Lessons from Portugal’s improved moldmaking industry

Go back 30 years and many of Canada’s moldmakers and plastics processors probably had at least one or two Portuguese companies as go-to contacts on their rolodexes. With a centuries-old glass making tradition that crossed naturally over into creating molds for plastics parts in the 1940s, Portugal was a hotbed of moldmaking and exporting — until the Great Recession, competition from low-cost countries, and the sharp depreciation of the U.S. dollar against the euro combined to wreak havoc on the economy of the small, southwestern European nation. How bad did it get? By 2012, mold exports to North America reached a historic low of just two per cent of Portugal’s total.

But there are signs of a turnaround, due largely to new and emerging markets and to the mold industry’s own efforts to retool itself. Almost six years ago, the sector’s local leaders, in close coordination with the Portuguese Ministry of Economy and Innovation, founded the private, non-profit Pool-Net Association to manage the Portuguese engineering and tooling cluster. Formally recognized as a legal entity by the Portuguese government in 2009, the cluster’s goal is to drive innovation and coordinate firms in the manufacturing supply chain that are engaged in industrial design, engineering and product development, prototyping, tooling, and plastic and metal parts production.

Cut to today and Portugal’s moldmaking industry is busy with work and realizing a sharp rise in product exports. “Portugal currently exports over 90 per cent of production to 120 countries. Europe is the main export zone, although exports to the U.S., Mexico, and Brazil are increasing. Last year, the North American market saw growth of more than 80 cent and now lies fifth in Portuguese mold and tool exports,” said Rui Tocha, Pool-Net’s general manager, who was interviewed by Canadian Plastics in June, during a four-day international “Molds Event” in Marinha Grande, Portugal’s tooling capital. “Portugal has around 450 companies employing approximately 8,000 workers in the two main locations of Marinha Grande and Oliveira de Azeméis.”

For the majority of these companies, Tocha said, the automotive industry is the major market, accounting for approximately 70 per cent of production, although many are diversifying into sectors such as packaging, aerospace, and health care and medical devices. “To support migration into these niche markets, the cluster takes part in European collaboration networks,” he said.

CLUSTER BOOM

A case in point was the signing of a cross-border cooperation pact between five European countries during the Molds Event. The alliance comprises Portugal’s Pool-Net, Spain’s AVEP, Italy’s Proplast, Austria’s Clusterland, and France’s Plastipolis. Tocha said he expected the cooperation between the clusters to be “deep”, noting that member companies, universities, and research organizations will likely exchange students and trainees, share data, and show production and operations to foreign members. “Some of these associations have already been cooperating with each other for years, but the alliance provides increased access to countries into which their customers have already expanded operations,” he said.

A further goal of Pool-Net is to improve the technical skills of the approximately 70 member companies. “We want to maximize such core technologies as milling, turning, and EDM; and introduce new technological skills into these strategic areas with effective transfer of knowledge and optimization of research and development results, with engineering topping the list,” Tocha said.

Portuguese firms are also pioneers in using new technologies which enable the use of in-mold labelling and decoration or multi-component products, Tocha added. “Moreover, the use of ‘smart tools’ by the Portu­guese moldmakers, which incorporate a wide range of electronic sensors, provides added value for international customers,” he said.

Six years into a 10-year plan, Pool-Net’s integrated approach seems to be paying off in spades. “By working together under a collective brand that embodies know-how, technology, innovation, and quality, Portugal has increased its competitiveness and market share worldwide,” Tocha said. “The message we’re sending is that Portuguese tooling companies are global solution providers that can close the loop from design to final product.”

So for today’s Canadian moldmakers, it might just be time to steal a page or two from the Portuguese playbook: whether formal or informal, the connections and cooperation fostered by clustering can work wonders for your bottom line. And while you’re at it, consider adding a Portuguese shop or two to your contact management software — or your rolodex, if you’re a dinosaur.