Interview with Joaquim Fernandes

Mundifios administrator explained to JT that it is now thinking of international markets such as Maghreb and Brazil without forgetting about Europe. The core business of the 26 year family company is the trading of yarns but also the subcontracting of more specific yarns in order to meet the market needs.

As a specialist in yarn trading, Mundifios has been growing every year and at present, this 26 year company has its eyes turned towards international markets - with the «elite of Portuguese clients» in its portfolio.
After Maghreb and Europe, Brazil is the next target. The company is expanding its business also into the production, with the purchase of the premises of the former company Fiação de Covas and with the exclusive production contract with Têxtil Tsuzuki.
In an interview to the Jornal Têxtil, Joaquim Fernandes, the company's administrator talks about this and other projects, as well as some of the key success factors of the company: a good team that suffers as a result of the defeats and celebrates the victories.

Jornal Têxtil (JT) – How did Mundifios come about?
Joaquim Fernandes (JF) – Mundifios is a family company, founded in August 1985 and with its initial head office in Selho S. Jorge, Pevidém.
Later, in 1992, it moved to new premises because of space issues and finally, in 1999, it moved to the Parque Industrial S. João da Ponte. It was founded basically as a result of an opportunity. During that golden era of the textile industry in Portugal, there was great difficulty in supplying yarn. At the time, in the 1980s, I held a stake in Têxteis Penedo, which I sold in 1990, and, at that moment, I felt those same difficulties in the supply. It seemed to me like a good opportunity to create an import and distribution structure of yarns. Nowadays, Mundifios is a bit more than that. Although its core business is the yarn trading, it also subcontracts fast fashion yarns as well as special yarns. They are subcontracted because we haven't got our own production unit yet.

JT – You said "yet". Is that going to change?
JF – Currently, we commission the entire production of Têxtil Tsuzuki, given the difficulties in terms of raw material, namely in terms of yarns and also, still in an early phase, we bought the premises of the former Fiação de Covas, which is insolvent. Fiação de Covas dedicated itself to
special yarns, synthetic fibres, mixtures and blends and it used to sell 60% of its production to our company, selling the remaining 40% directly. With the company becoming insolvent, we did not want to throw away the worked done up to now and, although it has not been fully consolidated, the acquisition of the plant is already decided. We shall soon start operating in the Fiação de Covas as producers.

JT – With regard to the Têxtil Tsuzuki, where does Mundifios stand? JF – What we did was acontract of fast fashion work on an exclusive basis. This means that Tsuzuki will work exclusively (100%) for Mundifios, while Mundifios guarantees the supply of raw materials, that is, cotton because it is a single product company. We are already supplying all the cotton necessary for its operations and Têxtil Tsuzuki will receive the amount agreed upon for provisioning this service.

JT – Taking into account that you are supplying cotton, how has the increase in the raw
material price affected Mundifios business? JF – Up to now it has positively affected our work because we operate with significant stocks. We sell an average of 2 thousand tons of yarn per month, which means that we always have a minimum of 4 thousand tons being shipped or in stock. And those 4 thousand tons are an added value when considering the strong and fast valuation of cotton. It is obvious that the dizzying rise of the price implies lack because only shortage justifies a sharp increase in the price. This idea of subcontracting Tsuzuki's production is easily explained by the difficulty in obtaining cotton yarn, which will achieve its highest peak in the next three months. In this way, Mundifios protects the supply to its main clients which is our mission: to service our clients with quality and fast.

JT – Are the yarns you sell produced in Portugal? JF – Well, of the yarns we sell, only a small percentage is produced in Portugal. At the moment, it is growing slightly with these two operations, but I believe we do not produce in Portugal more than 10% of our turnover.

JT – Where do the remaining 90% come from?
JF – Mainly from the Far East.

JT – The fact that only a small percentage is produced in Portugal is the outcome of a strategic option or is it the solution found due to the lack of spinning mills in Portugal?
JF – It is mainly for the second reason. The production units in Portugal disappeared, our set of spinning mills died out, there is only a small part left and it is unthinkable for our textile sector to operate without imports. It would not be possible to have a textile sector - which still has some importance –, because it already started disappearing at the level of the spinning mills. And, at the level of the spinning mills, it decreased rapidly and significantly, it is no longer able to supply the industry downstream.

JT – In 2010, at the commemoration of your 25th anniversary, you established a 20% growth
aim when compared to 2009. Was that aim fulfilled?
JF – It was even surpassed. We increased our invoicing by 50% the year we commemorated 25 years. It was a gift that we got. But we had the modesty to read these figures and not to think that it is exclusively the merit of the management. These 50% are mainly due to the increase of the raw materials and to an internationalisation policy that the company started three years ago and that began to bear fruits and the latter is the merit of the management.

JT – Which is the current turnover of the company?
JF – Mundifios invoiced approximately 64 million euros in 2010.

JT – How many employees do you currently have at the company?
JF – We have approximately 25 permanent employees.

JT – Recently, Mundifios was granted the Award for Excellence in Work (Prémio Excelência no Trabalho), a recognition of your concern with the employees. Which benefits do your employees have and how did that contribute to the success of the company?
JF – The Board believes that the work group, the team, is the secret recipe for the end result. That is, we wouldn't have obtained the results we have had these past 25 years - a significant part of the human resources are with us since the beginning - without the commitment of the work group. So, throughout the years we have established well deserved benefits for the workers; we have compensated their dedication to the company. We feel that everyone suffers with the defeats and everyone celebrates the victories. There is, indeed, a very strong group. The management compensates this dedication rewarding that availability and commitment to the company with a two month reward, paying 16 months of wages per year. We have a Medis health insurance for every employee, an annual bonus for the entire immediate family of the employees which is a cheque they can use for a dental check-up. For our 25th anniversary we organized a huge party and we have bottled water, coffee, tea, a cake for each employee every day... It is a way of motivating people and making them feel good at work, which is where we spend most of our time.

JT – And what does Mundifios offer as an added value to its clients?
JF – We are a certified company and the last ISO standard focused the client as the company's aim. We are certified and we are almost slaves of that rule: for us, the client is the reason for our existence. If we have no client, we have no business and the company ceases to exist. Thus, we are fully committed and dedicated to serve and meet our clients' needs. But it’s not only about meeting the clients' needs: it is also supporting them after the sale. We have a well-equipped laboratory that helps us identifying the fibres used in samples and we provide technical support, always centred on the client. No yarn goes out to the client before its composition and its quality has been verified. With regard to the delivery service, our clients know they will be served within 24 hours: we undertake to fill in all requests within 24 hours if the stocks allow so, obviously.

JT – How many customers does the company have?
JF – It may sound awkward must but I don't know the exact number. We have many customers – I'm convinced we have between 250 and 300 active clients. We have the elite of the Portuguese clients. All the good and important Portuguese clients are our clients. We are proud to be their supplier.

JT – Mundifios recently took its first steps towards international expansion. Which markets are you currently present in?
JF – Right now, about 30% of our turnover comes from foreign markets. Our goal is to achieve 50% of our turnover generated abroad within three years. We no longer seek to grow in Portugal, we want to grow abroad. In Portugal we are practically where we want to be, with the exception of a few clients with whom there is still space to grow. In the external markets, we are in Maghreb and all over Europe.

JT – Which other markets would you like to cover?
JF – The next two years, we wish to consolidate the markets where we are currently operating and then we will start our expansion towards Brazil.

JT – In June of last year you were at Texmed for the first time. Did you participate in other trade fairs?
JF – Our policy is not really to be in trade fairs, it is to be on the field. We focus more on the direct contact with our clients and less in the presence in trade fairs.

JT – Which other aims do you have for the future of the company?
JF – We will focus on the aims I have mentioned previously. Our aim is to achieve 100 million euros of turnover in three years. With the rapid changes in the markets - and a good example is the one of Maghreb, Turkey, which quickly stopped being a market - we believe that we must have a strategy, but not a very long-term one. We need to adapt the strategy to the reality which we deal with as we go along.

in: Jornal Têxtil - MARÇO 2011 nº 149