transfer and economic development. We have fulfilled that mission extremely well to become the top engineering school in Portugal and amongst the top 12 engineering schools in Europe and the top 50 in the world. Our challenging teaching process transforms students into highly sought-after professionals. We are also a top R&D institution, with about 700 professors and researchers as permanent staff. Técnico excels in fields like naval engineering, machine learning, and robotics.
How does your research, development, and innovation activities promote a culture of innovation? We have excellent researchers with international projection. In the last 15 years, we paid a great deal of attention to teaching students about entrepreneurship and technology trans-
fer. We have a clear policy of intellectual property protection and a network of companies that sign long-term agreements with us. This special group of cooperating companies is involved in a number of activities, including R&D and social responsibility.
To what extent do you work with other top universities around the world?
We have numerous exchange programs and a special relationship with 11 other engineering schools in Europe that make up the CLUSTER network of the top engineering schools. These include KTH in Sweden, EPFL in Switzerland, Barcelona Polytechnic, and several others. We also belong to a larger user network called CESAR, with 25 top R&D technical universities.
What are your top priorities for Instituto Técnico in 2019?
We want to strengthen our connections with companies, primary economic agents, and our alumni base. We are launching Técnico Plus, the overarching image for our professional courses. Finally, we want to make Técnico more independent of the state budget and will launch an initiative where we can create an additional source of funding. ✖
Over a decade of austerity measures combined with an ageing population have seen the average age of the Portuguese public teaching staff progressively climb to one of the highest in the OECD. With frozen salaries, an extended retirement age, and precarious working conditions, today the sector faces one of its biggest challenge yet.
IT IS A PARADIGMATIC SITUATION. Teachers in Portugal have been protesting over frozen salaries for over 10 years, organizing some of the biggest public protests the country has ever seen, and yet, a study from the OECD, published in September 2018, came to show that this professional class earns around 35% more than the average of professionals with a university degree in other sectors.
That, however, is a misleading statement. Since August 2005, salary increases for public school teachers have been suspended, but hiring has also been severely limited. Throughout the troika years, between 2011 and 2013, under a school system reorganization and optimization program designed to cut spending and improve resource efficiency (human and otherwise), over 2,500 schools closed across the country. With them, between 2010 and 2015, the Portuguese public education system lost as many as 25,000 teachers, 11,000 from schools’ permanent payroll (a 10% decrease) and 14,000 from independent hires (a 50% decrease). Globally, in just four years, there was a decrease of 20% of the national number of teachers employed, according to the national Court of Audits (Tribunal de Contas).
Naturally, those that left were the ones with less service time and in less protected professional positions, in sum, the youngest. Combined with the reduction in the number of schools, the near suspension of new hires, and the constantly extended retirement age (according to reports, the average retirement age for teachers in 2005 was 56 years old, today it is closer to 66), these cuts have conspired to raise the percentage of teachers older than 50 to 38%. That is 3% higher than the OECD average and a 16% climb over the space of decade (2005/2016). The OECD average climbed 3% in the same period. Today only 1% of the teachers in public schools is aged below 30. The OECD average stands at 11%. This places the Portuguese public teaching staff as the second-oldest in the OECD, after, but not far from, Italy.
This setup is behind the strange disparity of salaries. In Portugal, promotions in the public sector are largely dependent on years of service. As most of the remaining teachers are those with the longest
careers, that also means they are the ones with the highest salaries, which skews the figures.
Taking into account purchasing power, teacher salaries in Portugal are actually either in line with or below the OECD average depending on the number of service years. During the crisis years, these cuts were important in re-adjusting the national budget. Between 2010 and 2014, the Portuguese state’s expenses in the education sector fell by 17.1%, a change worth over EUR1.2 billion during that period; however, the consequences of those decisions and cuts are now more visible than ever. New teachers have an almost impossible mission in trying to find a permanent position. Many professionals have been hired, year after year, by many different schools for over 20 years without being able to enter the permanent payroll of a school, living under constant uncertainty.
After the current socialist government came to power in 2015, backed by the Communist and Left Block parties, the issue of teachers’ salaries and retirement age has again taken center stage. Unions are currently pressuring the government to lift the salary freeze imposed on public teaching careers and demanding compensation for the period without promotions and career advances. The government has so far proposed a salary increase recovery corresponding to two years, nine months, and 18 days of the lost period. The unions, for now, have refused to back down from their demand to receive compensation for the nine years, four months, and two days period, and as the 2019 National Budget continues under discussion, it is uncertain who will win the debate.
Back in June, the Deputy Secretary of State for Education suggested that lowering the age of retirement could be one of the paths to study in trying to address the issue of the ageing teachers, forcing some higher-paid older professionals to leave their positions and opening opportunities for young professionals. That would, however, have profound implications for the national budget, as the state would not only start paying salaries to the new teachers but also guarantee the pension plans of new retirees. ✖
A university library in one of Europe's oldest universities, in Coimbra
What are some of the university network’s main strengths, and how have they evolved over the years?
The first school we opened overseas was a higher polytechnic university institute in Mozambique. When we acquired the Ensinus Group in Portugal, one of its schools was also in Mozambique, and at present, it belongs to the Lusofóna Group. We want to expand in all the countries we are present in. There are provinces in Angola that are bigger than Portugal, though they have no graduates. With that in mind, since 1991, we have provided scholarships for students from these countries, especially Angola. In the first few years, hundreds of students were granted scholarships, and at present, over 2,000 students from these countries are studying here, and the number continues to grow annually.
What are the main objectives and vision for Grupo Lusófona for the next few years?
We will continue our expansion strategy. If the trend continues, then the country that will grow the most in the short term is Angola. It is necessary for Angola to stabilize its growth process, and we are convinced that it will do so and result in huge growth. We have a school in Angola, where around 5,000 students are currently enrolled and another 1,000 join the school every year. We also plan to open a university in Luanda that we aim to turn into a big university in Angola, given the country’s size.
What have been some of the university’s milestones?
UAb intends to promote leadership and innovation through distance education in the Portuguese language. We are talking about a population of 260 million around the world that should reach 400 million by the end of the century. In the future, all institutions will in one way or another adopt distance education, and open universities are a lab for developing the main ideas to innovate and promote new ways to do technology-based education. Digital communities are multicultural, with people living in different countries across the world, participating in the same group of learning. UAb promotes education with this multicultural view of the world.
The university has been developing local learning centers in Portugal and abroad supported by a digital pedagogical model. For us, distance education works in a collaborative space. At present, we have 19 local learning centers in Portugal and one in Mozambique. We also have more than 60 examination facilities worldwide where UAb students hold exams twice a year. Equally important, we cooperate with provincial and non-provincial universities, including a consortium with the University of Coimbra, and offer masters and PhD level programs together with other Portuguese universities, like the University of Algarve, the University of Lisbon, and the Instituto Superior Técnico. Besides, we have been working with the University of Cape Verde and Universidade Católica of Mozambique, among others. We collaborate to promote teacher and student mobility, either presence-based (mainly within Erasmus+) or virtually, especially with universities in Latin America and in the Portuguese-speaking countries.
St. Julian’s School has been offering an outstanding education since 1932. What have been the main achievements of the institute?
St Julian’s is a school with real tradition, which we celebrate on a regular basis. The school has evolved in terms of student population, and also in terms of the number of nationalities we have; students from over 40 different nationalities currently represent the institution. We are accredited by the Council of International Schools (CIS) as well as by New England Association of Schools and Colleges (NEASC). In addition, I am a member of the Headmasters’ and Headmistresses’ Conference (HMC) and the school is an associate member of the Council of British International Schools (COBIS).
What is the breakdown of the school’s students?
The majority of the students are British and Portuguese and the rest are split between 40 other nationalities.
What are some of the school’s main strengths and how have they evolved?
Two of the school’s main strengths are its reputation for excellent academic results and the happy and secure environment that it provides. Our holistic approach enables us to create a stimulating environment, making sure our students are happy. The school has well-developed sports, arts, theater, and music programs that enable students to engage in activities that they are passionate about, in addition to the academic curricula on offer.
What sets the school apart from its competition?
In Portugal, we are the only British international school that offers a mix of several curricula (English National Curriculum, Portuguese National Curriculum, and the IB Diploma). We have a strong reputation in Portugal and the rest of the world, which is linked to our forward-thinking approach combined with strong tradition and heritage.
Can you tell us about the latest programs that will strengthen the competitiveness of the university?
During the last two years, ISEL has performed incredibly well in fundraising both from the private and the public sectors through competitive project calls. One of the most important projects we won in this area is the Hovione, a EUR1-million investment in a chemical lab for teaching and research activities. We have also pursued projects to support experimental digital teaching, including two computer labs, Lab4Mat and LabIT, equipped for teaching and research in specific areas of applied mathematics, networks, and communications. It is worth noting that Lab4Mat supports a new degree in applied mathematics that started recently in 2016 but has already established a strong position in the market due to its quality, originality, and adequacy to modern challenges. Another concern is the modernization of ISEL’s digital and communications systems. This is a key issue for us but gladly, we recently received a EUR400,000-fund that will allow us to dematerialize and simplify our processes and activities related to academic, human resources, accounting, and document management. In energy efficiency, we are proud to be in the process of implementing a EUR2-million project over the next two years, which includes 11 areas of intervention, namely, lighting to LED, solar photovoltaics, roofs restoring, solar for the hot water system at the students residences, and replacing all the HVAC systems on campus.
Paulo Jorge Ferreira RECTOR, UNIVERSIDADE DE AVEIRO
What have been the institution’s main achievements since its founding in 1973?
Universidade de Aveiro has evolved to become a mainstream institution that is currently listed on several major rankings. From the outset, our goals were to be an international institution and not just a national one and to contribute to the development of the region. We want to grow in the global context while having a local impact.
What opportunities does the university offer to foreign students?
Our university is a small- to medium-sized institution; however, we have around 90 different nationalities. In 2018, we received Erasmus students from 38 countries. We have to be active in terms of integration and guiding our foreign students through processes such as visas and accommodation. We recently created a new, one-stop, intercultural help desk service for people arriving from other countries.
What are your main partnerships with the private sector, and how have these evolved?
In 2017, we formed a significant number of new partnerships, and these will contribute enormously to our budget. In relative terms, those partnerships are becoming fairly significant overall and are something we pay close attention to. We have welcomed R&D companies such as Altice Labs, Nokia Siemens Networks, and Hitachi, and have worked on projects such as the Smart Green Homes project with Bosch.
Sobral de São Miguel is a popular stop for all kinds of tourists, whether you are looking for good food, history, or a taste of nature
Portugal has improved its ranking in the World Economic Forum’s Travel & Tourism Competitiveness Index in recent years, and the sector continues to represent a major part of the economy.
In 2017, the country was voted World’s Leading Destination at the World Travel Awards, while Lisbon was awarded Best Destination for City Break, and the island of Madeira scooped up the Best Insular Destination. In all, Portugal achieved six prizes of enormous international prestige in the tourism sector over the year. According to the World Tourism Organization, Portugal is one of the top-20 destinations in the world. Last year, more than 12 million tourists made trips to and within the Iberian country, a figure higher than the local population of 11 million.
Tourism has been making a contribution to the economy in several ways. Portugal is widely recognized in Europe for its sun, beaches, gastronomy, and cultural, heritage, and religious sites. The country is also increasingly confirmed its place as one of the top global destinations for golfers, boosted by the country’s many resorts and historic villages. Due to the cheap flights across Europe, more tourists are targeting Portugal as a holiday destination. The country won another honor late in 2018 at the World Travel Awards, where it was awarded World’s Best Tour-
ist Destination at a ceremony held on December 1 in Lisbon. Turismo de Portugal was also awarded the World’s Leading Tourist Board for the second consecutive year.
Developments in Portugal’s tourism sector are unfolding as part of the government’s strategic plan, known as Estratégia Turismo 2027. It defines strategies over a 10-year period and aims to double tourism revenue to EUR26 billion by 2027, as well as increase the number of bed nights to around 80 million. The increase in tourism is not only noticeable in Lisbon or Porto. People are also booking holidays in the countryside in active, eco or sustainable destinations in less-known, rural areas. From World Heritage sites ranging from the historical center of Porto, do Heroísmo, Guimarães, Elvas, Coimbra, Évora, and Sintra, as well as monuments in Lisbon, Alcobaça, Batalha, Coimbra, and Tomar to the wine-producing regions of Pico Island and the River Douro, there is plenty of reason to believe the targets are attainable.
2018’s tourism trade balance was almost EUR9 billion and, according to Luís Araújo, President of Turismo de Portugal, whom we spoke to for this publication, “today, tourism represents 12.5% of total GDP, more than 50% of service exports, and almost 20% of goods and service exports, and it has been growing steadily for the last three years.” ✖
Portugal’s tourism sector’s contribution to GDP has more than doubled within a decade, and latest numbers suggest there is more in store for the thirdsafest country in the world.
Luís Araújo has been President of the Portuguese National Tourism Authority since February 2016. With a degree in law, he began his career in Group Pestana’s law department in 1996. From 2001 to 2005, he worked for the group’s Brazilian branch, where he was the board’s associate for new projects in Brazil and board member and Vice President for South America. Later, he served the government as Head of the Cabinet of the Portuguese Secretary of State for Tourism between 2005 and 2007. He then returned to Group Pestana as a board member, where he was responsible for human resources, communication and marketing, IT, central purchases, and new projects in South America until 2011.
How important is tourism as a strategic activity for the Portuguese economy?
Tourism has been making a contribution to the economy in several ways. At present, it represents 12.5% of GDP, more than 50% of service exports, and almost 20% of goods and services exports. In 2017, we registered growth of 9% in terms of arrivals, breaking the 20-million mark, and saw a 19.5% increase in revenue of the 15% in 2016. Tourism is certainly expanding, and we see that expansion especially during low season and to more undiscovered regions such as Algarve and Madeira. The highest growth rates were recorded in the regions of Alentejo, the central zone of Portugal, and the Azores. The future is challenging; however, the sector looks extremely promising at the moment. Many Portuguese companies are investing in tourism and diversifying their activities; in addition, many external agents see Portugal as a country with an attractive tourism sector.
What are some of the institutional capacity-building mechanisms to promote the industry?
We follow specific values within our organization and employ about 600 people. We support the private sector by funding projects and providing training with a country network of 12 educational institutions, from which around 3,000 students graduate every year. The unemployment rate in Portugal is less than 8%, as tourism created 55,000 jobs in 2017 alone. We also have a department that advises investors in Portugal and takes care of all tourism-related statistics. We work closely with all regions, city councils, and trade associations to help them develop their products, either by investing in specific marketing actions or by working directly with them to attract tour operators, travel agents, or newspapers.
How do you allocate your budget to prioritize areas that bring the most benefit and do you work closely with regional tourism promotional entities?
We are one of the main players funding tourism promotion, and we work with them especially in
three areas. The first has to do with accessibility, so that tour operators, travel agents, and airlines get to know our infrastructure. The second has to do with international marketing with actions such as familiarization and press trips. For example, in 2017 there were around 33,000 international news articles on Portugal. The third has to do with structuring the product, which is a basic part of a destination-selling strategy. Our focus is to develop joint strategies of branding through international fairs, workshops, and roadshows in the 21 tourism outbound markets where we have representatives.
What have been some of the crucial differentiating factors behind Portugal’s record tourism arrival numbers in 2017 and 2018?
There is a set of factors, and the first has to do with connectivity. The investment that has been made in terms of attracting airlines and tour operators and promoting the country as a whole is delivering results. The second has to do with positioning Portugal. In this regard, the attraction of large events has been extremely effective. For example, we will host the Eurovision Song Contest in Lisbon, with 40,000 people, and the third annual edition of Web Summit, with 70,000 visitors. We will also have 60,000 people from all over the world gathering in Lisbon for the Aga Khan Foundation as it moves its office to Portugal. In 2017, we supported around 66 conferences and congresses focused on diverse fields. Portugal is already on the top 10 International Congress and Convention Association (ICCA) event organizers in the world.
What would be your final personal message to encourage people to come and discover Portugal?
You cannot skip Portugal. We do not only say this because of the landscapes, gastronomy, and beautiful heritage buildings and UNESCO sites. Visiting Portugal is a 360-degree experience. There are things that set us apart from other countries. We are the third-safest country in the world and have the second-best road network in Europe. ✖
“In 2017, we registered growth of 9% in terms of tourism arrivals, breaking the 20-million mark.”
Turismo Centro de Portugal is working on positioning central Portugal as a sustainable and healthy aging destination with inclusive, sustainable facilities for all kinds of tourists.
What does the Tourismo Centro de Portugal do?
Our strategy, whether from the point of view of the domestic market or the external one, is based on five main axes. First, we are a cross-selling destination between Lisbon and Porto, an international affirmation that gives us world heritage sites and destinations that are highly differentiated when it comes to nature tourism, Serra da Estrela, and the sea. We not only have heritage and culture, but also many activities related to surfing and supertubes, not to mention a growing number of activities like cycling, walking, and religious tourism, in particular Jewish tourism. These five axes—touring, surfing, walking, cycling, religious, and rural tourism—are what we’re staking our strategy on to attract new markets such as Brazil, Canada, the US, and Asia.
Over 20 million tourists now visit Portugal on an annual basis. How has this affected the country?
We calculated there were nearly 6.5 million overnight stays in 2017, with growth coming mainly from Brazil, the Netherlands, Poland, and the domestic market. Key points that influenced this were the visit of the Pope in 2017, which generally brings a million visitors, the centennial celebration of the apparitions of Fatima, and the impact of social media on surfing and Nazaré played its part. It is worth remembering that for the centennial celebration of the apparitions of Fatima, some of the most important markets were South Korea, China, Vietnam, the Philippines, Thailand, Brazil, the US, Poland, and Israel.
How do you describe a typical guest who chose Portugal over other countries?
Families with small children, especially those who like cycling, walking, surfing, and windsurfing, are increasingly choosing Portugal as their preferred destination. Notably, in 2019, central Portugal will host a world surfing championship that will only bring more.
How do you assess the future of eco and rural tourism
in Portugal?
Central Portugal has one of the largest levels of rural tourism, and we have several examples of sustainable and environmentally responsible tourism. There is an eco-hotel whose whole process is made up of sustainable facilities and whose pest control, for example, is managed internally by frogs. Portugal has more than 70 river beaches with blue flags, one of which, Mira, has the longest standing blue flag in Europe. Similarly, there is a significant number of beaches with golden flags, which refers not just to the quality of the beach, but also the environment and water. A number of these beaches are located in isolated rural areas.
What is a typical itinerary for a more high-end visitor?
Central Portugal is not characterized by the existence of large hotel chains; our core is ’small is beautiful’ and related to small family units and intimate friendships. When we talk about Areias do Seixo Hotel, Casas do Cor Hotel, H2O Hotel, or Vista Alegre, these are places where the customer is greeted as a family member and where the owners perform or oversee all services. Brands such as Vuitton, Maserati, and Vogue have done catalog for these hotels. Casa do Cor is a typical example. Another example is Marialva, which is situated in a village in the heart of the Serra da Estrela and is managed by the daughters of the owner. Portugal’s best bet for the medium- to high-end segments is in this segment of small units with high levels of service.
What are your goals for the coming year?
We want to reinforce our attraction and our activities related to Catholic and Jewish tourism, such as Santiago de Compostela. We are working with partners such as Spain to coordinate actions aimed at distant markets. For example, we have already worked with it on a heritage appreciation strategy. Moving forward, we want to be seen more as the heart of Iberia and less as the center of Portugal. Altogether, we are repositioning our international approach. ✖
Pedro Manuel Monteiro Machado is the current president of Fiscal Council ANT (National Tourism Association), the Regional Tourism Entity of Central Portugal, and the Regional Agency for the External Promotion of Central Portugal. He has been pursuing a PhD in tourism at the University of Aveiro since 2013. Machado has a master’s in educational sciences with a specialization in educational psychology and a degree in philosophy from the University of Coimbra. Moreover, he is a co-sponsored member of the External Personnel invited by the Technical-Scientific Council of the School of Tourism and Hospitality at the Polytechnic Institute of Guarda as well as a co-opted member of External Personnel coopted by members of the Council of the Department of Economics, Management, and Industrial Engineering at the University of Aveiro.
The Azores islands offer visitors an enchanting glimpse into a world of geological wonders.
DIVINELY PERCHED ON THE MYSTERIOUS AND BEGUILING ISLAND OF SÃO MIGUEL, the Lagoa de Sete Cidades, or “lake of seven cities,” offers what is arguably the archipelago’s most spectacular natural scenery. Perched in the very volcanic craters whose ancient eruption gave rise to the Azores, Sete Cidades is the largest freshwater lake in the archipelago with depths of up to 33m in its Blue and Green lagoons, the lake’s two principle bodies. Spanning a width of 4.2km at its longest expanse, the lake is ringed by a spectacular mélange of lush green forests and fields that pour into the luscious body of water like syrup into a fresh pint of milk. Legend has it, it was here the blue-eyed Princess Antília was torn from the arms of her green-eyed shepherd loved. When forced to part by her father, the king, they each shed an ocean of tears: hers became the Blue Lagoon, his the Green.
The islands are also widely known for their excellent pineapple production. First introduced in the 19th century, and initially grown for domestic consumption in the homes of the rich, by 1864 the Azores exported their first batch to London. A decade later, they were shipping 17,000 units a year to the rest of Europe, a figured that peaked—as did many things in the first age of globalization—in 1914, with 2 million units. By then, a series of greenhouses had been adopted, particularly in the villages of Fajã de Baixo, São Roque, Vila Franca do Campo, Ribeira das Tainhas, Ponta Garça, and Lagoa, and most concede the best pineapples come from the aforementioned island of São Miguel. Though the industry was hit hard by the two world wars, it picked up again in the 1950s with exports further adrift and now boasts more than 270 producers throughout the archipelago. ✖
WE HAVE ALL SEEN THEM AND BEEN THEM. Tourists treading backwater into beaten tracks, seeking a sense of ‘the other.’ Unfortunately, many countries now rue the day they succumbed to the appeal of tourist revenue without checks. This has given the hugely popular Portugal pause for thought. In fact, it has won plaudits for its program of sustainable tourism. In November 2018 Portugal hosted the sixth Tourism and Management Studies International Conference, a leading European event, the theme of which was the challenges and strategies of today’s tourism industry. And while the fifth outing had sparked 550 papers and delivered 380 presentations, there is far more than academic prowess at stake.
The economic imperative is blatant. Since the seismic 2011-14 debt crisis, the beaches and putting greens of Portugal have buoyed a recovering economy. Tourism accounted for 17.3% of GDP in 2017, and sector data indicates that this is set to reach 20.5% by 2018. Tourism provides no less than one in five jobs, and the government foresees a further 100,000 to come if targets are met.
The World Travel & Tourism Council (WTTC) confirms Portugal’s ranking among Europe’s top five most-visited countries, urging the authorities to maintain that status. And in September 2018, Portugal was able to assure the WTTC Forum that the sector was in fine fettle. Sector numbers for 2017 spoke for themselves, as revenues had soared 19% YoY for 2017, printing a further 14% rise year to date. The record number of visitors was north of 20 million (57.5 million overnight stays). In fact, foreign tourists exceeded 12 million, and foreign overnight stays claimed 72.4% of total overnight stays on a marginal rise from 71.5% in 2016. Total revenues of USD18.5 billion were up 23.6% YoY. Extending the welcome in 2017 were 44 new hotels, while 20 were overhauled. In 2017 the record number of US visitors alone was close to 700,000. And in 2018 Portugal stands to have registered record non-stop flights from the US, with 91 per week in
peak season under the livery of five airlines, taking off from nine cities across the country. Meanwhile back in 2017, TAP Air Portugal, the national carrier, flew a record 14.25 million passengers, no less than doubling its flights from the US in when compared to 2016.
More significantly for the long term, in 2017 Portugal committed to the International Year of Sustainable Tourism for Development. It was also the launch year of Portugal 4.0, the transformative project built on tourism sector entrepreneurship and diversification. Celebratory initiatives included the rehabilitation of historical sites in Portugal’s interior to render more of its heritage accessible to a wider audience. A perennial problem for the tourism sector is that of seasonality, namely a cycle of full and empty rooms that curbs regular sector employment with attendant social consequences in areas wholly dependent on tourism. The sustainability model now being pursued is to disperse tourists nationwide throughout the entire year by capitalizing on clement year-round weather for cycling, hiking, and other more active pursuits, aside from traditional areas of appeal. Indeed, by 2027, Portugal hopes to have cut its seasonality ratio from 37.5% to 33.5%, while doubling qualified worker numbers.
This policy has already won plaudits, and in 2016 Portugal lifted the Sustainable Tourism European award. Notably, the Dark Sky Alqueva Reserve, in the Alentejo, was recognized by the European Commission in the European Tourism Indicators System (ETIS) for its light pollution night skies.
Electronic dance music legend The Prodigy once released an album menacingly entitled No Tourists, the title track of which features the refrain, “nothing to see, no ride is free.” And while that’s obviously not the message Portugal is sending, its sustainability program does make it clear that a sustainable tourism program is taking shape in sympathy with the citizenry itself and its natural habitat. ✖
As many countries have discovered to their chagrin, tourism has a tendency to exact irreversible damage on local environments, both natural and manmade, turning the unknown into the workaday and in a further nod to consumerism.
With multiple distinctions, awardwinning facilities, and the best beach in Portugal under its belt, Pine Cliffs offers an experience like no other for both leisure and business travelers.
Serving both business and leisure travelers, how do you position Pine Cliffs Resort within the hospitality industry? Looking back at its 25 years of history, Pine Cliffs Resort was positioned as a leading destination for the leisure and family market, also due to the continuous investment and enhancement made to the resort. These efforts have been recognized, and several distinctions were awarded throughout the years, the most recent being the World’s Leading Luxury Leisure Resort, Portugal’s Leading Family Resort, and Portugal’s Best Spa Resort. Pine Cliffs, with its wide range of facilities, is the perfect destination for individuals and family leisure travelers who are looking for well-being and lifestyle programs, offered at our brand-new Serenity Spa. It has received recognition worldwide and was recently awarded with the Best Luxury Wellness Spa Award in Europe. Due to the recent expansion of the property and the launch of two new products—Pine Cliffs Ocean Suites and Pine Cliffs Gardens—we are now a global player in the corporate and incentive market, benefitting from the global sales offices and loyalty programs for individuals and corporate accounts. In addition, Pine Cliffs Resort is the only Marriott property with these extensive and diversified facilities in Europe, which makes us unique.
What are your unique offerings, and how can people utilize your premises for special events?
The resort’s location is unsurpassed, standing on a spectacular clifftop overlooking the Atlantic Ocean. To top that off is the beauty of the hotel’s impressive Portuguese architecture with a perfect combination of the Algarvian and Arab influences. Another unique feature is our beautifully manicured gardens, which offers a great space for special events such as weddings or product launches, namely top of the range bikes and cars. Guests can also enjoy a tennis match at the well-known Annabel Croft Tennis Academy as well as our gold course, which is amongst top 50 in Europe, or enjoy a stunning beach that was elected by TripAdvisor users as the best beach in Portugal and the 12th-best in the
world. For our fit-fans, the fitness center “Pine Cliffs Goes Active” offers a range of individual and family activities with personalized service enabling guests to recharge energies.
What is the breakdown of guests at Pine Cliffs Resort?
Pine Cliffs benefits from a diverse geographical source of business, with the main feeder markets being the UK, Germany, and other European countries. There has been an increased interest out of Russia, the Middle East, and emerging markets, which have also played an important role in the local market over the recent years. There is a great diversity geographically in terms of the types of leisure guests. We can see families enjoying the resort as well as more leisure travelers with interest in sports, well-being, and lifestyle culture. In the business segment, the Algarve remains a unique destination either for incentives or using the destination for product launch events.
What is your assessment of the tourism sector in the country and of the hotel market in the Algarve specifically?
Portugal will continue its healthy growth process, mainly in cities such as Lisbon and Porto, as it enjoys a privileged position among the top three safest countries in the world. In 2018, a similar trend is expected in the Algarve region, but with a softer demand growth because competitive markets such as Turkey, Egypt, Tunisia, and Greece are gaining share of the global tourism market.
What are your main priorities for 2019?
Considering the geographical diversity, we strive to improve our offers to the various demanding holidaymakers coming to the Algarve. We will continue to focus our position in the market with the newest additions in the resort—Pine Cliffs Ocean Suites and Pine Cliffs Gardens. Together with our parent company, United Investments (Portugal), S.A., we will further enhance the overall existing facilities that will contribute to reinforcing the prestigious image of the resort. ✖
Among the top
Thomas Schoen graduated from the Munich Hotel School and has worked for Starwood/ Marriott for 25 years. He is currently the complex general manager of Pine Cliffs, a Luxury Collection Resort, in Algarve, Portugal. Until May 2016, Schoen was area manager Egypt as well as general manager of the Sheraton Cairo, where he supervised 14 business units with 4,750 rooms, covering the Sheraton, Le Méridien, Westin, W, and St. Regis brands. Prior to that, he was area manager Poland and general manager of the Sheraton Warsaw Hotel for five years, and complex general manager of the Luxury Collection Hotels Imperial and Bristol in Vienna for two and a half years. He also completed various executive assignments with Starwood in Scotland, Africa, and Bulgaria.
In his book Crowds and Power, Nobel Laureate Elias Canetti playfully observes that, “Flags are wind made visible,” a means for nations to mark the air around them as their own.
INTERNATIONAL EXPOS AND OTHER CONTESTS staged before the world’s cameras allow participant nations to spar for dominance, but are also importantly airing perspectives on common commercial and cultural issues. Portugal, already a hugely popular destination, has added to its visibility by flying the red and green over a roster of events that have brought specific industries and goals into sharp relief.
A perfect example of the sheer pace of change in the tech universe, Web Summit, now Europe’s preeminent tech event, is the eight-yearold brainchild of Irish entrepreneur Paddy Cosgrave. From an initial 400 visionary participants in the first outing in Dublin, today’s event hosts north of 60,000 from over 150 countries. Lisbon was the host nation in 2017. And now, a feather in Portugal’s cap, it has signed an agreement to host the show for a full decade through to 2028 to seal Lisbon’s status as a European technology hub. Lisbon had prevailed over 20 competing European cities.
According to the agreement, Portugal has committed to an annual payment of EUR11 million to Web Summit toward expanding the summit’s reach to an ultimate target of 100,000 participants. Meanwhile, should Web Summit for any reason opt out of the deal before 2028, it would pay Portugal EUR3 billion. And for good reason. Portugal claims that Web Summit week rustles up EUR300 million for Lisbon’s tourism sector. The deal moreover seals Portugal’s visibility in a key economic sector; bear in mind here that a decade ago, ICT expenditure as a percentage of GDP in Portugal had reached 6% by World Bank numbers.
Historically, a major seafaring nation—its very name meaning tranquil port—Portugal celebrated this legacy in Expo 98, a tailor-made World’s Fair staged in Lisbon. Titled The Oceans, a Heritage for the Future, the nation basked in the half millennium of Portuguese oceanic discovery. More significantly, urban planners exploited the
event to reclaim an exhausted industrial quarter of the city. The resulting Parque das Nações Lisbon—Park of Nations—is today a major tourist draw. As well as being a center for corporate endeavor and prestigious residential area, it serves as a modern foil to Lisbon’s historic architecture. Depending on taste, the visitor may take in the wonders of the Oceanarium, watch their money float away at the Lisbon Casino, and enjoy a bird’s eye view of their losses from a cable car.
Yes, it demands a mention. The Eurovision Song Contest has been pitting participating nations against one another in a battle of the larynx since 1956. And while the whole affair has developed a whiff of kitsch, millions still relish the spectacle. Not least the joy of politically motivated voting, arguably the best bit. Meanwhile, the ignominy of Nul Points has long become a meme. Having won the event in 2017, Portugal automatically came to host the 2018 outing in a first for the nation. The setting was the Lisbon Arena, and the late addition of Macedonia brought the participant count to 43 countries. This time Israel was to win its fourth contest with the song "Toy."
Ultimately, the destinations of major international events are selected with the appeal of the location to attendees in mind. In September 2017, Portugal was for the first time named “European Best Destination” at the World Travel Awards in St. Petersburg. The event, since 1993 known as tourism’s Oscars, is no small potatoes. Online voting is registered by the general public and over 200,000 tourism professionals from 160 countries. Upon winning, Mayor of Lisbon Fernando Medina, an economist by trade, observed that, “The recognition of Lisbon as the ‘World’s Leading City Break Destination’ is the result of its growing prestige and investment in the valorization of its patrimony.” A rough translation of this is that in leveraging its capital assets, Portugal has successfully built on its excellent heritage. We told you he was an economist. ✖
Located in southern Portugal, the Pine Cliffs Hotel, a Luxury Collection Resort, is an iconic retreat with stunning views over the Atlantic Ocean located on the top of the Algarvian red cliffs, above Portugal’s famous beach, Praia da Falésia. With a Moorish influenced decoration, Pine Cliffs’ rooms are full of exquisite indigenous detail. Renowned for its diverse selection of restaurants, Pine Cliffs has cuisine to suit every palate. Piri Piri is one of the finest steak houses in the Algarve, while O Pescador provides a relaxed, refined setting, serving specialty seafood. Whether it is international cuisine at the buffet-inspired Jardim Colonial, poolside salads at Corda Café, or refreshing drinks at Beach Club by Olivier, guests can enjoy varied al fresco dining in true Algarvian style. The resort boasts exceptional leisure and sports facilities including the 1,100-sqm Serenity Spa, the Pine Cliffs Goes Active gym and health club, the Annabel Croft Tennis Academy, a nine-hole clifftop golf course, and swimming pools and water sports. Offering renowned exemplary service, Pine Cliffs continues to exceed expectations for both new and returning guests.
The Pestana Palace Lisbon Hotel & National Monument is just over 11km from Lisbon airport, situated near the banks of the Tagus River. To its west lies the historic district of Belém with its centerpiece, the beautiful, 16th-century Monastery of Jerónimos. The Valle Flôr Palace’s construction was ordered by the Marquis de Valle Flôr in the late-19th century. The hotel is a privileged member of the ‘Leading Hotels of the World’ group and is listed as a Portuguese National Landmark. It has also won several international competitions for its fine dining. The Valle-Flôr Restaurant is integrated in the hotel and serves Portuguese dishes inspired by the terroir of the country, allowing guests a culinary journey from north to south. The elegant Allegro Bar on the first floor serves cocktails and light meals with a live piano in the evenings. Its wonderful location and facilities, excellent quality, and award-winning restaurant are only some of the reasons why the Pestana Palace Hotel has received several prestigious awards.
