Postponements and cancellations of orders are the day-to-day life of textile companies in the current conjuncture of the pandemic of the covid-19 and most factories expect to have a reduction of more than 50% of their turnover next April. The data are from the survey carried out by the Portuguese Textile and Clothing Association (ATP) among its members and which showed that 59% expect a loss greater than 50% of sales, to which 26% add a reduction of 30% to 50%.
“There is enormous uncertainty at the heart of the European economy, and it is expected to consolidate globally in the coming months, even after the current health crisis has passed. With 82% of textile and clothing exports in Portugal destined for the European market and the remaining 18% exported to the extra-European market, the textile and clothing industry and the 7.7 billion euros a year generated by it are now strongly threatened ”, Says the association in a statement.
The sector “is faced with successive postponements and cancellations” of orders by customers, who “in some cases are not able to pay” those they have already received. A trend that has a “profound impact” on company revenues, “especially in a scenario where fixed costs remain”. Workers' wages “may be at risk in the short term”. Textiles and clothing employs 138,750 people.
“It is therefore urgent to regulate the process for applying the simplified lay-off. Claimed by the government 15 days ago, this fundamental mechanism is immediately available and operational to enable companies to survive, ”says the association, chaired by Mário Jorge Machado, who claims“ different rules ”from those currently envisaged.
The period of demonstration of the break in the company's income must be “as short as possible” and the demonstration of the break “must be able to be done by simply showing that there are no future orders”.
ATP also requests that, with regard to the mechanism between banks and Banco de Portugal, a “moratorium on payments due and without a record of default” be given, as well as a “dilution over four or five years of the correspondent payment, to avoid treasury strangulation at the time of resumption of activity ”.
The State must guarantee that the credit lines created “will in fact be used without the use of banks, with special attention to the fees and commissions charged”, and that the planned financing “will reach the companies that really need it”. The bureaucracy, defends the ATP, "may lose everything".