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ABIMOTA TAKES UP LEADING ROLE TO RE-SHORE PRODUCTION
Portugal Bike Value wants to accelerate trend to re-shore production to Europe Portugal takes a leading role
ÁGUEDA, Portugal – The timing couldn’t be better with lead-times of more than six months for essential components while demand continues to escalate. The impact on the market is increasing and accelerating the trend of close-tomarket production. Portugal aims to take a leading role in this reshoring trend. How quickly is the country’s industry developing?
Jo Beckendorff
In October, the Portuguese bicycle industry association, ABIMOTA, announced a major investment scheme of €258 million as part of Portugal’s Recovery and Resilience Plan. It aims to strategically expand the role of the domestic bicycle industry as the leading bicycle manufacturing nation in Europe. Above all, Portugal wants to be seen as a genuine alternative to production in the Far East. This is reason enough for this trade journal to take a closer look at Águeda and the surrounding area, which is the heart of the Portuguese bicycle industry. In addition to Portugal, Bulgaria ABIMOTA consultants Sergio Gonçalves and Sergio Ribeiro, and Secretary-General Gil Nadais at ABIMOTA’s well-equipped in-house inspection and testing laboratory.
Photo: Jo Beckendorff
and Romania are investing in the European bike industry to add more flexibility to the supply chain. In a series of reports, we will update you on the latest developments in Portugal. Delivery and logistics challenges The EU is supporting Portugal’s ambitions with financial incentives. Loans, guarantees, investments, and microfinancing are implemented within the European Structural and Investment Funds framework. According to insiders, no less than 40% of the major investments in the bicycle industry have been co-financed by the European Union. Created by ABIMOTA to maximise the country’s potential as a
production location for the EU market, Portugal Bike Value benefits from the cycling boom. In times of delivery and logistics problems from the Far East, European bicycle and e-bike brands are jostling in the factories in Portugal in their search for more closeto-market production capacity.
Reshoring production Reshoring production to Europe often surfaces when talking with ABIMOTA Secretary-General, Gil Nadais, about the major strategic investment in domestic production. “In the 80s and 90s, our bicycle industry declined. After the turn of the century, it slowly started to pick up again, and in recent years the market opportunities have been favourable. We want to leverage this momentum and transform the bicycle industry in Portugal. If everything goes as planned, we will soon have a strong and large bicycle sector in Portugal again.” He also notes that the Covid-19 pandemic served as a catalyst in discussing close-to-market production in Europe. industry. His colleague, Sergio Gonçalves, goes one step further and talks about his vision to keep the production know-how in Portugal in the long term. “Research and development are key to solutions and technologies. That’s where we need to work together,” he said.
Key technology project “A key project within the Portugal Recovery and Resilience Plan is the foundation of a technology centre that is accessible for all producers,” says Nadais. The creation of this so-called ‘Centro de Interface Technológico’ in Águeda is in the pipeline. After all, Águeda and its surrounding area is the cradle of the nation’s metal industry. That’s one of the reasons why the local bicycle industry is also deeply rooted in this area.
Independent testing facility ABIMOTA has made a name for itself as an independent testing institute despite being a member organisation for the Portuguese bicycle industry. The test facility is located inside the organisation’s spacious headquarters. Despite this potential conflict of interest, many bicycle producers have their products tested at ABIMOTA in compliance with European standards. “In future, the newly founded Centro de Interface Technológico will not only function as a test centre, but it will also serve as a lever for companies, helping them to expand their knowledge and industrial competencies,” explains Nadais. “Other knowledge centres, such as universities, are also involved. With this combination, a bicycle knowledge hub is to be created, similar to the Taiwan Bicycle Industry R&D Centre founded in 1992. This institute was renamed Cycling and Health Industrial R&D Centre in 2003. At the institute in Taiwan, people work together rather than against each other. According to the basic idea, the Centro de Interface Technológico combines all challenges in market development and technology. Sharing this knowledge is the only way to remain competitive in the global marketplace.”
The latest scheme includes new machinery, technology, and the construction of an annexe to expand capacity Miranda shows results of major investments
ÁGUEDA, Portugal – Bike components supplier, Miranda & Irmão, Lda., is one of the old guards of the country’s bicycle industry in and around the Águeda region. The rollout of a major investment scheme to move towards mid and high-end production is almost complete.
Jo Beckendorff
In this Bike Europe report on the Portuguese bicycle industry, we highlight bicycle components manufacturer Miranda & Irmão, Lda. Miranda is one of the country’s manufacturers investing in component production for Europe’s OEMs. Its latest investment programme mentioned in the introduction included both new machinery and technology, as well as a reorganisation of the existing production floor and the construction of an annexe to expand its capacity. Although the start of the Covid-19 pandemic caused major delays in the implementation phase, it is now almost finalised. Bike Europe took a look inside the production facility. In November, everything was complete except for a few minor details. According to Miranda’s chief marketing officer, João Filipe Miranda, “At the moment we are at 90% of what we had planned and by the end of this year the whole expansion and re-organisation will be ready.”
Miranda’s transformation Today, Miranda’s portfolio includes various bicycle and e-bike components such as (aluminium) seat posts, hydraulic brakes and e-bike parts. Aluminium cranks, arms and chainrings are still Miranda’s strongest products, and the company’s roots lie in the bicycle industry. Earlier, Miranda produced front and rear lights and air pumps. With the moped and motorcycle boom in the 60s, which put the brakes on bicycle sales, the company switched to components for motorised two-wheelers. When moped and motorcycle production migrated to the Far East, this caused a prolonged challenging period for companies like Miranda: “We had to radically change something in order to survive. At the turn of the millennium, we invested in cold forging technology and the production of aluminium cranks and arms. Reentering the bicycle market initiated this turnaround for us,” explains João Filipe Miranda. In 2018, XMOD was introduced. According to Miranda, this is the ‘world’s first completely modular crankset system’. All individual parts can be freely selected and exchanged. A first CNC-milled stem followed this year.
Advanced material and production know-how Thanks to its advanced material and production know-how, the manufacturers, who prefer to operate internationally under the name Miranda Bike Parts, also entered the e-bike category at an early stage. In addition to e-bike parts, the company was also quick to enter the market with e-bike motor covers. Together with cold forging and injection moulding, the company now also holds CNC and powder and liquid painting expertise. Miranda is particularly proud of its metal knowledge. João Filipe Miranda explains: “The Águeda district is home of the Portuguese metal industry, and that gives us an excellent starting position.” It is no coincidence that Miranda was named as Portugal’s private-owned company with the most European and international patents filed in 2019. “We know how important it is to protect our inventions and ideas, as well as those of our customers,” assures João Filipe Miranda. Another strength of the company is that everything is done in-house and with the help of modern machinery, most of which is made in Portugal. “Thanks to keeping almost everything in-house, we not only have the best possible quality control, but our optimised production processes give us a competitive advantage. We can offer our customers attractive pricing as well as a flexible design process. And not to forget, an average lead-time of 30 days.” Eyeing the European market in combination with competition from the Far East, the Portuguese claim to offer their European customers tailor-made solutions. “We can offer this advantage with the help of easy and simple communication, product development and mass production.” After thorough restructuring, the factory is not only more efficient, but also almost everything is new. CMO João Filipe Miranda is pictured in the new factory. Photos: Jo Beckendorff
Green approach: a must in Europe Essential in the context of company restructuring these days is the environmentally-friendly approach to the production process. Here, Miranda points to the 1,300 solar panels on the roof of the company’s headquarters, the LED lighting that is now used throughout the factory and offices as well as the recently introduced recyclable packaging. Furthermore, steps taken towards more efficiency have also allowed processes to be optimised so that material waste is minimised in all stages of production. Currently, Miranda Bike Parts employs about 200 people. Meanwhile, it is a problem to find skilled employees in Águeda. The bicycle industry, as well as the local metal industry, are doing well at the moment. It is therefore understandable that the new carbon frame manufacturer, Carbon Team, for example, which is starting up this year, is not localised in the same area as the rest of the country’s bicycle industry around Águeda, but 30 kilometres to the northeast in a newly-built industrial park in Vouzela. With this step, the company hopes to attract local workers. Miranda Bike Parts is also a shareholder in Carbon Team, together with the traditional Portugal suppliers, Ciclo Fapril and Rodi Rims & Wheels. The family business has invested in the young carbon frame builder.
Aluminum cranks, arms and chainrings are still Miranda Bike Parts’ primary business.
Yamaha Motor and Hero Motors to partner in e-bike motor manufacturing
IWATA, Japan – After signing a joint venture agreement, it was announced that a total of €2.5 million will be invested by Yamaha Motor and Hero Motors to open a facility to produce e-bike hub motors.
The new e-bike hub motor factory will be in Ludhiana in India nearby Hero Motors, the owner of Hero Cycles, India’s largest bicycle manufacturer. The joint venture is scheduled to be established by the end of November, with Yamaha Motor holding a 10% stake and Hero Motors holding the remaining 90%. relocation to Europe is “high on the agenda and only a matter of time”. “Close-to-market production has become an important argument to convince European assemblers. And we want to facilitate them. We are currently discussing which location would be best suited as Yamaha already runs two production facilities in Europe – one in Bologna, Italy, and the second in Saint Quentin, France.” The statement on the cooperation with Hero Motors did not mention why Yamaha has chosen to go to India now and not start production in Europe.
Supply global market In a joint statement about the cooperation, the two partners did not mention when production is expected to begin. It was, however, stated that the facility will supply the global market. The statement mentions Europe as the largest market for e-bikes. According to Yamaha, “about half of the market’s offerings use hub-mounted drive units. We expect the
Close-to-market production is important to convince European assemblers.
prominence of these hub-mounted drive units to rise accordingly and signed the agreement to establish this joint venture with that in mind. By adding the hub-mounted drive units to our portfolio, we look to raise the overall strength and capabilities of our e-bike business and thereby secure future business growth.”
Increasing capacity for manufacturing chains, Time Sport pedals and Zipp wheels SRAM expands Portuguese production
COIMBRA, Portugal – In August, US component maker, SRAM Group, inaugurated its dedicated production facility in Portugal for the French pedal brand, Time, acquired in February. Sramport - Transmissões Mecânicas, Lda., as the Portuguese subsidiary is officially called, is rapidly expanding activities in the bicycle industry.
Jo Beckendorff
Avisit to the city of Coimbra, about 50 kilometres south of the country’s bicycle industry hub, Àgueda, immediately shows that there is much more behind this European production facility than ‘just’ SRAM bicycle chains and Time Sport branded clipless pedals. And these are not the only product categories SRAM invests in. Today, a total of 225 employees are working for Sramport.
Expansion of floorspace and capacity Since SRAM acquired the chain production facility in Portugal in 1997 (see box), the company focused on bicycle chains and eventually invested in both capacity and floorspace. In 2013, an office building was built in front of the factory, which is now home to the entire administration as well as, among others, its own test lab. Investments were also made in production. Next to SRAM’s chain production for the world market, since 2010/11, Zipp wheels for the European market are also assembled in Coimbra. General manager at Sramport, Isabel Gomes, comments: “When we started with Zipp in Portugal, the carbon wheel brand, Zipp, was not yet well known in Europe. To save on transport costs and custom duties from the US, assembly for the European market was moved to Portugal. All development, as well as the spokes, still come from the Zipp headquarters in Indianapolis.” Three years later, Zipp branded hub production began. These are distributed worldwide, unlike
The in-house test laboratory in Coimbra, Portugal.
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System for e-bike manufacturers
Connect & Go tracking
The Dutch Tech company Tracefy brings a new can-bus GPS tracker and concept for e-bikes to the market. In a lead time of approximately ten weeks, bicycle manufacturers (OEM) can release a whole series of ‘connected’ e-bikes, including a handy free application in any corporate identity. Thanks to this invisibly built-in tracker, bicycles are always visible and secured with geofence (motion alerts). The professional team of Tracefy takes care of the IoT implementation from A to Z. The GPS unit is invisibly built-in. The Tracefy can-bus GPS tracker is compatible with the more wellknown e-bike systems and Tracefy provides the necessary connections for other systems. “The IoT box is built-in and connected to the onboard computer of the e-bike,” says Jeroen van Kester, commercial director of the tech company. “It cannot be seen and therefore cannot simply be removed. We carefully exa- mine in advance what the best place on the vehicle is for the tracker.” equipped with the Tracefy GPS tracker.” Afte the demo models equipped by Tracefy have been extensively tested and the app has been approved by the client, a whole commercial se ries can be equipped. “Installation is quit easy but nevertheless as a service Tracefy specialists travel to the production location to train the responsible employees in the assembly of the tracker in the relevant models. Tracefy’s support team will remain the point of contact for any ques tions from clients and end users afterwards.”
Data platform
Bicycle brands can use the Tracefy platform to Security gain more insight into how customers use Vehicles equipped with Connect & Go are their bicycles. The bicycles sold generate data secured with geofence, a virtual lock. The on a daily basis. “Valuable information abou Tracefy app alerts a user if their vehicle is journey times, distances, battery usage, errors moved and they are not nearby. “If a vehicle etc. helps to focus on product improvement appears to have been stolen, it can easily be and development and provides guidance when recovered by an investigation service or the setting up appropriate warranty programs.” police. A lot of bicycle insurers already offer discount on a theft insurance if bicycles are This article is sponsored by Trafecy. One shift of Time Sport has the production capacity of 1,200 pairs of pedals and 4,500 cleats per week.
Photos: Jo Beckendorff
the Zipp wheels which are produced for the European market only. The next step was the integration of Time pedal production.
Time Sport pedal production moved to Portugal The Time pedal production goes under the name Time Sport. This was decided after the acquisition of Time’s carbon parts and frame business in February by the US supplier, Cardinal Cycling Group. The Time branded clipless pedal business, including the road bike and MTB pedals, cleats, and all associated patents, were taken over by SRAM Group. To distinguish the activities of both parties in the market, it was agreed that Cardinal Cycling Group would officially use the brand name Time Bikes and SRAM Group the name Time Sport. Earlier this year, all Time pedal production machinery was shipped from France to Portugal. Gomes and the team could rent a suitable building right next to the Sramport headquarters and factory in Coimbra. “We were really lucky as it is just a 5-minute walk,” she says. Production started in August 2021. In one shift, one line produces road bike clipless pedals while the other line is used for mountain bike clipless pedals. According to Gomes, one shift has since per week produced 1,200 pairs of pedals and 4,500 cleats. At the time of our visit early in November, capacity had just been increased to two shifts.
Wheel and hub production Due to high demand, chain production will be also expanded. The Zipp-branded wheel assembly and hub production will therefore move from the former chain factory to the current Time Sport production facility. It is at present unclear whether this building is big enough for expanding pedal, hub and wheel production or if a move to a larger facility will be more suitable. For the growing chain production, Sramport will create room for new machinery by enlarging the existing floorspace by around 1,000 square metres. At present, eight presses and seven production lines are working daily in three shifts in chain production. “The aim of our current investment scheme is to expand our production to close to 12 million metres of ‘Made in Europe’ SRAM bicycle chains for distribution on the global market in 2023,” states Gomes.
Company history goes back beyond SRAM
The history of the chain production facility in Coimbra goes further back than the SRAM Group. The company has its roots in the bicycle division of German Sachs, the bicycle division of which was once taken over by the North Americans. Sramport managing director, Isabel Rolo Gomes, still remembers the days when the French and Germans were managing the company. After all, she has been working for the company for 29 years. During that time, she worked her way up to become Sramport’s managing director. Since mid-2016, she has been in charge of SRAM’s subsidiary in Portugal. According to Gomes, however, it was not the German supplier Fichtel & Sachs, but the French vehicle manufacturer, Peugeot, that founded Transmeca, the forerunner of today’s Sramport: “Together with the Portuguese entrepreneur, Armando Simoes, Peugeot started Transmeca in 1968. Transmeca produced all kinds of chains for cars, motorcycles, mopeds and bicycles.” Simoes left the company in 1980, and in 1987, Sachs Industries SA France acquired 70% of the Portuguese chain manufacturer and the remaining 30% was taken over by Fichtel & Sachs AG from Germany. When Fichtel & Sachs was taken over in 1997 by Mannesmann, who renamed it Mannesmann Sachs AG, the SRAM Group entered the scene. The Americans took over the bicycle division of Mannesmann Sachs. This included bicycle hub production in Schweinfurt, Germany, as well as the chain production facility in Portugal. “Since we became part of SRAM Group, our chain production focused entirely on the development and production of the bicycle category,” reflects Gomes.
First Taiwanese bicycle company to invest in Águeda, Portugal Fritz Jou reports step-by-step growth
BORRALHA, Portugal – As part of its reshoring ambitions, in 2015, the Portuguese bicycle industry association, ABIMOTA, invited an industry delegation from Taiwan to Águeda. Participants were informed in detail about all possibilities of close-to-market production in the EU. Eventually, Taiwanese Fritz Jou Manufacturing Co, Ltd. opened a European subsidiary and built an assembly facility in Portugal.
Jo Beckendorff
At the time of the visit of the Taiwanese delegations, the Portuguese were probably thinking more about parts manufacturers that could supply their assemblers with components that usually come from the Far East. Fritz Jou Bikes Europe (FJBE) made an ambitious plan for a new factory in Parque Epresarial do Casarão’s industrial zone near Borralha in the Portuguese district of Águeda. Designed for an annual capacity of 250,000 units, it had to be built quickly and be operational by the end of 2016. However, by the end of 2016, there was no building on the 50,000 sqm site acquired by Fritz Jou. Things slowly started to move in 2017, and a 27,000 sqm facility was erected. Employee training began in December 2017 and assembly in 2018. According to FJBE’s CFO, Luis Simões, who represented the MD, Angelica Chou (daughter of Fritz Jou), who was in Taiwan during our visit, all frames assembled in the factory come from Asia. As for FJBE’s European clients, the company relies on Fritz Jou’s long-standing contacts. “At the moment, we have five European bicycle clients for whom we assemble classic bikes and e-bikes,” Simões explains. Without mentioning their names, he added that their products are distributed in Germany, France and the Netherlands. When it comes to e-bikes, the company focuses mainly on aluminium frames with integrated batteries. This is perhaps one reason why it continues to rely on frames made in Asia. After all, with their lead in aluminium frame production, the Taiwanese always offer the latest in-tube frames. Two assembly lines (one for regular and one for e-bikes) are operational, while a third is planned.
Contacts versus delivery issues Luis Simões expressed himself vaguely when discussing the current delivery problems, although he confirms that it is difficult to obtain certain components. “However, we have FJBE already assembles in Portugal for five European clients.
Photo: FJBE/Jo Beckendorff
ample storage capacity available for products which cannot be fully assembled yet, without hampering the rest of production. In addition, we have an experienced and well-connected supply chain team behind us, who brings a lot of experience to the table. That proves its value, especially in times like these.” The factory currently has a capacity of 400-450 units per day, including 260 regular bicycles. Besides delivery issues, Simões confirms it is not easy to find new staff. In the district of Águeda, where most of the Portuguese metal industry is based, this is a problem that not only FJBE has to face. Nevertheless, Simões sees his employer in an excellent position: “We have clients and can deliver a quality product and a step-by-step growing production.” Fritz Jou also invested substantially in the Borralha facility and acquired land to expand. The course is set for future growth.
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Frederik Reichert, SKS Germany:
SKS Germany is no more indispensable in the European bicycle industry. This year the German company celebrated its centenary. It cherishes its past and at the same time innovatively builds on the solid foundation that is characterised by Deutsche Gründlichkeit. An interview with export manager Frederik Reichert.
In what way is the topic of sustainability embedded in production in Germany?
“At SKS Germany, we consider sustainability extremely important. Our motto is not for nothing: Wertschätzen statt wegwerfen. That means: value raw materials and don’t just throw them away. When I look at our product range, I see very durable quality products. They avoid wasting raw materials. Resources are saved this way. In product development, for example, it is an important criterion that our technologies are always repairable. In addition, they are replaceable, if necessary even many years after purchase.”
How challenging is it to be innovative with products that are not very sexy at first glance?
“If you need a pump, you have a flat tyre. And if you are looking for a mudguard, the weather conditions are probably bad. The reason for using these products does not make them very sexy. And yet you see developments that do give our categories a sexy image. They are becoming more design products, everything on and off the bike has to be beautiful. You can see that in the mudguards, for example. Last year, we launched the Mudrocker, a variant for use at the front and rear. This is an integrated mudguard. We pay more and more attention to the combination of functionality and design. Sexy is a prerequisite for selling a product.”
In which corner are you currently looking for the biggest innovations?
“The way bikes are used in everyday life has changed. And so have the requirements and needs. In future, digitalisation will be even more noticeable in many of our product groups. You can already see it in high-precision digital pressure gauges, the COMPIT handlebar mount with integrated power bank and gadgets such as the AIRSPY tyre pressure sensor. The market is leaving room for creative IOT possibilities. Products are also gaining a more multifunctional character, such as an MTB mudguard with integrated lighting. There is still a lot of improvement and progress possible.”
In what way has production in Germany helped you in corona times?
“The bike industry has relied on supplies from the Far East in recent decades. But during the corona pandemic, it became clear that the foundation underneath was not solid enough. Because we are deeply rooted in the German Sauerland and also produce there, we could - and can - guarantee delivery. Our production was not hindered during the pandemic. We hardly had corona in the factory. Because of the lockdown, we only had a slightly lower production for one month at most. The production in Germany combined with the good infrastructure towards many European markets means that the trade could always count on us.”
Do the corona struggles play into the hands of SKS Germany?
“We have been an important supplier to bicycle manufacturers for years and are also strong in after sales. The corona pandemic has further increased the demand. Bike manufacturers see the advantages of production in Europe compared to the Far East, with the disadvantages of unstable quality, logistical struggles and high CO2 emissions. Demand has risen so much that we cannot take on new OEM orders until May 2023. We have therefore decided to increase capacity in our factory. We have invested in a new extrusion line for mudguards. This doubles capacity. These mudguards are intended purely for OEM applications. We are doing our best to further scale up our production. It is important that we continue to have sufficient personnel at our disposal. At the moment, there are dozens of vacancies, especially in production and logistics.”
