Portugal: a mature EC partner - Portugal: Gateway to Europe - European Community

Business America, May 20, 1991 by Miguel Pardo de Zela

Infrastructure

Construction and Mining Equipment--The construction industry sector in Portugal will offer an attractive market for U.S. exporters, as the country modernizes with the help of EC and local funds directed at infrastructure projects such as highways and roads, bridges, a natural gas terminal, sewage and water treatment plants, and the new Lisbon airport. Commercial building and house construction are up as well. Portugal is also the site of the largest non-coal mining development project in Western Europe, the $200 million Neves Corvo copper/tin mine.

The total Portuguese market demand for construction/mining equipment was $1.5 billion in 1990. The annual growth rate for the 1991-93 period should range between 10 and 12 percent.

Telecommunications--Portugal is following an ambitious program to modernize its communications sector. The Portuguese Parliament approved in July 1989 the deregulation/liberalization of some telecommunications services, which will soon allow the private sector to operate complementary services such as cellular phones, paging, videotex, and value-added services such as fax, audiotex, and voice mail box. In related areas, television is opening up to private sector involvement, reception of satellite TV is expanding rapidly, and air navigation and airport equipment will be purchased in order to upgrade local airports.

The market for telecommunications equipment in Portugal was $1.1 billion in 1990, and should increase 20-25 percent over the next three years.

Energy--Portugal has entered the 1990s with major steps towards diversifying its primary energy sources and increasing its power capacity to meet high consumption growth. The government, through the Ministry of Industry and Energy, launched a couple of major projects. Besides, the government is offering tax incentives to homeowners utilizing residential solar-heating units.

The government is currently in the process of evaluating tender proposals regarding the construction, and the concession to manage, a liquefied natural gas pipeline originating in Setubal, 50 km. south of Lisbon and going north 300 miles to Oporto. At that end there will also be a gas-fired, electric generating plant project linked to the pipeline. According to Portuguese authorities, the pipeline project will be instrumental in reducing Portugal's landed petroleum supply, required for energy, from 70 to 40 percent. The total project cost should be about $750 million.

Proposals for the construction of a four-phase thermoelectric plant complex, the Pego project, with each plant generating 300 mg. for a total of 1,200 mg. potential when completed, are now under consideration. Each phase will be coal-fired. The $2 billion project is scheduled to be finished by mid-1994.

Hospital Management; Medical Equipment & Supplies--A very important social infrastructure activity is the investment in upgrading and modernizing Portugal's hospitals, with opportunitied for hospital

   Profile of Portugal
Population:               10.4 million
Population Growth Rate:   0.7%
Area:                     92,080 sq. km. (includes
                          Azores and Madeira
                          Islands), slightly smaller
                          than Indiana
Religion:                 Predominantly Roman
                          Catholic
Government:               Parliamentary Democracy
Language:                 Portuguese
Next Scheduled Election:  Fall 1991
Foreign Visitors (1990)   18 million
Exchange Rate (average    $1 = 143 escudos
  in 1990)
GDP in market prices      $59 million
  (1990)
GDP Per Capita (1990)     $5,556
Composition of GDP
  (1990)
 Services                 51%
 Industry                 40%
 Agriculture              9%
Exports (1990)            $13,868
Imports (1990)            $21,050
Composition of Imports
 Food Products            12.4%
 Energy Products          10.6%
 Intermediate Goods       35.6%
 Machinery and Transport  36.5%
 Other                    4.8%
Natural Resources:        Fish, cork, tungsten, iron,
                          copper, tin, gold, and
                          uranium ores
Agricultural Products:    Grains, potatoes, olives,
                          grapes for wine.  Deficit
                          foods--sugar, grains,
                          meat, fish, oilseed
Primary Industries:       Textiles and footwear;
                          wood pulp, paper, and
                          cork; metalworking; oil
                          refining; chemicals; fish
                          canning; wine; tourism