An unfaltering entrepreneurial
Times may change, business may change but the
one constant in the world of business is the spirit of the entrepreneur.
Here Angelo Xuereb speaks to DAVID LINDSAY about a number of projects
past, present and future and gives his views on a range of subjects
from the construction and tourism industries to the hurdles the entrepreneurial
spirit is continuously facing
Having started off some 30 years ago with two employees
and a Lm200 road contract, Angelo Xuereb, today one of Maltas
foremost contractors and developers, ably embodies the entrepreneurial
spirit so highly sought after in the business world.
Meeting Mr Xuereb at his office recently, I was greeted by his characteristic
amicable manner and warm smile.
I first ask him about the near completion of his latest project, The
Verdala Mansions development, which, due to one certain feature of the
development, has been the subject of no small amount controversy over
the last few years.
Now that the exclusive residential development has become a tangible
entity on the real estate market, I ask how sales are progressing and
if he can gauge the level of market interest in the project.
"The last time we met we had spoken about the expectations of the
project, but today we are seeing a tangible development with 30 apartments
and four penthouses ready," Mr Xuereb explains. "Landscaping
activities are underway and the project is turning out, I believe, even
better than had been originally expected.
"At the outset we had intended the project for people seeking extraordinary
lifestyles and we have done just that. Now, as the projects final
phases are being reached, the finishings are being chosen we are only
choosing the best quality products and this shows in the final product."
Sales to date have been "quite encouraging", with close to
half the developments residences having been sold already, Mr
Xuereb explains. He adds that the recent increase in sales was spurred
by the fact that now prospective buyers are in a position to see a finished
product, as opposed to viewing mere plans.
"The quality of the project has to be seen to be believed,"
Mr Xuereb comments, adding that the first tenants should begin moving
in as early as January.
Interestingly, despite the fact that the Verdala Mansions project utilised
no overseas marketing, there has been a large amount of interest from
the foreign market, with about one third of all sales being derived
Of course, its very difficult to mention the Verdala Mansions
project without also mentioning the proposed, adjacent golf course
a proposal that has become embroiled in controversy.
Xuereb explains that the issue has been placed on the backburner for
the time being, while sales for the residential units themselves are
given the primary importance.
He says, "We are selling the Verdala Mansions in their own right
and we are not putting any conditions on the golf course. Of course,
we are still very keen on the golf course and we have now finished all
the requirements put forward by the Malta Environment and Planning Authority.
"Despite the opposition to this part of the development, I believe
the golf course will enhance the entire area, not just the Verdala Mansions
project, but the topography of the golf course will also add to that
of the whole Rabat area."
The last time we had spoken, he had just finished off the proposed courses
3,000 page Environmental Impact Assessment I ask how he views the results
and the state of negotiations with farmers currently working the land.
"Im happy with the results of the EIA as weve managed
to create the right balance between environment and development. Of
course, any kind of development will bear some kind of negative effect,
youre changing things after all."
Two major bones of contention related to the golf course proposal has
always been the conversion of the areas agricultural land into
the golf course and in reaching agreements with the farmers currently
working the land.
"I think were also enhancing the agricultural sector. Instead
of growing hay, as is done at present and which is very cheaply sold,
what we intend to do is convert the agricultural area about one
third of the entire golf course area into vineyards - giving
the farmers the vines, the water irrigation and viticulture know-how
as part of the compensation package. This is a high value added section
of agriculture and its also a guaranteed value.
"As things currently stand, the farmers are receiving some Lm30
per year for work carried out on 1,000 square meters thats
including all their expenses such as labour and seed. If these expenses
are calculated, it turns out that they are actually making a loss. But
the farmers dont count their own labour as an expense they
only count the seed as expenses.
There is a large demand for vineyards and grapes are currently
being imported from European countries when Malta, given our climate
and soil, should be exporting grapes. This particular area is special
for growing grapes - its topography, orientation to the sun and the
type of soil in the area is perfect for viticulture. In fact, I am told
that the area was made up of vineyards during the times of the Knights
Mr Xuereb explains he has, to date, signed agreements with 90 per cent
of the farmers far, with the remaining 10 per cent still holding out.
However, the agreements already signed have now elapsed and negotiations
will most likely have to begin again.
I make reference to the fact that nothing has changed in this respect
since we last spoke, which was over three years ago.
"Ive been waiting nine years for permission to carry out
a project like this which, when you think about it, the whole tourism
industry stands to gain from. Of course the Verdala will benefit the
most thanks to its proximity to the golf course, otherwise it would
be a white elephant and I dont want to have any white elephants."
I ask what other projects he has underway at the moment and Mr Xuereb
cites the Sea Passenger Terminal as a case in point. "I am one
of the main shareholders in the Sea Passenger Terminal consortium, VISET,
which is moving along very nicely. In my opinion, once the development
is completed, it will be the most appealing infrastructural project
carried out on a national basis."
This is another project of huge potential, I comment that he has something
of a knack for the larger, potential-laden projects.
"The problem is that if an entrepreneur has a vision," he
comments, "he has to be prepared to come across any number of obstacles.
Its in the human nature to object to any change. Later on those
who had opposed adapt to and even welcome the change once its
in place, but the initial reaction is invariably one of objection.
"The Sea Passenger Terminal will be another change a change
from public sector to private sector and it had taken us three
years to negotiate with government to sign the contract, although it
was a government tender.
"Another proposal I had come up with, and one that will see the
light of day soon, was that of cable cars linking the Sea Passenger
Terminal to central Valletta and a planned car park in Floriana. Again,
we thought the reaction would be a slap on the back and a "well
done, go ahead and do it". However, you always find objections
and we did once again in this case.
"At the terminal itself there will be a lot going on and it will
be an attraction for tourists. Cruise liner tourists will be able to
come off ship and be taken them directly to Valletta by cable car, avoiding
the stairs and the exorbitant amounts taxis are charging from just the
terminal to central Valletta.
"Of course, you dont make much money from the actual operations
of the cable cars, but rather from the business that they will generate
and a good deal of extra business is expected to be generated for Valletta.
"The part of Valletta where the Sea Passenger Terminal is located
is, at the moment, grossly neglected. In Malta we still dont have
a proper family centre, which is what we envisage for the area. We have
a centre for youths, Paceville, but no family center. The Sea Passenger
Terminal will be an area where one can take the family. There will be
dining, entertainment, things for the children to do and a complete
Mr Xuereb adds that the Terminals main area including Pinto
Stores and the marina - is expected to be completed by 2005, while other
phases will be finished in a staggered fashion after the main bulk of
the development is complete.
The lack of skilled labourers is a major problem facing the construction
industry, Mr Xuereb explains. Inroads have been made with the Employment
and Training Corporation and recent meetings with the ETC are beginning
to show "light at the end of the tunnel".
Mr Xuereb comment, "We would always prefer to employ Maltese, as
this limits communication problems since some of the foreigners working
in the sector speak English and some dont.
"Also, being Maltese, of course I prefer to employ locals but unfortunately
the Maltese also resist training. They just dont want to have
anything to do with the construction industry, the main reason being
that our standard of living is always improving and as such, no one
likes to say their children work in construction due to the stigma that
has been built around the sector.
"However, the hardships of the construction industry have been
greatly reduced, especially in concrete sector, where machines have
gone a long way toward reducing on a lot of the more gruelling tasks.
"The stone sector, unfortunately, hasnt invested in new machinery
like the concrete industry so of constructing with stone blocks is still
very hard work with the heavy blocks that need to be carried.
"In fact, being a representative of the BICC council, I am promoting
the idea of reducing the size of stone slabs to about 20 kilos, which
is manageable, whereas at the moment the standard weight is at 70 kilos.
"With 20 kilos slabs and a standardised size and weight, you will
be able to buy palettes of stone just as you buy palettes of tiles or
bricks nicely dressed and intact. With the way in which stone
is being handled today, there is a lot of wastage and damage.
So what does Mr Xuereb see in the short term for himself and AX Holdings?
"We are always an enterprising company and we are always coming
up with something new," Xuereb comments with a smile.
However, he is reluctant to give any indication of what his next brainchild
might be. He explains, "Unless you have the permits in hand for
something new, it is useless talking about the project. What Ive
learned is that you put out an application for a project and it takes
so long that you lose credibility.
"So its better to first get the permit and then announce
"However, one new project that we do have the permit for and are
about to embark on is the extension of the Victoria Hotel, which will
see the number of rooms at the hotel being doubled."
Does this show you have confidence in the local tourism industry, I
"In the Victoria, yes. If it had to be somewhere else, Id
be more cautious. The Victoria is in the centre of Sliema, its
accessible to the beach and shopping areas. Also, its a hotel
for corporate business and it is ideally located for that.
"Bugibba and Qawra, on the other hand, are not doing as well, due
to the extent of competition in the sector in the Sliema and St Julians
area. Of course, with the ensuing drop in prices, people go for the
best areas at the best prices. At the moment there are a huge number
of beds, and people tend to go for the best quality and location."