Malta Business Review Issue 7 by Adrian Friggieri

Issue 7 â&#x20AC;&#x201C; March 2015

Embracing New Ideas cover story A Winning Personality

An interview with Jonathan J. Borg, CEO Smartlight Systems and Vice-President JCI p.06

interview

feature

focus

TALKING POINT

Making Gozo More Sustainable Dr Anton Refalo, Minister for Gozo discusses various issues in an exclusive indepth interview p.12

Loving Food, Embracing Traditions MBR interviews John Magro, Chairman of Magro Brothers Group of Companies p.14

The Internationalisation of Maltese SMEs â&#x20AC;&#x201C; Part 1: The Motivation for Growth A series of special articles by David J Dingli p.36

Greece Bailout Talks: Acrimony & Uncertainty We follow the latest developments on the Greek bailout and debt obligations saga p.62

TODAY’S DECISION IS TOMORROW’S LEGACY. Lasting success goes beyond numbers and percentages. At HSBC we have a unique global perspective, which allows us to see the extraordinary impact that today’s business decisions can have in the future. That’s why we focus on building long-term partnerships with our clients, so that we can help them move forward in the right way. www.hsbc.com.mt/commercialbanking

IT’S NEVER JUST BUSINESS

Approved and issued by HSBC Bank Malta p.l.c.,116, Archbishop Street, Valletta VLT1444.

Issue 7 – March 2015

EMBrAcInG nEw IdEAS cover story A Winning Personality

An interview with Jonathan J Dingli, CEO Smartlight Systems and Vice-President JCI p.06

interview

feature

focus

taLKinG Point

Making Gozo More Sustainable Dr Anton Refalo, Minister for Gozo discusses various issues in an exclusive indepth interview p.12

Loving Food, Embracing Traditions MBR interviews John Magro, Chairman of Magro Brothers Group of Companies p.14

The Internationalisation of Maltese SMEs – Part 1: The Motivation for Growth A series of special articles by David J Dingli p.36

Greece Bailout Talks: Acrimony & Uncertainty We follow the latest developments on the Greek bailout and debt obligations saga p.62

Publisher MBR Publications Limited eDitor Martin Vella

MBR Publications Limited

technicAl ADvisor Marcelle D’Argy Smith

sAles Director Margaret Brincat sAles eXecutive Charlotte Munro Art & Design Jessica Camilleri

cover story

A Winning PersonAlity A thought-provoking interview with Jonathan J Dingli, CEO Smartlight Systems and Vice-President JCI

ADvertising 9940 6743 / 9926 0162; Email: margaret@mbrpublications.net; martin@mbrpublications.net

eXclusive intervieWs

contributors Diane Borg Bascetta; George Carol; David J. Dingli; Jean Paul Demajo; Ross Foster; Rex Merrifield; Patrick J. O’Brien; Antonella Riotto; Astrid Veld; Ana Zammit Munro

gozo FeAture: MAking gozo More sustAinAble Dr Anton refalo, Minister for gozo discusses various issues in an in-depth interview

sPeciAl thAnks BOV; DOI; European Statistical System; HSBC; IoD Malta; MHRA; Minister for Gozo; Minister for the Economy, Investments & Small Business; NSO; Smartlight Systems; The Business Weekly; OPM

gozo FeAture: loving FooD, eMbrAcing trADitions Mbr interviews John Magro, chairman of Magro brothers group of companies

long terM vision

Print ProDuction Printit oFFices 41B, Wayne, Triq il-Herba, Birkirkara, BKR 2322 telePhone +356 2149 7814 quote oF the Month “The virtue of a man ought to be measured, not by his extraordinary exertions, but by his everyday conduct.” - Blaise Pascal Blaise Pascal (19 June 1623 – 19 August 1662) was a French mathematician, physicist, inventor, writer and Christian philosopher. He was a child prodigy who was educated by his father, a tax collector in Rouen.

Disclaimer All rights reserved. No part of this work covered by copyright may be reproduced or copied and reproduction in whole or part is strictly prohibited without written permission of the publisher. All content material available on this publication is duly protected by Maltese and International Law. No person, organisation, other publisher or online web content manager should rely, or on any way act upon any part of the contents of this publication, whether that information is sourced from the website, magazine or related product without first obtaining the publisher’s consent. The opinions expressed in the Malta Business Review are those of the authors or contributors, and are not necessarily those of the editor or publisher.

Andrew Agius Muscat, CEO of MHRA states that Malta has to be proactive to build a sustainable tourism industry

Focus

32 34

toP sociAl MeDiA service trenDs to look out For

A first-class contribution from one of leading technical writer Marty Ron on creating a successful social media optimisation campaign

MAltA’s PreMier MArketing & b2b netWorking convention

An interesting centre double-spread about the largest and most successful marketing event of 2015

THE InTERnATIOnAlIsATIOn Of MAlTEsE sMEs – PART 1: the MotivAtion For groWth

Part 1 in a series of special articles that will cover the various aspects of SME internationalisation by David J Dingli

GlObAl UlTRA WEAlTHy POPUlATIOn HOld nEARly Us₴3 TRIllIOn In OWnER-OCUPIEd REsIdEnTIAl REAl EsTATE

Diane Borg Bascetta writes about Sotheby’s International Realty’s Partnership with Wealth-X

CONTENTS tAlking Point

libyA: the greAtest betrAyAl Award Winning and resident Journalist criticizes the lack of Western support and response to the Libyan people

the Pension systeM: is there A sustAinAble Future? MBR keeps on track with the progress of reforms and elaboration of the Pension System as presented by the Hon Prime Minister Dr Joseph Muscat

An AnAlysis oF tyPes oF errors in Public ProcureMent Within the structurAl FunDs ProgrAMMe A view on the report and parallel audit by the Auditor General in conjunction with the Supreme Audit Institutions (SAIs) of eight Member States

FAshion: insPirAtion coMes FroM Doing An interview with Hana Plzáková a multi-talented Czech born fashion designer based in Malta

greece bAilout tAlks: AcriMony & uncertAinty We follow the latest developments on the Greek bailout and debt obligations saga

Malta Business Review

editorial eal innovation in the business world is still rare. As I have said before, everyone talks about innovation, but the majority of new business executives I see still reflect linear thinking – one more social network with more features, another smartphone app for marketing, or one more platform for faster e-commerce. Remarkable changes, dynamic and absolute successes do not come from linear thinking. So what does it take for more dynamic transformations? Recently I really found the recommendations in a new book “Orbit Shifting Innovation,” by Rajiv Narang and Devika Devaiah most interesting. They encapsulate twenty years of breakthrough research initiatives and innovation strategy they have led with many of the most self-motivate global organisations large and small, including Unilever, Walt Disney and Intel among many. They define ‘orbit-shifting’ innovation as something that happens when an area that is ripe for change meets an innovator with the will and the desire to create history, not follow it. The breakthrough innovation creates a new orbit. Beginning with the Macintosh, Apple succeeded in doing this time and time again, transforming the lives of millions, with Steve Jobs at the helm. Every entrepreneur and every company I know has orbit-shifting intentions. But there is a big difference between orbit-shifting intentions and orbit shifting results. According to Narang and Devaiah, the people who accomplish real innovation results seem to exhibit a higher set of attitudes and motivation: Overall, what is different about these innovators is their mental model of romanticism in vision and realism in execution. They expect challenges, and when problems do arise, they are neither surprised, let down or disappointed. They face them head on, handle them and move on. Most of the rest of us are the reverse; realistic about the vision and romantic about execution. Entrepreneurs and startups are in the best position to find and run with orbit-shifting rather than linear innovations. They do not have to start by overcoming the choking gravities of an existing organisation and product set. That is why most large business and government entities are resigned to buying innovation, rather than birthing it. And in Malta this trend is contagious. The best start-up idea and mindset are those that are really orbit-shifting. New customers or stakeholders will never buy from business with linear thinking. In this edition we tried to practice what we preach and you can attest to our orbit-shifting philosophy throughout this entre edition. I hope you enjoy the read.

52 MARTIN VeLLA www.maltabusinessreview.net

A Winning PersonAlity by Martin Vella

Smartlight Systems has established a reputation as a leader in revolutionising lighting systems in Malta. Jonathan J Borg, CEO and also Vice President with Junior Chamber International attributes this success to the skill sets of his team and strongly advocates that a good education system needs to be backed up with modules that stimulate the need for improving soft skills for the students, something which he deems essential and definitely achievable

MBR: Can you talk about the vision around it and the process you took to get where you are? JJB: Our starting point was to provide the market with high quality lighting solutions. However, we realised that customers are more interested in having lighting systems. We are in a consumer-driven business where customisation and the need to be unique is something which attracts the end consumer. By providing lighting systems we give our customers the chance to have a holistic approach to their lighting needs. Over the years we have identified several niche markets which we have managed to successfully penetrate into. This vison gave us the competitive edge to constantly strive for further technological developments, which in turn had kept us in the forefront of the market. During a CSR event held in 2010 at Attard Local Council, we stumbled upon an emerging niche; off-grid solutions for illuminated road safety signs. This has given us a new area to invest in as we are constantly improving the

end product and adding the “smart” to the systems provided by means of implementing communication technology which helps us monitor the performance of such products. This market and our input so far has won us the Living Labs Showcase 2011 silver award for “innovation” in Sweden and “Innovative Energy Saving Solutions” Award in the Netherlands. Nowadays, we have a very wide portfolio of products in several niche areas and we keep on investing in our know-how and technology development to keep abreast of new technologies. In 2014 we won the “Most Entrepreneurial Company of the Year Award” at the MSV Life Top Entrepreneur of the Year Awards, another accolade which amply attests towards the capabilities of all the team at Smart Light Systems. MBR: When you created Smartlight Systems in 2008, could you have imagined it would be so successful? JJB: When we created Smartlight systems we were focusing on our long-term plan for

survival, we measured success through the client-satisfaction of the end product. Being a results-driven team we constantly strive for customer satisfaction, and operating a new technology, especially offgrid solutions, we often find we need to educate customers as to the limitations of such products when working off-grid. This has given us a natural modus operandi to go above and beyond the delivery high-quality products and solutions. Having said that, I never imagined that the success would be what it is, and we are looking forward to what the future holds for us. MBR: You have been defined as an entrepreneur in building your company, but at its current size and scale, most would see that as more of a corporate role. How important has it been to invest in yourself and how useful was it to the entrepreneurial feel, especially in terms of soft skills? JJB: I believe that no matter what your role in a company is, you must never stop investing in yourself. Rationale dictates that the first

European elected officers to JCI board

COVER STORY

way to go academically, but this isn’t the only way. It is important to know ones limitations and to work on yourself, as well as hone the soft skills which you may not be accustomed to use in order to be a better version of yourself. In 2008 I didn’t have half the self developed skills which I have today, from public speaking and team management to the confidence to seek new markets. Today, I have the privilege to be present and participate in several business forums and lectures with ease. I lead teams at different levels and my work revolves around seeking new challenges for the company to take on. MBR: Why is it imperative that our education system should do more on investing in student’s skill set and also talents, and start changing the current curriculum? JJB: I sincerely think that our education system compares very well to the international standards expected, although it is very much focused around the quantity of knowledge which a student possesses and can replicate in an exam. Several soft skills which might seem to be basic skills, such as basic business etiquette, confidence in presenting, how to address clients, public speaking, debating and sometimes even some basic social skills are rare to find. In our schools it is evident that despite the variety of student backgrounds, promising skillsets and rare talents, there is no system that is set to capture and develop such student talents at an early age. This diversity is an asset that we should be looking into to foster, promote, and develop. Over the years I have interviewed a number of candidates for several posts, and I have come across candidates who where very well qualified on paper but did not posses the basic skill set which is needed for even a junior post. The most sought-after skillsets for recruiters are becoming less and less about proficiency in specific processes and more about how you think systems through and work within the context of the team. Learning a technology is the easy part. Having the mindset to apply it, having the mindset and logic to process it, being thorough and detail-oriented while doing so, these are the critical skills. MBR: The passion for what you have done at Smartlight Systems is almost limitless. How do you get to balance your life from business engagement? JJB: Well many books say that you must leave your work behind and not let it influence your life, but obviously who ever wrote that didn’t have their own business. It is a common misconception that being a business owner is a glamorous job and you get to walk in late and leave early, but many

would agree that this is far from reality can possibly be. The responsibilities, worries, and constant thinking never stops, and undeniably crosses over to your personal life. However, I have found two key elements to help. Firstly, you must have a strong team behind you to back you up. When I look back at the achievements we have as a company, it would not be possible without the constant support and involvement of the dedicated team behind the scenes.

The most sought-after skill-sets for recruiters are becoming less and less about proficiency in specific processes and more about how you think systems through The second element is to keep a positive outlook on whatever happens. Everything happens for a reason, even things which could seem devastating. But you are more measured for how you handle the upsetting moments than the good ones. I manage to keep a balance by finding time for my business interests with the support of the team, and finding appropriate time for my personal life. So far it has worked. MBR: Following your recent appointment as Vice President for Junior Chamber International, you talked about the importance of the culture of character. Is this something you can drive through an organization and what are the duties, responsibilities and opportunities to occupy such a privileged position on the Board? JJB: My appointment on the Junior Chamber International board of directors stemmed from my drive to take on new challenges and keep on working on the personal skill-set which needs working upon, as well as to serve on an international board of directors of an organisation which has taught me so much. I am assigned to eight Nordic countries; Norway, Denmark, Sweden, Iceland, Latvia, Lithuania, Finland & Estonia. My main role is

Malta Business Review

to visit these countries and carry out the 2015 JCI plan of action by supporting the members to forge new collaborative partnerships, mentoring the members to make the most out of the opportunities which JCI can provide them, and provide development training as requested. All the above would not have been imaginable for me to do had it not been for the constant opportunities which this organisation has provided. Since I joined in late 2010, I have always used JCI to develop soft skills and forge networks which have not only made me into a better person, but a better employer and this is reflected directly through the successes of Smart Light Systems MBR: How have you adapted to this role and what does it involve in terms of delivering training in each country to all members, assisting with implementing the findings of the JCI 2015 plan of action and having to travel frequently? JJB: Well my work already takes me to several places since I have been forging business relations around Europe and the Middle East, which incidentally also happened through my involvement in JCI Malta. It does get demanding, but almost all the countries I am assigned to become countries of interest to me from a future business perspective. Also, as an assigned Vice President you do. MBR: How do you focus your efforts in leading JCI forward? JJB: My role is two-fold, on the one hand I need to be well prepared with the current status of the organization in the country I am visiting in order to adequately support them, on the other hand I have a responsibility toward JCI Malta, of which I am of course a member, and not only do I bring experience to the national board but know-how from other national Organisations. On a local level I keep on supporting when needed and actively attend all events when possible, as development opportunities. MBR All Rights Reserved | Copyright 2015

Corporate Brief

2015 Vice President JCI (Junior Chamber International) A member of the 2015 Board of Directors of Junior Chamber International (JCI) in the position of Vice President. Vice President assigned to the countries Iceland, Denmark, Norway, Sweden, Finland, Estonia, Lithuania and Latvia. Responsible for being the link between Head Quarters in St Louis, Missouri and each of these countries. The role will involve delivering training in each country to all members, assisting with implementing the findings of the JCI Strategic Planning Committee, linking with local Governments, Chambers of Commerce and other strategic business partners. Providing support to each country to assist with any aspect of JCI to further enhance the impact they are making in their local communities and at the same time looking at growth and development of each local and national organisation.

www.maltabusinessreview.net

Malta Business Review

Malta’s PreMier Marketing & B2B networking Convention

“GoinG DiGital increases Visibility anD the chances of explorinG new Markets anD new DeManDs” by Martin Vella

The Minister for the Economy, Investment and Small Business, Dr. Chris Cardona, spoke about the importance of Digital Marketing for SMEs in his speech at Malta’s Premier Marketing and B2B Networking Convention held at a jam-packed Sate Hall in The Palace, Sliema on 20th February. Ms. Marika Tonna COO of Malta Enterprise, which was the main sponsor of the networking convention, entitled ‘The Importance of Marketing and Investing in Growth for SMEs’, chaired the conference and delivered the opening speech. Minister Cardona described small and medium enterprises (SMEs), which account for 99.8% of Malta’s enterprises, as the backbone of the Maltese economy. Dr. Cardona stated that marketing is a necessary tool which can help facilitate growth and that the way marketing is conducted defines how others ones business, strongly impacting on brand reputation. Minister Cardona said that a good marketing programme would include a mix of website development, public relations, advertising, community-based initiatives, active participation in events and also networking. Dr. Cardona also referred to initiatives taken by the Ministry of the Economy, Investment and Small Business and Malta Enterprise to assist businesses such as the Ebiz courses, Go Global Programme, the Enterprise Europe Network, and the Advisory Services at Business First. Minister Cardona also spoke about the importance of going digital and said that apart from strengthening competitiveness, going digital provides enterprise with a sound foundation for trading abroad. “From a marketing perspective, going digital increases visibility and the chances of exploring new markets and new demands” said Minister Cardona.

From a marketing perspective, going digital increases visibility and the chances of exploring new markets and new demands Minister Cardona spoke about the services offered by Business First for SMEs to help them realise their prospects and guide them along the way. Amongst the responsibilities of an efficient and effective Business First unit, Minister Cardona mentioned facilitating and simplifying procedures for SMEs, identifying new opportunities for growth, conducting an effective outreach programme and establishing better advisory services. “Facilitating business and its growth is a cardinal principle for this government and we want to collaborate with all of you to achieve this goal” concluded Minister Cardona. MBR 08

Dr Chris Cardona, Minister for the Economy, Investment & Small Business

A Two-Note Melody

INCOME & GROWTH INVESTMENT SOLUTIONS

Similarly to the two-note combination used in the tuning of the horn, the Income and Growth Funds provide investors with finely tuned Investment Solutions that combine both capital gains and regular income* objectives. This provides investors with a diversified portfolio of investments in both the equity and bond market.

INCOME & GROWTH INVESTMENT SOLUTIONS 80072344 I vfm.com.mt

BOV Branches / Investment Centres & Licensed Financial Intermediaries

A Two-Note Melody

*The income that the assets of the Fund generate in relation to their value or market, and the frequency of payment may vary and are not guaranteed. Past performance is not a guarantee to future performance. The value of the investment can go down as well as up and any initial charges may lower the amount invested and the amount received upon redemptions. Investments should be based on the ful details of the Prospectus, Offering Supplement and the KIID which may be obtained from Valletta Fund Management Limited (“VFM”), Bank of Valletta plc Branches/Investment Centres and other Licensed Financial Intermediaries. VFM is licensed to provide Investment Services in Malta by the MFSA. The Vilhena Funds SICAV plINCOME c is licensed by&thGROWTH e MFSA and qualiINVESTMENT fies as a UCITS. Issued bySOLUTIONS VFM, TG Complex, Suite 2, Level 3, Brewery Street, Mriehel BKR 3000, Malta. Tel: 21227311, Fax: 22755661, Email: vfm.com.mt i80072344 nfovfm@bov.com,I Websi te: www.vfm.com.mt. Source: VFM BOV Branches / Investment Centres & Licensed Financial Intermediaries Similarly to the two-note combination used in the tuning of the horn, the Income and Growth Funds provide investors with finely tuned Investment Solutions that combine both capital gains and regular income* objectives. This provides investors with a diversified portfolio of investments in both the equity and bond market.

Malta Business Review

HealtHcare

Today’s

Dentistry! by Dr Jean Paul Demajo

Gone are the days of old-fashioned dentistry were extractions seemed to be the only solution. Today we try to safeguard our teeth in every manner, restoring and protecting them from future loss. This has made us very conscious of the aesthetics of our smile. Methodology has changed to one, which is holistic, and multi-factorial in approach whilst the choice of materials has also changed from gold to metal-free ceramics offering the best aesthetics money can buy.

Missing teeth conventionally replaced with removable dentures or tooth-supported bridges are more likely to be replaced with dental implants independent of the remaining standing teeth. This improves the life expectancy of the remaining teeth and offers excellent long-term outcomes. Digitalised dentistry is becoming more and more popular due to the high calibre of aesthetics produced and shorter timeframes incurred. The lost-wax casting technique of producing a custom-made crown or bridge has been exchanged with a milling process. Using this method, teeth are first scanned in the mouth with an intra-oral scanner producing digital impressions. These images are uploaded onto clever dental software, enabling both clinicians and technicians to design and subsequently mill crowns from pre-formed glass ceramic blocks. Enter CAD-CAM dentistry; Computer-aided dentistry and manufacturing. Timeframes in producing a single crown may be reduced from a minimum of 2days to virtually one hour! This methodology has now been extended for the production of removable acrylic and cobalt chromium dentures. Radiography has never been clearer and more accurate. The introduction of low10

radiation dose 3-Dimensional dental imaging units allows high clarity and easier problem analysis. Combined with CAD-CAM dentistry, this technology may produce custom-made surgical guides capable of inserting implants in the jaw without having to reflect gum flaps tremendously reducing post-operative discomfort to virtually nil. With the help of tissue engineering, lost bone and gingiva may be replaced easily to help rebuild oral tissues enabling implant insertion and jaw re-contouring. This results in normal aesthetic and functional oral anatomy. Engineered materials replace gum and bone grafts otherwise removed from the patients’ body causing unnecessary discomfort and trauma. So-called railway tracks or fixed metal braces are now being replaced with clear aligners or lingual brackets hidden behind ones smile. These brackets normally fixed to the front of ones teeth are instead glued to the back making them virtually invisible from the front. Aligners on the other hand come as a set of semi-rigid custom-made trays produced to fit ones teeth like a glove pushing teeth into the correct anatomical positions. The aligners are changed every 4-6 weeks until all teeth are in the right position.

Communication between dentist, patient and dental technician is at an all-time high. More one-on-one time is given for dialogue understanding better what the patient’s physical and emotional complaints are as well as what they would like to achieve. Addressing these issues, allows for better decision-making and a more satisfied clientele. Patients are aware that timeframes may be longer than initially thought, also driving up fees, but they do not hesitate to opt for the proposed treatment as long as they achieve what they have always wished for. Ask your dentist! MBR EDITOR’S NOTE

Dr Jean Paul Demajo is a Dental and Implant Surgeon who trained in London and is now working in private practice in Malta.

HealtHcare

Malta Business Review

A CAse sCenArio: -Young woman looking to reorganise her smile. -treatments executed include: 1. 11extractions in lower jaw with simultaneous placement of 4debgal implants 2. All-ceramic crowns and veneers of upper 10teeth 3. Restoration of lower jaw with ceramic implant retrieved bridges

extra-oral before treatment

Intra-oral before treatment

extra-oral after treatment www.maltabusinessreview.net

Malta Business Review

Feature: Gozo – exclusive interview

Making gozo More SuStainable by Martin Vella

EcoGozo has been nominated for an Environmental & Corporate Sustainability Award in the European Business Awards. In an interview with MBR the Minister for Gozo Dr Anton Refalo expressed his delight, saying that nomination is indeed a great honour for the Ministry for Gozo and the whole population of the island. For Dr Refalo this is a confirmation that Gozo is on the right track. However, the Minister reiterated that this should act as an energy booster, and the impetus to work harder towards the achievement of our eco-island ideals. So let’s find out more about the relentless work the Ministry for Gozo has accomplished

MB: What are the main priorities for the Ministry, and what point have arrived in tackling key challenges and objectives since taking office in 2013? AR: We have a single overriding priority: the creation of jobs in Gozo for the Gozitans. In the public sector, we have achieved a substantial part of this goal by transferring from Malta to Gozo hundreds of employees to work in government departments, including medical personnel who filled a longstanding void at the Gozo General Hospital. In the private sector, we have a twopronged policy, one for the short-term and the other for the long-term. In the short term, we have reversed what many fatalistically perceived as the inevitable decline or Gozo as a tourist destination. Through various initiatives, such as week-ends with reduced ferry fares, coupled with attractive and popular events, such as Betlehem in Għajnsielem, not only have we reversed the negative trend but we have achieved 12

a record number of tourists, both internal and foreign. This initiative has boosted tourism in the shoulder months, increasing bed-nights and thus decreasing the acute seasonality in this sector which was preventing entrepreneurs in the industry from creating new jobs for their personnel. For the longer term, we are working on innovative niches such as medical tourism and high tech industries. With regards to the former, a radical upgrading and expansion of the Gozo General Hospital is envisaged. This will have a strong multiplier effect on collective and individual accomodation services, which for obvious reasons will no longer be tied up with seasonality. As regards the latter, we are applying for EU funds to help lay a second fibre-optic cable between Malta and Gozo. This is vital, for without it, hardly any new direct foreign investment involving high-tech industry can be attracted to the island. During the seventies and eighties, Gozo boasted of an extremely strong industrial estate creating very good jobs for hundreds of Gozitans. Unfortunately these eventually closed down and were never replaced. Due to globalisation, and the added costs of transporting goods from Gozo to Malta before shipping them abroad, High-tech industry is the type of investment which is most feasable for Gozo – provided there is a back-up to the existing fibre-optic link. Operators in this industry usually insist upon a second link so that they can continue operations without incurring big financial losses in case of a failure of one

of the cables. Just as for commuters a permanent link between Malta and Gozo would be the best form of communication between Gozo and Malta; for contemporary investors a second fibre optic cable would be their permanent link with Malta and indeed the rest of the world. Regrettably, the previous Government did not regard this second link as a priority and we had to start from scratch in this regard. MBR: What infrastructure projects are currently underway in Gozo and how important are these to the Islands tourism development? AR: Two major infrastructural projects are being carried out. One is the revamping of the Citadel and its surrounding area. The water resevoir constructed in front of the Citadel entrance during the early British occupation of Malta is being tranformed into a state-of-the-art visitors’ centre. The Citadel, which is the principal architectural landmark of the Island, and which is visited by almost every tourist, will now significantly enhance its appeal. Modern technology will make a visit to this medieval fort a unique experience and this translates into an enhanced and upmarket tourist product. Another ongoing project is a new pipeline from Hondoq-ir-Rummien to Sannat, replacing the old connection which was in danger of breaking down under its age. This would mean disrupting the water-supply to Gozitan homes and industries. The Gozo Ministry is taking the opportunity of resurface the roads through which the pipeline is being laid.

Minister discussing projects with Qala Local council Perit Clint Camilleri mayor, Jesmond Borg and Paul Buttigieg- councillors, Director Joseph Portelli and Perit Angelo Portelli.

Feature: Gozo – exclusive interview

MBR: Can you tell us something about the EcoGozo project and how you have turned this around to show that it is possible to attain a clean environment? AR: EcoGozo is a Local Sustainable Development strategy for our island. Through it Gozo is earmarked to achieve results towards becoming a more sustainable island. Since taking office, we have embarked on a significant project for the restoration of a good number of parish church parvises, improving Gozo’s tourism product and community meeting points. We are also actively pursuing the development of the Rural Tourism niche, with particular reference to the importance of Gozitan agriculture for tourism. We have concluded an ecological restoration project in the site of a former quarry at Il-Qortin ta’ Isopu in Nadur, and we have also continued with significant action related to rainwater harvesting. Finally, we have also continued to invest strongly in Renewable Energy.

High-tech industry is the type of investment which is most feasable for Gozo –provided there is a back-up to the existing fibre-optic link. MBR: Under the Eco-Gozo development strategy, Gozo aims to become an eco-island by 2020. What does this mean and what are the main challenges you must address to achieve that goal? AR: We must address sectors where Gozo needs to improve its performance and become more sustainable. Given our geography and location, freshwater, and its availability remains our greatest priority. It is one of the areas where we are investing most. Investment in renewable energy infrastructure is also of high importance. Both these targets will help Gozo, and naturally the country at large, to achieve the EU’s 20-2020 targets. Education and Awareness also remain of strategic importance to achieve our goals. EcoGozo is not made up of Government projects only, but by an effort by the whole population of the island to raise its standards and performance, from little things like keeping our island clean, to strategic aims like environmental improvement and economic and social development. MBR: Can you outline your work vis-avis creating the right environment for the attraction of productive investment to Gozo through special incentives including start-up tax credits to new business?

AR: Two types of incentives are in place forming part of the Microinvest Scheme: The first assists undertakings considering Gozo as a location. For these undertakings there is a start-up tax credit of 50,000 euro (in Malta the maximum credit is 30,000 euro) during the first three years of operation for a new business in Gozo. Secondly, a tax credit totalling 65% - equivalent to 45% of eligible expenditure and an additional bonus of 20% applicable to industries in Gozo only - to assist existing undertakings to innovate, expand, implement compliance directives or develop their operations.

Malta Business Review

Collaboration with Armed Forces of Malta

MBR: What can you tell us about the development of the Gozo yacht marina and the significance for Gozo tourism of the cruise liner facility? AR: There is one proposal for the construction of a cruise-liner terminal and yacht marina which is currently being evaluated by the Privatisation Unit. A new buoy is being installed in Xlendi in place of the existing one which was put in the wrong place by the previous administration. The only ship which was moored with the existing one nearly collided with the sea-shore a disaster similar to that of Costa Crociera occurred was only narrowly averted. The Xlendi buoy will attract boutique-sized cruise-liners which typically carry high quality tourists. MBR: What steps and action have been taken since you took office to boost the Island physical infrastructure and to ensure a highly efficient and reliable inter-island transport system in order to minimize as possible the adverse effects of double insularity? AR: Our public spaces, particulary town and village squares – Qala, Xaghra, Għajnsielem, St Francis Square in Victoria – are being or will be refurbished and upgraded. Religious niches all over the island have been restored with the help of Wirt Għawdex. The Statue of Christ the Redeemer, perched on a hill overlooking Marsalforn, which was heavily deterioriated, was also restored and lighted up at night. At the moment, roads all over the island are being patched up. The feasability of a fast-ferry service is being intensely evaluated. Such a service would make Gozo accessible in a few minutes from the harbour area.

MBR: You have said that, “Gozo is an island of dreams. This is where dreams come true”can you explain why? AR: Gozo is the isle where the nymph Calypso almost fatally captivated Ulyssis with her charms. Despite the passage of three millennia, she still retains her irresistible allure to all those who visit her, be it for business or pleasure. It retains its ancient serenity whilst at the same time being easily accessible from Europe’s hectic urban areas. MBR: What is the most challenge you wish to see fulfilled during your tenure as Minister for Gozo? AR: My biggest challenge is to make Gozo a sustainable and up-market location providing good jobs for all Gozitans. MBR All Rights Reserved | Copyright 2015

EDITOR’S NOTE

Anton Refalo is the Minister for Gozo. Anton was born on the 25th July,1956. He graduated as a lawyer in 1980 at the age of 24. Married to Michelina (Lina) and father of two Andre’ and Simona. Anton first ran a general election in 1987. He was the youngest candidate within the the Labour Party and was successfully elected. From than onwards, Anton Refalo has always garnered the highest amount of Labour first preference votes within the 13th district. www.maltabusinessreview.net

Malta Business Review

Feature: Gozo â&#x20AC;&#x201C; ManuFacturinG

Loving Food ,

Embracing TradiTions by George Carol Background The Magro Brothers Group of Companies is a family owned organisation dedicated to the production and provision of quality food. The Group operates from a cluster of purposely-built food workshops and factories located in Xewkija, Gozo and aptly known as â&#x20AC;&#x153;The Magro Food Villageâ&#x20AC;?. The passion for good food and the deep-rooted family spirit are very present in the well trained and highly motivated workforce, who are committed to give the best consistent results to their world class clients. History The organisation was established in 1916, when three Magro brothers decided to join their father who was already a leading general provision merchant. In 1934 they ventured into food processing and established the first tomato processing plant on the tiny island of Gozo. During the hot summer months over 300 tons of fresh tomatoes from Malta and Gozo are processed daily in less than 24 hours from harvesting. Tomatoes are processed in highly controlled environment with filtered air and automated machines run 24 hours. Over the years Magro Brothers have built up close ties with farmers and this results in complete tracibility from fields to fork.

Michael, John, Christian, Nicholas Magro

Besides the tomato plant, the Magro Food Village houses also a gourmet cheese making centre making traditional Gozitan cheeselets as well as fresh cottage ricotta, Pekorin cheese and yogurts. In recent years, the company has branched very successfully in traditional maltese food under the premium Savina Brand. Savina takes the customer back to the origins and roots of the family concern. It is an exclusive, up-market brand that has roped in some excellent customers, among whom Prince Philip who each year gets a special hamper from the company and immediately sends his appreciation to the whole Magro family and to all Maltese who hold a special place in their hearts. Pope Benedict is another personality who appreciates Savina`s specialities. tradition & Heritage At the Savina Creativity Centre, visitors can watch food being prepared and can also enjoy free tasting. Depending on the season, they can watch the infusion of oils and vinegars, the pressing of sun-dried figs, a range of antipasti and sun-dried tomatoes in oil, succulent fruit jams and pure Gozitan honey. One can also find the latest innovations from the Sor Serafina range, named after an old nun who was a distant relative of the Magro family, which includes traditional Gozitan delicacies and sweets.

minn 22 tadama ✓ Magħmul Maltija magħsura qies konvenjenti ✓ F’għall-familja tajjeb sa tliet ✓ Iżomm ġimgħat ﬁl-fridge

✓ Bnin u sustanzjuż

... b’tadam Malti frisk!

Malta Business Review

Feature: Gozo – ManuFacturinG

Michael and John Magro

Duke’s visit to Magro premises

MBr: as an export orientated sMe how important is global expansion operation and what is the significance and implications of this international trade turnover? JM: Magro Brothers will soon be celebrating its 100 years of operation. In the local market the company has a number of popular household brands including Three Hills, Mayor and Hanini amongst others. The company sells its products also in various other countries and in fact more than 50% of the goods manufactured by the company end up in overseas markets such as Ireland, United Kingdom and Italy and some other 20 countries. Expansion of our organisation on a global scale has helped us increase our product lines and keep the majority of our highly motivated staff operating full time all year round. MBR: What or to whom do you attribute Magro Brothers’ success, how much is the Magro Brand product customized and how do you avoid becoming complacent when you have such great brands?

MBR: Is your most important focus on the individual, corporate, or government markets?

JM: The food market success is dependent entirely on the end consumer - you sell as much as your product looks good, taste good and guarantees high quality. We place great emphasis on the packaging of our products, as this is what catches the attention most, knowing all too well that the competition is stiff and difficult. We are constantly competing with major brand leaders, with mega millions expenditures on their packaging and marketing. Therefore, for us it is We are able to give a a great honor and achievement to be accepted on better service by being large world class supermarket shelves. Once we do make it inside the customers’ household, then it is closer to our clients of vital importance that the product actually tastes and have a more ingood too - that is the only way we can ansure that depth knowledge of our market and company grows and moves forward. So, in answer to your question ... our main focus is these markets definitely the individual client!

JM: In Malta, most brands are committed brand leaders and are consumed by the majority of Maltese and Gozitan households. We believe in longterm business relationships and actively invest time and energy to maintain these relationships motivated. Magro Brothers are also great believers in quality and were instrumental to introduce, in Malta, voluntary 3rd party food hygiene audits. Today, Magro Brothers proudly hold ISO 22,000 and BRC Grade A+ certificates where quality is further assured to adherence to their rigid standards. The Magro foods plant is also Gluten Free and therefore no products with wheat can enter the factory. Building brands is not easy but maintaining the quality associated with successful brands and make them great require much more efforts and a closer approach to changing consumer demands. Regular market surveys and in-store marketing initiatives help us keep up-to-date with our clients which we regard as the backbone of our success. MBR: With a global company, how close is the coordination region to region? Is the messaging seamless or do you consider markets individually? JM: Every region, market and country has its own different expectations and tastes. We strive to keep our clients happy and as such develop each recipe for every product we produce unique. Our Research and Development personnel are very busy to guarantee a custom base approach to world wide clients who know exactly what they want and who are usually quite demanding and with very high quality and taste standards. Today, we export to all the five continents, some in large quantities and others in smaller but significant amounts. In spite of the distances and time factors, Australia is also becoming an important client 16

to us. For the larger markets, such as the UK and Italy we have satellite offices with full time management and sales personnel, so that we are able to give a better service by being closer to our clients and have a more in-depth knowledge of these markets.

MBR: How do you keep an entrepreneurial feel at your size? JM: in spite of our expansion and growth, we have always been a family-run organisation and we are proud of this!. Today, not many food companies can boast of such a feat. I cannot say that it is an easy ride to take- there are many hurdles that we encounter on the way due to our size. However, we do our best to operate with the look and feel of large corporations. The fact that we are family-run gives us and edge over the competition in as much as there is more control and dedication every step of the way- from field to can we know exactly who we deal with and what we are getting. Size is not always everything when you are offering the best to your customers! MBR: At day’s end, is it still a business of knocking on doors and building relationships? JM: Magro brothers have always been great believers in long term relationships and in fact this is the opening statement of the company`s mission statement. We have relationships at all levels of business (employees, customers and suppliers) that run over 40 years and they are still motivated. Nonetheless we still knock on doors both locally and abroad to find new partners for our business. MBR All Rights Reserved | Copyright 2015

Gozo, beautiful through seasons

www.visitgozo.com

Malta Business Review

Feature: Gozo â&#x20AC;&#x201C; exclusive interview

Gozo island app the easy access to Gozo The world has gone mobile! More and more people now use their smartphones to search for things on-the-go rather than sitting in front of computers at home or in the office

obile apps are becoming so functional and popular among consumers, a Forrester Research report (FORR) predicted that by 2015, nearly half of all corporateissued devices will be mobile! Since more and more people are using their smartphones to search for everything whilst on the go, mobile apps are most probably the way forward! A recent survey conducted by Compuware has shown that 85% of consumers prefer apps over mobile websites due to convenience, speed and ease of use. Mobile apps are here, and will increasingly become a vital element in the total marketing plan for businesses as customers are looking for convenience, ease and instant results while on the move in their busy lives. It has never been easier and more pleasant to find the information you need. Whether itâ&#x20AC;&#x2122;s for booking a table in a bar or restaurant, whether you want to find out the latest events occurring in Gozo, new movies that are showed or what new at the theater, Gozo Island App is the best solution, straight at your fingertips. Even more, this interactive application contains information about local councils and schools in your city, parks, churches, the most beautiful beaches, museums, rent a car companies, bus routes, as well as the newest and most exciting activities such as diving, climbing, segway tours, water sports and the list continues to grow. It helps the locals, tourists and business travelers to plan their free time, to plan their time spent on the island as profitable as possible. Gozo app allows you to quickly find the information you need around you, using GPS and Google Maps, identifying your location and helping you choose the nearest Bank, ATM, bar, parking, hotel, hospital, school or any other information you might need. Fast, easy and accurate, Gozo Island App tends to be very useful in our accelerated live, providing an Easy Access to Gozo. MBR

YOUR EASY ACCESS TO GOZO

Gozo App

Find now all you need to know about the business in Gozo, events and local information, transportation and atractions. Download now for free.

Malta Business Review

HSBC 2014 FinanCial RepoRt

HSBC Bank Malta announCeS 2014 finanCial reSultS - reportS 42% drop in profitS in 2014 HSBC Bank Malta reported a 42% drop in profits last year, and bank CEO Mark Watkinson is expecting that 2015 will be a “very challenging” year for the banking sector as a whole.

Mark Watkinson, CEO, HSBC Bank Malta p.l.c. speaks as (from left) Rashid Daurov, CFO, and Sonny Portelli, Chairman, look on

The bank reported a pre-tax profit of €52 million for 2014, down from €90 million in 2013, and the main contributor to the bank’s decreased profitability was a €19 million increase in loan impairment charges, which are primarily attributed to lower valuations on legacy commercial properties. There was also a €14 million decrease in income associated with a challenging operating environment and lower non-recurring revenue items, as well as a €5 million increase in costs, largely due to regulatory fees and the additional investment required to ensure compliance. Mr Watkinson, however, underlined that the bank nevertheless registered very positive results on a number of fronts, including an improvement of its loan-to-deposits ratio from 73 to 67% as well as a 19% increase in gross new lending to customers, which stood at €710 million last year. The bank’s annual results also show that deposits went up by 8% to €4,867 million, its cost efficiency ratio increased from 50 to 20

57% while its return on equity fell from13.9 to 7.7%. But as he delved into the bank’s outlook for this year, Mr Watkinson acknowledged that “it looks difficult… it continues to look very challenging.” The CEO noted that economic conditions within the Eurozone were likely to remain very unsettled, and that the impact of the European Central Bank’s low interest rate and quantitative easing measures would continue to act as a drag. Banks also faced a scenario of continued regulatory change, he added. However, Mr Watkinson stressed that it was not all doom and gloom, stating that he remained optimistic about the local economy which, he said, was showing the first signs of sustainable growth. He also noted that the US was doing well, although he cautioned that it alone could no longer pull the world out of a slow economic growth scenario. He pledged that the bank would continue its

investment in Malta, declaring that its main targets for 2015 were growing its business, simplifying its services to customers and investment in regulatory change. The bank’s board of directors is recommending a final gross dividend of €0.026 per share, and is also recommending a bonus issue of one share for every nine shares held by shareholders, which will see its share capital increase from €97 to €108 million. The Maltese bank’s parent company, HSBC Holdings, also reported a drop in profits for 2014 – its pre-tax profit fell by a worse-thanexpected 17% to $18.7 billion. Global attention on the bank, however, is focusing on the findings of the Swiss Leaks investigations focusing on the Geneva-based HSBC Private Bank (Suisse). Asked to comment on the matter, Mr Watkinson said that he had nothing to add beyond HSBC Holdings’ own “very significant” public announcement. MBR Source: BPC

Gozo SeGway

Malta Business Review

Relax and smile, touR Gozo in style!!! Gozo is a small holiday island, renowned for it’s green countryside, red-sandy beaches and laidback lifestyle. The island is rural in character and is famed for it’s crystalline diving sites and places of interest, such as the Salt Pans, Ggantija Temples and Azure Window in Dwejra

ith this in mind, once Kevin stumbled upon the versatility and eco-friendly fun that Segways provide, he immediately knew that starting a business providing Segway Tours around the island would prove an immediate success. And he was so right, because fast-forward a year later and Gozo Segway Tours are already ranked no:1 ‘Activity in Gozo’ on popular holiday search engine TripAdvisor! Gozo Segway Tours offer 7 different guided tours all around the island. Their tours range from easy to adventurous, scenic coastline routes to ‘off the beaten track’ passage ways. They take you on a journey of exploration through hidden valleys leading to breathtaking places that only a local can know about. The tours depart from anywhere around the island, and to make sure to accommodate everyone’s needs, Kevin and his charming team also offer custom tours, anytime, any day of the week. The Segways are a great invention, using our balance to safely move us around. They’re incredibly easy to drive and the fun is simply addictive. Not to mention how robust they are...able to transport you through any terrain - off-road, up steep hills and for hours on end!! No feeling can compare to gliding silently and effortlessly through Gozo’s beautiful lush country-side! The tour leaders are very charismatic and informative, and provide great company throughout your stay! Gozo Segway Tours have a lovely website showcasing all their tours: www. gozosegway.com and have various social media accounts, including: Facebook, Twitter, Google+ Tumblr, Pinterest and TripAdvisor. Don’t thing twice! Book your tour today! Not to be missed!!

MBR

Ranked #1 Activity in Gozo on TripAdvisor

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Malta Business Review

IntervIew wIth CeO Of the MOnth

Long Term Vision Malta needs to be proactive to continue to build a sustainable tourism industry and this can only be achieved through unity of all the players in the Industry working in harmony to reach the required growth through a common long-term vision. In this interview, Andrew Agius Muscat, MHRA CEO talks about the MHRA’s challenges and the aims to achieve this goal. by Martin Vella

MBR: As a major association of the tourism sector, how does the MHRA best represent the interest of its members on several important national policy making Bodies? AAM: MHRA is probably one of the oldest established associations existing in Malta, founded in 1958. From inception MHRA was always a protagonist and 1958 tourism was not a pillar of our economy. We are talking of a period before the Independence, when Malta was still a Military base. And yet, there were a group of people with a lot of forethought who began dreaming about the potential of tourism in Malta. From then onwards, MHRA became a leader in the economic and political history of our country. This can be tracked down throughout the years, such as during the 1970s wherein MHRA had a decisive role in the set-up of Air Malta. During the 80’s there was a construction boom in the hotels and in the 90’s 5 star hotels started being built. Then there was the famous row regarding whether to introduce low cost airlines, where there was a raging debate on granting operation licence to low cost airlines. MHRA had immediately read the script and put up a green flag. Prior to that there was There are high and also the EU accession controversy and MHRA also great expectations was in favour of Malta joining the EU.

MBR: What are the main challenges you are facing? AAM: The challenges of the industry, which presently in general is doing well, as the macro results maintained same trends, and also of the country are:

that what has been 1- The product- both in terms of infrastructure Therefore, right from the onset, MHRA always (road cleanliness and maintenance); written will not be had and played an important role in our country’s economic landscape. Up to recently, where the contradicted, but 2- The service- since at the heart of hospitality lie wrangling on energy became a national issue, the people. implemented MHRA was at the forefront and was the voice that 3- Skilled Workforce- I believe that a lot of hard work highlighted the significance of addressing the energy still needs to be done so that we continue to train the workforce and sector, which was becoming a big problem not only for the operator, but also have a qualified workforce in order we may become leaders in also insisted that a big chunk of revenue generated was being eaten away this sector. by the energy tariffs and bills, as obviously the hotels consumed a lot of energy. We are not a political party, however, we always say it as it is, with We can combine these with the improvement of our infrastructure and respect to the government of the day. At the end of the day we are not also the environment. I am not saying that in these three things we went the Opposition, but we work hand-in-hand together with the authorities overboard. What I am saying is that we always need to continue striving for the good of our country as much as possible. to make upgrade our product in order we are the vanguard and always 22

IntervIew wIth CeO Of the MOnth

be ambitious to be the best in the industry. I think we have to also identify underlining security issues, especially when international security is posing such a major problem just beyond our shores. MBR: Turning on the National Tourism Policy recently you had a consultation meeting with the Minister for Tourism Dr. Edward Zammit Louis. Do you agree with the long-term plan of the policy which looks at a holistic strategy plan towards the industry?

Malta Business Review

EU- Jean Monet, Robert Schuman, De Gasperi began dreaming of uniting the European countries. They had just come from a devastating world war between their countries and so they found a common denominator which was of interest to all the countries, which was coal and steel.

Now, what I am saying is that tourism is a common subject to all the countries of the Mediterranean. Tourism creates wealth and gives a ‘feel good factor’ to any country. So when there is a ‘feel good factor’, the people start looking at ways to protect their country in order to enjoy AAM: Not only we agree with it, we were the architects who designed that ‘feel good factor’ and the consequential stability. When there is and promoted it. There is absolute need for this policy and also we instability in a country, the first sector to suffer is tourism, and when that must have a long-term vision. The word vison itself implies something happens, the majority of the population suffer which takes a course of time to achieve. with it. No leader in any country is happy when This is a core industry for our economy and his people suffer, since usually, when the people Tourism generates 30% so we have to look towards a long-term suffer, they turn against their leader, whether it is of our GDP and also future, irrespective of whoever holds seat of a democratic country or a dictatorship. government. And if today you don’t have a contributes cumulatively From this vision a foundation has been vision where you want to arrive tomorrow, 35% of the Government founded so that this shapes and sets up its own then it is obvious you will be working on structures. This will be under the patronage of revenue projects that will not be linked, are not the President of Malta and the first concrete complimenting each other, and do not project we shall be doing is in 2016, where we form a single cohesive chain, so there is no shall be participating with a manifest of 25 points of actions which consolidation. In fact, we proposed and have carried out discussions with the Government so that we come up with the 2030 vision, as you we will be presenting to the Prime Minister, so that he may present may see in the document. And this is paramount as it demonstrates them when Malta takes on the Presidency of the European Union the Government’s commitment to look forward in the long-term. The in 2017. Then the Maltese Prime Minister submits these 25 points greatest challenge which this policy holds is that what is written in it which he intends to address in those six months of EU Presidency must be reflected in the decisions which have to be taken. There are to all the Prime Ministers in the EU Council. These points have not high and great expectations that what has been written will not be been penned down only by Maltese, but were also discussed with Mediterranean countries, those member and also non-members of contradicted, but implemented. the EU. MBR: Referring to your Associate Partners, these are closely knit with the tourism sector and they have to sustain MHRA in the process. Do As a matter of fact in the past days, the subject of the Mediterranean you think these are considered as a strong Global group and what is Region has become of news value on both printed and visual news media. Therefore, from the feedback we have had and also from the their importance in terms of growth strategy? interest generated we have launched something which is already taking AAM: The benefits of tourism is that, direct or indirectly, everyone has a off in the positive direction which we had envisioned. piece of the cake, even the family at home who do not have a restaurant or own a hotel. Here you have a number of other organisations who also Tourism is the seed which our Association shall reap the rewards, not just give a lot of support to MHRA and I wish to thank them for their trust. from the political aspect, but also from the commercial aspect, because We as an association depend a lot on their support, and they themselves our country should ride on the same industrial plane which other depend on the industry and provide a service to the tourism industry. countries such as Italy and Germany do, and promotes itself with other This is a chain; tourism does not consist of only hotels and restaurants, countries which enjoy an economic growth. MBR but there are many more stakeholders that at the end of the day benefit from what the tourism industry generates. In fact, tourism generates 30% of our GDP and also contributes cumulatively 35% of the Government revenue.

MBR: Let me look at the Mediterranean Tourism Forum, The Great Story. What significance does this have to MHRA and to you personally? AAM: The idea to organise this begun when I joined MHRA. Tony Zahra was President, and when we began travelling to attend EU meetings, we started immediately noticing that even when you come to vote or discuss, you will see that the Mediterranean countries are not united as much as they should be- what I call the ‘Eurovision Syndrome’. You have the Scandinavian countries who are all united together, the central countries stand alone, but there is no fraternity which you find in other countries. This ironic since the Mediterranean region is the most important region in the world where tourism is concerned. Therefore, we decided to do something. This is where the idea to organise the MTF was conceived. We shall create a forum, a platform, a hall gathering all the stakeholders. To me personally this is a dream. I had studied my Masters Degree with the EU as my subject, so when this idea started expanding, I started seeing parallel to that which happened at the beginning of the EU. During the EU’s inception, the minds behind the

corporate brief Hotrec Was elected a member of the committee dealing with sectorial social development in 2014. This is a committee set up by the European organization encompassing all the private sector hospitality industry associations within the European Union (Hotrec). CEO Malta Hotels and Restaurants Association September 2011 – Present (3 years 6 months)Malta CEO Malta Institute of Management August 2009 – September 2011 (2 years 2 months) Group Strategy and Planning Manager Attard Bros Group 2006 – August 2009 (3 years)

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Malta Business Review

by Antonella Riotto

Traditionally, the office was a place where one would try to perceive success and authority, designed with classical wooden furniture, majestic desks, big armchairs and a huge book case. A brief smell of oak and usually resembles a cigar club rather than an office. Well, as times have changed and so has the office environment as design layouts have shifted to more informal and approachable styles

fino

Kivo -

A contemporary office masterpiece

Nowadays, it’s quite clear that office environments are being designed and integrated in large open spaces. Partitions are gradually becoming a thing of the past with work areas, meeting rooms, offices and boardrooms being more open. Offices are becoming less formal and more inviting as the type of customers are become increasingly diverse. Today office areas are relaxing and cosy environments in which people can spend their time working in comfort. The working culture is about fostering the sharing of information and developing new ideas. Doors, walls and partitions are being considered as barriers of contact. Physical contact is crucial in harnessing creativity and modern office layouts are being designed to encourage interactivity. The new trend is to have flexible spaces, using modern materials like metals, glass and plastic composites together with the more traditional textured ones. Using light and discreet colours for walls and furnishings to recreate a natural light is proving to be more productive, whilst diffused and adjustable lighting solutions are being implemented. Having a good balance between the workers’ needs and an efficient office layout is no easy task though. The designers’ challenge is to find the right balance using cut edge and innovative solutions. World recognised brand; Herman Miller is always on the front foot of innovation in office environments. Having the Aeron chair featured in the Museum of Modern Art’s permanent collection, they might have just come up with another piece of art with their latest innovation; Kivo.

Created by the young German designer Alexander Lorenz, Kivo uses triangle’s geometry and properties to develop a flexible modular canvas. Kivo is not only pleasing on the eye though, its applications in office environments are endless. Kivo divides existing open areas, provides privacy (with its soundproofing materials) and outlines entirely new places to work in. The lightweight free-standing system can simply delineate an area or repurpose it for something completely new that also can have many possible different functions. By using a very simple and versatile combination of a steel structure and magnetic tiles, customers can shape this piece of art into their own interpretation and use. Kivo is made to be adapted easily when floor plans change. Driven and inspired by the evolving workplace, open space offices can be designed and redesigned over and over again. This allows redesigning to not only to achieve efficiency, but also freshening things up every now and then. With a combination of acoustic dampening materials and visual screening, an open space can be transformed into a private escape with clear boundaries. Secluded areas can be quickly (and simply) carved out of the open workplace. Kivo is not only a dominant and powerful office piece but also has purpose. Its unique design makes it a truly inspiring piece and a worthwhile investment to working environments that want to harness creativity. MBR ABOUT The AUThOR Antonella Riotto is an Interior Design Architect with FINO

REDEFINE YOUR CONCEPT OF OFFICE FURNITURE FLEXIBLE AND INSPIRATIONAL WAYS TO EXPAND YOUR WORKSPACE WHILE RETAINING THE PROSPECT OF PERSONAL INTROSPECTION.

C. FINO + SONS LTD Fino Buildings, Notabile Road, Mriehel BKR 3000, Malta T: +356 2549 3000 E: info@fino.com.mt facebook.com/FinoGroup

Malta Business Review

EDUCATION

Education With an EyE For EmploymEnt by Ross Foster

he question a lot of students ask when considering their further education options is, ‘will the course really increase my chances of employment?’ This is the golden question when considering any kind of educational venture; everyone is looking for a return on those tuition fees. ¬ It’s no secret that MBAs are the world’s most popular master’s degrees and by extension, business and management courses also share this popularity, with these subjects achieving the top spot on the Telegraph’s degree popularity survey. Though a popular subject area is only one string in a graduate’s bow.

they were born in, but a foreign shore. When a graduate makes the decision to live and work abroad, qualifications are important to help reach employment and put down solid roots. This is where the universality of a degree comes into play. Students need to be educated to compete on a global market, and an internationally recognised degree is a good starting point. By collaborating with the University of Chester, a respected UK university, Global College Malta offers international business degrees benefiting from a UK teaching style, which imbues students with in-demand qualities such Thanks to collective graduate data it can Malta itself has the highest as creativity, teamwork and leadership. be determined that over 75% of business post-secondary employment 3 International graduates from British courses 1 graduates in the UK go on to employment , rates in the EU also earn markedly higher average salaries with over half of that number going into than they would have with a degree from business-specific fields. Malta itself has the a local university (TRIGO study, BIS, 2011). highest post-secondary employment rates in 4 Partnerships with British universities give all the benefits of a UK 2 the EU . Though for fresh students these impressive numbers are degree without the travel and maintenance cost. of little comfort, and the possibility of a wasted one to three years plagues their minds with doubt. The remedy for this is an educational institution that focuses, not only on the minds of their students but also their prospects. Through partnerships with local companies, Global College Maltaa higher and tertiary education institution based in the south of Malta- is supporting the success of its students through short term internship programmes, aiming to provide them with both specific and broad spectrum training. A business college specialising in degrees, training courses and English language lessons, Global College Malta’s internship programmes are open to any enrolled student who wishes to work in HR, accounting, finance or marketing sectors (among other areas available on request). Students are travelling more and more every year. With this in mind, they may decide that their final destination is not the place

Education with an eye for employment, it is a very present reality and a necessity in the modern world. MBR Editor’S notE Ross Foster is an English and Professional Writing graduate from the University of Wolverhampton, England. He has a passion for writing and editing and has taken the opportunity to get some valuable experience in a content driven writing environment in Malta. He is currently interested in educational reporting and current affairs journalism. Fun fact: he is now so used to the heat of the Maltese Summer that he regards the UK as an icy tundra.’

Prospects.ac.uk accessed 2/02/2015 at http://www.prospects.ac.uk/options_business_and_management_studies.htm Malta Today, 13 November 2014, Tim Diacono accessed on 2/02/2015 at http://www.maltatoday.com.mt/news/national/46137/maltas_postsec_graduate_employment_rate_ highest_in_eu_#.VM- WSkfF_g0 3 Education UK, accessed 2/02/2015 http://www.educationuk.org/global/articles/open-the-doors-to-your-dream-career/ 4 Tracking International Graduate Outcomes study,Education UK, accessed 2/02/2015 http://www.educationuk.org/global/articles/open-the-doors-to-your-dream-career/ 1 2

Malta Business Review

Arts & Culture

The TeaTru Manoel BoV PerforMing arTs fesTiVal renews iTs aPPoinTMenT

Kenneth Micallef, Head CEO’s Office at Bank of Valletta with Ray Attard, CEO at the Teatru Manoel

Ray Attard, CEO at the Teatru Manoel and Kenneth Micallef, Head CEO’s Office at Bank of Valletta launched this year’s edition of the Festival against the inimitable background of the Theatre’s stage that is almost 300 years old. The Festival’s highlight is the production of Gaetano Donizetti’s L’Elisir D’Amore, a comic opera in two acts, performed on Thursday 12th March, with a re-run scheduled for the 13th and 15th of March. In spite of the fact that it is believed that Donizetti wrote this masterpiece over a six-week period, it remains one of his most popular works to date. The Teatru Manoel BOV Performing Arts Festival has another two outstanding appointments lined up. On the 1st April, Rüya Taner, will be giving a piano recital in West meets East. Taner

Bank of Valletta and Teatru Manoel have launched this year’s Performing Arts Festival. This Festival brings together a number of events that open a window on the wonderful world of performing arts

is a widely-acclaimed concert soloist who has performed with leading orchestras around the world. Then it will be the turn of the Toi Toi Big Band Concert – a family show featuring the Big Band Brothers. This performance is scheduled for the 5th April, coinciding with Easter Sunday. Speaking about the Bank’s involvement with the Teatru Manuel, Kenneth Micallef explained that, “Bank of Valletta has long recognised the value of culture as an integral part of a holistic education. The Bank’s collaboration with the Teatru now goes back over a decade, years in which the Bank gave its financial support to enable the staging of important productions, whilst opening this world to a wider spectrum of people. Thus, it gives us great pleasure to be here today, launching yet another edition of the BOV Performing Arts Festival.”

Ray Attard highlighted the importance of continuous investment in the area of performing arts. “Support, such as that being extended by Bank of Valletta, is critical to continue nurturing a love for the world of performing arts among a wider crosssection of the population. Besides boosting our efforts, such support reinforces the position of Teatru Manoel as an important milestone not only in rich history of our islands, but also in its present and future, particularly in the build-up towards Valletta being named the European Capital of Culture in 2018.” MBR Booking for the Teatru Manoel BOV Performing Arts Festival can be made online www.teatrumanoel.com. mt by email bookings@teatrumanoel.com.mt or by phoning 2124 6389.

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Malta Business Review

Editor’s ChoiCE FinE dining

Rampila Restaurant

A unique dining locAtion in VAllettA foR lunch oR dinneR

rossing over the restored City Gate Bridge into Valletta you will see on your left a restaurant nestled into the bastion walls. This is Rampila, one of the finest dining locations in Valletta.

It is Rampila’s reputation for excellent cuisine and hospitality that has enticed leading Michelin Star Chef Accursio Craparo to join the Rampila team as visiting chef for a period of Sixty Days. This combination of Accursio and Rampila is bringing a new dining experience to lovers of fine food and wine. Accursio is noted for his adaptations of traditional regional dishes and ingredients to modern styles and tastes. The chefs at Rampila bring a confident Maltese interpretation of classic Mediterranean Kitchen and the result is simply fantastic. For example Accursio’s Rabbit Ragu with Ditalini Pasta is light yet bursting with flavour and a delightful surprising creation of one of Malta’s favourite foods. Or the Pork Neck with soft crust potatoes, mushrooms and hazelnuts as a main course. Rampila will also be offering Accursio’s four and six course Tasting Menu and will create daily specials in addition to the a la Carte Menu. Looking for something different for lunch? There is a three course lunch time tasting menu which at only €26 is tremendous value. Indeed diners will not be alarmed at the prices. The Accursio Rampila Sixty Day Menu is very affordable. The Sixty Days at Rampila ends 30th March. Make sure you don’t miss out! MBR Rampila is open everyday for lunch and dinner. A5 horiz A.pdf

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More information and reservations call 21226625, 79226625 or book your table on www.rampila.com

Restaurant Rampila welcomes you to a sixty day celebration of Mediterranean gastronomy with Michelin Star chef, Accursio Craparo.

Unique dishes paired with Malta’s and Sicily’s leading wines, the Accursio, Rampila combination promises to be a memorable experience not to be missed.

CMY

Discover Accursio Craparo’s innovative cuisine. Make your reservation today!

Rampila Restaurant 1, St. John’s Cavalier Street, Valletta Tel: (+356) 9944 1120, (+356) 2122 6625 Email: info@rampila.com

www.rampila.com

Situated In The Heart of Valletta , opposite the Grand Masters Palace, Malata restaurant serves the finest in French and Mediterranean cuisine . In winter the 500 year old cellar with its vaulted ceiling hosts up to 42 covers and is cozy and candlelit, the walls are decorated with fascinating memorabilia and amusing caricatures of politicians past and present. In summer and for as long as the weather holds, Lunch and dinner are served al fresco on the large tree shaded terrace . Live Jazz Bands play every Tuesday from 8PM till around 11PM with repertoires ranging from Latin Jazz, New Orleans and Classical to Swing and Contemporary Malata | Palace Square, Valletta | Malta, EU | Tel: +356 2123 3967 Mob: +356 7920 7521

Piadina Caffe is a cute little cafeteria offering light, healthy snacks from early morning until 4pm. Apart from the piadina – thin Italian flatbread filled with a variety of cold, cuts, vegetables and cheeses - other types of snacks are served as well, with a variety of salads and a small array of gluten-free products also on the menu. Pay us a visit and enjoy our family atmosphere, friendly service and delicious food offered at very reasonable prices. Food can be consumed on the premises or take-away while we offer free delivery in Valletta.

Piadina Caffe, 24, Triq SanTa LuCija, VaLLeTTa

The menu is based on what the chef Antonio buys daily from the Valletta markets. You can choose fresh homemade pastas, salads, platters and fresh fish (when available) alongside a selection of wines to accompany the exquisite dishes. Host Anna can serve you some of the best Sicilian style Cassata sweet cake among other delicacies to go with an Italian coffee or cappuccino. La Giarra is ideal for business lunches and relaxing dinners. It can also accommodate groups and any particular requirements.

Vi aspettiamo.

75/76 Republic Street, Valletta | Tel: (+356) 2123 1255 Mob: (+356) 9949 6010 - (+356) 9943 9384 Email: lagiaramalta@gmail.com Website: www.lagiaramalta.com

Ta’ Kris Restaurant A Mediterranean Gastronomical Treat

Ta’ Kris Restaurant Open: Every day for lunch and dinner 80, Fawwara Lane, Sliema | Tel: 2133 7367 / 9984 7713

Malta Business Review

marketIng

Top Social Media Service TrendS To look ouT For by Marty Ron

Social media services are coming of age and one must stay aware of these changes and trends. There must be a strategy, budget and definite goals to create a successful social media optimisation campaign.

f you are handling social media optimization for yourself or of others as an agency, you must stay aware of the recent trends in social media. As a provider of social media services in India, you can not afford to remain ignorant about these. As this is an evolving industry, it is very important to stay updated. Twitter or Facebook were actually invented to have fun. However, the purpose has changed completely. These are not for communicating with friends or kill some leisure time. These have evolved into proper marketing channels. Now, a lot of tactics and practices must be brought into use which can sometimes make this otherwise fun medium to be a bit tedious. However, even if that is the cost, you must implement the newer trends for your marketing success. Paid Likes: As big companies now are going for social media channels, it is becoming increasingly important for everybody to 32

pay for Facebook likes, Twitter self-serving ads or Pinning in Pinterest. In other words, SMM is no longer free if you really want to be successful. It is a paid war now. In 2015, paid marketing is going to be the next big thing. Strategy: Plan it once and plan it well. As we already pointed out that Facebook or Twitter are not for leisure purpose any longer, you must have a sound strategy for both of these. As the complexity increases, the strategy must be fine-tuned as well. You must have a measurable goal, target audience and a definite budget. However, this is not all, this is just the beginning. You must have a plan till the end. You should continuously evaluate the success of the plan and adjust it if need be. Brand or traditional publishers: Social media has made each one of us a publisher. It has provided us with the power, platform and tools to publish our own materials. Brands, individuals and groups, all are

realising that content publishing and social media optimization go hand in hand. They can be very effective together in reaching the ultimate goals, sales, conversions, brand awareness or whatever the goal might be. Unlike the traditional media, the instant global coverage which the content receives is unparalleled. Crowd source marketing is the term which you must comprehend. As there is no fixed obligation to any publisherHealth Fitness Articles, the crowd now decides what it wants to read rather than the publisher feeding them of their choice. ABOUT THE AUTHOR Marty Ron is a freelance writer, technical writer, and editor of a leading magazine. He writes for many online E-commerce websites, as well as for other websites like social media services. He also has been writing blogs for on various forums and his insights is extremely resourceful for the readers. MBR

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Malta Business Review

Malta’s PreMier Marketing & B2B networking Convention

Malta’s PreMier Marketing & B2B networking Convention a Massive suCCess by Astrid Veld

For today’s B2B and SME marketer, the route to success can be complex and convoluted, with a bewildering array of options, tools, choices and channels available. How do you make sense of it all and find the solution and marketing plan which best suits your specific requirements and optimises your chances for success? It’s precisely this challenge that Malta’s Premier Marketing & B2B Networking Event, by far the largest marketing event ever held in Malta, aimed at addressing, offering succinct, actionable information on all the key marketing issues of concern to SMEs, exporters, start-ups, investors and small businesses. What happened on the day: • 400 marketing and B2B practicioners under one roof. • Fourteen in-depth best practice sessions covering topics that are crucial to all SMEs, exporters and marketing practitioners. • Fifteen case studies designed to produce clear and actionable insights. • Two inspirational keynote sessions from industry thought-leaders. • Five critical streams and a personalised agenda. • The sharing of ideas and discussions between peers during networking. • Renewed enthusiasm and inspiration to communicate and drive home objectives across teams and organisations. What Was different: • Quality is better. Unlike the old days of sending a large staff to an attractive conference locale, most of today’s attendees seem to be quite serious about their mission. In other words, they are influencers and decision makers, not just tire kickers. • Prospects are smarter. A large percentage of attendees have done a 34

bit of pre-conference online research. They showed familiarity with the feature sets of leading exhibitors. Also, their questions tended to be tougher and more perceptive, and they were less prone to accept canned or shallow answers. This was good news for the well-prepared exhibitor and not such good news for those who are ill-prepared. • Less emphasis on the social aspects. Adding to my earlier point about the seriousness of today’s show attendees, there is more of a business focus as opposed to a party atmosphere. • Technology is everywhere. From laptops to pads to smartphones, technology is a ubiquitous part of this event. Attendees used technology to capture relevant information and to connect with each other through social media. It is not unusual to accept someone as a LinkedIn connection five minutes after meeting them. • ROI is crucial. This marketing event proved that more executives these days want to know more about the show metrics in terms of touches, leads, and qualified prospects, and less about what a great time their staff had. That’s my quick synopsis of the differences and what made Malta’s Premier Marketing & B2B Networking Event a huge success. For further information, photographs and video of this event please contact MBR Publications Limited on 9926 0162/9926 0163/9940 6743 or email margaret@mbrpublication.net

MBR

Maltaâ&#x20AC;&#x2122;s PreMier Marketing & B2B networking Convention

Malta Business Review

www.maltabusinessreview.net

The InTernaTIonalIzaTIon of MalTese sMes

Part 1 – the Motivation for Growth

OvErvIEW

by Ing. David J. Dingli M.Phil(Maastricht);MBA(Brunel);B.Elec.Eng.(Hons.)

This is part 1 in a series of articles that will cover the various aspects of SME internationalization. This part focuses on the “Motivation for Growth”. If this driving force is not even present within the firm then there is no point even discussing internationalization options. This article will explain the challenges of growth and its inherrent drivers. Part 2 will cover the “Barriers and challenges for SME Internationalization”. Here I will address the stubmling blocks that even the best intentioned companies who are wholly motivated for internationalization must muster enough courage to overcome. Part 3 will deal with the “Pre-Internationalization phase”. Companies must be ready to embrace internationalization and require a set of parameters and characteristics to be present in their organisation

in order to reduce the risks that are associated with international growth. Part 4 is all about “Exporting as a means of Internationalization”. Although exporting is not the only means to internationalize it is by far the most common and still the most sought after method, hence it was felt that a section should be wholly dedicated to this approach. Part 5 looks at the “International Entrepreneur and Born Global Companies”. We are coming across more and more high technology innovative entrepreneurial firms that are set up with the initial intention of going global. They might not even have a domestic market. These firm bypass all traditional stages of the internationalization process. Malta needs as many of these kinds of firms as possible.

InternatIonalIzatIon for SMes

Malta Business Review

David J Dingli delivering his presentation during Malta’s Premier Marketing & B2B Networking Convention

PArT 1 – MOTIvATIOn fOr GrOWTH SMEs are increasingly competing internationally and, internationalization of SMEs is being encouraged by national governments throughout the world. This internationalization process can take many forms: exporting, international collaboration, franchising, networking, licensing, and foreign direct investment. Considering the economic importance of SMEs, their urgent need to compete in the global arena and the recent push to increase exports it is extremely relevant to understand how SMEs approach internationalization and what the drivers for success in international business may be for SMEs

Growth in the EU has been under pressure internationalization. Business growth is for quite a few years now. It is interesting to associated with increasing financial return as note that relatively few SMEs in the EU are a major incentive for business owners. It also doing business outside Europe. SMEs being serves to validate the entrepreneur’s initial the backbone of the European economy are start-up project as it wholly encompassed a crucial element to assist in the restoration the broad vision that could have sparked of growth in the EU. Reports confirm that the business idea in the first place. However, growth can export oriented SMEs only be initiated from generate higher turnover a strong base. The core Reports confirm and employment growth business must already when compared to that export oriented be generating profits or SMEs catering solely for SMEs generate it will be impossible for the domestic market. the business owner to higher turnover and Furthermore, export fund growth especially oriented SMEs tend to employment growth international growth. The be more innovative. It when compared to entrepreneur, hopefully is therefore clear that well versed in Leadership supporting SMEs to SMEs catering solely and the Management internationalize at a for the domestic of Change, will be able national level is also in the market to address the complex public interest. Based on managerial, legal, and this premise a key action financial challenges that of industrial policy is to provide support services to SMEs in order lie ahead. Growth will probably require new to make it easier for them to internationalize employees to be hired who will be looking their business with third country markets as towards top management for leadership. well as maintaining presence within the EU Growth means that the business owner must learn to delegate and trust employees markets a priority. as the management structure must become Internationalization is a growth strategy less centralized and the company structure hence business owners need to face the undergoes re-structuring. In reality this many challenges associated with business means that the business owner must pass on expansion or growth. The Internationalization the leadership of the local operation in order stage of a company is exciting and challenging to strategically focus on new international and so filled with opportunity but sadly also business development. These changes never surrounded by perils. come easy. They always raise the stakes as Large organizations have the benefit of far as internal politics are concerned, and using a structured framework within a clear create dissent over what goals and projects hierarchy of decision making while small and the company should pursue. Growth also mid-size enterprises (SMEs), tend to maintain means that market share will expand, which as the central focus of decision making means that the company could be altering its - the entrepreneur or owner. Therefore position in the marketplace and will therefore the entrepreneur or owner’s personality require new and sustainable strategies for and leadership style are determinants dealing with larger competitors. Growth also in the shaping of the decision making brings about financial concerns. Just like a process in a SMEs approach to growth and start-up company growth requires injection www.maltabusinessreview.net

of new capital. This will require the approval and commitment of shareholders, investors, and institutional lenders, depending on where the company is seeking its sources of finance. If business owners understand the realities of growth strategies they will be capable of understanding that their objective of achieving long-term profitability is no more than a by-product of effective strategic management, planning and execution. Yes, there is always risk in growth however strategically led organisations learn how to mitigate that risk.

Growth means that the business owner must learn to delegate and trust employees as the management structure must become less centralized SMEs often approach internationalization by two main methods: exploitation or exploration. Exploitation is defined as using and developing “things already known”. This would mean that a company develops an ability to improve continuously its existing resources and processes. On the other hand exploration is defined as analysing new alternatives and acquiring new knowledge. In internationalization, this requires the company to possess the ability to adopt new processes, products and services that are unique from those used in the past. SMEs with a high level of exploration capability may be open to internationalization early on; even during their infancy stage. They are willing to take risks in exploring and acquiring knowledge in the global market and therefore respond more aggressively to opportunities. On the other hand, SMEs with a high level of exploitation capability may view internationalization as a last resort to expand their product lifecycle and are more conservative in terms of meeting international challenges. The key motivations for Internationalization may be summarised as follows: •

Grow market share; control of the supply chain, reduce costs (scale economies)

•

Market position; knowledge and network building

•

Management capacity factors, R&D investment, firm size/age/experience

•

Limited domestic market as well as its saturation / stagnation

•

Owners previous experience

•

Regional location; country/regional image

international

Delegates and SME executives networking together during Malta’s Premier Marketing & B2B Networking Convention

Growth MotiveS:

KnowledGe related MotiveS:

Growth opportunities associated with international markets have long been identified as a key driver of firm internationalization. Growth-related factors appear to be increasingly important to SMEs, reflecting their rising appreciation of the international pathways and associated opportunities for future business growth. Business owners who express growth intentions are more than twice as likely to export, than those whose owners do not indicate growth ambitions. The possibility of growth in other markets and increased profit opportunities from international expansion are key stimuli for exporting. A firms’ overseas venturing decision is motivated by a need for business growth, profits, an increased market size, a stronger market position, and to reduce dependence on a single or smaller number of markets. There is no doubt that all Maltese SMEs realize and accept the limitations of our small domestic market. It is therefore interesting to determine why not enough locally owned firms have not already internationalized their business. Possibly the barriers are stronger than the motivators.

Knowledge assets both push and pull SMEs into international markets. The “push” dimension stems from an owners’ previous international experience and related management capacity factors. R&D investment, innovation capabilities, unique product or technology, and language skills as well as the firm’s resource base, moderated by size, age, and experience of the firm also contribute towards the knowledge drive for internationalization. In contrast a search for knowledge assets may pull SMEs into international markets, as they seek to obtain missing knowhow required to maintain their lead in technological development. networK / SoCial linKS MotiveS: There is a stimulating effect on export activity of firm’ soft assets, including social and network capital, some of which may have accrued through the owners’ social and family links. doMeStiC / reGional MarKet driverS: There is a strong push effect of SMEs limited or stagnated domestic market on internationalisation behaviour. Export propensity increases in regions with less favourable domestic conditions, local

InternatIonalIzatIon for SMes

Malta Business Review

strategies at once. The problem with super aggressive international marketing strategy approach is the risk of growing too fast. Operationally the company will not be geared up for it – demand will exceed capacity, internal control systems will not be efficient to cope with high volume and the skilled people who will be urgently needed to do the work will not be available at the snap of a finger. All these operational problems will nullify the hard work put into marketing as potential customers will not give you a second chance. Success is great, securing international orders is exciting however all this must be carefully managed to ensure you build a strong brand and reputation with your new foreign clients. MBr

reFerenCeS peng Cui, a.; walsh M.F.; Gallion d.; Internationalization challenges for SMEs and global marketing managers: International Journal of Business and Social Research (IJBSR), Vol.1, No.1, December 2011 Study on Support Services for SMEs in International Business Final Report Client: DG Enterprise and Industry; Rotterdam, March 22, 2013

A firms’ overseas venturing decision is motivated by a need for business growth, profits, an increased market size, a stronger market position, and to reduce dependence on a single or smaller number of markets incentives to export and good export infrastructure. The favourable country/ region of origin image in international markets also serves as an additional stimulus for the internationalisation of SMEs. There is also an observed greater tendency to export among firms from sectors characterised by high levels of export intensity and presence of foreign buyers. Supply Chain MotiveS: SMEs role in global value chains through facilitating their integration into production/supply systems of foreign affiliates of larger firms will also promote internationalization. These “soft” factors within the external environment of SMEs, including network and supply chain links, social ties improved global trade infrastructure, and sector

and region-of-origin factors are interrelated and they reflect recently emerging trends, including, for example, the increasing importance of linkages with the lucrative supply systems and value chain networks of larger global players to SME internationalisation. In conclusion, growth brings along a key dilemma for business owners: Should they first engage in International marketing expenses and strategies in order to obtain orders or should they first invest in spare capacity to be able to deliver to potential customers on time? Of course, one could reason do both at the same time, however considering that financial constraints are tights it will not be easy to manage both

Tan, Alvin, Brewer, Paul, & Liesch, Peter (2010) Measuring export readiness using a multiple-item index. In: 2010 European International Business Academy (EIBA) conference, 9 - 11 December, 2010, Porto, portugal. Report by the OECD Working Party on SMEs and Entrepreneurship, OECD. “Top Barriers and Drivers to SME Internationalisation”, OECD (2009), Calderón García H., Cervera Taulet A, Tubillejas Andrés B.; “Marketing strategy in internationalisation processes”: an approach to the role of perceived problems Strategic Marketing, International Marketing; internationalisation problems; export public Programmes Internationalization Process of SMEs: Strategies and Methods. Masum M.I.,Fernandez A., Master Thesis EFO705 Mälardalen University School of Sustainable Development of Society and Technology Västerås Sweden June 2008

EDITOR’S NOTE David J. Dingli is the managing consultant of Resource Productivity Consulting Services, a management consulting firm specializing in strategic planning, Internationalization of SMEs, operational efficiency improvements and management development & training. (www.rpcsmalta.com). He is also an Assistant Professor with Maastricht University, MsM School of Management, The Netherlands and has lectured at MBA level in 29 countries throughout Asia, Africa, South America and Europe. He may be contacted at: djdingli@ go.net.mt; or Tel: 99430196

www.maltabusinessreview.net

Malta Business Review

Luxury reaL estate

Global Ultra Wealthy PoPUlation hold nearly US$3 trillion in oWner-occUPied reSidential real eState aSSetS by Diane Borg Bascetta

Malta Sotheby’s International Realty proudly announced Sotheby’s International Realty’s partnership with Wealth-X to provide valuable insights into today’s luxury real estate market and the buying behaviours of the ultra-high net worth consumer. Nearly US$3 trillion of the world’s private wealth is held in owneroccupied residential properties, a value greater than the GDP of India, a new report by Wealth-X and the Sotheby’s International Realty® brand released today showed. There are 211,275 ultra-high net worth (UHNW) individuals – defined as those with US$30 million and above in net assets – in the world and 79% of them own two or more residences.

•

Some of the main hubs for luxury residential real estate are New York City, London and Hong Kong, but niche locations – such as Lugano, the Hamptons outside New York City, and rural areas around the world – are gaining in popularity.

•

The Wealth-X and Sotheby’s International Realty Global Luxury Residential Real Estate Report forecasts that the ongoing shift in the wealth creation cycle from the West to the East, and the growing significance of intergenerational wealth transfers will have significant consequences on the luxury residential real estate market - with a noted emphasis on new developments and a change in investment grade cities.

The Wealth-X and Sotheby’s International Realty Global Luxury Residential Real Estate Report 2015, which looks at trends in the UHNW population’s appetite for luxury residential real estate across the world, identifies specific attitudes, behaviors and locations that matter to this industry and this wealth segment.

Below are other key findings from the inaugural report: • The value of UHNW-owned residential real estate assets increased by 8% globally in 2014. • On average, UHNW individuals own 2.7 owner-occupied residences. • As of 2014, over 7% of the world’s UHNW population made their wealth through real estate, up from 5% in 2013. • Ultra affluent women value real estate assets more than their male counterparts, holding 16% of the net worth in such assets, on average, compared to less than 10% for men. • Luxury residential real estate is an asset class typically favoured by UHNW individuals with inherited wealth: these individuals hold 17% of their net worth in such assets, compared to just under 9% for selfmade UHNW individuals. • UHNW individuals with net worth between US$30 million and US$50 million typically keep their primary residences for over 15 years and their secondary residences for over 10 years.

ABout WeAlth-X Wealth-X is the world’s leading ultra-high net worth (UHNW) intelligence and prospecting firm with the largest collection of curated research on UHNW individuals, defined as those with net assets of US$30 million and above. Headquartered in Singapore, it has 13 offices on five continents.

• •

Billionaires change one of their four properties, on average, once every three years. Secondary residences are typically 45% more valuable than primary residences; twice the square footage and have 10 acres of land. At 83%, Monaco has the highest density of foreign-owned UHNW residences. Over 6% of the world’s UHNW population have relocated their primary residence to a different country from which they were born – these individuals often keep a secondary residence in their home countries, and India is the leading country in this respect.

Wealth-X President David Friedman commented: “Wealth-X is pleased to partner with the Sotheby’s International Realty brand for this inaugural report, which underscores Wealth-X’s commitment to conducting groundbreaking research on the world’s ultra-high net worth (UHNW) population. Expert commentary from the Sotheby’s International Realty team complements Wealth-X’s global intelligence on the world’s UHNW population, producing a report that demonstrates a true collaboration between the world’s leading UHNW intelligence provider and the global leader in luxury residential real estate. Luxury residential property is a core component to the anatomy of the ultra-affluent at the intersection of their lifestyle and investment.” “We are proud to partner with Wealth-X to provide valuable insights into today’s luxury real estate market and the buying behaviors of the ultra-high net worth consumer,” said Philip White, president and chief executive officer, Sotheby’s International Realty Affiliates LLC. “We believe that a solid investment in real estate is one of the single best factors for building long-term wealth, and that many of today’s ultra-high net worth consumers would agree.” MBR For more information, kindly direct your request to info@maltasothebysrealty.com.

network. Services include: Residential Sales & Letting, Commercial Sales & Letting, Property Management and Relocation & Residency. Malta Sotheby’s International Realty is operated by CSB Real Estate Ltd – forming part of CSB Group (est. 1987) who offer specialised business and commercial services to clients wishing to set-up or relocate their businesses to Malta.

About MAltA Sotheby’S InternAtIonAl reAlty

About Sotheby’S InternAtIonAl reAlty AffIlIAteS llC

Malta Sotheby’s International Realty aims to serve the high-end residential and commercial real estate market, representing lifestyle properties of exceptional quality and unique characteristics. A brand that represents quality and luxury, its presence in Malta serves international clients looking for high-end real estate investment in Malta and Gozo, and local clients seeking real estate investment opportunities worldwide through our international

The Sotheby’s International Realty network currently has over 16,400 sales associates located in approximately 730 offices in 56 countries and territories worldwide. Founded in 1976 to provide independent brokerages with a powerful marketing and referral program for luxury listings, the Sotheby’s International Realty network was designed to connect the finest independent real estate companies to the most prestigious clientele in the world.

Talking PoinT

Malta Business Review

Libya:

tHe greatest Betrayal By Patrick J. O’ Brien

“It is great to be in free Libya”, David Cameron exclaimed in Benghazi’s Liberty Square in September 2011. “Your friends in Europe will stand with you as you build your democracy.”

How tHings Have cHanged!

ibya is no longer free and is in chaos. Her internationally recognised and popularly elected government is holed up in Tobruk. Another government rules from Tripoli, run by a mixture of Islamists and secularists who lost the June 2014 elections and are anxious that the Tobruk government is just a rehash of the Gaddafi era. Water, electricity and gas are in short supply across the country and crime is on the rise. On Sunday 25 January, gunmen kidnapped the Deputy Foreign Minister in Bayda. Tripoli international airport has been burned down, with at least 90 per cent of the facilities reportedly destroyed. Turkish Airlines, the last foreign airline operating in the country, has halted flights (although some Libyan-owned airlines have recently restarted some services). In the east of Libya, Benghazi is in disarray as clashes continue between rival armed factions. The so-called “Islamic State” governs the city of Derna with an Islamic court and education ministry — and operates a number of training camps in the country. They have claimed a number of attacks, including the beheading of several activists in Derna, the abduction of twenty Coptic Christian Egyptians and, most recently on 27 January, an attack on the Corinthia hotel in Tripoli, in which ten people were killed and many Maltese’s employees were based. The United States and NATO washed their hands of the whole affair after aiding rebels to depose Gaddafi and allowed Libya’s baby democracy to fend for itself in the wild. The West spent billions on toppling Gaddafi’s regime but has so far wasted it by not backing the Libyan people in the dawn of their democracy. This disengagement is one of the biggest factors in the subsequent conflict. It

is vital that the West now intervenes to bring Libya back from the brink. To do otherwise will spread her instability throughout North Africa, allowing terrorist networks to flourish and continue to take advantage of the country. We will see more terror attacks as a result, the proliferation of arms will create more conflicts elsewhere and deepen current wars; migrants and drugs will continue to wash up on the shores of southern Europe. Action is imperative to the West’s national security. In the end a moderate pact of Libyans and a united and forceful international response — is needed to save the country from the ledge from which it is currently leaning. It will take time, it will cost money and it will require long term planning. But inaction now will only lead to the need for action later.

The West spent billions on toppling Gaddafi’s regime but has so far wasted it by not backing the Libyan people in the dawn of their democracy National Security Minister Carmelo Abela has confirmed this month that the government does not intend deploying Maltese soldiers in a UN-mandated mission in Libya, even if it is a peacekeeping operation. In any case, Mr Abela added, such a mission does not seem to be on the cards at the moment. “The Prime Minister has already said we will participate in a UN-mandated mission but that this does not necessarily mean through the presence of Maltese soldiers on the ground,” he said. Earlier this month, Prime Minister Joseph Muscat said Malta was not in a position to send soldiers because it does not have the capability and assets to contribute troops.

This view was not shared by senior army officers, including two retired commanders, who insisted that Malta’s army is fully capable and has the capacity to contribute troops in such a military operation. The current situation threatens the whole of Europe and is a direct threat to the security and economy of both Malta, our neighbour Italy, as well as the southern EU bordering states. Besides the threat of terrorism, a Libya in complete turmoil would create a mass exodus of refugees and migrants, with obvious consequences. Let us hope it doesn’t come to this and that intense international pressure on both Libyan governments will lead to some common sense and a much-needed peace deal and ensure to eradicate the Islamic State jihadists, who plan to conquer Europe via Libya. This has been revealed in letters seen by an anti-terrorism group. Owing to its perfect location on the continental doorstep, the terrorists plan to ferry fighters from North Africa across the Mediterranean and therefore, this should be setting off security bells, especially in Italy, which saw 2,164 illegal migrants recently rescued in the space of 24 hours. It could now be faced with many that are terrorists, according to Egyptian Ambassador to London Nasser Kamel. “Those boat people who go for immigration purposes and try to cross the Mediterranean … in the next few weeks, if we do not act together, they will be boats full of terrorists also.” Just as these assessments came to light, Italy issued its own statement, outlining just how great a risk there is of Libyan militants merging with the IS. On Wednesday its Foreign Minister Paolo Gentiloni spoke of an “evident risk” and that time for Libya was “running out”. He called for “a change of pace” from the international community. MBR www.maltabusinessreview.net

Background image: In its vegetative state, slime mould is one large cell

Malta Business Review

ICT

by Rex Merrifield

Scientists are developing computing devices built from living organisms such as slime mould and bacteria, in order to harness their problem-solving and programmable properties

ne organism of interest is the manyheaded slime mould, Physarum polycephalum. In its vegetative state, slime mould is one large cell consisting of a mass of protoplasm, the living material found inside the cell wall. It finds food by sending out a series of protoplasmic tubes that act as a transport network for nutrients.

‘Conventional computers have served us very well, and are good at doing specific things, but they are actually quite dumb.’ - Professor Martyn Amos, Manchester Metropolitan University, UK

The clever thing is that the slime mould is able to map the optimal route between different pieces of food, such as oat flakes, in order to create the most efficient way of transporting nutrients throughout the organism. This is important because, while conventional semiconductor computers are extraordinarily efficient at performing repetitive tasks, problems such as optimisation of transport networks do not readily lend themselves to this kind of processing. Slime mould could therefore provide a solution. ‘Combined with conventional electronic components in a hybrid chip, Physarum networks could radically improve the performance of digital and analogue circuits,’ said Professor Andy Adamatzky, Director of the Unconventional Computing Centre at the University of the West of England in Bristol, UK, who is scientific coordinator of the EU-funded PhyChip project. This remarkable organism has already been used to navigate through mazes, calculate efficient networks, construct logical gates, and even in robot control. InspIred by nature, made by nature The project is working to develop a Physarum chip, which comprises a network of slime mould tubes coated with conductive substances. Inputs could include chemicals,

light or electrical signals and the results would be assessed electrically or optically. In principle, such devices could be hooked up to humans either directly or via interfaces, to become wearable or prosthetic self-growing computing devices that enhance humans’ cognitive abilities. ‘Growing protoplasmic tubes of slime mould could be used as the architectural skeleton to build bio-electronic circuits, to provide connections between living tissue and computers, such as brain-machine interfaces,’ Prof. Adamatzky said. ‘Such interfaces might, for instance, allow an amputee to control a prosthetic limb the same way he would control his real limb – with just a thought.’ Other living organisms whose computing potential scientists are trying to exploit are bacteria. Researchers in the EU-funded PLASWIRES project are using bacteria to try to produce a living computer that runs different genetic programs in parallel. Currently, genetic engineers are able to reprogramme bacteria such as E. coli to produce different chemicals and molecules, such as proteins, by introducing new genetic programs into their cells. But E. coli will only tolerate a few added genes or small genetic circuits. To produce more complex biomolecules for diagnostics, the biologists, physicists and computer scientists in the PLASWIRES project aim to hook up many cells as ‘processors’ running more complex programs. ‘We think we could programme a whole bacterial colony to run in parallel different genetic programs,’ said Dr Alfonso Rodríguez-Patón, associate professor of computing at the Technical University of Madrid, who is scientific coordinator of PLASWIRES. That demands control of the communication between cells to get them to work in concert, using small pieces of DNA called plasmids. ‘This is what we need to program a bacterial internet, or a living parallel computer, where each bacterium is a live processor executing a genetic program and sharing the results with neighbouring bacteria,’ Dr Rodríguez-

Patón said. ‘In this way, our programmed bacteria colony behaves as a powerful live parallel computer where the plasmids are the wires.’ By mastering this process, the system could potentially diagnose pathogens or the plasmids could even be ‘programmed’ as antibiotics, where they are able to detect virulent bacteria and trigger a response to kill them. Bio-hyBrid devices Unconventional computing holds out the prospect of new areas of exploration, partnering the digital world of conventional computing with the analogue systems found in nature. ‘Bio-hybrid devices will be the way forward for feasible, unconventional computing in the short-to-near term,’ said Professor Martyn Amos, scientific coordinator of the EUfunded TRUCE project, which is supporting and mapping out the state of play and future possibilities for unconventional computing, from quantum devices to PhyChip’s slime moulds. This hybrid approach could be along the lines of co-processors, such as the specialised chips in conventional computers that render graphics. ‘We can anticipate maybe in the future having the equivalent in unconventional computing, where you have a slab of slime mould, or a colony of bacteria, or even a quantum chip, which takes over some of the work that can be done better by that device, that communicates with a traditional computer, and they can work in sympathy with one another,’ said Prof. Amos, who is based at Manchester Metropolitan University, UK. While there is great scope for unconventional computing in the coming decades, it is not intended to replace existing technology in the short term, said Prof. Amos. ‘The point is to expand the range of possibilities, in the sense that conventional computers have served us very well, and are good at doing specific things, but they are actually quite dumb.’ MBR ABoUT AUThor Rex Merrifield is a Journalist, media consultant and trainer with Industry Information Technology and Services, Finland

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Malta Business Review

Venture Capital Malta

VENTURE CAPITAL MALTA LAUNCHED

by George Carol

The Minister for the Economy, Investment and Small Business, Chris Cardona has today launched Venture Capital Malta (VC – MT), an initiative that the Government, through Malta Investment Management Company Limited (MIMCOL) and Malta Enterprise, is developing in collaboration with finance and advisory specialists from the private sector

“The main objective of VC – MT is to develop Malta as an oasis for new business opportunities, welcoming new ventures with the support of finance in the guise of private equity or venture capital” said Minister Cardona. Minister Cardona stated that Malta has been successful in developing a vibrant financial services sector underpinned by a strong banking sector and that this initiative would help bridge the gap in the provision and availability of funding for start-ups. Dr. Cardona said that this would continue to enhance the currently available bank financing and other schemes and incentives supported by the government, some of which have been further extended under the current administration. VC – MT will help create a platform focused at assisting those start-ups that may not always be in a position to access the kind of financing they require. “The government is well aware that the next stage in our economic strategy for improved competitiveness is the creation of a stronger framework for the funding of creative industries and other industries with significant IP; VC-MT is our response” said Minister Cardona. Minister Cardona stated that the role of Government was to provide the framework and resources for specialised firms to work hand in hand to create the environment required to attract venture capital to our island rather than playing the role of the Venture Capitalist, as was done in previous attempts by previous administrations which failed. Both MIMCOL and Malta Enterprise will provide funding and resources, and will work with financial services providers reaching out to the leading cities hosting Venture Capital

and Private Equity. “The mission is to get these people to consider Malta as an ideal jurisdiction for a new venture set-up in Europe” said Minister Cardona. Adrian Said, Chairman, Malta Investment Management Company Limited said that all interested professional firms are invited to join this initiative, which is itself in the start up phases. In his introductory comments, Dr. Mario Vella, Chairman of Malta Enterprise, emphasised that the Government needs to be careful in not repeating the same mistakes of the past and that this initiative is being built on that premise. Lord Marland, Chairman of the Common Wealth Business Council, said that he is glad to see that government will not be a direct investor but an enabler. “Governments may be good at many things but taking investment decisions is not necessarily one of them. The enabling role is indeed the best role government can take” stated Lord Marland. Lord Marland concluded by stating that he is honoured to have been invited

for the launch of this initiative and to be in a position to assist with the development of such a platform. Stanley Mifsud (Manager, Malta Investment Management Company Limited) gave a brief overview of VC-MT and new Budgetary measures during the launch. MBR

Corporate Visit

Malta Business Review

The PresidenT of MalTa visiTs eXanTe The Portomaso-based integrated brokerage and fund platform company EXANTE hosted President of Malta, H. E. Marie-Louise Coleiro Preca at their offices last Friday. The event coincides with EXANTE’s upcoming anniversary on the Island as the company celebrates its achievements as a global brand in online brokerage.

“Setting the standard and constantly raising the bar, Exante is the king,” stated Forbes Magazine, one of the leading financial journals including FT, which have reported on this company.

MarkDebono Trade Desk Exante, explaining Exante’s business model to the President

Exante’s Patrick J O Brien welcoming President to their offices

The President was greeted by Alexey Kirienko, EXANTE’s CEO and Director Gatis Eglitis. During her visit, the President was given a significant donation in aid of the Malta Community Chest Fund and in return presented a commemorative plaque to mark her visit. The President discussed her role as President and stated how important it was for Malta to have companies like EXANTE located here. “Our decision to choose Malta as our strategic location and our decision to invest here in 2011, has proven to be a excellent one” stated Patrick J O’ Brien, Exante’s Communication Director and International Journalist of the Year, as awarded by his peers in 2014. “Our campaign slogan is “Proud to be Maltese” and we genuinely are. It was a honor that the President acknowledge this by taking time out of her busy schedule to visit us and speak with our employees from all in-house departments” EXANTE is a next generation prime broker which provides professional traders with a revolutionary trading platform. With offices in Russia, Singapore and Latvia, it seems this broker is in prime position as its head into 2015. MBR

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Malta Business Review

EntErprisE and invEstmEnt

COMMONWEALTH BUSINESS FORUM 2015 The 2015 Commonwealth Business Forum (CBF) set to take place from the 24th to the 26th November, was launched recently by Prime Minister Joseph Muscat at the Malta Chamber of Commerce.

“The future of the Commonwealth can be stronger if we cooperate on different levels, from political to cultural to business and trade,” said Muscat. “I am positive that the Business Forum, which will be held in Malta around the fringes of the Heads of Government meeting, can provide the necessary thrust for further growth and prosperity in the Commonwealth,” he added.

Prime Minister Joseph Muscat

Minister for the Economy, Investment and Small Business, Chris Cardona

Lord Jonathan Marland, Chairperson of CWEIC

The Forum is co-organised by the Government of Malta and the Commonwealth Enterprise and Investment Council (CWEIC) and will take place at the Hilton Hotel Malta. It is set to attract over a thousand delegates. The programme will provide a space for high level dialogue between business and Government leaders and will develop stronger partnerships to ensure that the Commonwealth plays its part in promoting sustainable growth across the world. Prime Minister Joseph Muscat was joined by Minister Chris Cardona, Minister for the Economy, Investment and Small Business; Lord Jonathan Marland, Chairperson of CWEIC; UK MP Zac Goldsmith and Mr Adrian Hillman, Chairperson of the CBF 2015 organisation committee. The launch was attended by key business people from a wide range of industries. Key themes which will be discussed during the CBF in November will include ‘Technology for Growth’, ‘Destination Malta – Creating a Trade Hub for the EU, Middle East and Africa’, and ‘Financial Services for Growth.’ Other priority issues at the Forum will include infrastructure, healthcare, tourism and sustainability. “The Commonwealth Business Forum provides a unique opportunity for the business community across the Commonwealth to come together to discuss key issues, share best practice, identify new business opportunities and meet senior Government representatives and their peers from all parts of the world,” said Lord Marland.

UK MP Zac Goldsmith

The CBF also serves as a platform for Commonwealth nations to showcase investment opportunities to the global

business community. The Forum provides an opportunity for businesses to influence the debate on global trade and investment issues. Lord Marland continued, “We are keen to work with partners in Malta to ensure that the Forum leads to real outcomes – both in terms of new business partnerships and deals done, as well as providing a clear agenda for how the Commonwealth network can add value by bringing prosperity and sustainable economic development to member countries.” “This is an economy with good growth, few barriers, sound finance, solid regulation, political stability, easy communication, no punitive taxation, open markets and low unemployment. We are not going to be complacent – and we will continue to welcome investment and skills from Commonwealth countries and beyond,” said Economy Minister, Chris Cardona. ‘With a combined population in excess of 2.3 billion, GDP of more than US$10 trillion and an estimated average annual growth of 7.3% for Commonwealth countries over the next five years intraCommonwealth trade and investment has the potential to grow significantly in the future,’ said Mr Adrian Hillman. Also speaking at the launch was UK Parliamentarian and former editor of the Ecologist Magazine, Zac Goldsmith MP, who said “given the range of voices it can bring together, the Commonwealth has a real opportunity to make a unique contribution to the global agenda for sustainable development particularly in regard to the unique challenges facing small states. Malta’s leadership will be crucial.” The Forum first took place at the Edinburgh CHOGM in 1997; since then it has featured prominently as part of the CHOGM programme. The Forum is the major business event in the Commonwealth calendar, bringing together Heads of Government, Ministers and top business leaders from around the world. MBR For more information one can visit www. chogm2015.mt andwww.cweic.org.

We bring you excerpts from the speech given by the Hon Prime Minister Dr Joseph Muscat during a seminar organised at the Hilton on Thursday 19th February 2015, entitled ‘Towards sustainable and adequate pensions’. This year marks the 59th anniversary of the establishment of Malta’s social insurance scheme. In fact in 1956 became an entitlement for all workers gained through contributions made during one’s working life. The programme was further enhanced in 1979, with more generous provision, including schemes for survivor’s pensions based on the deceased husband’s entitlement and the introduction of a National Minimum Pension for those with a full contribution record. Having in place a good pension system has consistently been a key element of the social and economic policy of the political movement which I lead. And this explains why I feel so strongly about this subject. Like my predecessors, I want to ensure that we have in place a system that is strong in terms of its adequacy and its sustainability through time. Like them, I will not shy away from taking the necessary steps to change the system so that it serves the changing interests of our society. Back in 1997, a technical commission was appointed that had look into the adequacy and sustainability of the state pension scheme. It took a decade of subsequent reports and 48

counter-reports until finally, changes were made in our pension system. These changes were meant to stem the decline in the generosity of the pension system for those born after 1962 by increasing the maximum pensionable income and by introducing a much improved minimum pension. Against that, the state pension age was gradually to rise to 65, with the first increase coming into force when my administration was elected. I have to admit that I feel that this reform fell short of what could have been expected after a decade of expert analysis and an unending series of reports. First of all, it looked at just future retirees and ignored the fact that current pension provision is not serving the needs of everyone today. In fact the poverty rate among our pensioners in the year when that reform took place stood at 24%. At the same time, the reform left us with a system which would face ever-mounting deficits. By 2050, pension spending as a proportion of our national product was meant to rise to over 15% from 8.6% today. As a result, the European Commission and credit rating agencies are always warning us about the long term cost of our pension provision and urging us to take steps to correct this. On being elected, this Government formed a Pensions Strategy Group, consisting of key Permanent Secretaries aided by technical experts, with the express mandate of coming up with a reform that looked both at current and future needs. I asked for a new strategy and a set of principles to inspire our social

insurance system and breathe new life into it. The Group is working within the context of five principles. The first is that there needs to be a clear definition of the objectives of the Maltese pension system. In particular, we need to define the exact nature of the poverty alleviation function of our system and optimise the effectiveness of the various and frequently disjoint social assistance programmes we currently have. The second principle, which though quite obvious has tended to be ignored in the past, is that an adequate and sustainable pension system needs a strong active employment policy. While most EU countries have mature and stable labour markets, with little prospect of growth, we are in a very different position. Let me give you a clear example. While between 2020 and 2040, Germany’s working age population is projected to fall by 16%, or by one in six, here in Malta it will stay the same. At the same time, while the employment rate in 2013 in Germany was 74%, that in our country was just 61%. We have a huge potential left. I believe that though we have had unprecedented success, with record employment growth placing us at the top of the European league table, there is still much more to be done. The third principle is that the state pension should be a solid foundation, but not necessarily the only source of retirement income. This line of thought is consistent with the social and economic philosophy that inspires the movement which I lead. We want

pension reform

to enable people. We want them to strive to reach their potential. This means that even in retirement provision, we need to provide the necessary means for those less able to do so. I want to spend some time to elaborate this point better as I believe it is key to understand our planned reforms. Let us start with the part which will directly interest an audience of financial services practitioners such as you. One of the clear omissions of the 2007 pension reform was that it left untouched the issue of private pension provision. While promoting Malta as a financial service centre, and even attracting to our islands foreign-based pension funds, subsequent administrations delayed and prevaricated on the establishment of private pensions here in Malta. I have to admit that I have never understood exactly why this was so. To anyone remotely aware of the local financial industry, it is incredible that in a financial centre there is such an obvious gap in the spectrum of financial products on offer. Especially when in other financial centres, the pension industry is typically one of the largest components, generating high quality and specialised jobs. Some of you may have wanted more generous incentives. Some of you may have wanted larger tax credit allowances. To this I say that Rome was not built in a day, and we need to be careful not to repeat the mistakes of other countries. A look at the UK’s history in this area, for instance, shows us that if pursued too aggressively the promotion of private pensions can be self-defeating, especially if not accompanied by a campaign of financial education. We do not want to have pension mis-selling scandals here in Malta. The Maltese are a nation of savers. In the last two years, household bank deposits rose by €1.3 billion, or 17% of GDP. And bank deposits constitute just half of household total financial assets. Up to now most savings were ending up in short-term assets that do not yield much return. I hope that with the setting up of a local private pension industry, there will be a shift into more longer-term products, which then can be used to boost the funds available for local productive investment. I believe that voluntary private pensions will not just enable many to save a bit more with the help of fiscal incentives. I believe they will help us change mentalities and reduce the culture of dependency and instead utilise to the full the dynamism and optimism of the Maltese people. However let me make this clear. We are talking of voluntary private pensions. I have made it clear where we stand on forced saving. Our families, particularly those on low income, cannot and should not be forced by the state to save into privately provided pensions. They are already paying their national insurance

contributions and should be able to depend on the state to provide them with a decent pension to get them started. We deem the current levels of national insurance contributions to be sufficient in this regard. Other European countries, which have experimented with mandatory second pillar programmes, have not fared that well. The cost of these programmes and the lack of return to savers have led many Governments to either partially reverse or even nationalise these schemes. This includes countries like Poland, Hungary and Slovakia. Further away, countries like Chile that focused provision on second pillar schemes had to belatedly introduce generous state supplements as pensioner poverty increased. I am not going to allow my country to make the same mistakes.

In fact the poverty rate among our pensioners in the year when that reform took place stood at 24% Besides income from past saving, there are other income streams that we want individuals to have access to during their retirement so as to reduce their dependence on the state pension. One area, which the Minister for Finance has been studying recently, is home equity release. Most of our pensioners are home owners and have invested most of their incomes to acquire this substantial but very illiquid asset. We want to ensure that pensioners will be able to access this wealth, without necessarily losing ownership completely. Home equity release is already happening in practice and it must be regulated. The other area where we need to make steady progress is enabling older persons who want to work longer to do so. The employment rate of older persons in Malta is very low, 36%, against the EU average, 50%. Our social security system places a number of hurdles to those who opt to work longer. However employers also need to change their mentality and attitude towards older workers. Like in recent years, when we saw our workplaces changing with the entry of so many women in the formal labour market, our next challenge will be to accommodate an increasingly ageing workforce. Industry needs to understand the importance of not focusing on the age of the individual but rather seek to maximise the contribution of everyone. This should be read in the context of our commitment, which we will continue adhering to, that we will not raise retirement age any further. After this rather long discussion of the third principle that will

Malta Business Review

inspire our reforms, let me pass on to discuss the final two. The fourth principle is that to be socially sustainable, our system needs to provide a fair balance between contributions and benefits across generations. This is a call for a return to basics. When the 1956 social insurance system was introduced, it was clear that you had to contribute in a given way to be able to get benefits. It was also clear that the system was to be self-financing, with a separate Government account being set up for social security. However these principles have been thoroughly eroded by time and changing circumstances. Those designing our system in the 1950s would not recognise our country today. We are no longer a nation with one breadwinner who works constantly in the same job. We are no longer a nation of big families with a constant flow of new potential workers. We are no longer a nation where a large proportion of people do not make it to the state pension age. We are no longer a nation when if you make it to pension age, you can look forward to just a few years of retirement. We are no longer a nation where wages are relatively stable and do not grow overmuch during one’s career. This brings me to the last principle within which the working group is working. To remain adequate and sustainable, the pension system needs to be able to evolve, particularly to respond to long term developments. Our economy and society is constantly changing. We cannot expect our social security system to remain unchanging. Otherwise it will become irrelevant. Let me give you one example. At present a worker is only covered on her or his main employment. Consider a cleaner who holds three part-time jobs. She works more than 40 hours, and yet our system will cover just one of her parttime jobs. Under the current system she will be doomed to a whole retirement in poverty after a career of hard work. This and many other such examples have convinced me of the need to keep our pension system under close and regular surveillance. I will not make the mistake of announcing reforms supposed to end all reforms. I am under no false impressions that today I can know what the situation will be in 2050. In politics we say that even one week is very long. Imagine 35 years. What you can expect from this administration in this field is good common sense, a real concern for the needs of those served by the pensions industry – both private and public, and a vision to enable the citizens in our country achieve their potential and get what they deserve in their old age. MBR Courtesy: OPM www.maltabusinessreview.net

Malta Business Review

PUBLIC PROCUREMENT

he Auditor General presented to Hon. Speaker the Report of public procurement regulations to contract managemententitled ‘An Analysis of Types of Errors in Public Procurement related shortcomings. Irregularities classified as breaches of within the Structural Funds Programmes’. This was a parallel the principle of equal treatment entailed the inappropriate or audit carried out in conjunction with the Supreme Audit Institutions incorrect application of the procurement method adopted, a (SAIs) of eight Member States. This audit focused on errors that lack of clarity with respect to the tender award criteria and other were already detected and categorised by the Authorities, namely, administrative shortcomings. the Planning and Priorities Coordination Division, in its role as The most significant irregularity in terms of materiality was that the Managing Authority (MA); the EU Paying Authority within of non-compliance with the advertising procedures. Irregularities the Ministry for Finance, as the Certifying Authority; the Internal classified under this category resulted from failure on the part of Audit and Investigations Department, as the Audit Authority (AA); the Contracting Authorities to adequately advertise the project. as well as the European Commission (EC). In the case of an error detected by the EC, For the purposes of this audit, the National this was the result of the misclassification of Irregularities classified as Audit Office (NAO) reviewed and analysed the project as ‘research and development’ breaches of the principle errors in expenditure carried out through instead of ‘education and vocational public procurement and declared to the EC of equal treatment education services’. This led to an erroneous during the period 2010-2013. entailed the inappropriate procurement method, which resulted in the The errors reviewed addressed various Contracting Authority failing to appropriately or incorrect application of aspects of public procurement, including advertise. The financial correction applied was the procurement method breaches of the principle of equal treatment, that of approximately €1 million, equivalent adopted failure to state selection and award criteria to 25 per cent of the declared project cost. and the resort to incorrect methods of The MA registered the highest incidence procurement. Other irregularities included of error detection, equivalent to 59 per cent of all irregularities. non-compliance with advertising procedures, unapproved changes Possible explanations for this are the fact that the MA is the first line in contract scope and the unjustified resort to direct contracts. of verification, therefore increasing the probability of detection, and Irregularities detected accounted for 1.64 per cent of the value that its breadth of review is wider than that of the other Authorities. of projects carried out through public procurement. In terms of The value of the irregularities detected by the MA accounted for 33 actual amounts, out of the €425,756,293, which represents the per cent of all errors. Although only one error was detected by the total value of projects, €6,997,691 were classified as irregular EC, this accounted for 54 per cent of the value of all irregularities. expenditure. This irregularity resulted in a financial correction of With regard to the corresponding financial corrections, those €1,291,297, equivalent to 0.3 per cent of €425,756,293. imposed by the MA made up for 21 per cent of the value of all corrections while that by the EC represented 73 per cent. Other Errors relating to the incorrect application of certain ancillary shortcomings are presented in the Report, which may be accessed elements and breaches of the principle of equal treatment were through the NAO website- www.nao.gov.mt MBR the most prevalent. The first error, detected by the AA, featured a broad array of irregularities ranging from the erroneous application Source: DOI 50

Motoring

Malta Business Review

Peugeot 308 voted Car of the Year 2015 in MoroCCo

Peugeot 308 - a total of 22 prizes since its launch

www.peugeot.com.mt | www.facebook.com/peugeotmalta

This prestigious award was made to the brand on 27 January in Casablanca, during an evening that brought together many interested parties: motor industry professionals, guests and media from the kingdom of Morocco. The Peugeot 308, which was up against the BMW 2 Series Coupé, BMW X4, Hyundai Elantra and Mercedes C Class, won the support of the specialist motoring jury. With voting by the organisation committee (made up of journalists from Autonews- the leading motoring magazine in the kingdom- and motor industry and leasing company professionals) on the one hand and the general public (with internet voting) on the other hand, the new Peugeot 308 was unanimously awarded this national distinction for 2015.

Presentation of ‘2015 Car of the Year’ award

Today, with more than 230,000 sales worldwide since its launch in September 2013, the Peugeot 308 continues its success story, with its “Car of the Year 2015” award in Morocco. In a Moroccan private car market of 122,000 vehicles in 2014, Peugeot was in 5th place with a market share of 7.2%. The new Peugeot 308 was launched at the end of January 2014 and with nearly 900 units sold, it was in 5th place in its segment. MBR

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Inspiration Comes From Doing by George Carol

Hana Plzáková is a Czech born fashion designer based in Malta, who will be soon later launch her own atelier shop in Rabat. Her label ranks as one of the freshest and innovative. Plzáková presented her recent Spring 2015 collection which was showcased at Charity Fashion show in aid of the Hospice Malta at Palazzo Nobile. In the following interview, Plzáková talks about her inspirations for the collection, fall 2015 trends and her passion for designing MBR: Can you tell us about yourself and how did your fashion design come to you? HP: My passion is designing and making dresses. Having actually worked directly with textiles and fabrics, I began my own brand focusing mainly on dresses. I shall soon be launching my new atelier shop in Rabat. I have been a creative person all my life. Even my childhood was evidently artistic through my paintings, crochet, knitting, sewing and I always was creating something interesting. Fashion design is a combination of creative work, art and handwork with colourful fabrics making the connection.

It was an opportunity to learn how to enjoy life and to find the right way of enjoying it MBR: What inspires you to do your collections and do you always have an idea in mind? HP: The best ideas come from life experiences. My collections are always influenced by a lot of factors which are driven by my mood, experience, every day of life, travelling, and interesting ideas which I can see every day in combination with interesting colours, fabrics and designs. My collections are always made also with sense for comfort. I always try to take extra care regarding comfort and the needs of my customers. Actually, sometimes it is very big challenge to make a beautiful exclusive design dress which would be comfortable and provide all the characteristics which the client asks for. One of my favourite quotes says that ‘inspiration comes from doing’ and I can confirm it! When I work on a new dress, always more and more ideas come to my mind because the imagination is endless. 52

IntervIew wIth FashIon DesIgner

event was priceless and very powerful. So it was a wonderful experience. It was a great environment, and I started feeling like a protagonist of the fashion show. MBR: How has Malta changed your life and did it change your brand?

MBR: Are you self-taught or did you study fashion design, and what made you take fashion more seriously and make a career out of it? HP: Actually both. Since my early childhood my grandmother and my mother taught me sewing, knitting and crochet. It became my hobby for several years and at the end I finished the degree to become a Textile Engineer. At University I started with business and economic studies and then I decided to make a career out of my hobby, so I started to study textiles, fabrics and also fashion design. My studies were very broad and farreaching including textile marketing, textile technologies, evaluation, intelligent textiles and also two years of fashion design. During my studies I decided to run a wedding atelier, where I made wedding and evening dresses, also organising weddings with unique ideas for decorations, incorporating thematic weddings. MBR: What is your experience based in Malta and the recent fashion show in aid of the Hospice Movement? HP: For me that has been another life experience. In Malta I can say I have found second home where I feel very comfortable. I was very happy that we could organise that fashion show in aid of the Hospice Movement, with the collaboration of Malta Art Events. The first idea was to make a fashion show which will be more enjoyable, unusual and beneficial, to showcase not only just dresses, but also to create a cultural evening with classical music, ballet and reception. This involved very hard work starting with collection of dresses, looking for sponsors, models, hair-dresses, decorations, music etc. The feeling of satisfaction I drew when I saw people who want to help, donate and then enjoying that

HP: When I look back it I realise how it changed my life a lot. When I came to Malta this opened my eyes to new opportunitiesI met different people with diverse culture, and faced new challenges. This has been a learning curve that made me recognise and also realising how our life is merely in our hands. It was an opportunity to learn how to enjoy life and to find the right way of enjoying it. The passion for fashion and making dresses stayed with me. There is also a space in the market for designer dresses and Malta gave me more power to reach customers, understand them and help them to make for them their dream dresses.

I am preparing an e-shop with ballet and dance wear where customers can find and see all products and order them from their home MBR: What do you think about Maltese do you think people here are interested in fashion? HP: I think in general Maltese are very interested in fashion. They like to wear branded clothes in latest trends and take care of themselves very well to look at their best. On other hand, I constantly feel it is a problem to buy clothes here because the prices are more expensive than those abroad, with a smaller selection. And I can see also that a lot of Maltese go abroad for shopping. MBR: Tell us about your upcoming project? HP: I have always been focusing on woman dresses because I can decorate them with beads, embroideries and design them very well, because I enjoy doing the handwork a lot. One of my dreams is also to make dancing dresses and costumes, where I can use more handmade ornaments and craft also children’s wear. In Malta there are a lot of dance schools, ballet courses, school shows and performances, and celebrations where there is a need of dance wear or costumes. I am launching a shop with ballet and dance wear with not only hand-made dresses, but also dance wear collections from Europe, where people may find special collections and also comfortable clothes for sports, dance, mainly ballet for children’s collections.

Malta Business Review

MBR: What can you tell us about ballerinasworld.com? HP: I am preparing an e-shop with ballet and dance wear where customers can find and see all products and order them from their home with delivery service in Malta and Gozo. Generally e-shop gives an opportunity to a customer to see the product offer any time and find the right product from his home. MBR: How has your work evolved since you began your own label and how has it been received in Malta? HP: My own label came from my hobby. I started to make clothes for myself, then for my family and then to other people. On one hand there is my product and design, on the other there is a customer and his needs. I learn how to connect these two sides together. I try to help people to design a dress that fits and suits them very well, find inspiration and learn new ways how to make and decorate clothes, offer better quality service, always coming up with new ideas and challenges. I haven’t been running business in Malta for very long time, but I believe that hard work always breeds success. MBR: What is the biggest lesson that you have learned as you intend to have your own brand and atelier shop? HP: I think one of the most important things in life is to do something that you really like and enjoy doing. I had the opportunity to make a career out of design and I recognise how powerful it is to pursue your dreams. To have my own brand is everyday a new experience and means hard work that brings satisfaction. Each day is a new lesson. It isn’t only about making clothes; but it is also about marketing, management, organising, planning, budgeting and making things happen. I have understood how marketing is important. I graduated also in marketing but I gained my best practice and knowledge skill-sets only by running my own business and absorbing my own mistakes by myself. Through all this I am capable to create the e-shop, website, manage good promotion, sell products and communicate with people. MBR All Rights Reserved | Copyright 2015

Hana Plzáková

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Malta Business Review

HigHer education

COURSES STARTING SOON

The eie Institute of Education is now 15 years old. The eie acronym stands for â&#x20AC;&#x201C; Excellence in Education. Excellence is confirmed by the student and graduate testimonials that eie regularly receives from satisfied customers. eie has grown into an established organisation both in Malta and internationally. Apart from locals, the institute hosts foreigners who choose Malta and eie as a place to further their education. One can opt to follow part-time, distance learning or lecture based programmes, which are carefully designed to be both enticing and versatile â&#x20AC;&#x201C; what our working students

require while studying and coping with their busy lives. Our education will help students reach their goals as a highly qualified professional individual to play important roles globally both in commerce and industry. All academic programmes are approved by the NCFHE, as per local regulations governing tertiary educational programmes. EIE Institute of Education is licensed by the Ministry of Education as an Institute of Further and Higher Education - (License Number: 2005TC-001) MBR

AcAdemic courses stArting soon: Postgraduate Diploma (MQF Level 7) in Management

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A certificate of attendance will be presented to those students who attend at least 90% of the lectures. To guarantee individual attention, classes are limited to small numbers, so early booking is recommended. We invite you to call eie on 21332804 or 21332805 or email us on info@eie-group.com for any assistance.

Malta Business Review

IndUstrIal ProdUctIon

IndustrIal productIon stable In euro area

Up by 0.1% in EU28

The 2015 Commonwealth Business Forum (CBF) set to take place from the 24th to the 26th November, was launched recently by Prime Minister Joseph Muscat at the Malta Chamber of Commerce In December 2014 compared with November 2014, seasonally adjusted industrial production1 was stable in the euro area2 (EA18) and rose by 0.1% in the EU282, according to estimates from Eurostat, the statistical office of the European Union. In November 20143 industrial production grew by 0.1% in both zones. In December 2014 compared with December 20134, industrial production decreased by 0.2% in the euro area and increased by 0.3% in the EU28. The average industrial production for the year 2014, compared with 2013, rose by 0.6% in the euro area and by 1.0% in the EU28.

Monthly coMparison by Main industrial grouping and by MeMber state Industrial production was stable in the euro area in December 2014, compared with November 2014, due to production of durable consumer goods rising by 2.3%, intermediate goods by 1.1%, energy by 1.0% and capital goods by 0.2%, while nondurable consumer goods fell by 1.8%.

annual coMparison by Main industrial grouping and by MeMber state The decrease of 0.2% in industrial production in the euro area in December 2014, compared with December 2013, is due to production of energy falling by 1.7%, durable consumer goods by 0.5%, capital goods by 0.3% and intermediate goods by 0.2%, while non-durable consumer goods rose by 0.7%.

In the EU28, the increase of 0.1% is due to production of durable consumer goods rising by 2.0%, intermediate goods by 1.0%, capital goods by 0.7% and energy by 0.3%, while non-durable consumer goods fell by 1.4%.

In the EU28, the increase of 0.3% is due to production of durable consumer goods rising by 3.0%, capital goods by 1.2%, intermediate goods by 0.8% and non-durable consumer goods by 0.5%, while energy fell by 1.8%

The largest decreases in industrial production were registered in Ireland (-12.4%), Portugal (-3.6%) and Malta (-3.3%), and the highest increases in Poland (+2.0%), France (+1.6%) and Sweden (+1.2%).

The largest decreases in industrial production were registered in Greece (-4.2%), Malta (-3.8%) and Portugal (-3.1%), and the highest increases in Ireland (+18.2%), Estonia (+7.6%) and Poland (+5.7%). MBR

Source: Eurostat News

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Malta Business Review

FDi

Direct investment in malta anD abroaD: January-June 2014

The stock position of Foreign Direct Investment in Malta as at the end of June 2014 stood at €136.8 billion, while Direct Investment abroad amounted to €35.7 billion As from 2014, the Foreign Direct Investment (FDI) statement is being compiled in accordance with the Sixth Edition of the IMF’s Balance of Payments and International Investment Position Manual (BPM6). However, FDI is being presented on a directional basis, in Malta and abroad, in this release. Moreover, for the first time this statement is incorporating special purpose entities. Consequently, these updates do not allow for comparison with data from the previous FDI News Releases. Foreign Direct investment in malta As at June 2014, foreign direct investment in Malta was estimated at €136.8 billion, with 97.9 per cent originating from fi nancial and insurance activities, which now include special purpose entities. This amounts

to an increase of €5.6 billion over the corresponding month in 2013. There was a net increase of €1.5 billion in FDI fl ows, whereas the corresponding period in 2013 showed an increase of €4.1 billion (Table 1). These were mainly the result of decreases in equity capital. Direct investment abroaD During the fi rst six months of 2014, direct investment abroad increased by €0.7 billion, which follows an increase of €0.9 billion during the corresponding period of the previous year. This was mainly the result of increases in claims on direct investors of €1.2 billion. In terms of stock position, in June 2014 direct investment abroad by resident enterprises was estimated at €35.7 billion. MBR

NSO/Eurostat News 58

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Malta Business Review

NEWSMAKERS

MALTA WELCOMES FIGHT AGAINST TERRORISM

Stronger co-operation, co-ordination between Member States and their institutions and the balance between security and respect for fundamental freedoms were the main messages coming from the General Affairs Council’s discussion on security related issues, held in Brussels on the 10th February, in preparation for the informal meeting of Heads of State and Government later on this week. Parliamentary Secretary for the EU Presidency 2017 and EU Funds, the Hon. Dr. Ian Borg, led the Maltese delegation. In his address, Hon. Dr. Ian Borg leant Malta’s support for measures aimed at preventing and combating terrorism. He stressed that there is a need to send a strong political message that we will do what it takes to ensure that citizens do feel safe. He reitrated the importance to safeguard citizens’ lifestyle and their right to live in a democratic society without compromising privacy. This must also be done without resorting to unnecessary alarm that can disrupt citizens’ lives and practices. Amongst the measures mentioned by the Council, members also discussed the importance of having an EU PNR (passenger name record) as soon as possible, ensuring full use is made of the rules of the current Schengen Border Framework as well as addressing the external dimension. In this regard Parliamentary Secretary Borg also mentioned the importance of prevention and in this regard emphasized the need for stronger engagement in addressing the conflicts in the Southern Neighbourhood, citing Libya and Syria as requiring particular attention. Ministers also welcomed the Programme of the Latvia Presidency and the importance of strengthening economic, social and territorial cohesion. This will also include the facilitation of EU competitiveness, the full exploitation of the digital potential of the European economy, and the need to engage Europe in a global context. MBR

MINISTRY FOR FOREIGN AFFAIRS CONCERNED BY LATEST DEVELOPMENTS IN LIBYA The Ministry for Foreign Affairs is gravely concerned by the latest developments in Libya and strongly condemns the heinous crimes committed against Egyptian nationals. There should be no refuge for those who have committed these despicable acts. International justice must be set in motion to bring all those who participated or were involved in any way in the perpetration of such crimes to be brought to justice sooner rather than later. The Ministry extends its sincere condolences to all the families of the victims and expresses its support to the friendly Egyptian people in this moment of grief. The Ministry takes also this opportunity to urge, once more, all Libyans in general and the main Libyan actors in particular to put aside their differences, rally around and work together in the search for a negotiated peaceful settlement of the crisis. The Ministry reiterates that there is no other alternative to political dialogue and reconciliation. The Ministry strongly believes that unity and understanding among the parties in the Libyan crisis could resolve the political, economic, and social upheavals as well as the humanitarian crisis that are afflicting Libya. This process would furthermore contribute towards combating the rise of terrorism and extremism in Libya. MBR

OVER €60 MILLION OF EU FUNDS FOR UP TO 845 SMES THROUGH THE SME INITIATIVE

ESTONIAN SMES TO BENEFIT FROM EUGUARANTEED LOANS UNDER HORIzON 2020

Small and medium-sized enterprises (SMEs) in Estonia will get easier access to risk capital for financing innovation activities thanks to the new EU-backed loan guarantee facility. A deal signed today between LHV Pank, an Estonian Bank, and the European Investment Fund (EIF) will allow LHV Pank to enter into new loan agreements with innovative SMEs as well as Small Mid-caps for a total of €40m over the next two years. The loans will be guaranteed up to 50% by the European Investment Fund and the European Union (EU) under InnovFin SME Guarantee, which is part of the new generation of financial instruments supported under Horizon 2020, the EU’s Framework Programme for Research and Innovation (IP/14/670). MBR More information: http://ec.europa.eu/research/index.cfm?pg=newsalert&year=2015&na =na-170215

Parliamentary Secretary for EU Funds and EU Presidency 2017 Ian Borg has launched the SME Initiative by pledging more EU Funds for SMEs and said that this would open up new doors for SMEs and their investments. For the purpose of the SME initiative, the government of Malta is allocating the amount of €15 million from its EU Structural funding. Dr. Borg said that the number of SMEs to benefit from these funds was expected to be eight hundred and forty-five (845), whilst the expected investment to be leveraged by this financial instrument could go up to at least €60 million. Dr. Borg was addressing a business breakfast this morning aimed at local banks in the presence of the EIB (European Investment Bank) group during which details of the SME Initiative were revealed. Dr. Borg explained how in recent months his work had brought him closer to SMEs from all walks of life and he acknowledged the fact that SMEs needed help to invest in order to be smarter, more focused and at the same time act as a tool to achieve the EU 2020 strategy. He explained that a public call for the selection of the financial intermediaries (FI) will be launched in the coming weeks. Once the selection process is completed, SMEs will be able to start reaping the benefits of this instrument. Dr. Borg emphasised that EU Funds for SMEs aims to harmonize other actions taken at national level in support of SMEs by using structural funds (ERDF) together with other EU resources. Also present during this morning’s business breakfast were representatives from the European Investment Bank (EIB) along with all CEOs of local leading banks. MBR

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Malta Business Review

EU/GrEEcE

Greece bailout talks: acrimony & uncertainty by Special Correspondent

“Once Greece is committed to honour its debt obligations, Malta is in favour of flexibility that would allow Greece some fiscal and economic latitude in order to continue addressing the economic and social consequences of the crisis. But the Greek authorities should work within the context of the current programme in order to ensure a smooth period towards eventual new and mutually agreed arrangements that would safeguard the financial and economic interests of both Greece and the euro area,” the Minister for Finance Prof. Edward Scicluna told a meeting of Euro Area Ministers for Finance, held on 16th February 2015. Finance Minister Edward Scicluna also stated during the meeting that “such outcomes can only be achieved through intense constructive dialogue, an open and trust-worthy working relationship between all the relevant stakeholders, and mutual respect and solidarity”. Malta joined fellow colleagues in seeking a common language with a view of bridging outstanding differences. At a meeting for euro area Ministers for Finance held on Monday 16th February 2015, Ministers expressed disappointment over the fact that there was still no common ground between the new Greek government and the Eurogroup members. The Ministers augered that such a common ground together a way forward would be found. The Eurogroup will reconvene when Greece is ready to ask for an extension of the current program. The meeting also discussed and supported the request by Portugal to allow them to pay off some of the IMF loans in earnest. In addition, the Eurogroup also took note the on the state of play of the Cypriot program and also took stock of the economic situation in the Euro zone on the basis of the winter forecast. For the meeting, the Minister for Finance was accompanied by the Permanent Secretary Mr. Alfred Camilleri. MBR

“Once debts are honoured we are ready to be flexible” – Finance Minister Edward Scicluna

GrEEk ECoNoMy IN NUMBErS • Unemployment is at 25%, with youth unemployment almost 50% (corresponding eurozone averages: 11.4% and 23%) • Economy has shrunk by 25% since the start of the eurozone crisis • Country’s debt is 175% of GDP • Borrowed €240bn (£188bn) from the EU, the ECB and the IMF Source: BBC News

Who does Greece Owe? Total debt €323 bn Eurozone

IMF

60%

10% European Central Bank

6% Other bonds

Greek banks

Foreign1% banks Bank of 1% Greece

15% Other loans

3% Source: Open Europe

EDITOR’S NOTE It may seem like the naughty pupil submitting homework to the headmaster but Greece’s government has spun it differently: as proof that Greeks are now “co-authors of their destiny”. By the time of going to print, Athens had to Brussels a list of reforms it is willing to make in return for the loan extension. Its creditors had to give their verdict immediately. If there is disagreement, the deal could collapse. If it needs fine-tuning, Greece has until April to do so. The Greek government says it will suggest reforms to tackle tax evasion but in reality it will be forced to adhere to many of the austerity demands of the original bailout. As part of the deal Greece has agreed not to take any unilateral actions to threaten financial stability. It will still try to push for civil servants to be rehired and social spending increased but ultimately the creditors will have the final say and for many here hoping that the hated oversight of Greece will end, that is a galling prospect.

Banking

Malta Business Review

Twelve BOv Branches exTend Their afTernOOn Opening hOurs Twelve BOV branches are open for business from 16.30 to 19.00 hours on specific dates. During the extended opening hours, clients can open new accounts, apply for Bancassurance products, Collective Investment Schemes, Home Loans, Personal Loans, Debit and Credit Cards, place orders for stockbroking transactions, apply for 24X7 Banking Service Packages and Standing Orders and ask for additional information on other products and services offered by the Bank. Cashiering service will not be offered during this time. Extended customer service will be offered through the BOV Branches as follows: BOV Gzira BOV Mosta BOV Naxxar BOV Preluna Towers, Sliema BOV Qormi BOV Marsascala BOV San Gwann BOV St Julians BOV Siggiewi BOV Zebbug BOV Zejtun BOV Zurrieq

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Malta Business Review

AnniversAry

MSCC President Mr Munoz

Maltese-spanish ChaMber of CoMMerCe Celebrates its 5th anniversary by Ana Zammit Munro

The Maltese-Spanish Chamber of Commerce celebrated its 5th Anniversary recently with an event held at the Malta Chamber of Commerce which was addressed by Minister for the Economy, Investment and Small Business, Dr Chris Cardona, H.E. José Pons, Ambassador of Spain to Malta, Mr Anton Borg, Deputy President of Malta Chamber of Commerce, Enterprise and Industry and Mr Alfredo Munoz Perez, President of MSCC.

M Discussion panel

H.E.Jose Pons

r Alfredo Munoz welcomed the participants and explained the goals of the event. In his speech he exposed the role played by the MSCC over the last five years, when business relations between Malta and Spain increased significantly as well as mutual awareness, and requested an effort from all players to boost trade and investments, still far behind the figures that potentially can be reached. H.E. José Pons in his address said that Spain and Malta have a long standing common history dating back at least to the 13th century and that in recent history, Spain has always supported Malta and both are nowadays faithful partners in the EU, working very hard to enhance their bilateral relations. He believes that both countries have many reasons to be optimistic about their future economic relations and he is convinced that, together, both countries can connect much better their people, companies and businesses. Mr Anton Borg praised the close collaboration between the MSCC and the Malta Chamber of Commerce where both entities have worked together very closely for the evolution of bilateral relations over the last years.

MSCC 5th Anniversary

Minister Cardona spoke about the strong historical ties between Malta and Spain which have been reinforced during the last

It is expected that these positive developments in the Spanish economy will also positively impact our commercial relations decade in view of the mutual membership in the European Union. He said Malta is proud to host sizeable Spanish investment in Malta comprising mainly pharmaceutical companies and companies which operate in the services sector which continue to show the Spain interest in the Maltese financial sector. He said it is encouraging that the Spanish government’s forecast for this year’s economic growth stands at 1.8% which is expected to be largely driven by increased exports, rising domestic demand and an expected record year for tourism. “It is expected that these positive developments in the Spanish economy will also positively impact our commercial relations,” concluded Minister Cardona. A discussion panel was moderated by Vanessa McDonald and the panel members were Mr Angel Torres, Head of the Spanish Economic and Commercial Office for Malta, Mr Alfredo Munoz Perez, President and CEO of Middlesea Insurance p.l.c, Dr James Muscat Azzopardi, Director of Credence and Mr Mario Camilleri, CEO of Big Bon Group. MBR

Illegal MIgratIon

MED 7 MEETING IN PARIS DISCUSSES CRISES IN LIBYA AND SYRIA AND MIGRATION IN THE MEDITERRANEAN Minister for Foreign Affairs, Dr George W. Vella was in Paris end week of February to participate in a meeting of the Med 7 group that apart from Malta is composed of France, Italy, Greece, Cyprus, Spain and Portugal. The meeting was convened to discuss unfolding developments in the region, in particular the crises in Libya and Syria as well as other pressing priorities concerning youth employment, migration in the Mediterranean as well as environmental challenges in the regions

Malta Business Review

he EU’s High Representative and Vice President of the Commission Federica Mogherini was also present for the talks. Minister Vella thanked his French counterpart for convening the meeting at a time when the tension in the region is escalating to very worrying levels. The fact that the Ministers were meeting in Paris, in the aftermath of the January attacks is also very significant in itself, Minister Vella said. In addressing the meeting, Minister Vella elaborated on the situation in Libya, which he described as an increasing growth threat to security and stability in Europe. He welcomed the fact that the matter was brought to the UN Security Council following a further deterioration of events during the week and reiterated Malta’s support to the reconciliation efforts being made by the Special Representative of the UN Secretary General, Mr Bernardino Leon. Minister Vella stated that the evident rise of extremist and terrorist entities in Libya is a very alarming factor that needs to be addressed. He also highlighted the importance of keeping the migration issue firmly in sight and called for EU solidarity in this respect adding that prevailing instability in Libya will result in increased influxes of migrants in the coming months. As a response to growing inter-cultural and inter-faith tensions in the Mediterranean region and beyond, Minister Vella stated that Malta actively supports deeper engagement with important regional partners such as the League of Arab States and the Gulf Cooperation Council. Every opportunity and existing mechanism should be availed of to spread a culture of tolerance in Europe’s neighbourhood. MBR

Teatru Manoel BOV Performing Arts Festival presents

L’Elisir d’Amore L’Elisir d’Amore Gaetano Donizetti’s Gaetano Donizetti’s

Teatru Manoel BOV Performing Arts Festival presents

Teatru Manoel 12, 13, 15 pre-opera talk 6.45pm Teatru Manoel 12, 13, 15 pre-opera talk 6.45pm Bookings: www.teatrumanoel.com.mt

March 2015 March 2015

7.30pm 7.30pm

bookings@teatrumanoel.com.mt Bookings: www.teatrumanoel.com.mt +356 2124 6389 bookings@teatrumanoel.com.mt +356 2124 6389

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Malta Business Review

NEWSMAKERS

HOTEL PHOENICIA STARTS THE YEAR IN IRELAND WITH A LITTLE ROMANCE Hotel Phoenicia’s wedding team attended the popular Wedding Journal Show in Dublin. Weddings and Events Executive Chrystelle Doublesin along with Justine Storace, Sales and Events Coordinator, offered advice and information to newly engaged couples interested in getting married or honeymooning in Malta. The Wedding Journal Show attracts all the biggest names and leading wedding suppliers, Hotel Phoenicia has regularly participated in this show which was established over 16 years ago. The Wedding Journal Show has grown to become Ireland’s most successful bridal exhibition and its highlights include “The Style Stage”, an exciting interactive zone featuring live makeovers and workshops hosted by Ireland AM’s Sinead Desmond. A talking point of every Wedding Journal Show is a huge catwalk which features the latest wedding dresses from international designers and Ireland’s leading bridal boutiques. With international models and top choreography, this is described as “the best produced catwalk in the country”. MBR Hotel Phoenicia is ranked in the top 3 of Malta’s most romantic hotels by TripAdvisor. To find out more about weddings and honeymoons at Hotel Phoenicia visit www.weddings-malta. com or www.facebook.com/phoeniciahotel, or call 2122 5241.

SUSTAINABLE LOW CARBON GROWTH NEEDED TO HELP UN SUSTAINABILITY AGENDA MEET ITS GOALS

HSBC Water Programme Green Flag

PARTICIPATION IN THE HSBC WATER PROGRAMME LANDS SCHOOL GREEN FLAG In a first for the HSBC Water Programme – Catch the Drop campaign, a participating school has been awarded the distinction of a ‘Green Flag’ by Nature Trust Malta. The Green Flag is the highest international distinction a school can receive to mark its commitment towards education for sustainable development. San Anton School attained the prestigious rank after obtaining funding from the HSBC Water Programme – Catch the Drop campaign to implement an environmental project. The EkoSkola group at San Anton School came up with the idea of reducing plastic waste by replacing disposable water bottles with refillable ones. Besides eliminating a plastic bottle per day per student, the action led to a considerable reduction in the school’s carbon footprint as disposable plastic bottles use both a lot of energy and water when being manufactured and cause pollution when discarded. MBR

DRESS DOWN FOR CHARITY

Thomas Smith Group Solidarity Fund Hospice Malta

Minister for Sustainable Development, the Environment and Climate Change Leo Brincat stated that sustainable low carbon growth was needed to help the UN Sustainability agenda meet its goals during a meeting at his Ministry, with Lord Marland, a Former British Minister for Energy and Climate Change and UK Prime Minister’s Trade Envoy and Zac Goldsmith, a Conservative MP who had edited The Ecologist and received the Mikhail Gorbachev’s Global Green Award apart from heading his own party’s Quality of Life Group. Both personalities are in Malta for the launch of the CHOGM related Business Forum opened by the Prime Minister earlier today. Minister Brincat stressed that their sound business and environment linked backgrounds provide sterling proof that economic challenges can be met while strengthening sustainability, the environment and the climate sectors as had been outlined by the Global Commission on the New Climate Economy that former Mexican President Felipe Calderon had prepared in the run up to last year’s UN Climate Summit that Prime Minister Muscat had attended in New York. He stated that as Minister for Sustainable Development his task was to ensure that a genuine and innovative sustainability agenda could play its part in boosting further the economic recovery underway. MBR 66

Thomas Smith Group Solidarity Fund - Puttinu Cares Foundation

Earlier in January, Thomas Smith staff presented two cheques to non-governmental organisations Hospice Malta and Puttinu Cares Foundation. The money was raised by staff donations throughout the year 2014 in return for wearing casual attire to work. Every Friday is a Dress Down day at Thomas Smith Group, with the intent to collect donations from staff, and aid those in need. Randomly selected employees then nominate and vote the benefiting charities. Kenneth Delia, General Manager at Hospice Malta, together with Ms Anna Zammit received the donation of €1,500. Mr. Delia praised Thomas Smith staff for the support they have shown towards the initiative and its volunteers. Andrew Decelis, on behalf of Puttinu Cares Foundation, received the donation of €2,000. Mr. Decelis thanked Thomas Smith employees for the generous amount which will go towards the running of the new apartments built and funded by Puttinu Cares in Sutton, UK. Donations were presented by Elaine Bonello, Thomas Smith Human Resources Manager and Thomas Smith employees Diandra Axisa and Ligia Sammut Farrugia respectively. Thomas Smith Group and its employees recognise the importance of the charitable organisations in Malta and their continual need for funding. Since the inception of Dress Down Fridays, the program has donated more than €22,500 to Thomas Smith staff who were in need, as well as local charities. MBR

Tax and Corporate Services

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