Over the course of the year, The Malta Financial and Business Times, brings its readers interviews with opinion makers from the widest possible sectoral range, with a view to providing them with an insight into a broad variety of businesses. From tourism to trade unionism, from politics to innovative management and from IT to agriculture, here’s our pick of extracts from 2004.
An even keel for the cruise liner sector
VISET Chief Executive Officer Chris Falzon, speaking about upcoming prospects for the cruise tourism sector, explains that VISET has a good number of firm bookings in place for next year and believes that 2005 could, in fact, be a record year.
“This industry is no stranger to sudden changes,” he explains, “but overall, the industry is in a very good state, firstly because there are many new ships coming on stream, many of which are being brought to the Mediterranean.
“In addition to this, operators are trying to increase their Mediterranean operations during the winter months. Many are exploring this option, which would clearly mean increased business for Malta, being in the sunnier part of the region.
“Having said that, there is a lot of potential and prospects are looking good. We are looking forward to a very busy November and December. However, a lot depends on how stable the southern Mediterranean region is going to be over the period. Given stability, the outlook is very positive.”
The changing dynamics of Malta’s tourism product
Just four months into his new position at the Malta Tourism Authority Chairman Chris Grech highlights a number of issues affecting the MTA and tourism as a whole.
Mr Grech explains his vision for Malta’s tourism industry. He believes that we need to have a long-term view of where we want to go and stresses the need not to look at our 1.1 million plus visitors simply as numbers.
“The bottom-line is that we have to compete for every single tourist that we get,” Mr Grech points out. “Every visitor to Malta has chosen the island from amongst a thousand competing destinations.”
That is why, he is convinced, it is imperative that we move away from the generic view of these 1.1m tourists and to look at them according to the basic segments that together comprise up to 90 per cent of Malta’s tourism market. He advises that we must understand the dynamics behind each of these segments and ensure that we have a sustainable competitive advantage in all of them over the next five years. “We need to attract tourists from various sectors if we want the value added generated by tourism to be spread equally and justly.”
Capping the deficit while spurring growth –
government’s balancing act
Finance Ministry Parliamentary Secretary Tonio Fenech on Malta joining the euro:
“Government’s policy is that we want to join the euro sooner rather than later, but how soon depends on a number of issues. First of all, the government does believe it is in the economic interest of the country that we join the euro as soon as possible. There are a number of advantages for us in terms of the strength it will give our economy, in that we will form part of an international currency, the elimination of exchange risks and the elimination of the costs of financing associated with having a different currency than our major trading partners. Euro adoption will also mean price transparency in that consumers will be able to compare prices easily and as such competition will be better facilitated if we are in the euro area.
“It should also be made clear that when we asked people to join the EU, we also asked them to join the EMU – there was no derogation on joining the euro.
“It should also be clear that the government is separating the issue of the deficit from the euro - we want to address our fiscal deficit because it is in the economic interest of the country to do so. We are not acting to reduce the deficit simply because we want to join the euro, if we had to take that line of thought we would lose the real significance of what we are doing.
“We need to address our deficit if we want to see more jobs, irrespective of euro adoption. However, if we manage to do that then there is nothing holding us back from going into the euro today before tomorrow. If we’re able to meet our targets, then the earliest possible adoption will be possible, but if we decide to prolong the process we will postpone meeting our fiscal deficit targets, which in turn means we will postpone joining the euro.
“However, if we keep looking at the issues facing the economy in a sectorial way, then we will most probably not meet our targets, we will send the wrong message to the international investment community, we will lose jobs as a consequence and we will not see our economy picking up.
“We’re either going to go for it together or else, obviously, government will have to take the decisions in the interest of the nation and the economy. The government is prepared to take the necessary decisions, but how much better would it be if everyone had to understand the decisions that need to be taken, if we were to take these decisions together and move forward with them together?”
Entrepreneurship and innovation: the keys to success for today’s managers
Malta Institute of Management President Joe Zammit is adamant that if Maltese managers are to compete on the global stage, they must first hone their skills of entrepreneurship and innovation.
“Management has gone beyond simply managing human resources, productivity or company initiatives. Now we’re living in a wired, global environment in which quite a number of different factors have to be taken into consideration.
“As such, being a manager today requires not only skills but also an entrepreneurial spirit - a fresh way of looking at things, an open mind, an awareness of change and risk management and so many other factors that are now being put increasingly in the limelight. To succeed in today’s global environment, today’s managers have to have a global outlook.
“It is the spirit of the entrepreneur that actually gets you out of your shell. Entrepreneurship is a process of discovery and the entrepreneur is continuously striving to discover and start something new. We need to instil this entrepreneurial drive into management because today’s business environment necessitates staying ahead of the competition. That is done through vision and innovation, supported by very strong management practice ingrained with a culture that nurtures new thoughts and ideas.”
Nurturing the entrepreneurial spirit
Malta Enterprise Chief Executive Ray Muscat on the Kordin Business Incubation Centre:
“What we’re trying to do here is create a hub of activity created with technology, innovation, start-up companies. The process is slow and we knew it would be, other countries have been at it for decades.
“The idea is to bring in entrepreneurs and their ideas, but the thrust of our focus is on the entrepreneurs more than on their idea or project as such - on developing the entrepreneur to succeed in business. So if the entrepreneur’s project eventually fails, the he, or she, has nevertheless emerged from the experience with new business skills they have accrued along the way.
“This process gives a lot of value to our clients from day one – we’re helping with their business plan while challenging their ideas.
“The KBIC has been an experiment which is now paying off, in that the project generally moving along very well and in that there is still a great deal of huge room for opportunity and expansion.”
Oracle’s new strategy for Malta
In its bid to capitalise on the SME market and to strengthen its position in the new EU member states, the Oracle Corporation is implementing a new strategy for Malta. Malta’s Oracle Business Development Manager Kevin Attard speaks about the initiative.
“Oracle is now investing directly in the enlarged EU, as opposed to being represented solely by third parties. We feel that we now need to invest further in these countries, including Malta, and to establish a direct presence.
“Oracle has rolled out this strategy in Malta not merely because they have done the same in other countries. Not just for the sake of having another Oracle country office along with the offices they have in 110 countries and employing engaging another person in addition to the other 40,000 people on the payroll.
“Oracle is now viewing Malta as a strategic ICT player in the enlarged Europe. As has been widely publicised, there is a commitment from the EU that it wants to place Europe as the number one global player in the ICT field in the coming six years. The Maltese government’s commitment over the next six years, meanwhile, is for Malta to be the number one ICT country in Europe.”
A winning team-product combination
Newly appointed InterContinental General Manager Christophe Laure speaks about Malta’s tourism product and the Malta’s largest five star hotel’s prospects for the coming years.
“I like two- to three-year missions on a specific issue. It could be a hotel opening, a repositioning or, in this case, following up on the great job done opening the property. We now need to reposition the Maltese hotel on the market and work on the average room rates, which are below what is desirable for a five star property.
“Having opened just last year, we are in a good position and now we are looking to ensure good occupancy and average room rates, and of course to ensure we have the company standards in place.”
On Product Malta, Laure comments, “I would say that the days of merely lying on the beach soaking up the sun are now over, people are expecting more and I think Malta has a lot to offer in terms of history and culture.
“It’s a question of putting the strategy together and making sure we have the right programmes in place. We see a very enthusiastic and aggressive MTA with a very good marketing campaign, so we are undoubtedly on the right track. Overall, it seems that the right people are in the right place and that they have the right direction.”
Hail the Maltese product
John Magro of Magro Brothers says that as long as Maltese products retain their quality, they will survive the flooding of the market following its full liberalisation.
“Our company has been preparing itself for years for the liberalisation of the market, so it wasn’t unplanned. We’ve invested a lot in a factory and raised our standards to EU levels. In fact today, apart from the domestic market we’re also exporting to EU countries. Obviously, liberalisation means that we’ll lose some of our domestic market share. Now that levies have been removed, a lot of foreign products, which are our competitors, have become more accessible to a lot of people. So our traditional customer has a wide choice. I can’t say that we haven’t lost a bit of our market share, but as a company we were geared for this competition.
“Some products are cheaper, some are more expensive than ours. Now the Maltese customer has to start choosing what it really wants. Certain products are of our same level and have prices that are similar to ours’ or higher, while some other products are, in my opinion, inferior to ours’ but with lower prices. Now it’s up to the Maltese customer to decide what it wants to do with its money. I believe that the more time passes, the more the Maltese customer will mature and appreciate more the genuine Maltese products.”
From third party funds to a fully-fledged presence
Global Financial Services Group Chief Executive Officer Nicholas Portelli on the Global Group’s metamorphosis:
“We had begun competing not just against other brokers but against the banks themselves and the company felt it was the right time to take the company a step up and list on the stock exchange. The IPO was very successful and was oversubscribed by one and a half times.
“I think the take up on the IPO was good and we also managed to attract our partners to take a good shareholding in the company. In fact, Aberdeen holds five per cent of the company, and a number of other institutional investors are also involved.
“From there the company moved from strength to strength. Obviously we had tough times when the market began to fall in 2000, and for two years investor appetite fell. However, I view this as a learning experience, which in the end taught us to further diversify the business, which led us to the merger with British American Insurance Co. (Mtius) Limited. The Global Group is in a better position to offer a wider array of services to our clients. This operation is strongly backed up by very competent and client focused staff.
But the company does not intend limiting itself to Malta’s shores:
“We already do business overseas when it comes to the higher net worth private clients, an area we feel we are relatively competent in. However, when it also comes to the life assurance arm, since we are the Life assurance principals, we are in a good position to develop that area of business in overseas markets.
“We are doing this in a focused manner through identifying niche markets. As such, we’re looking for niche opportunities in North Africa, the Middle East, Eastern Europe – areas where we feel we can compete and add value.”
Taking it to the streets
At the beginning of the year General Workers’ Union Secretary General Tony Zarb speaks about Malta’s rising unemployment, just before the Union, Malta’s largest, took its message to the streets via its www.bidritt campaign:
"Basically, we will be asking government to take action over Malta’s rising unemployment levels, while also telling government that we are ready and willing to help to remedy the situation with all the resources we have at our disposal.
"We aim to make government acknowledge the situation, on which it has been silent, recognise that there is a problem and that we, as the General Workers’ Union, are prepared to help it create more jobs here in Malta - not only blame government for the situation."”
"People are attacking the General Workers’ Union, but no one is understanding the thrust of our campaign. What we are saying that we have to attack Malta bureaucracy, we have to talk with new investors so we can encourage them to invest in Malta. We have to do everything we can to try and create jobs and we are prepared to do just that.
"But the thing is that many say we don’t need demonstrations, that what we need is dialogue. But it is our view that the discussion period is now finished. The time for talking is over and we now have to act with concrete suggestions and decisions.
"The Union is being attacked for organising a demonstration, but we have the right to demonstrate. All over Europe you see workers demonstrating, and the GWU in Malta is holding a demonstration to bring forward the message that we want work. These critics must bear in mind that this demonstration is not an industrial action at all, we will not be interfering with any work in Malta.”