Portugal Is Riding a Boom in Bicycles

VOUZELA, Portugal — Inside a manufacturing facility set amongst eucalyptus timber in the Portuguese countryside, employees rigorously lower skinny strips of sticky carbon fiber and press them into molds. It is sluggish and painstaking labor.

But after every mould is cooked in an oven heated to 200 levels Celsius (about 390 levels Fahrenheit), out comes an extremely gentle body for a bicycle which will promote for about $7,000, serving to speed up Portugal’s progress because the largest bike manufacturing nation in the European Union.

Demand for bikes is hovering, thanks in half to the coronavirus pandemic. More individuals have determined to pedal to remain match after lengthy lockdowns, or to keep away from crowded trains and buses on the best way to work. Politicians, conscious of the climate benefits of cycling, are including extra bike lanes to their cities, together with in Paris, Berlin, Lisbon and Barcelona, Spain.

And it has been a boon to northern Portugal, residence to a heavy focus of producers with ties to bicycles. About 60 firms in the area assemble bikes or make their components and equipment, together with handlebars, brake pads and helmets.

The nation of 10 million individuals — a little greater than 2 p.c of the European Union’s inhabitants — produces almost a quarter of the bloc’s bicycles. The business has changed into one in all Portugal’s fastest-growing employers, its work drive increasing 65 p.c in the previous 5 years to 7,800 workers, in keeping with Abimota, a bicycle business group.

The progress is partly the results of protectionist commerce legal guidelines that forestall low-cost Chinese-made bicycles from coming into the European Union. The home bike firms have employed expert employees left behind when different producers have shut down or moved elsewhere looking for cheaper labor.

But as demand has escalated, the bicycle makers have run into the identical supply-chain points which have damage so many different industries, holding up manufacturing as a result of components from Asia are lacking. That has spurred further funding in the area, together with what’s believed to be Europe’s first manufacturing facility to make carbon-fiber bike frames. It began working in January.

“One lesson from the pandemic is that you need to be nearer to your production,” mentioned Emre Ozgunes, basic supervisor of Carbon Team, the manufacturing facility’s proprietor, “because if everything shuts down, you can probably still drive to Portugal to pick up frames, but not to China.”

The firm, a three way partnership of three Portuguese firms and two companions from Germany and Taiwan, is initially planning to make 25,000 frames a yr, nevertheless it has the ground house to double that quantity. About 30 p.c of the 8.four million-euro ($10.2 million) development value was lined by European Union subsidies. Until now, almost all carbon frames bought in Europe had been imported from Asia, with solely a few made in smaller European workshops, Mr. Ozgunes mentioned.

Across Portugal’s bicycle business, firms are speeding to bolster manufacturing and assist cut back Europe’s reliance on imports from Asia.

“I think this pandemic has made it clear to everybody that it is a big advantage to be able to produce in Europe,” mentioned Pedro Araújo, the chief government and proprietor of one of many firms, Polisport.

Mr. Araújo was a 19-year-old motorcycle aficionado when he based his firm in 1978, producing mudguards for off-road bikes. Polisport nonetheless makes the mudguards, nevertheless it generated most of final yr’s €52 million in income from little one seats, helmets and different biking equipment.

RTE, which operates Portugal’s largest bike manufacturing facility, protecting about 430,000 sq. toes, is getting ready to open one other manufacturing facility subsequent door to make electrical bikes. It just lately launched its personal e-bike model.

But RTE may even open one other manufacturing facility subsequent yr in Poland, to produce its predominant buyer, the enormous sports activities retailer Decathlon, a French firm with shops worldwide.

Bruno Salgado, the manager director of RTE and scion of the household that owns the corporate, mentioned the bicycle frenzy created alternatives for a number of international locations to extend manufacturing. His manufacturing facility in Portugal makes use of employees and automatic equipment to churn out about 5,500 bicycles a day, however it will produce no less than 7,000 to satisfy demand if it might obtain components sooner, he mentioned. A bicycle can have greater than 100 components.

Europe faces “big sourcing problems” that may take two to 3 years to resolve, leaving some clients dealing with prolonged waits, Mr. Salgado mentioned. For some components, he mentioned, manufacturing facility orders positioned now are assured to be delivered solely in early 2023. Stocks have dried up after months of closures prompted by lockdowns, worldwide shipments are solely slowly resuming, and it takes time to boost manufacturing in response to hovering demand from cyclists.

Still, it is smart to take a position in a manufacturing facility in Poland, he mentioned, a nation higher located for a lot of European markets and one the place Decathlon has shops. “I believe we cannot sit back and relax just because Portugal is now making a lot of bikes,” Mr. Salgado mentioned, “because all the other countries are learning and some also have better geographic positioning.”

Portugal’s instance is inspiring others elsewhere. Arnold Kamler, the chairman of Kent International, an American bicycle firm, mentioned in a cellphone interview that he had found at RTE “the finest factory I have ever seen in my entire life.”

Mr. Kamler mentioned that he sought to duplicate a number of the lean manufacturing processes that he had seen in Portugal inside Kent’s manufacturing facility in South Carolina however that “we are not there yet.” (The United States is, to date, a secondary marketplace for Portuguese bikes and elements, accounting for about $1.2 million in exports in 2019.)

In their want for extra workers, Portugal’s bike makers have been in a position to re-employ individuals laid off by different industries, together with engineers and meeting line employees. RTE employed dozens of individuals from a close by automotive elements manufacturing facility that closed. At Polisport, Mr. Aráujo employed a number of engineers from Philips, the Dutch electronics firm, after it moved a part of its manufacturing to Asia from Portugal. Polisport now has greater than 650 workers, up from 100 a decade in the past.

At Carbon Team, a number of the employees got here from a close by shuttered carpet manufacturing facility, a part of a textiles business that was historically a pillar of Portugal’s economic system. “If somebody knows how to knit,” mentioned Mr. Ozgunes, the overall supervisor, “they certainly have the manual skills needed to put carbon fiber into a mold.”

One of the previous carpet weavers, Pureza Silva, 50, got here knocking on the door of Carbon Team’s manufacturing facility after struggling by two years of unemployment. “When you have reached my age,” she mentioned, “you are certainly not going to get many opportunities to find a new job like this, and I’m enjoying making something new.”

After Portugal joined the European Union in 1986, it acquired billions in subsidies to assist modernize its economic system. But it additionally discovered itself extra uncovered to the free commerce promoted by the bloc, which helped Asian producers flood Europe with bicycles and different items that they may make extra cheaply.

But in 1993, the lawmakers in Brussels launched tariffs that now go up to 48.5 percent on Chinese bikes, giving Portugal and different E.U. nations a likelihood to develop a homegrown business. Tariffs have now been prolonged to electrical bicycles, too.

Portugal’s biking business depends on these anti-dumping tariffs to maintain inexpensive bikes out, mentioned Gil Nadais, the overall secretary of Abimota, the Portuguese bike affiliation.

Without tariff safety in opposition to China, “unemployment would shoot up here,” he mentioned.

Still, Portuguese executives insist that their manufacturing hub has additionally been fast to regulate to rising demand for higher-end bikes, together with hybrid and electrical fashions. Technological innovation has additionally trickled all the way down to makers of elements. Frames first shifted to lighter aluminum from metal, and now to dearer carbon fiber. For electrical bikes, the lighter frames lengthen the journey vary of the motor.

“This is no longer just a race to produce at the cheapest price,” Mr. Ozgunes mentioned, “but also to adapt to a fast-changing market in which the bike no longer is like the kind our grandparents used.”

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