13 August 2003

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Achieving tenfold growth in six years and still growing

Since 1997 the Borg Group of Companies has been redefining the various industries it operates in. Here DAVID LINDSAY meets Managing Director Edward Borg, who has seen the Group’s turnover increase tenfold in just six years. Here he speaks about the Group’s successes past, present and future.

The Borg Group of Companies, best known for the Borg Cold Stores mother company, has come a long way over the last six years, increasing turnover tenfold while successfully tapping import and export markets. The future, Managing Director Edward Borg explains, is even brighter.
The company was first established back in 1918 as Malta Cold Stores and after subsequent reshuffles within the family-run business, Edward now owns a number of business concerns under the umbrella of the Borg Group.
The mother company, Borg Cold Stores, operates cold storage for third parties and also produces flake, rock and cubed ice under the Iceman brand name. It also serves as the main shareholder of the subsidiaries, one of which is industry-leading Buxom Poultry Ltd., which was bought some 11 months ago and which also represents, in many ways, the future of the Group.
Representing 60 to 70 per cent of Malta’s chicken consumption, Buxom was a good investment with even better future prospects. Edward elaborates, "At the moment we’re gearing up to start trying to tap nearby export markets such as that of North Africa and maybe Sicily.
"But the Buxom project is much larger than that. It’s sitting on 110 tumoli of land and, in addition to ongoing activities, it will also include some 50 tumoli of vineyards and 20 tumoli of olive trees. We are also looking into partnering with experts in rabbit breeding to start producing rabbits professionally for the local and export market such as the French, Dutch and Italian markets where there is a high demand."
While plans for operations at Buxom are promising, Edward insists on taking things one step at a time, applying the primary focus on poultry. In this respect the last 11 months have seen production increase from 1,000 to some 8,000 to 10,000 birds a day.
Supplementing this growth is the creation of a dedicated division for research and development, which is today being expanded through a recruitment drive with the idea of tapping possibilities in markets other than the local market.
The import and distribution side of the business deals in over 300 items of frozen goods and, Edward explains, is a company that faces a lot of tough competition like so many others in this day and age. As such quality, price and service need to be continually ensured and improved upon. One service that sets it apart from others in the industry is the day-to-day delivery service, created for restaurants that require same day delivery, while normal deliveries are carried out through the comparatively quick next day service.
The company has also injected a heavy investment in information systems, allowing for detailed sales and distribution information to be placed at managers’ fingertips.
A newer Group investment is the Flock Hatchers subsidiary, through which eggs are imported from European countries such as Holland, Belgium and Germany. The eggs are then incubated and hatched in Malta and are brought to different farms for rearing and eventual processing at Buxom.
Edward sees export opportunities in this field as well, citing the possibility of exporting day-old chicks to the Maghreb and Middle Eastern markets, where the method is already in practice.
The Norafri company, meanwhile, stands apart from the Group in that it is Edward’s ‘baby’. The company deals mostly in processing equipment, with North Africa as its main target market. Here Edward represents Dutch processing equipment manufacturers and the processing plant in Malta, thanks to Malta’s proximity to the North African market, serves as a show plant for the quickly developing market.
Since this aspect of Norafri is not a continuous business as it deals with rather large investments, the company also deals in speciality crates for chickens, plastic crates for day-old chicks and a growing number of farm-related items.
"At the moment a lot of farmers are investing in upgrading their facilities," Edward explains, "The government has authorised subsidies through the SMPPMA programme, which is a way of helping the local agricultural sector to improve its efficiency levels, product levels, sites, hygiene and also to become more professional so the local sector will be able to compete in the European scenario."
Indeed, a common concern is that the agro-food industry will not be able to compete within the enlarged Europe, but you seem to be moving with the times I point out.
"I’m trying, let’s put it this way," Edward explains, "and I believe that with the right management, the right volume levels and the right attitudes there is no reason why we can’t compete.
"I’m not saying we will be able to compete in all aspects but we have to grab the bull by the horns and try the best we can. With the right attitudes, co-operation of the government and a good measure of determination, I think that yes, we will be able to compete."
He also points out that consumer trends in Malta are changing, with demand for the fresh product supplanting the frozen. In this respect the company is looking at venturing into organic and free-range products, going back a genuine product fed on wheat, grains and vegetables.
"But obviously we are first consolidating the Group and the local market from the Group’s perspective. When I bought the companies in 1997 the turnover was around Lm700,000, by the close of this year the turnover would have gone up to Lm7 million.
"This has taken a lot of work and organisation. Mistakes happen, but we learn from our mistakes and learn how to get them right the next time around."
But seeing a tenfold business growth in just six years has not led to complacency and the Group is working on a number of other projects and, without divulging commercial details, Edward hints that by the end of the year there could very well be something new on the market for the consumer.
This new future for the Group has also necessitated the creation of a new corporate structure, for which recruitment experts have been brought in to select the right people to bring the company forward.
"We have to survive one way or another and we are trying to recruit decision takers, which would give me time to do what I am good at. Although we are quite organised as regards structure, with managerial positions overseeing of the day-to-day running of the subsidiaries, what we need is to have another corporate level on top of that which reports to the board. We are working on this, and other initiatives, today to start facing the challenges of tomorrow. This, of course, takes a lot of work, energy and dedication."
The Group in 1997 was made up of some 25 employees, while today it employs over 80 full-timers and about 30 part-time employees. Edward comments, "You have to have a dedicated team, treat your people right, and give the right incentives, which I’ve basically been trying to do.
"The profit sharing scheme we are drawing up for the managerial team is one of these incentives. Our managers already have a good salary but my view is that if the company is making money, it is only right that the managers, although they don’t actually own the company, should share in its success.
"But, again, just like any other group of companies there are ups and downs and you have to be strong when the seas are rough. I believe psychologically that our approach has been the correct one, the intentions have been correct and I can proudly say I have a very competent and efficient staff with the right mentality – if I didn’t have that, I wouldn’t have anything today because it simply cannot be done alone."

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
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