Relocation: the pandemic forces companies to approach Spain

The emergence of the covid pandemic revealed the excessive dependence on third countries, in particular, on products as essential at first as medical supplies. In this context, the debate on industrial relocation began to take hold. An issue that, far from blurring, continues there, as a consequence of the increased cost of transport and the breakdown of distribution chains. in practice, what is really happening today?

The health crisis and all its consequences are forcing companies to start bringing their production closer to Spain. Increasing environmental awareness has also helped. For example, through the contracting of finished products to manufacturers of greater proximity, with the approach of parts of the production, or with the search for closer suppliers. The path of return along that path, with greater or lesser intensity, has already begun. Another thing is to dismantle the factories of their own that some companies relocated in their day with the aim of achieving more competitive costs, in order to move them here in a situation like the current one. The high costs involved in undertaking operations of this scale are holding back such a large relocation, together with the conviction that the current problems are temporary.

In any case, Mercantile companies that once chose to bring their production to Spain admit that they are being less affected due to the supply problems of raw materials and the increased cost of freight.

Without going any further, from the Community of Internationalized Industrial Companies (Amec), an entity that brings together 350 companies from all over the country, its general director, Joan Tristan, asserts that, “at the moment, there is no clear relocation process. Companies consider that the problems that are currently occurring may last a while, but they are temporary and not structural.” This is the reason why the executive of Amec warns that “relocation is spoken with a certain lightness, because moving a factory from one place to another costs a lot of money. There are workers, infrastructures, machines … It is not something so simple , and, today, the circumstances do not exist “.

They are pronounced in similar terms by the Spanish Confederation of Metal Business Organizations (Confemetal). They explain that the issue “was raised in the midst of the pandemic given the strong uncertainty it was going through, but, once the worst moment had passed, it has practically been ruled out, since the conditions are not met. In our case, we are talking about a sector with nails expensive machinery and installations, which are not easy to move. In addition, there are other factors, such as tax pressure or labor and energy costs, that do not help either “

On the other hand, other types of measures are being adopted that move in the direction of bringing production processes closer together. “Likewise, instead of moving a whole factory, a part of the production does move, not necessarily taking it to Spain, but to closer countries, such as Morocco. It also seeks the hiring of local manufacturers, as well as suppliers On the one hand, for having insured supplies and, on the other, for greater environmental awareness “, Joan Tristán emphasizes.

However, this process of approximation is not as easy as it might seem a priori. Less at the moment. This is how it is revealed Enrique Fajul, CEO of the internationalization consultancy Iberglobal, who emphasizes that “you have to find manufacturers and suppliers that have the products that companies need, and it is not always easy. Sometimes, companies will have no other option than to invest in the creation of factories, either in Spain or in other countries, that meet the appropriate conditions, such as those located in North Africa or Eastern Europe “.

The president of the Federation of Spanish Footwear Industries (Fice), Marián CanoIn this sense, it recognizes that “the difficult time we are currently experiencing is being seen as an opportunity to bring production processes closer together, and there may be companies that are considering it”. However, it does issue another clear warning: “For this they also need fiscal and labor stability to accompany them”, sentence the president of the shoemaker’s association.

For his part, his counterpart in the Spanish Association of Toy Manufacturers (Aefj), Jose Antonio Pastor, points out that “relocation will depend on how long this situation can last. At present, the conditions to move a factory do not exist, but perhaps smaller production volumes do, for which it is also necessary to look for suppliers that offer what companies need “.

In similar terms, the vice president of the Spanish Intertextile Council (Cie) expresses himself, Pepe Serna, who also indicates that “one of the few good things that the pandemic can leave is that some activities of the companies return to our territory. But it is still too early to see if this trend can become consolidated.”

Meanwhile, from the Business Federation of Wood and Furniture (Fevama), its general director, Amparo Bertomeu, recalls that, “at the time, there was an important part of relocation in the sector due to raw materials, but that trend has been reversing not now, but years ago, among other things because the client highly values’ made in Spain ‘. It is likely that the current context could provide a new impetus. “

And what do companies think? There are some who already have relocation experience. This is the case of the toymaker Injusa, which in 2011 decided to move all the production it had in China to its facilities in the Alicante municipality of Ibi, only three years after it also left manufacturing in Mexico, because it no longer worked so profitable. Your CEO, Luis Berbegal, affirms that the results obtained subsequently have supported that decision, and that currently, due to the problems of costs and shortages, “the only thing we have had to do is look for closer suppliers for some components for our products that we kept bringing from Asia. “

At the other extreme is the Vicalhome company, belonging to the furniture sector, located in the Valencian municipality of l’Olleria, and which maintains the main part of the production in Asia. Your commercial director, Nacho Soriano, confirms that they are looking for manufacturers and raw materials in countries such as Poland, Ukraine or the Czech Republic, “to avoid problems in costs and distribution.”

Ausa, on the other hand, is a Manresa company dedicated to the manufacture of industrial vehicles, which has hired a Spanish manufacturer to make the chassis. The CEO, Ramon Carbonell, he points out that “we have two suppliers, and one of them we have transferred to the Peninsula. Of course, we have had to help the manufacturer to adapt its processes and technology so that it could produce the product we need.”

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However, the approach to Spain is not only a matter of the industry. In the commerce sector there are also companies that are working in this direction. This is the case of Ale-Hop, the gift store chain that is identified by the cow at the entrance of its stores. Your advisor, Darius Grimalt, explains that “we bring items from anywhere in the world, but, at the moment, we are reinforcing our contracts with Spanish manufacturers, and not only because of the risk of shortages, but also because of the conviction that we must walk towards sustainability”.