Tejidos Royo expects to make a profit in two years after investing 13 million

The family owners provide financing to revive the company, relocate the factory, and avoid debt renegotiation after years of losses.

Tejidos Royo is one of the oldest textile manufacturing companies in the province of Valencia, dating back to 1903. Its current president, José Royo, representing the fourth generation of the family, acknowledges that the sector is in crisis in Europe, but refuses to move production to Asia, or even North Africa. In this situation, and after several years of losses—the last two fiscal years have been around two million euros—the company has taken a turn that it hopes will refloat the company: it is closing one of its factories, moving everything to its other location, and the owners are contributing 13 million euros to finance a shift in product types.

The latest public figures indicate that the fiscal year ending June 2024 had a turnover of 30 million, eleven million less than the previous year.

"Nowadays, price is king in fashion, and we can't compete on costs with Bangladesh," explains José Royo. Therefore, they've decided to focus on durable, technical fabrics that can generate better margins. "There are already many players in this market," he acknowledges, "so we're looking to differentiate ourselves."

After trying out motorcycle denim, which started well but eventually fell apart due to price, he's exploring other avenues along those lines. One is Nyco, a cotton fabric designed for military clothing that has passed very demanding abrasion tests and is very lightweight. "It's interesting for entering competitions and improving sustainability," he notes. Also a fire-resistant fabric, "not for direct exposure to fire, but for industries like the steel industry," he explains.

The third is a multi-protection pair of jeans, which has little traction in Spain, but Royo points out is in high demand in northern Europe. Finally, he's preparing to launch a textile "with the secret police in mind, because it's puncture- and cut-resistant," he concludes.

This shift in product is linked to a manufacturing restructuring, with which they hope to begin generating profits in 2027. A €13 million investment is being made. José Royo acknowledges that this investment has been made by the family owners to avoid having to renegotiate bank debt. In 2024, the company's short-term and long-term debt stood at around €18 million.

Royo is in the process of closing its factory in Picassent (Valencia) and moving staff and production to Alcudia de Crespins, where it already had another plant, the site of the company's founding. This move generated reluctance among employees, who threatened a strike . "It didn't happen because we agreed with them on a salary supplement and we'll provide a bus to transport them," explains Royo. The company has 198 workers, following two layoffs resulting in the dismissal of 100.

In Alcudia, the company has 100,000 square meters of unused capacity. It will allocate five million there to build a technical yarn factory and also to dedicate itself to recycling.

The second chapter, worth eight million, corresponds to the relocation of the Picassent weaving and finishing factory, which was more oriented towards fashion textiles.