Basilio Horta, AICEP Portugal Investment Agency
Release Date: 2009-11-02
Basilio Horta, President of AICEP Portugal Investment Agency, was interviewed by EuropeAvia.com to speak about the dynamic and rapidly evolving business environment and the strategic, geographical and investment opportunities that Portugal has to offer to foreign companies setting up their businesses in the Western extreme of Europe. Specifically, Mr.Horta shared his views on FDI in Portugal, on the aviation industry and the China-Portugal partnership.What are the competitive advantages for foreign companies setting up their European headquarters or R&D centres in Portugal?
Portugal is a member of the European Union and founding member of the Euro currency, offering investors a stable social and political climate, a business-friendly climate, competitive cost advantages and a high-quality labour force.
Portugal has modern transport infrastructure and very good maritime connections, offering connectivity with Europe and the world. Its strategic location offers natural links to Europe, Africa and America. Moreover, the country has a modern telecommunication infrastructure.
On top of this, Portugal has a wide range of availability of industry skills at competitive costs and a strong availability of critical support industries, services and R&D.
Portugal offers investors a broad spectrum of incentive programmes. Incentives range from financial and tax incentives, to R&D incentives and to job creation and training. This extraordinarily large range of programmes enables companies to optimise their investment strategies and to benefit from assistance which is customised to their needs.
How would you define AICEP’s success in raising the country international investment profile since its instauration?
The World Bank Report, in 2008, ranked Portugal as a top reformer ‘reformer’ country which were implementing pro-business changes in the investment climate. Portugal maintained its Rank position in terms of Global Competitiveness, 43rd among 133 countries. Moreover, Portugal is reported by the Global Competitiveness Índex 2007-2008, as the 8th best country considering the global time to start up a business.
Out of 198 countries, Portugal moved from 48th to seventh worldwide and 2nd in Europe (only behind the United Kingdom) in the E-Government Country Rankings of the Brown University -“Global E-Government Analysis”. This represents a climb of 41 places in the ranking. Moreover, it is the ninth most peaceful country of the world. Portugal moved from 53rd to 17th position in its capacity to attract FDI, from 2005 to 2006, according to an annual survey carried out by A.T. Kearney and Foreign Policy Magazine.
Portugal is getting popular as prime business location and we succeed in ranking our country on the CEO’s shortlist for site location. Portugal is, nowadays, being perceived as a business hub. Even though these are relevant achievements, especially for a small country, we feel we still have a lot to do, since we are convinced the country’s potential is much higher than the existing international awareness.
Portugal continues to positively surprise those that visit us and that identify business opportunities in our country. This is something we want to preserve, by continuing to improve the investment climate, at the same time we work to reduce the gap between the real potential of the country and the potential perceived by international investors.
What is the current and potential contribution of the aviation sector to the economic performance of Portugal?
The aviation sector represents an opportunity to develop a new economic sector in Portugal.
Up until 2004, the aviation sector in Portugal was of limited expression. The only noteworthy company was OGMA, which was a MRO unit, dedicated mainly to the maintenance of military aircraft in service with the Portuguese Air Force and the production of the Pilatus PC12 centre fuselage. From 2004, and after the acquisition of OGMA by a consortium lead by Embraer, new skills were developed, making OGMA now one of the leading maintenance stations in Europe. Not only for Embraer but also for Lockheed and Airbus models.
In 2008 Embraer chose Portugal as the location for its new manufacturing plants. These two plants will be centres of excellence for metallic and composite material parts and structures. These are state of the art items and for the first time will be built outside of Brazil. This shows how confident Embraer is on the quality of the Portuguese workforce and its ability to perform in such a demanding sector.
With the development of a national suppliers industry, capable of manufacturing aircraft parts, we believe that in the near future Portugal will have an industry with an impact on our economic performance. Our goal is to have in the next 3-5 years a core of companies capable of supplying the major aviation manufacturers and supporting the Embraer project in Portugal.
How would you define Portugal’s current competitiveness as a centre of excellence for aviation and what are the country’s ambitions in this sense?
We believe that Portugal possesses some qualities that allow us to feel confident that we can be competitive for future aviation projects. I would highlight the infrastructure that is already available and ready to receive any kind of aeronautical project. Locations such as Beja or Évora, where there is no airspace restriction and the weather conditions are excellent for any kind of test flights. Secondly, the quality of our workforce. I’m not only talking about the workers at the production line but also at an engineering level. We have two universities that have graduation courses on Aeronautical Engineering and all the graduates find job positions in the most important aviation companies in Europe and North America. Thirdly, the capacity of the Portuguese companies to adapt to a new market. We have a very strong cluster of auto parts manufacturers, that supply the major auto manufacturers and that are already investing to adapt their industrial activities to the aviation industry requirements.
As I have said before, our goal is to have a core of companies capable of supplying the major aviation manufacturers. In next Farnborough Air Show, in 2010, AICEP will organise a national pavilion, where some of Portuguese companies already working on this sector will be present. I invite all the Chinese companies to come and visit us, to get a better knowledge of our national capacities.
How important is China’s booming aviation sector in Portugal’s internationalisation of its economy and what are the country’s ambitions in this sense?
We at AICEP are always monitoring the Chinese economic evolution. The restructure of the China Aviation Industry Corporation lead to the creation of a new structure highly competitive that is reducing its gap towards their European and American competitors. With the development now of a Portuguese Aviation Industry supplier’s network, we believe that there is potential for our companies to supply the new products being developed in China. As our companies are already certified in accordance with the European and North American aviation authorities, it will be much easier for Chinese aircrafts to obtain European and North American certification. Another area, where we believe our companies can be successful is in the maintenance area. Chinese aircrafts have a huge market in Africa. African airlines resort to European companies, already certified for maintenance and parts acquisition. Due to our historical links with Africa, we believe that Portuguese companies, working with the Chinese aviation manufacturers can be very successful in this market.
What is AICEP’s development and marketing strategy in raising Portugal’s profile in China?
We are actively present in China, with 3 offices. We have an office in Beijing, one in Macao and our main office is in Shanghai. We choose Shanghai for our main office as it is in fact China’s economic capital, with hundreds of companies based there. Beijing, due to political importance, is another city in China where we felt that our presence should be made visible. The historical links and the large Portuguese community make it essential for us to be in Macao.
Our strategy is based on two pillars. One is to promote Portugal as a key location in the world for companies to setup investment projects. The other is to assist Portuguese companies that want to expand and reach new international markets. As the Agency responsible for promoting Portugal, we have been talking with several Chinese companies who have shown interest in our country. These companies operate in different sectors, such as IT, renewable energy, electronics goods. What they all have in common is their desire to use Portugal as an entry point to the European market. What the Chinese should take in consideration is that Portugal is not only a door to the European market, but also the South American and African markets.
We have also been using several trade events to promote Portuguese companies and their products. It is our opinion that by making visible to the Chinese companies our range of products and by letting them experiment the quality, Chinese will become clients of “Made in Portugal”.
What is your final message for our readers in China, in Europe and worldwide about Portugal’s excellence?
I would like to invite them to visit Portugal and to experience the dynamic and rapidly evolving business environment and the competitiveness of our labour skills.
| Company: | AICEP Portugal Investment Agency |
| Position: | President |
| Country: | Portugal |