A consortium of four Portuguese textile firms and China's Kingdom Holdings has started initial operations at Portugal's first industrial wet-spinning plant for flax and hemp, in a project worth about €30 million ($35m).

The facility, Nafilux by Nau Verde, stands in Rebordões, Santo Tirso, north of Porto. The partners expect it to create about 250 jobs.

Who is behind the venture?

The consortium joins Calvelex, Mundifios, Paulo de Oliveira and Riopele with Kingdom Holdings, a major producer of flax and hemp yarn. All four Portuguese partners are established names in the country's knitwear and spinning sector, and the deal gives them a domestic source of European bast-fibre yarn.

The mill occupies a refurbished former industrial building of about 15,000 square metres. Converting existing industrial stock rather than building new keeps the capital focus on spinning equipment rather than construction.

Where does the money come from?

The plant forms part of the Lusitano Project, supported by Portugal's Recovery and Resilience Plan. That plan distributes European Union recovery funds, which means the project answers to EU-level investment criteria as well as commercial ones.

The €30m figure covers the venture as a whole. The partners have not yet disclosed the split between public support and private capital from the five consortium members.

What does the plant change for sourcing teams?

The project aims to return flax and hemp spinning to Europe. Today, much raw fibre is grown or processed in Asia before mills reimport it as yarn. Buyers of linen and hemp fabrics have therefore faced long lead times and limited visibility upstream, since spinning sat outside Europe even when weaving and finishing stayed in Portugal.

A wet-spinning operation in Santo Tirso shortens that chain. European weavers and vertical mills can now source flax and hemp yarn from a single site, and brands auditing their fibre supply gain one less offshore tier to verify.

Why does a Chinese partner fit a reshoring project?

Kingdom Holdings brings what the Portuguese firms lack: scale experience in flax and hemp yarn production. The company ranks as a major producer of the yarn, and the consortium structure lets the European partners tap that process knowledge while keeping the capacity physically inside the EU.

For Kingdom, the plant places its capability inside Europe's tariff and compliance perimeter. That matters for buyers whose sourcing policies favour EU-processed fibre.

What should buyers do now?

The plant has begun initial operations, so yarn supply exists but at unproven volume. Sourcing teams specifying linen or hemp for 2026 programmes should qualify Nafilux output early, confirm which of the four Portuguese partners will handle distribution, and ask for the traceability documentation that Recovery and Resilience Plan funding implies. Buyers locked into Asian yarn supply now have a European fallback — but they should test it before they need it.