Mario Jorge Machado of Euratex on leading Europe's clothing industry towards a more sustainable model

Recently elected President of the European textile and clothing industry confederation Euratex, Mario Jorge Machado was in Paris this week to meet industry leaders. On the occasion of the Première Vision Paris trade show, the industrialist, who is also President of the Portuguese Textile and Clothing Association (ATP), talks to FashionNetwork.com about his vision of a difficult economic context for the textile industry, and gives his views on European regulations, circularity, innovation and artificial intelligence.

FashionNetwork.com: You’re taking over the presidency at a difficult time for the industry. How do you see the current economic situation?

Mario Jorge Machado: We’re facing two distinct 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 we talk to is very concerned about that. 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 make itself more circular and more transparent. We are convinced that, in the future, this process will enable European industry to be held in higher esteem by consumers. Of course, we have other values such as innovation, design and service, but this issue of responsibility is essential.

MJM: We’re decarbonising, we’re moving away from hazardous chemicals, we’re investing in renewable energies 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 achieve this at a time when we are already seeing climate change. So we need to act, as an industry and as consumers. The consumer has enormous power to say “I’m going to buy a product that is produced in a sustainable way” or “I’m 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 a future for itself. In that future, textile companies could have, let’s say, a less difficult time than the one they face today.

FNW: Will you continue Euratex’s fight to simplify and clarify the legal frameworks surrounding the textile industry?

MJM: We face a twofold challenge. Setting up a business in Europe, and developing it, is quite complicated with all the current regulations. So we need to simplify that. But at the same time we need to become more transparent for consumers. In fact, European companies need to invest in digitisation and communication. Because if you’ve done an excellent job in terms of sustainability, but your consumers know nothing about it, that’s 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 up to sustainable fashion to integrate it. And today we need to find ways of ensuring that the cost of sustainable action is not so different from the cost of action that is not sustainable.

MJM: Consumers need to be aware of the products they buy. So it’s very important that the new European legislation, with the digital product passport (DPP, editor’s note) and the environmental product footprint (PEF, editor’s note), gives consumers very easy access to this data. 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, for example. The industry has to move towards a circular economy and we have to make sure that the products we start recycling are not contaminated with dangerous chemicals such as formaldehydes or certain other products whose use is banned in Europe.

FNW: So Europe urgently needs to find ways of dealing with Shein, Temu and others?

MJM: We have no certainty about the composition of what comes from certain production countries. Particularly in cases where products are bought over the Internet, arrive in Europe and are then recycled without anyone knowing what’s in the fabric. Together with the EU and its customs authorities, we need to find solutions to combat Shein and Temu. We are in favour of competition, but our industry needs fair competition on a level playing field. We need reciprocity. Euratex is fighting 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 don’t, 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 major imports. From 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 energies. 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 go further in this direction. This is another challenge for Europe: renewable energy must be highly competitive with energy from fossil fuels. And we need access to it at very competitive prices, because we are competing with other regions of the world. Euratex is currently discussing at European level the need for better connections in terms of integrating our electricity system. So that we can use energy from country to country. We cannot accept each country taking different measures. We should act as a block, and in the right direction. Using better energy is also a way of differentiating ourselves, of doing things right.

“One of the best places in the world to find innovation and sustainability is in Europe.”

FNW: Is it difficult to convince European brands to increase production in Europe?

MJM: If brands want to be transparent for 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 in Europe. This is one of the reasons why Portugal has been so successful over the past year: innovation and sustainability. These are key points for the future of the European textile industry. Of course, we must continue to invest in training our workers, because innovation is synonymous with new technologies and know-how. In this respect, we have the major challenge of recycling, whether mechanical or chemical. By 2025, it will be compulsory in all European countries to collect end-of-life textile products. With so much fibre, we need to find a new business model for reusing this source of materials. It’s 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. What’s more, in Europe we also have a great deal of intangible value. This value is linked to our culture, our education, our history, our creative affinities, our capacity for innovation in textiles and clothing… Consumers the world over 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 need to take care of it. Regulation can help in this. This is what we need to discuss in Brussels. The new legislation that will be adopted in the next two or three years can make a difference, either to make this sector prosper or to make life more complicated for it. There are a lot of concerns, of course, but there are also opportunities.

FNW: You also mentioned recycling. Euratex is currently running its Rehubs project. How far has this European collection and recycling network got?

MJM: It’s a new business model that’s developing. And, as with any new model, you have to create demand 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. So we need a stronger Europe, a more unified 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 certainly going to be crucial for this industry. One of the problems in the clothing industry remains that of 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 prospects than if your lead time is four or five months. So if you have models that can be forecast, it’s much better. The best scenario is one where production is launched after the product has been purchased. We’re moving in that direction, and AI can help. In fact, if all the production machines communicate automatically with each other, and AI constantly adjusts manufacturing, we will become more competitive. AI is a new world that we need to learn to use more. But here again, AI will be less about technology than about people, because textile workers will have to learn.