By Ron Shinn
There was a time just 25 years or so ago when processors and original equipment manufacturers who wanted to save money but still get high-quality injection molds went offshore — to Portugal.
But the allure of cheap Asian labor caused an abrupt about-face. In just a few years, Portugal’s orders from North America — which once totaled 65 percent of Portugal’s output — disappeared completely as those customers raced to China and elsewhere in Asia.
Fortunately, the Portuguese mold-making industry has remained strong. Now, the often-cited problems in Asia of poor quality control, delivery delays and high transportation costs that are resulting in reshoring of plastics industry operations to the U.S. are leading some mold buyers back to Portugal.
“Our shipments to the U.S. have been slowly increasing for the past five years,” said Patrício Tavares, spokesman for Cefamol, the Portuguese national mold makers association, during an interview at K 2022. “But we are not yet even close to what we were 20 years ago.”
Some of that comeback growth has been in the automotive market, Tavares said. “We have a high standard of quality, so automotive has been a logical step."
He also said that European and Asian auto manufacturers that have expanded in the U.S. outside of the traditional Detroit-Cleveland area have also benefited Portuguese mold makers. “These companies are building new supply chains, and we are trying to enter those supply chains. Some of them are the same companies we are working with in Europe.”
Here is a little background. Mold making in Portugal for plastics evolved from a centuries-old glass-making industry. In 1950, two brothers who built molds for the glass industry split, and one brother left the company to start his own business. Not wanting to compete with his brother, he decided to make molds for plastics.
Today the industry is centered north of Lisbon in the towns of Marinha Grande and Oliveira de Azeméis. Tavares estimates there are about 500 tool and mold making companies in those two areas and nearly every one can trace its roots to that first company. A colleague who visited said you could frequently walk out the front door of one mold maker and see the plant of the next one.
Mold making companies in Portugal have always been a tight-knit group. They generously fund their trade association, which appears at trade shows around the world. They have always invested in automation and in research and development. Some of the Portuguese mold making plants are heavily automated, lights-out facilities.
There has always been a high level of cooperation between the Portuguese companies. An example occurred in 2018 when five Portuguese mold makers recognized a business opportunity in Mexico’s growing plastics industry and joined together to open a plant in Mexico to build, service and repair molds.
A generation ago, a mold made in Portugal for a U.S. customer cost about 15 percent to 25 percent less than the same mold made in the U.S. Later, a mold built in China might double that savings compared with a U.S.-built mold.
Tavares said new orders from the U.S. started to appear at exactly the same time he started hearing complaints about Asian mold makers.
Mold orders from the U.S. now account for about 10 percent of Portugal’s total mold making business, and the number is slowly growing. During the past 20 years, strong growth in the automotive industry in Germany, Spain and France sustained the Portuguese mold making industry. “The switch of markets was a fast process,” said Tavares.
Portuguese mold makers originally had many customers in the U.S. toy industry. When those orders disappeared, Tavares said it allowed the Portuguese tool industry to evolve, first into automotive, then consumer goods, medical and packaging industries.
“We have a lot to offer companies in North America,” said Tavares. “Good quality and a good price. We are increasing our business in the U.S.”
Tavares said his association is organizing efforts to increase Portuguese penetration into the U.S. medical molding market because of its high-value parts. A second target is the U.S. packaging market, which he said is proving to be more difficult because of strong competition from U.S. mold makers.
Will U.S. companies return significant amounts of their mold making business to Portugal? Tavares said he is hopeful it all comes back, but is realistic that it will never again account for 65 percent of Portugal’s total sales. Mold making industries in the U.S., Canada and Mexico are stronger than they were 20 years ago, he said.
Keeping mold building in this country has plenty of benefits. However, competition from Portuguese companies offering high-quality molds at good prices also benefits domestic processors.
Ron Shinn, editor
