Europe Grows the Flax and Asia Spins It: a 30 Million Euro Mill at Santo Tirso Starts Up to Take That Step Back

Most of the world's flax is grown in Europe, and almost none of it is spun here. The fibre is shipped to Asia, turned into yarn, and sold back to European weavers. A 30 million euro plant in a converted mill at Rebordões, in the council of Santo Tirso, is now starting up to close that loop, and it expects to employ about 250 people.

The plant belongs to Nau Verde, a Portuguese company created for the purpose, and trades under the name Nafilux. Behind it sit four established Portuguese textile firms, Calvelex, Mundifios, Paulo de Oliveira and Riopele, in partnership with Kingdom Holdings of China, one of the largest producers of linen and hemp yarn in the world. Jornal de Negócios reported the investment on Monday. Recruitment for operators is already under way.

What a wet-spinning mill actually does

Flax and hemp are bast fibres, taken from the stem of the plant rather than from a seed head. To spin them fine enough for apparel-grade linen the roving is drawn through a hot water bath, which softens the pectin binding the fibres and lets them slide past one another. That process, wet spinning, is what produces long, smooth, high-count linen yarn, and it is the step Europe largely stopped doing.

The consequence is a supply chain that crosses the world twice for a crop grown a few hundred kilometres away. Portugal's mills buy back as yarn what European farms sold as fibre, with the freight, the lead time and the currency exposure attached. Nafilux is described as the only wet-spinning facility for flax in Portugal and one of very few in Europe dedicated to 100 percent premium linen yarn. Hemp, treated in the same way, is the second fibre in the plan.

The site and the money

• Location: Rebordões, Santo Tirso, in the Vale do Ave textile belt north-east of Porto.
• Building: a former industrial unit associated with Filatex, roughly 15,000 square metres of covered area, refurbished and re-equipped.
• Investment: about 30 million euros in the factory itself.
• Employment: around 250 jobs.
• Programme: part of the Lusitano Project, a mobilising agenda under the Recovery and Resilience Plan with a total investment of 111.5 million euros.

The wider agenda is not only about spinning. Its stated goal is a chain that turns natural and recycled fibres into yarn and then into higher value garments and textile products, which is the same argument Portuguese textiles have been making for a decade about moving up from volume work.

Why the timing matters

The mobilising agendas are in their closing phase. The government has just published the 7.3 billion euro closing account on the recovery plan's research consortia, and the programme has spent much of 2026 racing an execution deadline that has already forced a hard look at what the 53 agendas actually delivered. A physical factory entering start-up, with hiring under way, is the kind of outcome the scheme was sold on and the kind that has been thin on the ground.

It also lands in a sector under pressure from the other direction. Portuguese textiles have spent the year arguing that EU antidumping duties on imported yarn hit them without protecting them, because the tariff falls on the input rather than on the finished garment. A domestic spinning capacity does not solve that for polyamide, but it changes the shape of the problem for one fibre: a mill that makes the yarn is a mill that no longer has to import it.

For the region, the arithmetic is simpler. Vale do Ave lost spinning capacity for thirty years. Two hundred and fifty jobs in a rebuilt Filatex shed is the first meaningful reversal in some time, and the fact that the technology arrives via a Chinese partner rather than despite one is the part the industry will be watching.