The newly elected president of the European textile and clothing industry confederation Euratex, Mario Jorge Machado, was in Paris this week to meet with industry leaders. On the occasion of the Première Vision Paris trade fair, the industrialist, who is also president of the Portuguese Textile and Clothing Association (ATP), spoke to FashionNetwork.com about his vision of a difficult economic context for the textile industry and gives his opinion on European regulations, circularity, innovation and artificial intelligence.
FashionNetwork.com: You are taking over the presidency at a difficult time for the sector. How do you view the current economic situation?
Mario Jorge Machado: We are faced with two different situations. Firstly, demand is weak and buyers are more cautious, because they are afraid. We must not forget that there is a war going on in Europe, so everyone who speaks to them is very concerned about it. But there is also the question of our future, and European textile companies have prepared themselves to be more sustainable, both environmentally and socially. Not least because consumers are looking for more sustainable products. Europe is taking the right steps to become more circular and more transparent. We are convinced that in the future, this process will allow European industry to be valued more by consumers. Of course, we have other values such as innovation, design and service, but this question of responsibility is essential.
“The industry must move towards a circular economy.”
FNW: Is decarbonising the industry then essential?
MJM: We are decarbonising, we are moving away from hazardous chemicals, we are investing in renewables to move away from fossil fuels… All these investments are important for consumers, because we are all aware of the importance of decarbonising the economy. We need to do this at a time when we are already seeing climate change. That is why we need to act, as an industry and as consumers. The consumer has enormous power to say “I am going to buy a product that is produced sustainably” or “I am not going to worry about these issues”. This means that we need to invest in consumer education. And on this issue, Europe is very well positioned to forge its own future. In that future, textile companies could have, let us say, a less difficult time than they face today.
FNW: Will you continue Euratex’s fight to simplify and clarify the legal frameworks surrounding the textile industry?
MJM: We are faced with a double challenge. Starting a business in Europe and developing it is quite complicated with all the current regulations. That is why we have to simplify it. But at the same time we have to be more transparent for consumers. In fact, European companies have to invest in digitalisation and communication. Because if you have done an excellent job on sustainability, but your consumers don't know anything about it, it is a waste. And everything has a cost: sustainable production has a cost, but its absence has a cost for the planet. We can no longer allow the planet to absorb this cost, it is sustainable fashion that must integrate it. And today we have to find ways to ensure that the cost of a sustainable action is not so different from the cost of an action that is not sustainable.
FNW: So certain regulations have a role to play…
MJM: Consumers need to be aware of the products they buy. That is why it is very important that the new European legislation, with the digital product passport (DPP) and the product environmental footprint (PEF), allows consumers to access this data in a very simple way. There is a third important point here, which is to indicate the real cost of products that do not include social and environmental criteria. If this social and environmental cost appears on the product, consumers will understand that it is not actually cheap. It is even expensive, because someone has tried to save certain production costs, but it will cost more to collect and recycle them, for example. The industry has to move towards a circular economy and we have to make sure that the products we start to recycle are not contaminated with dangerous chemicals such as formaldehyde or certain other products whose use is prohibited in Europe.
FNW: So Europe urgently needs to find ways to deal with Shein, Temu and others?
MJM: We are not sure about the composition of what comes from certain production countries, especially in cases where products are bought online, arrive in Europe and then recycled without anyone knowing what is in the fabric. Together with the EU and its customs authorities, we must find solutions to fight Shein and Temu. We are in favour of competition, but our industry needs fair competition on equal terms. We need reciprocity. Euratex fights for a level playing field. This means respecting the environment, water consumption, energy and social issues. All these factors must be taken into account when products enter Europe. We can no longer be in a position where “I don't care how this product was made, I just want a cheap product.” This is a business model that is incompatible with the survival of the planet. In Europe we have taken the measure of what is at stake and I am convinced that the other regions of the world will do the same, because if they do not, they will no longer be able to sell in Europe.
FNW: Portugal has become a symbol of the relocation of textile production in the face of large imports. Based on your experience at the head of the local sector, what lessons can the sector draw from the Portuguese experience?
MJM: Portuguese companies have invested heavily in innovation, both in new technologies and in renewable energy. In Portugal, in the first six months of the year, 70% of energy came from renewable sources. So this is an important step and we need to continue moving in that direction. This is another challenge for Europe: renewable energy must be very competitive with energy from fossil fuels and we need to access it at very competitive prices, because we are competing with other regions of the world. Euratex is currently discussing at European level the need to improve connections to integrate our electricity system, so that we can use energy from one country to another. We cannot accept that each country takes different measures. We must act as a block and in the right direction. Using energy better is also a way of differentiating ourselves, of doing things well.
“One of the best places in the world to find innovation and sustainability is Europe.”
FNW: Is it difficult to convince European brands to increase production in Europe?
MJM: If brands want to be transparent to consumers – and they do – they need a supply chain that is also transparent and sustainable. And one of the best places in the world to find innovation and sustainability is Europe. This is one of the reasons why Portugal has been so successful over the last year: innovation and sustainability. These are key points for the future of the European textile industry. Of course, we must continue to invest in the training of our workers, because innovation is synonymous with new technologies and knowledge. In this regard, we have the great challenge of recycling, whether mechanical or chemical. In 2025, it will be mandatory in all European countries to collect textile products at the end of their useful life. With so much fibre, we need to find a new business model to reuse this source of materials. It is also an opportunity, because if we have this source locally and we can extract new fibres from it, it will be an opportunity for products to be produced entirely on European soil.
FNW: Another reason to produce in Europe, then…
MJM: There are many advantages to having a more localised industry. In addition, we also have a great intangible value in Europe. This value is linked to our culture, our education, our history, our creative affinities, our capacity for innovation in the textile and clothing sector… Consumers around the world are proud to wear a garment made in Europe. This is an area where Europe still dominates the world in terms of fashion. So we have this advantage and we have to take care of it. Regulation can help in this regard. This is what we have to discuss in Brussels. The new legislation that will be passed in the next two or three years can make a difference, either in making this sector prosper or in making life more difficult for it. There are many concerns, of course, but also opportunities.
FNW: You also talked about recycling. Euratex is currently developing its Rehubs project. How far has this European collection and recycling network come?
MJM: This is a new business model that is developing and, as in any new model, demand must be created as well as supply. And it is in this situation that regulation will play a crucial role. If tomorrow the European Commission declares that all clothing must contain 30% recycled fibre, Europe will not have the production capacity to meet this demand. As I mentioned, in January 2025 there will be major changes in collection and recycling. And all Member States and entities must have the same regulatory framework. We cannot have different rules for France, Spain, Italy, Germany or Portugal. That would be very complicated for companies, but also for brands. That is why we need a stronger Europe, a more united Europe on this issue.
FNW: You mentioned investment in innovation. What role could artificial intelligence play in Industry 4.0?
MJM: AI is something that is definitely going to be crucial for this industry. One of the problems in the garment industry remains unsold stock. So AI can be a great help in terms of forecasting, projecting trends and optimising production quantities. And if you can produce in three or four weeks, that offers completely different perspectives than if the lead time is four or five months. So if you have models that can predict, that is much better. The best scenario is one where production starts after the product has been purchased. We are moving in that direction and AI can help. In fact, if all production machines automatically communicate with each other and AI constantly adjusts manufacturing, we will be more competitive. AI is a new world that we have to learn to use more. But again, AI will be less about technology than about people, because textile workers will have to learn.
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