12 January 2005

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Government to create venture capital incentives - Gatt

Malta Enterprise receives double funding for 2005

Government intends setting up incentives for the creation of much-needed venture capital, while also encouraging further investment in research and development, re-training and post graduate studies for students.
“We need to go beyond the traditional manufacturing industries and we will therefore be introducing incentives to encourage the set up of back office operations, IT international software vendors, film productions and warehousing and distribution operations in Malta,” Investment, Industry and IT Minister Austin Gatt said while on a recent company visit to Stainless Steel Products.
But while government intends to embrace the ‘new economy’ and put the Maltese workforce in a better position to join the mushrooming sector, Dr Gatt insisted that Malta’s traditional manufacturing base will not be ignored. Illustrating the point, Dr Gatt referred to the fact that Malta Enterprise has received Lm1.8 million in funding, double its usual funding, for 2005.
At the same time, Dr Gatt explains, “Government has directed that Malta Industrial Parks change its policy regarding the financing of industrial parks and factories and will be seeking private and bank finance to push forward at a quicker pace both refurbishments and new buildings.
“This is a sea change in Malta’s industrial policy, a sea of change born of the realisation that change is constant and necessary if we want to be successful in the future as we have been in the past.”
The development of Malta’s manufacturing sector no longer hinges on forking out tax holidays for foreign direct investors, Dr Gatt comments, adding, “Today, the challenge is to create the right type of economic environment that ensures that manufacturing in Malta has the right skills available, assists training, encourages R&D, increases output and caps costs – wherever they originate from – to levels that are competitive”.
“We have moved from an economy that was Government dependant to an economy where Government is only one of many players. Government can, of course, paint the broad picture but it cannot substitute the aggressive entrepreneur who knows his business, is not risk averse and produces quality. That is why this Government is following an aggressive privatisation policy. That is why this Government has last month announced new incentives for industry that are very different from the usual soft loan approach.”
Stainless Steel Products is an FDI success story. Set up in 1970, the company today employs 139 workers, has a turnover of more than Lm5 million, with yearly turnover increases since 2000, has invested Lm2.5 million since 2003 and pays over Lm1 million in wages and salaries.
Dr Gatt explains, “With a 34 year history, it is obvious that the company would not have been the success story that it is today, if it were not able to adapt its strategies and production lines, find the financing required and re-tool as and when required to ensure quality at the highest standards. This constant change must not have been easy to adapt to but the market realities of today’s world impose change, quality and innovation as the unquestioned pillars of success.
“The Maltese Government has assisted Stainless Steel Products along its growth path and indeed the company has benefited under the very first legislative act introduced in this country to help industry. As has happened with the company, it is a constant challenge to Government to keep both that legislation - as well as the bureaucratic processes underpinning it – relevant to today’s economy.”

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