CORUCHE, Portugal (AP) ― In the centuries-old cork forests of southern Portugal, locals who for generations have harvested the bark that bungs billions of bottles around the world don’t think much of the rival plastic stoppers and metal screwcaps threatening their livelihoods.

“Cork is a safer bet,” says Joao Simoes, a 64-year-old, as he peels the bark off a cork oak ― a job he’s been doing for the past 40 years. “It seals (bottles) better.”

Some of the world’s leading winemakers disagree. Since the turn of the century they have used more and more alternative stoppers in an unprecedented threat for the economy of Portugal, the world’s largest cork producer and one of western Europe’s poorest countries.

The competition compelled Portuguese cork companies, accustomed to a long-standing near-monopoly, to embark on a do-or-die makeover. Now, producers say, their modernization and diversification program is paying off.

They say they have checked the steep drop in the market share for cork stoppers, holding it at around 70 percent for the past 2 years. And last year cork exports improved for the first time in a decade with growth of more than 8 percent, according to National Statistics Institute.

“For the first time in 250 years, the cork industry was actually challenged,” says Antonio Amorim, chairman and CEO of Amorim, Portugal’s oldest and largest cork company. “We would like to ... think that the worst times for the cork industry are behind us.”

Portugal supplies about half of global cork production, and the spongy bark is a major export earner for a national economy that’s floundering. Portugal had to ask for a 78 billion euros ($112 billion) bailout from its European partners and the International Monetary Fund earlier this year to keep it from going bankrupt.

It went into a double-dip recession last year, and its frail economy is forecast to keep contracting through 2013. The jobless rate has climbed to a record 12.4 percent.

Cork’s recovery illustrates the kind of overhaul which officials say Portuguese businesses need to become more competitive. The textile sector, another traditional industry and major employer, slumped amid globalization but is now reaping the rewards of restructuring and upgrading, with exports rising 24 percent in the first five months of this year. Modernization “is the path we must take with the utmost urgency,” Portuguese President Anibal Cavaco Silva said last month.

The first decade of the new century was grim for the cork sector. Exports fell to below 700 million euros in 2009 from just over 900 million euros in 2002. The market share for cork stoppers, which account for roughly half of cork exports, plunged. Several Portuguese cork companies, including the second-largest, went bust. Hundreds of workers lost their jobs.

The cork industry ensures the livelihoods of some 10,000 Portuguese workers and their families, most of them in rural areas where jobs are hard to come by.

“The economic importance of the cork industry and of the cork forest is absolutely critical,” says Carlos de Jesus, operational director of the Portuguese cork association Apcor.

The challenge to Portugal’s dominance came from the other side of the globe. Winemakers in Australia and New Zealand were unhappy about what they said was the inconsistent quality of cork stoppers and occasional “cork taint” ― the sour, musty taste that spoils a wine and is widely blamed on chemical interaction with the cork. It’s what people refer to when they say a bottle of wine is “corked.”

On top of that, a cork stopper costs between 36 cents and $2.88. Its synthetic rival comes in at 22 cents-58 cents.

Most New World producers, who export much of their wine to Britain and the United States, converted to synthetic closures and screwcaps. Some producers on other continents followed suit. Wine experts gave their endorsement for the switch. One anti-cork group staged a mock funeral in New York featuring a cork stopper in a casket.

The Portuguese government, aware the industry is too big to fail, declared its survival “a national cause.”

The War of the Stoppers had begun.

In a key victory, the cork business earned green credentials from the World Wildlife Fund, which applauded the industry for being renewable, sustainable and environment-friendly. The cork oak’s bark is pried off roughly every nine years, when the inner lining is able to withstand exposure. This happens in a regular cycle for more than a century with each tree.

In the hushed forests around Coruche, about 100 kilometers northeast of Lisbon, small teams of skilled workers zig-zag across the sandy soil and pale, wispy grass in search of trees ready for harvest.

The woodland echoes with a soft chopping sound as with a small steel ax they carefully cut an incision in the bark and pries it off, lobbing the featherweight slabs, half of whose volume is trapped air, onto a flatbed truck. Behind them they leave scattered trees with bare orange trunks that give off an earthy smell.

“I don’t know what people around here would do without cork,” says Simoes, the cork harvester.

Women in traditional straw hats use white paint to mark the ‘unmasked’ tree with the final digit of the year it was harvested. That way they know where to return nine years later.

Cork has been collected the same way for many generations here, but the next step in the process showcases the 21st-century reamp.

The Amorim company has in recent years opened two new state-of-the-art plants in Coruche. One of them is the world’s biggest stopper factory. It helped Amorim produce 3.2 billion cork stoppers last year ― a company record.

The factories make heavy use of advanced technology, including lasers, robotics and computer-assisted automation that bring economies of scale and were barely imaginable just a decade ago.

White-coated lab technicians huddle around chemical read-outs from gas chromographs, scanning for signs of cork taint. Women at conveyor belts of stoppers check for tiny defects such as “split ends” and “worm holes” that might let air seep into a bottle and spoil the wine.

The cork companies have also reversed their sector’s decline by moving into new markets, such as the emerging economies of China, Russia and Brazil.

They have diversified, too. Researchers have developed new uses that include home furnishings and construction, footwear and fashion accessories, and mopping up oil spills with cork grains.

Rui Falcao, a Lisbon-based international wine judge and author, says that although cork’s near-monopoly for stoppers is gone forever it is still favored for more expensive bottles while alternative closures are popular for younger wines.

“Definitely there is a market for both of them,” he says.