In sinking economy, Made in Portugal kayaks float on

The "Made in Portugal" label will dominate the waters at the London Olympics, with the country's kayak-canoe industry prospering despite a floundering economy.

Of the 200 crafts at the Games that begin July 27, three-quarters were built by Portugal's Nelo, the Olympics' official supplier since the 2004 Athens edition and a rare success story out of an economy in deep water.

As Portugal grapples with a recession dating back to late 2010, its economy buoyed by international funds since 2011, and tens of thousands of residents stream out in search of jobs, Nelo is alive and well.

Sales are expected to grow by a quarter this year for this company from the northern town of Vila do Conde founded by a Portuguese kayaker in 1978 in a moment of pluck.

"Foreign boats were too expensive, so I began making my own," said founder Manuel Ramos, 53, Portugal's first national kayak champion.

"I later started selling them to the Portugal clubs, then I went global in the early '90s," added Ramos, who started the company when Portugal still had few canoers, a decade before its 1988 debut at the Olympics.

Nelo, named after Ramos' moniker, now exports the majority of its canoes and kayaks to a roster of 100 countries, with this year's production slated to reach a personal record of 3,000 watercrafts.

The company expects 5 million euros ($6.28 million) in sales in 2012, or an uptick of between 25 and 30 percent from 2011.

According to Nelo CEO Andre Santos, the Olympic-year sales are no fluke.

"The Olympics are a particular challenge and a source of pride for us to see our boats represented at the top of the podium, but our sales go up every year with or without the games," the 35-year-old Santos said.

As London gears up for the Olympics, Nelo's 80-plus employees are tirelessly putting the finishing touches on last orders for the games.

In a spacious factory smelling of paint and carbon fiber, employees tweak watercraft, including the kayak of German champion Ronald Rauhe and the canoe of France's Mathieu Goubel.

At the last Olympics in Beijing in 2008, 20 athletes paddling Nelo's watercrafts walked away with medals. This year, Ramos is hoping for more.

"It's a hard number to beat, but we'll try," he said.

The secret to its success, according to Nelo CEO Santos, is a "boldness" that's in stark contrast to their "completely dormant competitors" unable to diversify their models and provide boats adapted to each athlete.

Portugal's financial crisis, he adds, has been a good thing for the company.

"The country has become more competitive on price thanks to the cost of labour and the euro's depreciation in particular," said the former competitive kayaker, a credential shared by many Nelo employees.

The currency's depreciation has enabled Nelo to export more to the US and Asian markets, Santos said.

But while Nelo has profited from its country's woes, it has also had a hand in beefing up Portugal's canoe scene to a competitive level, with some of the country's top paddlers hailing from Vila do Conde.

One is Leonel Ramalho, European kayaking champion in the 30-kilometre (19 miles) division -- which doesn't figure in the Olympics -- who credits Ramos with his success.

"One day Nelo said it was time I win something and told me I should swing by the factory so they could build me a boat. Two years later, here I am," the 29-year-old said after a few paddle strokes along the town's Mau river.

A manager of Portugal's canoe-kayak team at the London Olympics echoes the sentiment.

"It's been 10 years since Nelo dominates the world canoeing scene, so of course we're benefiting," Rui Fernandes said during a visit to the Nelo factory for final tweaks.

"We'll have six athletes in London and, more to the point, they are in the running to bring back medals. This was unthinkable a few years back," he said.

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