Portugal’s Bike Boom: How the Country Is Meeting the Demand

VOUZELA, Portugal — Inside a manufacturing unit set amongst eucalyptus bushes in the Portuguese countryside, staff rigorously minimize 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 mild body for a bicycle that will promote for about $7,000, serving to speed up Portugal’s development as the largest bike manufacturing nation in the European Union.

Demand for bikes is hovering, thanks partly to the coronavirus pandemic. More folks have determined to pedal to remain match after lengthy lockdowns, or to keep away from crowded trains and buses on the solution to work. Politicians, conscious of the local weather advantages of biking, 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, house to a heavy focus of producers with ties to bicycles. About 60 corporations in the area assemble bikes or make their components and equipment, together with handlebars, brake pads and helmets.

The nation of 10 million folks — a little bit greater than 2 % of the European Union’s inhabitants — produces practically 1 / 4 of the bloc’s bicycles. The business has changed into one in all Portugal’s fastest-growing employers, its work power increasing 65 % in the previous 5 years to 7,800 workers, in keeping with Abimota, a bicycle business group.

The development 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 corporations have employed expert staff left behind when different producers have shut down or moved elsewhere searching for cheaper labor.

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

Molds for carbon-fiber bicycle frames, made by Carbon Team, are heated for 3 hours in a 200 diploma Celsius (390 levels Fahrenheit) oven.Credit…Rodrigo Cardoso for The New York TimesEmre Ozgunes, the basic supervisor of Carbon Team, with one in all the firm’s carbon fiber frames.Credit…Rodrigo Cardoso for The New York Times

“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 unit’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 corporations and two companions from Germany and Taiwan, is initially planning to make 25,000 frames a 12 months, however it has the flooring area to double that quantity. About 30 % of the eight.four million-euro ($10.2 million) building value was coated by European Union subsidies. Until now, practically all carbon frames bought in Europe had been imported from Asia, with just a few made in smaller European workshops, Mr. Ozgunes mentioned.

Across Portugal’s bicycle business, corporations are dashing 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 in all the corporations, 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, however it generated most of final 12 months’s €52 million in income from youngster seats, helmets and different biking equipment.

Polisport generated most of final 12 months’s income from youngster seats, helmets and different biking equipment.Credit…Rodrigo Cardoso for The New York TimesThe pandemic has demonstrated “that it is a big advantage to be able to produce in Europe,” mentioned Polisport’s proprietor, Pedro Araújo.Credit…Rodrigo Cardoso for The New York Times

RTE, which operates Portugal’s largest bike manufacturing unit, overlaying about 430,000 sq. ft, is making ready to open one other manufacturing unit subsequent door to make electrical bikes. It lately launched its personal e-bike model.

But RTE can even open one other manufacturing unit subsequent 12 months in Poland, to provide its important buyer, the big sports activities retailer Decathlon, a French firm with shops worldwide.

Bruno Salgado, the government director of RTE and scion of the household that owns the firm, mentioned the bicycle frenzy created alternatives for a number of nations to extend manufacturing. His manufacturing unit in Portugal makes use of staff and automatic equipment to churn out about 5,500 bicycles a day, however it might produce at the very least 7,000 to fulfill demand if it may obtain components quicker, he mentioned. A bicycle can have greater than 100 components.

Europe faces “big sourcing problems” that may take two to a few years to resolve, leaving some prospects dealing with prolonged waits, Mr. Salgado mentioned. For some components, he mentioned, manufacturing unit 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 lift manufacturing in response to hovering demand from cyclists.

Still, it is sensible to spend money on a manufacturing unit in Poland, he mentioned, a rustic 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.”

Bruno Salgado, the government director of RTE, mentioned the bicycle frenzy created alternatives for a number of nations to extend manufacturing.Credit…Rodrigo Cardoso for The New York TimesChecking a lately assembled bicycle at RTE earlier than being shipped to its vacation spot.Credit…Rodrigo Cardoso for The New York Times

Mr. Kamler mentioned that he sought to copy a few of the lean manufacturing processes that he had seen in Portugal inside Kent’s manufacturing unit in South Carolina however that “we are not there yet.” (The United States is, thus far, a secondary marketplace for Portuguese bikes and parts, 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 folks laid off by different industries, together with engineers and meeting line staff. RTE employed dozens of individuals from a close-by automotive parts manufacturing unit 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 few of the staff got here from a close-by shuttered carpet manufacturing unit, 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 basic supervisor, “they certainly have the manual skills needed to put carbon fiber into a mold.”

One of the former carpet weavers, Pureza Silva, 50, got here knocking on the door of Carbon Team’s manufacturing unit after struggling via 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 obtained 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 as much as 48.5 % on Chinese bikes, giving Portugal and different E.U. nations an opportunity to develop a homegrown business. Tariffs have now been prolonged to electrical bicycles, too.

RTE operates Portugal’s largest bike manufacturing unit. It is making ready to open one other manufacturing unit subsequent door to make electrical bikes.Credit…Rodrigo Cardoso for The New York Times

Portugal’s biking business depends on these anti-dumping tariffs to maintain inexpensive bikes out, mentioned Gil Nadais, the basic 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 right down to makers of parts. 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.”