The Business Observer 5th June Issue 2014 by Content House

INDUSTRY FOCUS

Issue 2

June 5, 2014

Distributed with Times of Malta

CARGO ARRIVING AT GRAND HARBOUR ON GRIMALDI'S EUROCARGO PALERMO

The Bolar Provision which enables generic testing will run out in 2017. What preventive medicine does the pharma sector need to make sure it survives? see page 6 >

NEWS Maltco prods the Lotteries and Gaming Authority to be a pioneer for responsible igaming, saying this will help the jurisdiction’s credibility. see page 3 >

Port procedures under ﬁre Vanessa Macdonald Complaints about cargo being brought in on the catamaran have unleashed a stream of complaints about port procedures, years after the port reform had ostensibly tackled them. There are now calls to remove Ħal Far groupage rules, abolish eco-tax and revise stevedore rates. Importers have been contacting the Business Observer clamouring for the government to remove the requirement for cargo from the EU to be unloaded under Customs supervision at Ħal Far – even though it seems to be largely ignored. The issue is the latest twist in a story which started when the Malta Chamber of Commerce, Enterprise and Industry complained that cargo was being brought in on the catamaran without paying dues such as eco-tax and VAT, which is paid on all

cargo arriving on the Grimaldi which must go to Ħal Far. However, Italian Ambassador Giovanni Umberto de Vito subsequently turned the argument on its head by saying that if the principles

commercial vehicles by reason of the fact that they are crossing the border from Sicily to Malta, which services are neither required nor of any benefit to the purchaser of the services. The services are not

“e implications of changing the rules, at least in theory, are signiﬁcant” of the single market were to be applied, then the Ħal Far rules are the ones which should be changed. A complaint has already been filed officially with the European Commission, claiming that the Ħal Far procedure had the “equivalent effect of Customs duty and was therefore in violation of Article 25 of the EC Treaty. “The said legislation imposes the purchase of services on

obligatory or uniform throughout the Community,” the complaint reads. The implications of changing the rules, at least in theory, are significant. For example, the extra fees for a 40ft container that has to go to Ħal Far rather than straight to the client or to the importer’s stores were €1,270 in one case. A 3 cubic metre consignment had to pay €385. The procedure is also

time-consuming and can take up to 48 hours. The reality is that most importers ignore the regulation – except for the ones that have bonded stores there and use it for unaccompanied cargo. In fact, the European Commission confirmed to the Business Observer that a case had been opened against Malta on this issue a few years ago but it was closed by the complainant. But some of those who do abide by the regulations and go to Ħal Far complained, on condition of anonymity, that any extra charges must be passed on, either to the client or to the cost of their production. “I have a stevedore licence but even so it is more expensive. Consumers are suffering. And even though we have been complaining about this, neither this government nor its predecessor has ever done anything about it,” one said. Continued on page 3 >

CASE STUDY Cavalieri Hotel reinvents itself yet again, this time as an art hotel, aimed at creating a new niche market. see page 13 >

INTERVIEW David Curmi defends the Chamber stand on trade from Sicily and interest rates, and explains the main points of its Industrial Policy. see page 14 >

e Business OBSERVER

June 5, 2014

NEWS

€485,000 more for export

We must help irresponsible gamblers – Maltco Maltco CEO John Katakis has urged the Lotteries and Gaming Authority to pioneer certification for responsible gaming for the online gaming sector, saying it would be a positive thing for Malta as well as for the sector. Maltco was recently certified by two separate authorities – the European Lotteries Association and the World Lotteries Association – as offering “responsible gaming”, both because of the self-help limits it offers its players and for the way in which the games are designed. Although most of the main lotteries around the world have certification, not many have it from both entities, he said. “There is a small percentage which does not have any certification but we – especially as a national lottery – could not afford to be in that group!” There is already a robust certification structure set up around responsible gaming offering by land-based organisations, but no comparative set-up around online gaming companies. “It is a shame as it would confer a lot of credibility not only on the operators themselves but also on the jurisdiction,” he said. “This is a role that the Lotteries and Gaming Authority could pioneer, as it would complement the work being done by the Maltese jurisdiction to fight moneylaundering. After all, there are links emerging between money laundering and online gaming.” The certifications were the result of a process which began in September, when consultation was also launched with all the stakeholders, including Sedqa and Gamblers Anonymous. Around 350 of them were asked for their comments on the pro-

We want at all costs to prevent a player from getting into problems – John KataKis posed materials, such as outlet signs and warning stickers. Maltco has also designed an online self-test form asking eight questions for players to download from the internet so that they can assess whether they are at risk of addiction. Training started in January of employees, agents and sellers, and the process ended in March with four to five days of intense scrutiny by the British auditors for the certifying bodies. This included visits to all the outlets and checks on the games to rank them according to the way in which they use triggers to entice players to continue, all of which fell under five on a scale

of one to 10, with 10 being the most addictive. “We cannot exclude players but we can offer them self-help by allowing them to set their targets and giving them feedback as they reach them, so that they can take their own decisions. We want at all costs to prevent a player from getting into problems, and if we can help to nip the problem in the bud, then we will do so,” he said. Maltco contributes a regular sum towards the fund handled by the Responsible Gaming Foundation. So far it is not yet aware of what the foundation is planning but it is hoping to meet its head, Silvio Schembri, to see what role it can play.

Malta Enterprise is putting up €485,000 to help the export of locally manufactured products. The two programmes cater for industries that are new to export as well as for those that wish to expand their current export market. The Go Global Programme focuses on companies whose export revenue is less than 20 per cent. It includes a free assessment of export readiness, an export management master class and financial assistance to conduct market research as well as support to undertake export promotion initiatives.

Around 20 new exporters are expected to benefit from this programme. The Global Growth Competition is a competition through which 12 market development plans will be selected. The companies would receive help to put their plans into action over a three-year period at a co-funding rate of 50 per cent. Subject to certain conditions, the maximum grant value can be €80,000 over three years. These programmes are being supported by HSBC Bank Malta through the Malta Trade for Growth Fund.

< Continued from page 1

would need to be changed. But whether the cargo originates in the EU or not, there is still one other problem: eco-tax. Since this tax is unique to Malta, it has to be collected at the point of entry. The Malta Chamber of Commerce, Enterprise and Industry proposed that another option to create a level playing field would be to remove the groupage rules (see interview on page 14). But he stressed this would not be possible unless ecotax were scrapped. The removal of the Ħal Far clause would remove one aspect of the way in which cargo is treated differently to the catamaran, but not others. For a start, trailers on the catamaran are accompanied by driver and truck while the cargo on the Grimaldi is unaccompanied and requires considerably more documentation as well as fees of €320 per trailer paid to port workers who drive the trailers from the vessel to the port area, which is based on metric volume, even though most is now containerised and shipped via Ro-Ro. Another cost is the ship agent’s service document processing charge of around €95, only imposed on the Genoa route.

“This was all done following a pre-accession meeting for stevedores and there was a huge outcry when they realised that they would lose work if the single market rules meant the end of port procedures.” The Ħal Far rules were introduced just before Malta joined the EU. The chief negotiator for accession, Richard Cachia Caruana, said that the issue at the time was that groupage cargo can come from any country not just the EU. “This means that it all has to go to a Customs post, even if some or most of it is of EU origin. “Note that groupage cargo also has to go to a warehouse to be split up, as by its very name it is clear that there are a number of different importers for each cargo shipment. Large importers very rarely have to use groupage and hence avoid this problem,” he said. Mr Cachia Caruana believes that “in such a case, they would need to be treated differently to groupage cargo of mixed origin”. Legal Notice 82 also does not make any provision for EU cargo to be exempted from Ħal Far and this

e Business OBSERVER

June 5, 2014

e Business Observer is a new business newspaper distributed with Times of Malta every fortnight. Editorial Vanessa Macdonald, Head of Content (Business), Times of Malta.

EDITORIAL

A ‘logistical’ step forward

Publishers Allied Newspapers Ltd. Content House Group Ltd.

Allied

N E W S PA P E R S

A M E M B E R O F T H E A L L I E D G R O U P O F C O M PA N I E S

Changes are finally being made to the Business Promotion Act which will pave the way for logistics as a sector... and not a moment too late. Transportation and advanced logistics were one of the seven sectors identified by the previous government in its Malta Vision 2015. Years ago, it was already obvious that the new activities flourishing in Malta would require infrastructural support. Its inclusion was an important sign that although Malta was moving increasingly towards services, manufacturing was still an important sector – and that there were other hubbing activities which would be exploited. The president of the Chartered Institute of Logistics and Transport, John Portelli, summarised the activity extremely well: It is about getting the right things to the right place at the right time and in the right condition ... at the right price. Malta already has a strong transhipment presence for seafreight – with the Freeport acting as a giant open air warehouse for containers. But there is so much more that could be done, whether between forms of freight (sea/air, air/road and so on) or with bulk freight being brought here to be sorted out and dispatched to different locations, whether that freight happens to be retail products from China, halal foods from the Middle East or oil and gas supplies heading for Libya. But the vision seems to have been myopic. A few aspects emerged which show how much more needed to be done to get this sector moving. One was revealed in the Business Observer (May 22) when Economy Minister Chris Cardona said he wanted to change the law to enable Malta Industrial Parks (MIP) to allocate warehouse space. At the

moment, MIP can only give space for productive capacity – and warehousing is seen as merely storage, rather than as a vital part of supply chain management. What was also bizarre is that this sector was not covered by the Business Promotion Act as a qualifying activity for incentives. In fact, the Act specifically precludes this sort of distribution hub, although it is a qualifying activity for Malta Enterprise investment aid. Incentives would attract new FDI, which has been sorely lacking in recent years. Certainly, action needs to be taken sooner rather than later. Medserv has already invested heavily in its warehousing in anticipation of work picking up in Libya and other sites. The airport is reportedly looking into creating a corridor linking it to the Freeport to enable international freight to move between them without having to go through customs. Freight companies are currently investing heavily in both trailers and warehousing to be able to handle this sort of freight. And the eventual allocation of the Marsa Shipbuilding site to operators could generate even more demand for space – which is sorely lacking. Too much of the precious little space there is – and make no mistake, logistics requires vast amounts of space – is being occupied by companies that are no longer active or whose activity levels no longer merit the factory allocation. Getting rid of these operators is not easy, as cases all too often end up in Court, often merely as a delaying tactic. After years of rhetoric, the time has come to get to grips with the obstacles that need to be removed to let this sector take off. Changing the Business Promotion Act on its own will not be enough.

Advertising Enquiries Tel: 21 320713 Email: info@contenthouse.com.mt Advertising Sales Nadine Schembri Advertising Sales Director of ProMedia

Printer Progress Press Ltd.

Progress PRESS

A M E M B E R O F T H E A L L I E D G R O U P O F C O M PA N I E S

BUSINESS OPINION

Investment the key to it all

Lino Spiteri Overall, the Maltese economy is doing well. That was so under the previous administration. That which succeeded it, the Labour government, continued with the

same theme. We now have fresh confirmation from the annual specific report of the European Commission, which also states that it expects Malta to continue to do well. The report’s reservations were of a mediumto long-term nature. Alongside such widespread positive comments there are indicators which suggest a closer look should be taken at the statistics. For instance, in spite of a general feeling of well-being, some of the figures suggest that retail trade is slowing down. That is not borne out by empirical evidence. Yet, if the collected figures do not lie there has to be an explanation.

It does not seem to lie in a widespread economic slowdown. The more plausible suggestion emanated from the Minister of Finance. He said the figures of the National Office of Statistics do not take trading over the internet into account. That is a fair point. The internet trading phenomenon has reached Malta. The articulate use the internet to source many of their requirements, usually from abroad. But internal internet trade is growing as well. Even groceries can be bought over the internet. Possibly domestic internet trade is duly recorded in retailers’ accounts, and so is

captured as consumption by the NSO. But internet trade sourced from abroad is not recorded anywhere except in the individual consumer’s records, which do not make it to the NSO. Another factor affecting internet trade and consumption records is the growing tendency of individual consumers to source their requirements overseas, to a large extent but not uniquely from Sicily. Not only items of furniture but also apertures are brought in that way. Word has spread that considerable savings can be made on like-forlike products ordered from Sicily and brought down in a private van or other means of transport.

In this case, statistics are not telling the whole truth, though not deliberately, calling for a fundamental review of how they are collated. I do not think statistics have been lying in what they say about the construction industry. There has been a long slowdown. With the policy changes that have been announced and with the revision of Mepa’s structure and more sensible efficiency therein, it may be that this sector will soon start picking up, hopefully in a sustainable environment-friendly manner, justifying local and euro talk of Continued on page 13 >

arbecue anyone?!

We have put together some fantastic barbecue packages to take all the stress out of organising your summer staff party, giving you all the time to relax and enjoy. Have fun in an exclusive outdoor venue and dance your night away with a DJ or Jazz Trio. Packages start from just 30 per person. Call us now to get the charcoal burning.

FOREVER PHOENICIA

Hotel Phoenicia Malta, The Mall Floriana Tel: (+356) 2122 5241 sales@phoeniciamalta.com www.phoeniciamalta.com

e Business OBSERVER |

June 5, 2014

INDUSTRY FOCUS: PHARMA

Preventive medicine for the pharma sector

SERGIO VELLA

PHARMACEUTICAL MANUFACTURING STILL HAS A LOT OF ADVANTAGES.

After a year which saw employment in the pharma industry contract slightly – mostly as a result of the acquisition of Arrow and then Actavis by Watson – there is good news for the sector. During the first quarter of 2014, Malta Enterprise approved a substantial expansion project for one of the pharma companies which will push up employment levels. But the sector is soon to face one of its most challenging resurrections as the Bolar Provision (see box) will run out in 2017, taking with it all the benefits it offered generic companies. Sergio Vella, managing director of Actavis, is not concerned. This is something the company has been preparing for over the past years and he admits that while the Bolar

Provision may have been one of the main factors that attracted so many companies over the years, there are many other benefits that Malta offers to keep them here. “The package that Malta offers is very strong. Pharmaceutical manufacturing still has a lot of advantages, one of the main ones being the strong technically-prepared workforce. Around 99.8 per cent of our workforce – we employ some 800 out of the 1,163 employees in the sector – are Maltese, and they are all very high-calibre, whether graduate or technical. “In the past there used to be gaps in the skills supply, particularly for graduates, chemists and to a lesser degree pharmacists and technicians. It took a bit of time for the educational stream to catch up

with what the industry required. But we were able to progressively replace foreigners with Maltese,” he said. “One thing that we never did was poach from other companies, as we believe that this just creates a vicious inflationary circle. So we preferred to work with the university and with Mcast to solve the root problem.” The Maltese plants are also leaders when it comes to operational complexity. “It is the easiest thing in the world to churn out high volumes of one product, but what we do here is handle 2,300 product codes at Bulebel with 800 others at Ħal Far – representing the different Continued on page 9 >

Manufacture of pharmaceutical products and preparations

Date

Full Time Equivalent (FTE)

Active Companies

Investment

Dec-11

1146.5

€18.3m

Dec-12

1218

€9.5m

Dec-13

1163

€6.9m

e Business OBSERVER

June 5, 2014

INDUSTRY FOCUS: PHARMA

e Bolar Provision

Malta’s edge Malta started to attract pharmaceutical companies thanks to the way in which it adopted the Bolar Provision into its laws. The Bolar Provision resulted from the judgment in a case instituted by Roche Products against Bolar Pharmaceuticals, in an attempt to stop them starting the Food and Drug Administration approval process until the patent had expired. The US subsequently passed an Act which allowed generic companies to start the approval process. It means that although the patent holder for a drug can protect it for 20 years, generic companies can do testing and clinical trials before this date. As soon as

< Continued from page 6 dosages and formats of 55 chemical entities. We are very flexible and are able to change from one product code to another very quickly, which means shorter lead times, crucial in this industry,” Mr Vella said. This is one of the reasons that Malta is often chosen out of Actavis’ 30 centres to handle new products, even though the actual R&D unit here was closed a year ago. Of course, the flourishing industry also benefits from clustering. For example, a local printing press invested heavily to be able to deal with the very specialised requirements for drug cartons and leaflets, and companies like Express Trailers not only offer temperature-controlled trucks but also back-up warehousing with full supply chain management.

the patent expires, the generic company is ready to launch its alternative without wasting precious time. In the EU, such a right was not harmonised at EU level until 2004, when a Bolar-type provision was introduced, but it varies among member states. The Maltese legal system allows a wide definition. This competitive edge was enhanced by the fact that at the time there were only a relatively small number of patents registered in Malta. In 2007 Malta joined the Europ-ean Patent Organisation, so all patents filed in Europe after this date were automatically valid in Malta.

“Having services and suppliers on your doorstep is very beneficial, as every single thing helps with our flexibility,” Mr Vella said. What could the Maltese pharma sector look like beyond the Bolar Provision? Mr Vella believes the best option would be to expand the range of products, which is now mostly single oral doses such as tablets and active pharmaceuti-cal ingredients. “Most of us here should consider moving up the technical value chain into things like biosimilars, and drugs for diabetes

and oncology. Of course, the challenge would be to ensure that the human resources will be available for this – which means that action has to be taken sooner rather than later,” he said. His words have already been taken to heart by the university and the head of the pharmacy department, Lilian Azzopardi, said a lot was already being done. “With the global changes in the pharmaceutical industry and the innovations in medicines, the pharmaceutical industry is moving towards development and production of advanced therapy

“Services and suppliers at hand are very beneﬁcial, as every single thing helps with ﬂexibility” – SERGIO VELLA

medicines such as biosimilars and stem cell therapy. “This trend is expected to be seen also locally, with the local pharmaceutical industry manufacturing and distributing biological agents which are being used as medicines. This change also brings about a change in the processes required for the procurement and monitoring of the effectiveness and safe use of medicines, a process referred to as pharmacovigilance. The newlylaunched PharmD programme will address these innovative clinical aspects,” Prof. Azzopardi said. However, skills are not enough. Costs need to be competitive, with Mr Vella warning that while companies were constantly working to reduce the cost of converting raw materials into the finished product, the government had to ensure that labour and electricity costs were contained. “We agree with the Chamber that the government

should see whether it is feasible to reduce the electricity tariffs for industry before 2015. “But the government also needs to look at the very significant transport costs and ensure that the premises cost remains under control. “Looking at external factors, the reduction in state aid intensity is a concern and it could have an impact on investment decisions, as companies will do their homework and go wherever is most advantageous,” he said. But for the moment, Actavis is all systems go. It will open a new stateof-the-art warehouse adjacent to its facility in Bulebel next month, to be able to cope with the production which has trebled since 2005. “Pharma is changing and evolving, but there are a lot of positives. All the stakeholders just need to concentrate on the sticking points to keep it all going,” he concluded.

e Business OBSERVER |

June 5, 2014

University help up front The Department of Pharmacy of the University of Malta is at the forefront in supporting the development of pharmaceutical industry in Malta. • The department has ongoing collaboration with the different sectors of pharmaceutical industry from research to manufacturing to distribution of medicines. This collaboration includes placements to provide experience in relevant real scenario activities.

• A course leading to a Bachelor degree Honours in Pharmaceutical Technology was launched in 2011. The first graduates from the three-year fulltime course will complete their studies this June. • Students are taking up pharmaceutical research and reading for a PhD in collaboration with pharmaceutical industry. Students following a Master of Science in Pharmacy follow core credits related to processes of

pharmaceutical industry and a number of students specialise in topics of interest to the local pharmaceutical industry. • The department is launching a professional doctorate for pharmacists, the PharmD, leading to a Level 8 post-graduate degree. The programme allows pharmacists to develop advanced skills in pharmacoeconomics, pharmacovigilance, critical analysis and application of drug information and research skills.

US-EU deal

Will it help? The Trans-Atlantic Trade and Investment Partnership currently being negotiated has deep implications for the pharmaceutical industry, already a highly-regulated sector but one made considerably more difficult because of different compliance rules. Peter Chase, the vice president for Europe of the US Chamber of Commerce, believes that while the agreement would reduce costs on both sides of the Atlantic, it would do so in a gradual way – and it would not interfere in the regulatory integrity. “We have to respect each other’s respective regulatory systems, and TTIP will not change our systems but help to find ways to build bridges between them. “But if the regulatory systems offer similar levels of protection, and just differ in some of the procedural aspects then you can build a bridge between them, for example, by more mutual recognition. If they are very far apart you will need to build spans to make that bridge ...” he said. One example of ways in which TTIP might have an impact is hygiene practices in the US and the EU – so-called Good Manufacturing Practices – which are virtually the same. As it stands, the Food and Drug Administration comes to Europe and inspects European plants even though they were already approved by EU officials, and vice-versa. “We build in such a lot of cost for absolutely no gain!” said Mr Chase. However, TTIP will not change everything. For example the FDA carries out a deep scientific assessment of each drug it allows onto the American market, but this takes much longer than it does in

PETER CHASE: BUILT-IN COST FOR NO GAIN

Europe, meaning drugs are often available on this side of the Atlantic much earlier. “Europeans might prefer it if the FDA would speed things up, but we are not going to do that! FDA will continue approving the way it is doing now...,” he said, adding that the same applied when it came to the snail’s pace at which the Europeans approved geneticallymodified food. He stressed that this was not a new concept and that there are already a number of areas where regulators have built up trust, resulting in numerous mutual recognition agreements. “The beauty of TTIP is that even after the agreement is negotiated, you will continue to have regulators working with one another and reaching new agreements as trust and confidence build up. “They will do this not because trade negotiators ask but because it will improve their own efficiency and effectiveness in carrying out their mandate.”

e Business OBSERVER

June 5, 2014

CASE STUDY

ird time lucky for Cavalieri?

Will it prove third time lucky for the Cavalieri Hotel? For decades the hotel had plodded along as a typical four-star hotel, but in 2006 the Testaferrata Moroni Vianis who own it decided on a radical change. They opted for a more leisureoriented segment and totally renovated the structure and appearance. The owners concluded an exclusive agreement with Saga, a British company that caters for British over-50s, making a considerable investment to make the hotel age-friendly and tailoring everything from the lobby area to the restaurant to cater for the British preferences. But after two years the two sides parted ways and the hotel had to reinvent itself at the worst possible time. Europe was following the world into recession and the exclusive agreement meant that the hotel had fallen off the radar with regard to tour operators, destination management companies and so on. Mark Camilleri is never one to shy away from a challenge, and when offered the post of general manager in 2009 he barely hesitated. Yet there was little in his 20 years of experience which prepared him for the complete change of direction. “I was wary of relying on just one market, and my priority was to get exposure for the hotel and put it back on the map. Low-cost airlines had started to change the landscape completely, and although we were still targeting the leisure market –

which represented 79 per cent of our clients – we stopped the all-inclusive business model used for Saga and things started to change.” He started to target groups as there were not many hotels in that category around the St Julian’s area, and the hotel handled over 100 in his first year. But with just 258 rooms and restricted meeting rooms, it meant he was limited to groups with a maximum of 160 delegates. He was still not happy. “I knew that a lot of corporate visitors did not want to stay in five-star hotels, and so I went to the top international companies in Malta to explain to them what we could offer,” he said. It worked, and more and more corporate work came their way. However, all the promotion in the world would not work without a product to support it. Just a few years after the refurbishment, it was time for yet another one. In 2010 he went to the owners with another proposition centred on the refurbishment. He wanted something that would make the hotel stand out, and a soft brand. In just four years, he is watching all three of these ideas come to fruition. The €1.2 million refurbishment will cover all the aesthetics of the hotel, from rooms right to public areas. “We did not want to close down, so the work is being done in phases and should be completed by the end of 2014,” he said.

< Continued from page 5

Dr Vella, appointed by the new government amid a lot of unnecessary flak, brought with him important previous experience both of Malta Enterprise as well as of the private sector. As expected, and responding to prods by his interviewer, the chairman spoke of the unsatisfactory state Malta Enterprise was in relative to satisfying requirements. Among other things he pointed out that of the

sustained good overall economic performance ahead. To my mind, though, and to that of many others what matters most is the level of net new investment in the economy, particularly foreign direct investment. Domestic real investment is very important and the fiscal and other measures announced to stimulate it are welcome. But foreign direct investment is essential since its output reaches a much bigger market. On both counts Malta Enterprise has a key role to play. This is a known fact and it was recently made clearer through an interview carried by this newspaper with Mario Vella, the chairman of Malta Enterprise.

“Mark Camilleri is drawing up a programme, together with a number of art groups and societies in Malta, to oﬀer painting holidays, art courses, seminars for artists and even performing arts”

“The next thing I did was try to work out what would give the hotel a unique selling point. The location on the edge of Balluta Bay is extraordinary, but to make your mark internationally, you need something more,” he said. The answer came from Berlin, where he was attending the international travel fair. “I was staying at an art hotel and I started to daydream about the layout of the hotel, with its alcoves in the foyer, the wonderful natural light, and of course the wealth of talent in Malta. And that is what we decided to do ...” he smiled. The hotel started off with exhibitions – 40 last year – using everything from the lobby to dedicating each floor of the hotel to a different artist. They brought in Joseph Casapinta as resident artist, who works from the hotel three evenings a week, and art critic E.V. Borg as curator and adviser. But to qualify as an art hotel, exhibitions are not enough and Mr Camilleri is drawing up a comprehensive programme, together with a number of art groups and societies in Malta, to offer painting holidays, art courses, seminars for artists and even performing arts. “It seems to be working,” he said, pointing to enviable occupancy levels of over 85 per cent from the period from February to November. The hotel also had to adjust its operational staff to cope with the new demands. There are now 14 managers out of the 150 staff and

many more sales executives. Leisure tourists are now only around 40 per cent of the total, as contracts with tour operators were wound down. And groups are limited to no more than 100 rooms at any time. But this means more work to fill rooms and attract more corporate work – currently 8 per cent and growing – and conference and incentive work (8-10 per cent). “We are looking at other niches for the leaner winter months and get regular sports groups, such as football training camps and most of the Malta Marathon international participants,” Mr Camilleri said. The third and final part of the project was to find a ‘soft brand’. “We did not want to become part of a major franchise, but there are many other soft brands which can give your marketing a significant boost through their online channels. Since October we became part of the Great Hotels of the World, an alliance of over 400 four- and fivestar independent hotels around the world. “We noticed an immediate surge in enquiries, especially from the conference and incentive sector,” he said. “The hotel is an institution and we needed to change the perception of it as an old hotel, and to raise awareness of all that we are now offering. It has been four years but we are already seeing a difference,and by the end of the refurbishment, we will be ready to pick up speed!”

150 or so of its employees, only a handful were directly involved in foreign investment promotion. That is now being seen to, along with various other gaps. In due course the government will be announcing a revised industrial policy, to which Malta Enterprise will no doubt contribute a lot, while the views of the representatives of the public sector are also expected to be taken fully into ac-

count. The stress should be on helping domestic industry and other economic activities restructure where necessary and update their skills, not least on the basis of improved productivity and competitive unit costs. But the main drive should be on foreign direct investment, on making Malta more attractive to encourage existing growth sectors to expand their actives, to identify

new sectors especially in niche areas. Logistics, well-established elsewhere but relatively new to Malta, may be presumed to be attracting much attention by export promoters. An imaginative approach exploiting our combined resources will have to be applied, on a policy which husbands land still available for exploitation, as well as industrial facilities which are under-used or not being used at all. Growth is a function of investment. That is how we arrived where we are. That is how we have to move forward – through a coordinated effort combining the intelligence and skill of labour and capital, of the public administration, representatives of the broad private sectors, and the unions. Much needs to be done. Much can be done with the right effort.

MARK CAMILLERI – NEVER ONE TO SHY AWAY FROM A CHALLENGE

“Domestic real investment is very important and the ﬁscal and other measures announced to stimulate it are welcome. But foreign direct investment is essential since its output reaches a much bigger market ”

e Business OBSERVER |

June 5, 2014

INTERVIEW

In whose interest? That does not mean they are brought in with tax evasion or without paying eco-tax. It does not mean that. But we know for a fact cargo is coming into Malta without payment of eco-tax – which is a unique tax – and with dubious procedures for the payment of business-to-business VAT. Mr Saliba has to give us proof that the authorities have actually levied eco-tax. We have no proof that this has ever taken place.

Malta Chamber of Commerce, Enterprise and Industry president DAVID CURMI has been in the headlines several times over the past weeks, proclaiming the chamber’s stand on everything from illegal trade from Sicily to bank interest rates. But not everyone agrees with the chamber’s stand – and the motivation behind it. VANESSA MACDONALD challenged some of its claims. Figures supplied by Virtù Ferries show that a small proportion of the trailers on the catamaran are Sicilian traders. They accuse the chamber of creating this ‘smokescreen’ to protect the larger importers who are its members from the loss of trade due to legitimate competition ... Do you agree? No, we disagree. This is not an issue we have with Sicilian traders – and we never really mentioned the words ‘Sicilian

traders’. What we have is an issue with procedures. The proportion of Sicilian traders as stated by Virtù may be low, but those that are coming into Malta which are not Sicilian-owned is definitely not. The problem is that the government is totally unaware of what is inside those trailers. Virtù said it gives a manifest saying what it is said to be inside ... Yes, “general cargo” ...

I have seen a manifest and it specifies whether it is fresh food or furniture or anything else. And these manifests are given to customs and to the police. We think that they are not given in every case. That is a very serious allegation. That is what our members feel. They are finding products on the market that made their way to Malta but not through their channels.

You say you have the facts. Why don’t you publish them? So far we have not been able to ascertain whether there has been a single case, let alone to establish the scope of the problem. We have passed on some factual information to the authorities. We do not think that we should pass on information to the media. And are investigations under way? That is what we are told. The Italian Ambassador believes the solution is not surveillance on cargo coming via the catamaran but the removal of the clause which means all groupage must go to Ħal Far, whether it is from the EU or not. The accompanied cargo arriving on the catamaran does not follow that procedure and it is unfair, as our members who are importing cargo legitimately through other sources must take it to Ħal Far

where they are charged haulage and customs fees, must pay for bonded stores, and pay VAT on their freight – which you do not pay when you ship through the catamaran. We cannot accept that cargo that comes with one shipping line has to be taken to Ħal Far but cargo that comes through another has a different procedure, which is far more advantageous and less costly. So make catamaran cargo go to Ħal Far or remove the requirement to go to there for the rest? Doesn’t it worry you that it costs some €1,500 extra for a 40ft trailer to go to Ħal Far? If we level the playing field, we have no problem. No problem with removing the clause about the requirement to go to Ħal Far? We have no problem with that. But eco-tax has to be removed as well before this can be done. This is a unique tax that does not make sense – other than as a source of revenue for the government – and is the most problematic one at the moment for our members ... In your Industrial Policy you are proposing an urgent revision of the cost-of-living adjustment. You’ve been asking for this every year for decades. When are you going to give up? Never. This is something we believe in very strongly. We raise it at every opportunity and we will continue to raise it until the authorities realise that we cannot continue with a situation where our unit labour cost has increased at a rate higher than that of Germany and the UK. At the same time our productivity is actually down. Everyone understands that it is bad and needs to be discussed. But no one has the political courage to tackle it. At the last MCESD meeting the unions did seem to be quite concerned about competitiveness, especially in manufacturing, and they were raising similar issues to ones we have been raising recently, such as the electricity costs. The government is proposing to lower electricity rates for industry in March 2015. You want it to do so sooner. Government will not get cheaper electricity until then, so your proposal would mean greater losses for Enemalta ... We have the third highest utility rates in Europe at 18c per unit when the average in the EU is 9c. With the 25 per cent discount that the government is going to give in March 2015, it will bring it down to 12.5c/13c so we are still far away from the 9c EU average and countries like Tunisia where the average unit price is 6c. We fully understand the government’s constraints but we

e Business OBSERVER

June 5, 2014

Chamber’s Industrial Policy

Blueprint for the future The role of manufacturing Industry is a very important pillar in our economy and the economy would probably not survive without it, but its share of gross value added has gone down from about 19 per cent to 12 per cent.

We want to send a message to the FDIs that as a country we are doing something about utility rates. And we also need to attract new FDI” have been trying to come up with alternative packages to help around 22 heavy consumers in the interim. We want to send a message to the FDIs who own these companies that as a country we are doing something about it. And we also need to attract new FDI .... We have not managed to attract any significant FDI since Lufthansa Technik and SR. The EU has set a target of bringing industrial activity and manufacturing back to around 20 per cent of GDP from15.3 per cent. It Malta, the figure is around 12-13 per cent. It is going to be a steep climb. The debate about interest rates and declining demand for lending is still going on. Do you agree that the problem is that companies are under-capitalised? Interest rates cannot be seen in isolation of the whole banking structure. If you were to input a request for lending from a small under-capitalised Maltese company into a European bank, I think the system would still give you the same sort of rate that the Maltese bank is coming up with, because a small undercapitalised Maltese company requesting a facility presents a higher degree of risk. I am very concerned with intrusion into this area, as banks are going to have to go through a very difficult time. We cannot compare ourselves to any European country. We just have two main lending banks. Germany has 100. Holland has 50, the UK has over 100. Losing Banif Bank would not be a plus as we want to increase access to finance. If it is acquired by someone who is already here it would mean you would have one bank less. The two main banks are now going to be supervised by the ECB and whether we like it or not, their life is going to be more difficult than it was. Banks will obviously become more risk-averse and this would

decrease their appetite for risk, making them very selective. They would exclude start-ups and people with no track record. Our business sector depends on these two banks. Let us try and preserve what we have built and not destroy it. We find certain proposals being made very superficial. For example, you cannot say that just because a bank is charging very low interest on house loans and relatively higher interest on commercial loans, they should be averaging their rates. The bank lends on the basis of risk, not averaging costs.

Your policy is calling for collateral free loans through credit guarantees – something similar to Jeremie. Where would the money for such schemes come from? The Prime Minister said the proposed Development Bank could borrow money from the ECB and then give these funds to the banks exclusively to stimulate business – it would not lend directly. That is a possibility. There is a lot more money where Jeremie came from and many other types of models in Europe we haven’t even looked it. We should not shy away from this as there is considerable appetite for these packages.

Attracting FDI What does a foreign investor ask when he contemplates whether Malta is viable to operate from? They normally ask five questions: what is your average labour cost, what is the cost of factory space per square metre, what are your electricity rates, what are labour conditions and what are the incentives? They are not interested in anything else. Remember that Malta will be losing significant competitive advantage as incentives have been reduced, on the whole, from 30 per cent to 15 per cent. Factory space There needs to be an urgent space audit as there is a lot of space which is being underutilised or not utilised correctly. There should not be a waiting time. An investor who

wants to come to Malta would want to be able to set up within three months. There was a proposal two years ago by Malta Enterprise and Malta Industrial Parks to revise the rents for government-owned factories – without consultation. They would have been very unrealistic. It was a long fight to stop them from going ahead. If they have to be changed, it has to be done in consultation with stakeholders as the government needs to be aware of realities of manufacturing today. The cost of factory space is one of the few advantages that remain today for manufacturing. They may be low when compared to the private sector, but not when compared to what other countries can offer. Labour costs and competitiveness Statistics show that our unit labour costs have gone up. Had they gone up in line with productivity, I don’t think we would have complained. But what we are worried about is the compounding effect on wage structures this has had over a period of time.

e Business OBSERVER

June 5, 2014

STOCK MARKET REVIEW

Rizzo Farrugia MGS Index reaches new record levels Edward Rizzo The Rizzo Farrugia MGS Index was launched in December 2010 to enable market practitioners and investors to follow price trends in Malta Government Stocks. While the MSE Share Index tracks the movement in prices across the equity market, the MGS Index tracks movements in the bid prices of the Central Bank of Malta for all Malta Government Stocks listed on the Malta Stock Exchange. Similar to the MSE Share Index which uses a market capitalisation weighting scheme, the larger MGS issues have a bigger weighting on movements in the MGS Index. Due to the inverse relationship between bond prices and yields, an increase in the index represents a decline in yields and vice versa. The MGS Index started off this year on a very positive note and advanced by 2.2 per cent following an equally positive performance in 2013 with a rise of 1.2 per cent. In recent weeks the index regularly traded up to new record levels and exceeded 1,040 points last Thursday. The Rizzo Farrugia MGS Index had surpassed the 1,000 points level in November 2012. As such, the Index has increased by over 4 per cent in the past 18 months. This is simply a reflection of the price increases across Malta Government

EUROPEAN CENTRAL BANK (ECB) PRESIDENT MARIO DRAGHI (INSET) PAUSES DURING THE MONTHLY ECB NEWS CONFERENCE IN FRANKFURT IN APRIL. HE IS EXPECTED TO ANNOUNCE A FURTHER REDUCTION IN INTEREST RATES WHEN THE GOVERNING COUNCIL MEETS TODAY. Photo: Ralph Orlowski/Reuters

supply in a particular bond exceeds the normal market size of circa €250,000 nominal set by the Central Bank, the price at which the Central

“e upward movement in Malta Government Stock prices therefore reﬂects the decline in eurozone yields” Stocks and investors would not only have benefitted from the capital gain on their bond instruments but also from the interest income accumulated during the period. As such, the past few years have been very positive for the many local investors who hold large exposures to Malta Government Stocks. The index is based on the bid price quoted by the Central Bank of Malta on a daily basis. This is an indication of the price at which the Central Bank would be willing to buy limited amounts of each security. This indicative price generally reflects economic developments and interest rate expectations and not the demand and supply dynamics that many investors may expect. Although many prices on the market generally trade around the indicative bid price quoted by the Central Bank, it is worth highlighting that the market price sometimes varies depending on market circumstances. As such, if the

Bank eventually bids in the market is a few basis points below the indicative price. On the other hand, we have also seen some instances in recent months where the market price of some bonds is at a premium to the indicative bid price of the Central Bank since some investors would have wanted to purchase whatever is available in the market. The Central Bank also quotes indicative offer prices for some bonds where they have availability thereby providing a rather effective two-way market mechanism. So what has been driving prices and the index higher in recent months? MGS prices generally move in line with the changes in the benchmark yield across the eurozone, i.e. the German Bund. The upward movement in Malta Government Stock prices therefore reflects the decline in eurozone yields.

In recent months, German Bund yields declined on expectations that the European Central Bank would introduce new stimulus measures to combat the weak eurozone economic performance and increasing fears of deflation. The eurozone economy is still clearly struggling and the tepid recovery varies remarkably from one country to the other. Economic growth across the entire region was disappointing with an increase in GDP of only 0.2 per cent during the first quarter of 2014. While Germany’s growth rate doubled, economic growth in France stagnated and Italy’s GDP contracted once again. Meanwhile, the problems of high unemployment across the region continued with the average rate of unemployment remaining close to its recent highs of 12 per cent (as at March 2014) and German unemployment unexpectedly rising last month. Although the ECB may be comforted from a slight easing of deflationary pressures in April (the inflation rate rose to 0.7 per cent from 0.5 per cent in March), inflation remains significantly below their target of close to but below 2 per cent. The ECB had indicated

e Business OBSERVER |

that a rate of inflation below 1 per cent is a “danger zone”. It has been below this level since October 2013, mainly because of falling energy and food prices and the appreciation of the euro. Recently, ECB president Mario Draghi again stated that the bank is aware of the deflation risk and the ECB was equipped to get inflation back to its target again. The ECB’s monthly monetary policy meeting is taking place today and many international economic commentators widely expect the ECB to announce a further reduction in interest rates by 15 basis points to 0.1 per cent following the recent data and comments from high officials at the ECB. There has also been widespread speculation that the interest rate banks receive on their deposits at the ECB (currently zero) will be lowered into negative territory. This means that eurozone banks will be charged a fee to park their money at the ECB. Economists believe that such a measure will encourage banks to boost lending thereby possibly providing some momentum towards an economic recovery.

A rate cut by the ECB would also likely lead to a drop in the value of the euro which should also assist the economic recovery. In fact, last week the euro touched a fresh 16week low against the dollar of

$1.3584 per euro. The euro could weaken further if the ECB also engages in using unconventional monetary policy, i.e. quantitative easing, which was used by the other two major central banks in recent years to boost the economic recovery. There are widespread indications that interest rates will

June 5, 2014

maturities of over 15 years specifically targeted at retail investors whereas local corporate bond issuance was very weak. Irrespective of the duration, the yield attracted many retail investors to place excess liquidity in such instruments. The upward movement in prices in recent years, as reflected in the MGS Index, has so far rewarded

“e Treasury issued bonds with maturities of over 15 years speciﬁcally targeted at retail investors” decline and remain at these historically low levels for another two years. This implies support for bond prices at the current levels. However, investors must keep in mind that bond prices can also decline. The volatility in the Rizzo Farrugia MGS Index in May to July 2009, July to August 2010 and November to December 2012 proves this. It is also important for investors to understand that longerterm bond prices are more volatile and as these have performed very positively over the past few years, they will likely decline at a faster rate in the future once there are indications of a consistent economic recovery. Although an official increase in interest rates is unlikely before 2016, it is highly likely that secondary market bond yields will start to recover well before the first official interest rate hike by the ECB. Local investors have become more exposed to longer-term government bonds in recent years as the Treasury issued bonds with

investors handsomely. With an increasing amount of shorter-term and higher coupon corporate bonds available in recent months and others to follow imminently, it is curious to see if this week’s MGS issue attracted fewer retail investors. The results of the MGS issue will be published next Monday and one can then analyse whether the recent increase in corporate bond issuance has begun to negatively impact the demand for MGS by retail investors. Whatever the outcome, many local investors have exposed themselves to a higher allocation of long-dated bonds. Although it is naturally very difficult to time any reversal of this current bull market in bonds, investors must understand that this will eventually take place and therefore a ‘buy-to-hold’ strategy which was mainly the case to date, would not be ideal in an eventual rising interest rate scenario. Edward Rizzo is a director at Rizzo, Farrugia & Co (Stockbrokers) Ltd

Rizzo, Farrugia & Co. (Stockbrokers) Ltd (RFC) is a member of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This report has been prepared in accordance with legal requirements. It has not been disclosed to the company/s herein mentioned before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities to which this report relates (other than executing unsolicited client orders) until such time as the recipients of this report have had a reasonable opportunity to act thereon. RFC, its directors, the author of this report, other employees or RFC on behalf of its clients, have holdings in the securities herein mentioned and may at any time make purchases and/or sales in them as principal or agent, and may also have other business relationships with the company/s. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Neither RFC, nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof and no representation or warranty is provided in respect of the reliability of the information contained in this report. © 2014 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved

e Business OBSERVER

| June 5, 2014

APPOINTMENTS

€30m bond issue by Mariner Finance

New president for MBB Mario Spiteri has been appointed president of the Malta Business Bureau, taking over from George Vella who held the post for two years. Mr Vella will still be involved as a member of the board of directors. Mr Spiteri is an entrepreneur and is involved in tourism, insurance, local and international real estate, and financial and management consultancy. Throughout his career he has worked in senior management roles, predominantly in the financial services sector. For many years, he served on various committees of constituted bodies. Directors Anton Borg and George Micallef have relinquished their post, and will be replaced by new vice president Anthony Zahra, and John Vassallo. Charles Brincat and Charles Zahra were both reelected for another term.

Mifsud Bonnici appointed Med Bank director Frederick Mifsud Bonnici has been appointed to the board of directors of Mediterranean Bank as a non-executive director. Mr Mifsud Bonnici spent 42 years with PricewaterhouseCoopers and currently holds the post of non-executive chairman of Blevins Franks Trustees and Blevins Franks Gamma. He was deputy chairman and subsequently chairman of the Malta Stock Exchange between 1990 and 1999 and chairman of Bank of Valletta and its subsidiaries between 2012 and 2013.

Pharmacist elected president of European Association Lilian Azzopardi was elected president of the European Association of Faculties of Pharmacy during its annual conference being held in Slovenia. Prof. Azzopardi is the head of the University’s Department of Pharmacy and has been actively leading developments in pharmacy education.

LGA appoints management team A new executive management team has been appointed at the Lotteries and Gaming Authority. Paul Fenech is chief officer for strategy and business planning, Dominic Micallef is chief officer for investigations and enforcement, Vincent Marmara is chief regulatory officer, Edwina Licari is chief legal officer, Heathcliff Farrugia is chief operations officer and Carlo Mifsud is chief financial officer.

New partner at VCA VCA, a boutique firm of accountants, has taken Alice Losco on as a partner of the firm. Ms Losco joined VCA in 2005 and her experience covers auditing, quality standards and procedures within the audit department and internal training programmes for audit staff.

New CEO for Valletta Cruise Port Valletta Cruise Port has appointed Stephen Xuereb as the chief executive officer, taking over from John Portelli who has been at the helm of the over the past five years. Mr Xuereb played a central role in Valletta Cruise Port plc’s success since its inception as Viset in 2002, serving as chief finance officer since 2009. He oversaw the financing of the €37 million project, as well as playing an active role in developing the cruise line business in Malta. He is also responsible from the travel retail operations within the group.

Directors appointed to MIA Following the recent AGM, Malta International Airport’s directors up to the next annual general meeting are Michael Bianchi, Nikolaus Gretzmacher, Yousef Sabeh and Alfred Quintano as non-executive directors, with CEO Markus Klaushofer, deputy CEO and CFO Austin Calleja and CCO Alan Borg as executive directors. The Malta Mediterranean Link Consortium appointed Karl Dandler as non-executive director, replacing Michael Hoeferer, whose term of office came to an end at this AGM.

Mariner Finance plc is offering €30 million in bonds, with the potential to rise to €35 million in case of over allotment. The unsecured bonds will be used for the refinancing of existing bank borrowings, possible acquisitions of other ports and logistical facilities, as well as corporate funding of the group. The bonds are being issued at an interest rate of 5.3 per cent payable annually, at an issue price of €100 per bond and will be redeemed in 2024. The company has applied for the bonds to be listed and traded on the Malta Stock Exchange. The Mariner Group plans to expand and grow its container terminal operations through selective acquisitions. Geographical preference of potential targets will include regions serviced by the European port system, such as the UK, the Baltic Sea area and the Mediterranean.

THE BALTIC CONTAINER TERMINAL IN RIGA.

The Mariner Group will also continue to expand and optimise operations at the Baltic Container Terminal through further investment in port equipment, warehousing and technological processes. “Since we commenced operation of the Baltic Container Terminal in Riga in 1996, the company has grown to be the largest and fastest-growing container handling facility in the

Baltic states,” said chairman and CEO Marin Hili. “We recently expanded our warehousing facilities to over 20,000 square metres, and plan to double them over the coming years. Further investment will go towards the acquisition of a new ship-to-shore quay crane, which will be commissioned later on this year, as well as increasing the terminal’s overall handling capacity,” said Mr Hili.

e Business OBSERVER

June 5, 2014

BUSINESS UPDATES

JUANITA BENCINI

KPMG’s AML oﬀering goes from strength to strength The KPMG Malta AML Roundtable has matured into a natural forum for sharing information by MLROs and compliance officers of regulated entities on anti-money laundering, developing common approaches to issues and promoting desirable policies as well as standards, while keeping abreast of a rapidly-evolving environment. Juanita Bencini, partner at KPMG responsible for organising the Roundtable, said: “Summer 2014 will see us inaugurate the tenth series of the AML Roundtable. We could never have come this far without the support of those who actively attend and contribute during the sessions, which are intended to foster interaction between subject people and the regulators. This is an exciting moment for the firm and establishes us as leaders in the market.” Topics discussed during the Roundtable range from recognising what constitutes a suspicious

activity to fraud and fraud mitigation. The Roundtable also looks at emerging issues such as the upcoming fourth EU AML Directive and the Malta money laundering National Risk Assessment, which will be published later this year. Internationally, KPMG was named the Global AML Firm of the Year for 2014 by Finance Monthly,

“is is an exciting moment for the ﬁrm” an international publication on the corporate world from a financial viewpoint, awarding firms and individuals that have outperformed the market and their peers in the key areas of finance. Criteria used in judging included innovation in client care; recog-

nised expertise; involvement in significant deals, cases or notable work; volume of work compared to industry peers; and size and value of involvement within transactions, deals and cases. “This is a great achievement and a reflection of the depth and breadth of our Global AML practice,” said Brian Dilley, Global Head of the Anti-Money Laundering Practice. “I am convinced that we have the most globally coordinated AML practice, which is able to service our clients wherever they need help.” In April, KPMG was named AML Advisory of the Year by ACQ (Acquisition Finance) magazine’s Global Awards 2014, and this year has also seen the launch of the KPMG Global AML Survey. The survey provides an in-depth analysis of the AML landscape and a view into emerging areas of risk, such as trade finance and tax evasion, as well as looking at AML trends

within the insurance and asset management sectors. The survey was distributed to AML and compliance professionals in the top 1,000 global banks, and garnered 317 respondents in over 40 countries, which included Malta. The aim of this year’s survey is to identify emerging trends, opportunities and threats; capture industry perceptions on regulation, cost and effectiveness; and benchmark AML efforts in the financial services industry. Some of the key findings highlighted in this year’s report include emphasis on the fact that AML

issues are moving back up the agenda for senior management, that the costs of compliance continue to rise, that Politically Exposed Persons (PEPs) remain an area of focus, gaining increased attention from senior management. Other topics cover Know Your Customer and sanctions compliance, which remain a challenge. Transaction monitoring systems are found to represent the greatest area of AML spending. Further details on the KPMG, Malta AML Roundtable and access to the Global AML survey can be found at http://goo.gl/ps2PYj.

• Bar coding of fire extinguishers for record keeping and inventory control; • Next-day service for empty fire extinguishers; • Repair of large-capacity industrial wheeled fire extinguishers;

• Fire extinguisher surveys; • Fire detection; • Fire fighting; • Fire suppression; • Fire trace; • CCTV; • Intrusion detection system; • Access control.

Maintenance and servicing at Firetech Service and maintenance provide peace of mind, safe in the knowledge that any system faults are dealt with rapidly and with minimum downtime. Firetech maintains a fleet of certified, highly-skilled technicians, all with a ‘can do’approach in order to guarantee prompt 24/7 emergency response. Firetech’s team is fully trained to carry out maintenance checks on all installed systems with or without a service maintenance agreement, and have a high level of customer liaison skills ensuring exceptional customer service. You can be confident that the staff, trained to the relevant codes of practice, will complete the work in an efficient and professional manner.

Preventative maintenance Preventative maintenance can avoid any unnecessary service callouts. A pre-arranged regular check would be put in place to carry out system tests to ensure that the system integrity and functionality is monitored. This will help diagnose underlying faults before the system integrity is compromised, potentially saving on cost.

Portable fire extinguishers maintenance and servicing Portable fire extinguishwers must be inspected and tagged, at least on an annual basis. All repairs and

hydrostatic testing are done in Firetech’s certified workshop by certified employees. Firetech offers: • Annual automatic service plan – scheduling your annual fire extinguisher inspection;

e Business OBSERVER |

June 5, 2014

BUSINESS UPDATES

Pikolinos – shoes with passion First and foremost, Pikolinos is a shoe with a lot of personality. Each shoe is unique, and that is why they apply all of their experience and expertise to the craftsmanship that seals in the shoe’s personality. They identify with the Mediterranean lifestyle, and are designed to be high-quality, comfortable footwear, embodying the values that are more important than trends. Leather is the star of the shoes – it receives only natural treatments that leave it super soft. Each shoe is produced using raw (non-dyed) leather and is subsequently filled with colour using a 100 per cent chrome-free process. As a result, they respect both your skin

and the environment. Pikolinos shoes are 100 per cent Spanishmade. The key for reaching out to the modern man is a renovation of the essence of Pikolinos. For them, young and urban moccasins and lace-ups will be the star of Spring Summer 2014. The highlight of the collection is still the casual look with flexible and light soles for comfortable and versatile men. Pikolinos is exclusively available from King Shoe Shop in San Ġwann, Valletta, Baystreet, Gozo and Tower Shoes in Sliema. Visit www.kingshoeshop.net to view the full collection, or find us on Facebook.

Banif Bank expands its branch network in Mosta and Paola Banif Bank (Malta) plc has opened new branches in Mosta and Paola as part of a network expansion programme that will enable the bank to reach out to more clients in their localities, while attracting regional traﬃc. Oﬀering better facilities and points of sale to customers is foremost for the bank, and having a wider geographical coverage will contribute further to its high standards of customer care. CEO Joaquin Francisco da Silva Pinto said that Banif is a core do-

mestic Maltese bank vying for a larger share of the local market. e bank was an impressive accomplishment in a very short time, clearly uplifted by the trust and confidence of the public. As an important player in the financial sector, Banif Bank contributes to the resilient financial system in Malta and maintains the country’s reputation as an important hub for financial services. “We will continue giving our customers the high quality of serv-

ice they expect, foreseeing their needs and strengthening our relationship with them,” said Mr Silva Pinto. “We will keep exploring how best to improve our product portfolio to their satisfaction, challenged by ever-changing trends and consumption patterns and a highly competitive market. Year in year out, we conﬁrm the bank has the fundamentals in place for longterm growth and a strong position on the market.”

STRETCHING CAN BE BENEFICIAL IN REDUCING MUSCLE-RELATED DISCOMFORT AND MUSCULOSKELETAL DISORDERS.

FlexiFit: now in your oﬃce Studies have shown that posture is directly linked with office performance and morale. Improved posture at work results in employees who are alert for longer and are happier at work – a fact that many large companies figured out long ago. It is also clear that not all employees are still young and fit. Age, excess weight, injuries and medical issues discourage employees from exercising. This is where FlexiFit is a leader among

peers. FlexiFit offers different fitness programmes that your employees are more likely to stick to, working on posture and reducing back pain, keeping employees active at work and injury-free. Exercises are graded and ideal for people with back and knee problems including sciatica and slipped discs, middle-aged and the elderly. This is because exercises are based on functional movements such as standing tall,

strengthening areas which are directly linked to office performance. This is recommended by doctors and physiotherapists as it greatly reduces, back pain and repetitive strain injuries. FlexiFit classes are a positive approach to team building while improving personal fitness. For more information call 9949 0896, e-mail plethoradance@ gmail.com, visit our website danceclassesmalta.com or like PlethoraDance on Facebook.