The Commercial Courier October/November 2014

THE COMMERCIAL/56

COURIER THE OFFICIAL BUSINESS MAGAZINE OF THE MALTA CHAMBER OF COMMERCE, ENTERPRISE AND INDUSTRY SINCE 1947

OCTOBER / NOVEMBER 2014

Flying high A sharp 24% rise in daily flights to and from Malta compared to 10 years ago

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IN THIS ISSUE WHAT BUSINESSES WANT FROM BUDGET 2015 / THE IMPORTANCE OF JUMP-STARTING MALTA’S COMPETITIVENESS / A RECORD YEAR FOR THE MALTA STOCK EXCHANGE / A LOOK INTO THE DESIGN OF CONCEPT RESTAURANT DIAR IL-BNIET / WHAT THE INDUSTRY REALLY THINKS about THE PROPOSED EXTENSION OF SHOPPING HOURS / KAREN CARUANA’S ARTISTIC SELF-EXPRESSION / THE LATEST BUSINESS NEWS

THE COMMERCIAL/56

COURIER OCTOBER / NOVEMBER 2014

food trends

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41 wealth management

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MANAGING YOUR WEALTH

‘A BUSINESS AGENDA TO GOVERNMENT’: WHAT BUSINESSES WANT FROM BUDGET 2015

From investing in jewellery to putting your money into a highinterest savings account, Jo Caruana speaks to the experts about the ways to achieve viable wealth management.

Sarah Micallef speaks to Director General Kevin J. Borg about the Malta Chamber’s pre-budget submissions to Government and asks Finance Minister Edward Scicluna what businesses can expect.

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JUMP-STARTING MALTA’S COMPETITIVENESS

31 IN FIGURES

Following recent news that Malta slipped six places in this year’s Global Competitiveness Report, Sarah Micallef learns how boosting competitiveness is key to future economic growth and stability.

66 THE DEBATE IS IT OPENING TIME FOR EXTENDED SHOPPING HOURS?

AIRLINES AND PASSENGERS… IN NUMBERS A look into the figures related to the airline industry in Malta.

32 DESIGN TRENDS

26 INTERVIEW

PRESERVING TRADITION

‘STOCK EXCHANGE EXPECTING AN ALL-TIME RECORD YEAR WITH UP TO €800 MILLION IN TRANSACTIONS’ Malta Stock Exchange CEO Eileen Muscat talks record figures, recent achievements and future focus with Martina Said.

Martina Said meets the director and designers behind concept restaurant Diar il-Bniet, who together have successfully married tradition with innovation.

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101 MEET THE ARTIST OF SELF-EXPRESSION AND LOVING WHAT YOU DO Artist and illustrator Karen Caruana chats to Sarah Micallef about her artistic journey so far, and finding the right tools to convey a message through her work.

stablished in 1947, The Commercial Courier is the official magazine of the The Malta Chamber of Commerce, Enterprise and Industry. It is the leading business magazine, having one of the best distribution channels in the sector. The publication is distributed for free to the members of the The Malta Chamber of Commerce, Enterprise and Industry. It is also distributed with The Malta Business Weekly as well as delivered to leading business people on the island.

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Jo Caruana investigates what some of the industry’s key insiders really think about the proposed extension of shopping hours.

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ON THE COVER Detail of airplane turbine. Statistics show that there has been a 24 per cent increase in the average number of aircraft daily movements in Malta since 2004.

Malta chamber’s silver collaborating partner

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Malta chamber’s bronze collaborating partners OCTOBER / NOVEMBER 2014

CC Editorial

Talking competitiveness at an EU level In its Economic Vision for Malta 2014-2020, the Malta Chamber of Commerce, Enterprise and Industry makes it clear that in order for the country to prosper, it needs to take a number of very important decisions. The Malta Chamber claims that Malta’s economy is at a crossroads, and what was successful in the past, does not necessarily equate to guaranteed success in the future.

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n its Economic Vision, the Malta Chamber compiles an action plan with recommendations for Government, which will lead to economic growth and safeguard Malta’s competitiveness on an international level.

The Malta Chamber’s observations however would be idealistic at best, if considered outside the context of the international scenario, with particular reference to the European reality. By 2050, none of the European member states are projected to be among the world’s largest economies.

European states have a choice between succeeding together or becoming insignificant separately. Europe is experiencing a slow but steady recovery, but restoring Europe’s competitiveness will take more than a few years.

It is good to see those countries that OCTOBER / NOVEMBER 2014

carried out structural reforms in recent years starting to reap rewards, but there is still an urgent need for a number of member states to make rapid progress in structural reforms in order to achieve longterm economic growth.

Due to high operating costs, high energy prices and excessive administrative burdens, Europe is becoming less attractive as an investment location. Europe is losing investments not only to fastgrowing economies but also to developed economies such as the US. The Malta Chamber makes it a point to illustrate the case for competitiveness, in a number of fora. The Malta Chamber has as

yet struggled to discuss competitiveness at the MCESD, but its arguments were heard at a European level. During his intervention at the European Parliament of Enterprises (EPE) held in Brussels in October, Deputy President Anton Borg illustrated the challenges faced by smaller isolated states and regions such as Malta, specifically in relation to the generation of energy.

Mr Borg explained that smaller countries’ limitations such as external dependencies and remote insularity kept such regions from achieving competitive electricity rates and which in turn affect cost competitiveness of all economic sectors, particularly industry and tourism.

“The Malta Chamber makes it a point to illustrate the case for competitiveness, in a number of fora.”

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CC Editorial He appealed for the adoption of the principle of common but differentiated responsibilities, rather than a ‘one-sizefits-all’ approach, so as to recognise differences between countries’ economic and technical capacity to tackle certain inherent challenges.

The EPE, organised by EUROCHAMBRES, addresses the notion of a democratic gap that exists between EU institutions and the main players of economic growth in Europe. It is argued that EU legislators do not take into account the entrepreneurs’ concerns sufficiently, and conversely, the roles and functions of the European Union are insufficiently known to businesses.

Bringing the debate back to our shores, the Malta Chamber reiterates that competitiveness remains the top priority for the country.

We must strive to address this priority both from cost and non-cost related points of view. Cost related elements such as wages, energy costs and internal transport are determined by the country directly and therefore, we must avoid situations where any erosion of our competitiveness is selfinduced.

On the other hand, we must also concentrate on non-cost elements such as research and development, quality and the training of the country’s human resources.

“We must also concentrate on non-cost elements such as research and development, quality and the training of the country’s human resources.”

These are elements that need to be constantly fostered and nurtured.

Malta cannot afford to ignore warning signs such as slipping six places to the 47th place in the World Economic Forum Competitiveness Rankings, ranking 103rd place in the world and last in the EU28 in the ease of doing business index.

These are signs that warrant immediate attention and will need to be addressed by decisions which require strong political courage. In the interest of our economy,

and our country, it is important that we are timely in our decision-making.

It is equally important for stakeholders to support the tough decisions that await our country. Unless we take them, we will forever live with the structural bottlenecks that continue to shackle our path towards future economic prosperity.

These tough decisions may initially not go down well but we must all acknowledge that they would be in the country’s longterm interest. cc

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‘A business agenda to Government’: What businesses want from Budget 2015 Ahead of next year’s Budget, Sarah Micallef looks into the Malta Chamber’s pre-budget submissions to Government with Director General Kevin J. Borg and speaks to Finance Minister Edward Scicluna about what businesses can expect from the upcoming Budget.

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he Malta Chamber of Commerce, Enterprise and Industry has made a number of submissions to Government as part of the pre-budget consultation process 2015, through which it aims to “provide a business agenda to Government rather than wait for a Government agenda for business,” as Malta Chamber Director General Kevin J. Borg highlights.

The proposals centre on two principles: fiscal responsibility and the importance of ensuring national competitiveness.

Mr Borg lists investment support as a priority, explaining, “Government must continue to strengthen the imputation corporation tax framework, complemented by a number of proemployment, pro-training initiatives and pro-research and innovation policies,

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which are key drivers of economic advancement rendering Malta an attractive destination for Foreign Direct Investment.”

Speaking of the ways in which the Budget for 2015 will be stimulating the economy and business, Finance Minister Edward Scicluna told The Commercial Courier that this Budget will continue to focus on consolidating public finances and lowering the deficit and debt. “The economy is doing well and, at this rate of economic growth, the primary concern is to keep the growth balanced. There is, in fact, no need for fiscal stimulus at this point. We should understand that the private sector is more interested in letting itself do its business without too much needless hindrance from the state, rather than state aid,” he says.

Conversely however, the Malta Chamber proposes the neutralisation of the loss of intensity aid levels. Mr Borg cites, “the loss or reduction in intensity aid levels in the new programming period leaves a vacuum in the supporting framework for economic growth. There is urgent need of alternative supporting solutions to be created to incentivise investment.”

“The economy is doing well and, at this rate of economic growth, the primary concern is to keep the growth balanced.”

- Finance Minister, Edward Scicluna 11

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Photo by Lionel Galea

“There is no need for fiscal stimulus at this point. We should understand that the private sector is more interested in letting itself do its business without too much needless hindrance from the state, rather than state aid.” - Finance Minister, Edward Scicluna Another priority for next year’s Budget, according to Mr Borg, is the much discussed reform in the Cost Of Living Adjustment (COLA) system, as well as the need for a clear definition of the term ‘Exceptional Circumstances’ which is already contemplated in the law.

“The definition would allow an automatic triggering of mitigating factors for COLA, 12

should the need arise,” he states.

In its June 2014 report, the European Commission stated that no policy steps have yet been taken on reforms to the Cost Of Living Adjustment mechanism in order to limit its potentially negative impact on competitiveness through a misalignment between minimum wage and productivity developments.

In response to this, Minister Scicluna maintains that at the same time, “the same Commission has toned down its objections on the issue, since a close examination of the mechanism indicates that the real risks to loss of minimum wage competitiveness lie elsewhere.”

In his view, “the public sector wage contracts which were agreed on the eve of the most recent election are a bigger threat. The main function of our COLA is to update the minimum wage each year.

If it is not done automatically, somebody must decide it each year.”

Moving on to further pre-budget proposals, Mr Borg indicates that the Malta Chamber has consistently called for a reduction of energy costs for business. “In light of the fact that the 25 per cent reduction in tariffs which will come into effect in March 2015 will not suffice to bring down local tariffs to the level of EU averages, concrete proposals were put forward to lower local rates further.” These included allowing bulk buying and joint purchasing of electricity as well as allowing high energy users to opt for a fixed or variable tariff, he adds.

In addition, it is his view on behalf of the Malta Chamber that Government should further support the development of business and enterprise. Mr Borg maintains, “tangible measures must be taken to enable Malta to move up the World Bank rankings and similar classifications for ease of doing business.”

To this end, the Malta Chamber urges the authorities to undertake an exercise to map all administrative procedures which directly impact on business activity, and minimise unnecessary burdens; fully implement the Small Business Act, including adequate impact assessments for new regulations; reform the Public Service to effectively interact with business; and create a national competitiveness watchdog to ensure that productive businesses are not unnecessarily hampered by regulations and taxes.

With reference to the pre-budget consultation document issued by the Government earlier this year, which indicates the levels of growth in Gross Value Added in different sectors of the Maltese economy for the first half of 2014, Minister Scicluna comments on contractions of around -4.0 per cent in financial services and manufacturing.

“The financial sector value added which was affected during the first half of this year can be explained by the lower profitability of the banking sector which, like its counterparts abroad, is experiencing higher compliance costs, and the need for more provisioning and OCTOBER / NOVEMBER 2014

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“The loss or reduction in intensity aid levels in the new programming period leaves a vacuum in the supporting framework for economic growth. There is urgent need of alternative supporting solutions to be created to incentivise investment.” - Malta Chamber Director General, Kevin J. Borg increased capitalisation,” he says.

As for the manufacturing sector, “the sector experienced an increase of 140 full time jobs and 68 full-time jobs as primary jobs during the same period. Also with regard to Foreign Direct Investment inflows, the manufacturing sector was the largest contributor towards the turnaround in FDI inflows to Malta in 2013. So there is a lot of unevenness in the sector with one big firm undergoing some losses in demand and with all the other firms having a more stable and positive outlook,” he maintains.

The Malta Chamber Director General believes that more can be done for the country as a whole to embrace the need to reach for higher standards of excellence – a belief reflected in the proposal that enterprise should 14

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CC cover story be supported by institutions such as Malta Enterprise to assist in such transformations via incentives linked to the achievement of international standards and accreditation.

In addition, the Malta Chamber also suggests establishing Malta as a leading ‘living lab’ centre. Mr Borg explains this concept, maintaining, “Malta has the right environment to become a regional, if not global leading ‘living lab’ for businesses to conceptualise, co-create, undertake innovation, test-bed and commercialise future-ready solutions for a region. Malta should build on its position to become a ‘trusted’ location with strong business and enterprise ties and competences, coupled with

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close collaboration between the private and public sectors, to develop as the reference nation for regional solutions and whereby product and process standards selected areas are developed and exported from Malta.”

Moreover, fostering human development is also an important priority for the Malta Chamber. “Government and social partners need to interact more closely to address the availability

of improved quality and flexibility of the labour force while addressing unit labour cost developments which are not consistent with productivity gains,” Mr Borg says.

“The local education system needs to be reformed in such a way as to inculcate the right aptitude and attitude in Maltese youngsters, and reverse the current trend wherein people choose to rely on social benefits rather than perform

“Malta has the right environment to become a regional, if not global leading ‘living lab’ for businesses to conceptualise, cocreate, undertake innovation, test-bed and commercialise futureready solutions for a region.” - Malta Chamber Director General, Kevin J. Borg

OCTOBER / NOVEMBER 2014

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certain jobs or simply choose not to work at all,” Mr Borg argues. “A campaign needs to be undertaken to restore pride and professionalism in a host of jobs and careers that are nowadays being frowned upon by Maltese workers. The education

system needs to create a generation of young people who are in love with what they do. This can be achieved through proper career guidance, apprenticeship and internship schemes. It is necessary to profile the skills needed by all sectors

of business, identifying those which are over and under supplied. Based on this, a human capital development programme can be designed.”

Complementing this, Minister Scicluna outlines the major critical areas that the Budget for 2015 will be addressing as building on the momentum initiated through the 2014 Budget growth measures aimed towards making work pay. “These measures now need to be reinforced and extended to the whole social policy sector,” he says, adding, “this would fulfil our next step: that of avoiding dependencies on social benefits. These dependencies are created by the state through the past patchwork approach to the annual budget, which only served to penalise beneficiaries if and when these were to take up employment.”

Finally, on the part of the Malta Chamber, Mr Borg calls for a reform of the MCESD. “Urgent attention is required for this essential institution to be given true independence and autonomy. MCESD must be well equipped, resourced and directed to ensure the attainment of a non-partisan approach to economic and social development. With adequate resources, MCESD must establish and pursue a set of specific goals that will assist social and economic development in Malta,” he concludes. cc

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Jump-starting Malta’s competitiveness “We must not allow our relative success in the past to fog our vision towards the future.”

– Malta Chamber President, David G. Curmi With the recent news that Malta slipped six places since last year in the World Economic Forum’s Global Competitiveness Report, Sarah Micallef talks to the experts about the current situation, and how boosting competitiveness is the key to Malta’s future economic growth and stability.

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he World Economic Forum’s recently released Global Competitiveness Report for 2014-2015 has seen Malta slip down six positions in its ranking since last year to 47th place out of 144. Considered the most comprehensive assessment of national competitiveness worldwide, the report provides an insight into the competitive landscapes of 144 economies.

Speaking of Malta’s competitiveness within the context of the global and European economy, Economy, Investment and Small Business Minister Chris Cardona notes the importance of bearing the particular characteristics of our country in mind. “Factors like physical geographical size, location and the size of our internal market are very important to evaluate our competitiveness,” he maintains.

Dr Cardona highlights the fact that 20

because of its size, Malta is limited in the kind of FDI production it can attract, while conversely, it specialises in the production of high-value small components, like switches and micro-chips, which are exported to form part of a larger consumable. “Because our internal market is so small, most of our exports are industry-to-industry rather than consumer products.” He also notes that our geographical location plays to our advantage: “companies operating from Malta have a foothold in the European Union, yet they are also just a few kilometres away from North Africa and the Middle East.”

Minister Cardona goes on to point out a number of competitive advantages Malta holds in respect to some of its direct competitors in Europe, including a welltrained, English speaking workforce and long experience in dealing with FDI.

As a Swiss citizen living in Malta, and with Switzerland having retained its crown as the world’s most competitive economy for the sixth consecutive year, Competitive Malta President Margrith Lütschg-Emmenegger reflects on the Maltese islands’ global ranking. “Although the islands’ situation is not as rosy [as Switzerland’s], on a positive note they continue to rank as one of the world’s top financial jurisdictions. Malta has also maintained the 13th ranking position in terms of the strength of auditing standards and reporting standards.” Having said this, she is also quick to point out the key improvement areas the report highlights, including bureaucracy and government inefficiency as well as access to finance and the insufficient capacity to innovate.

Further to this, in an interview with The Commercial Courier, Michele Napolitano, OCTOBER / NOVEMBER 2014

CC cover story Director of Global Sovereigns and Supranational at global ratings agency Fitch, stresses that while Malta gained about 4.5 per cent of export market shares in recent years, pressures are mounting. “Nominal unit labour costs have grown faster than the eurozone average, and Malta is losing competitiveness compared with peripheral eurozone countries, which have experienced significant labour cost adjustments. This could put pressure on the trade performance of the Maltese economy in the future.”

As Malta Chamber President David G. Curmi asserts, competitiveness is one of the two principal pillars on which the Malta Chamber’s proposals for the upcoming Budget are based. “Together with fiscal responsibility, competitiveness is the key to Malta’s future economic growth and stability. Competitiveness is determined by two main elements which are cost and noncost related. Cost-related elements such as wages, energy costs and internal transport are determined by the country directly, and play an important role in determining its competitiveness. We need to ensure that all stakeholders understand the importance of these elements in terms of the country’s future economic prosperity.” As for non-cost elements like research and development, Mr Curmi cites that “quality and the training of

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the country’s human resources are elements that need to be constantly fostered and nurtured. Malta cannot afford to ignore warning signs that may have a bearing on its competitiveness.”

Speaking of Malta’s position in the World Economic Forum Competitiveness Rankings, Mr Curmi maintains, “Malta scored weakly in terms of ease of doing business (business start-up procedures), innovation, labour market efficiency and certain aspects of infrastructure including roads and electricity supply. Moreover, in terms of ease of doing business alone, Malta ranks 103rd in the world, and is in last place within the EU28.”

Asked about the Maltese economy’s current responsiveness to the needs of FDIs, Minister Cardona cites the fact that the average 40-year time span of major FDI companies in Malta is significant. “It shows that we are able to retain the FDI that we attract, and that we have been sensitive and responsive to their needs throughout time.

Successive governments kept a favourable climate for these FDIs to operate in this

country.”

Having said this, Minister Cardona admits that there are still issues that need to be tackled: “we must encourage more students to specialise in areas in which we are attracting FDIs. There is also the issue of industrial space, which is very limited.”

Despite these necessary improvements, he asserts that during the last months, improvements to meet the demands imposed by competition and by industry have been made. “To mention just one, we have managed to improve significantly on the time for an industrialist to be given the green light

by Malta Enterprise to start an operation in Malta. On average, the waiting time for a definite answer from Malta Enterprise has been reduced to barely a month.”

While on behalf of Fitch, Mr Napolitano is in agreement on the fact that Malta has been successful at attracting FDIs in high-value added sectors including financial and business services, ICT and online gaming, he warns that competition for FDIs is becoming fiercer among eurozone

“Factors like physical geographical size, location and the size of our internal market are very important to evaluate our competitiveness.”

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

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“Malta is losing competitiveness compared with peripheral eurozone countries, which have experienced significant labour cost adjustments. This could put pressure on the trade performance of the Maltese economy in the future.”

– Fitch Global Sovereigns and Supranational Director, Michele Napolitano

countries. “Preserving competitiveness will be a key driver of FDIs in Malta. In this respect, high energy costs, inefficiencies in public procurement processes and in the judicial system are weaknesses for Malta’s competitiveness. The fact that the Government is working on reforms in these areas is positive and suggests that policymakers are not complacent.”

On his part, Mr Curmi believes that while Malta is sensitive and responsive to the needs of FDIs, more needs to be done. “Past success in understanding what investors needed does not guarantee the same success in the future,” he states. He points to the fact that Malta has lost its ability to incentivise investment in large manufacturing undertakings due to changes in the regional aid regime, stating, “the application of these regulations on Malta must be challenged at a political level to ensure that the loss of regional aid is replaced with other compensatory measures that seek to address Malta’s disadvantages.”

In the meantime, he continues, “we need to continuously identify alternative supporting solutions to incentivise investment. In order for the country to prevail in the present sensitive European 22

economic climate, manufacturers need consistency, clarity and continuation from policy-making bodies.”

Bearing Malta’s ratings in mind, Mr Napolitano echoes Mr Curmi’s views in relation to Malta’s challenges in attracting investments. He lists the obstacles: “Malta’s Ease of Doing Business Indicator scores well below the median for countries with an A rating. According to the 2013 EU justice scoreboard, Malta scores significantly worse than the EU average on time needed to resolve non-criminal cases. Energy costs for businesses are among the highest in Europe.

There is also evidence of weak competition in some sectors of the economy.” Tackling these bottlenecks, he asserts, could increase Malta’s attractiveness as a destination for FDI. Additionally, according to Mr Napolitano, “at Fitch we are concerned about the Government expenditures’ trends in the healthcare and pension sectors in Malta.

Without reforms in these areas, future governments may need to modify the tax system to finance higher healthcare and pension spending. Given the businessfriendly tax system has been pivotal in attracting FDIs in recent years; the lack of

healthcare and pension reforms is a threat to the long-term competitiveness of the economy.”

In so far as Malta’s positioning itself favourably to attract investments, Minister Cardona maintains that the Government’s strategy is to “widen our networks and create more visibility for Malta as an investment location.” He states that while the European market remains important, opportunities are also being sought from other areas. “We have established an excellent connection in China and have also made significant inroads in the United States.

There’s also an interest in Malta from Arab countries.”

Besides creating these networks, the Minister for the Economy, Investment and Small Business asserts that Government is also gearing up to create space for new FDIs to invest in Malta. “We are projecting that by the end of the year we will host the first tenants at the Life Sciences Park in San Gwann. Malta Enterprise is currently finalising a number of agreements with tenants for the Park. There we will have local and foreign industries working in the Life Sciences using the most innovative technologies and methods. Adjacent to the Life Sciences Park we will also be having the Digital Hub, where companies working on software development will also collaborate with the Life Sciences on such areas as bioinformatics.”

In Ms Lütschg-Emmeneger’s view, the key to Malta’s competitive success lies in innovation. “Talent needs an innovationfriendly environment in which to grow,” OCTOBER / NOVEMBER 2014

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“Malta has shown glimpses of its potential to become one of the world’s most successful economies. To achieve this potential, Malta needs to invest in those who through their talent, skill, entrepreneurship and the development of intellectual property, can bring the best out of this country.”

– Competitive Malta President, Margrith LütschgEmmenegger become one of the world’s most successful economies. To achieve this potential, Malta needs to invest in those who through their talent, skill, entrepreneurship and the development of intellectual property, can bring the best out of this country,” she maintains.

Mr Curmi is in agreement, maintaining, “our achievements are not permanent and they must be protected and often reinvented.” Indeed, Mr Curmi believes that complacency is the biggest threat to Malta’s competitiveness. “We must not allow our relative success in the past to fog our vision towards the future. There are areas that need immediate attention and decisions that require strong political courage. We must be agile and timely in our decision-making, and all stakeholders have to support these tough decisions that may initially not go down well but which we all acknowledge would be beneficial in the long term.” cc

she maintains, and “public policy can contribute decisively towards such an environment, especially where this is geared towards encouraging the development of innovative ideas and products which have a degree of potential that is both unique and sustainable.” Additionally, it is her belief that further measures to improve access to finance, more innovation-friendly rules and regulations, and additional incentives for research and development can also make a substantial difference to Malta’s competitiveness.

“Innovation is a keystone of long-term competitiveness. However, the development of innovative capacity can only come about through the consistent application of the correct strategies. Over the past decades, Malta has shown glimpses of its potential to

“In order for the country to prevail in the present sensitive European economic climate, manufacturers need consistency, clarity and continuation from policy-making bodies.”

– Malta Chamber President, David G. Curmi OCTOBER / NOVEMBER 2014

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CC INTERVIEW

‘Stock Exchange expecting an all-time record year with up to €800 million in transactions’ Martina Said speaks to the CEO of the Malta Stock Exchange, Eileen Muscat, on record figures, the Exchange’s achievements in recent years, and its clear focus on international business for 2015.

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ollowing a record year with trading levels of €760 million at the Malta Stock Exchange in 2013, CEO Eileen Muscat is hopeful that this year will yield an even better result. “Figures up until September this year show a total traded amount of €720 million, which is 93 per cent of the total value of transactions achieved last year. This year’s figure will probably be higher than last year’s – by end of December we expect trading to exceed €800 million, making 2014 an all-time record year.”

“After a decline in recent years in equity and corporate bond trading, we experienced a record year, and have managed to maintain it and exceed it, so we are seeing OCTOBER / NOVEMBER 2014

CC INTERVIEW capitalisation which has exceeded €10 billion.”

In spite of record figures and a good level of trading activity, Ms Muscat says there is always room for improvement, and would primarily like to see more companies coming to the market. “It is granted that the number of domestic companies that can come to the market is limited, but we believe there is room for more. The truth is more companies are coming to the market, but they are doing so with corporate bonds; what we are not seeing are new companies coming with equity.”

She says that getting companies to come to the market with equity is always a greater challenge as it is not typical of Malta’s market – bonds have always been the investment of choice for the local market, and seeing new names always augurs well, as once a company comes into the corporate bond

market, then it is more likely it will also come for equity. “We would obviously like to see that number increase, the more companies you have, the greater the number of sectors that are represented, be it hospitality, IT, banking or communications. Additionally, the more sectors that are represented, the more likely that it will translate into greater liquidity on the secondary market, and that it will attract new investors.”

Asked about a company’s potential to grow by taking the route of going public, Ms Muscat says that companies decide to list for a reason, and the main reason is that they want another way of getting capital, other than, or in addition to, going to the banks. “Companies that may want to attract institutional or international investors consider trading as a viable route. However, it is a difficult decision for companies to make – there is a cost to listing, but they

“After a decline in recent years in equity and corporate bond trading, we experienced a record year, and have managed to maintain it and exceed it, so we are seeing a recovery in the market.”

Photos by Matthew Mirabelli

a recovery in the market,” says Ms Muscat. “We’ve seen a sustained level of interest in Government stocks, but we’ve also seen a slight increase in trading in both equity and corporate bonds. It’s been a particularly busy year for bond listing on the primary market, so as far as the level of activity, both the primary and secondary markets have sustained themselves.”

She adds that there’s been a slight dip in prices, which in turn has resulted in a dip in the index – “our index this year is slightly down from last year, but it seems to be recovering its value now. This has also been reflected in the total market OCTOBER / NOVEMBER 2014

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“Our index this year is slightly down from last year, but it seems to be recovering its value now.

This has also been reflected in the total market capitalisation which has exceeded €10 billion.” have a potential market that is limitless, as in today’s world, there is no limit on investment, wherever the investment is coming from, so potential for growth is positive.”

She adds that, looking beyond the gaining of finance directly, a company profile also undergoes change once it is listed. “In order to list, a company must have a certain structure, governance and must satisfy particular financial structures. All this is a very positive mark for a company, and shows a level of maturity and development which is certainly a key to attracting investors.”

Not all companies, however, since listing on the Stock Exchange have thrived in terms of profitability. Does this affect the perception of persons considering listing?

“Perceptions are certainly affected – markets are very psychological and a general downward or upward trend does have an impact, but I would say it is not related to one particular company or sector – there could be a company in a thriving sector or similar sectors that are doing very well, but this particular company for some reason is not; it ultimately always boils down to the company.”

She says that the real concern would be if there is a downward trend to the market as a whole. “There are periods where the market does suffer. Companies do not live on their own and are affected by external issues – the financial crisis and problems in our neighbouring countries had an effect on the market to a certain extent, and specifically on the companies that make it up. There are times when perceptions affect the market, but sometimes they’re real, other times they are just perceptions.” She adds that the real concern would be if the market does not react or recover, and in a small market like Malta’s, the effect of one company not doing well is greater than if it were in a much bigger market. “At the end of the day, however, it is a market risk, one that both companies and investors are very well aware of.”

Ms Muscat says that the best-performing equities and bonds in the market – setting aside Government stocks that are always a preferred investment – are in the financial sector, followed by companies in the IT, hospitality and construction sectors. Also, the number of accounts trading increased to 300,000 from 150,000 over the past ten years. “The figure represents about 85,000 individuals, which is a huge penetration of the adult population in Malta, and that is a very positive sign,” she says. “It does not 28

“In order to list, a company must have a certain structure, governance and must satisfy particular financial structures. All this is a very positive mark for a company, and shows a level of maturity and development which is certainly a key to attracting investors.” mean that all accounts are active, but it does mean that individuals and companies are looking at listed securities as different and new ways of spreading their investments.”

Ms Muscat says that when trading first began and investors started to increase, there was a significant skew towards Government stocks, but today, most investors would have small investments in different parts of the market, and the number of persons who trade on the secondary market – not just the number of trading accounts – is increasing. “It has taken us 20 years, but considering we have gone from a culture that is completely saving to a culture that is now a bit more risk-taking, that is quite positive.”

Apart from the number of local companies listed on the Malta Stock Exchange, were there higher expectations for the number of European companies seeking to list locally? Ms Muscat says that, for many years, the Exchange was largely serving a domestic market, was still growing locally, and there was no conscious effort to attract foreign companies. While EU membership theoretically facilitated this, it is not enough.

“Over the past few years, the Exchange has invested heavily in its technology, created new partnerships with other operators and has been focusing on international business. On the latter, however, one must be realistic. We are not addressing

the multi-billion multi-national companies, but we are certainly addressing the smaller companies which may not have a natural home in larger markets. Companies will always look towards their home markets like anything else, so there is always the hurdle of offering something better than one’s home market,” she explains, “but a number of factors come into play with crossborder listing, such as where your investors are based, the cost of getting listed and regulations. In Malta, we are still very costeffective and have an excellent regulatory reputation. The Exchange is doing a lot of work in this regard.”

As this year begins to near its end, Ms Muscat says that the Exchange has clear goals for the next one. “International business will be high on the agenda. We are still very dedicated and committed to the local market and SMEs in the local market, but certainly whatever we are doing, we will do in light of the fact that we are ultimately in a European market and need to get that perspective on board. We will also be one of the first CSDs moving to the pan European clearance and settlement system in July, we will be taking on board other technology-based projects from a regulatory perspective, but also as business enablers, and we will consolidate what we started in 2014.” cc OCTOBER / NOVEMBER 2014

CC in figures

Airlines and passengers‌ IN Figures

55% Dramatic increase in the number of passengers that flew to or from Malta over the past 10 years comparing 2003 with 2013

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Number of airlines that currently fly to Malta

24%

over

4

MILLION Impressive number of passengers that used the Malta International Airport to fly to or from Malta throughout 2013

30%

Increase in the number of airlines operating in Malta over the past 10 years

80+

Number of destinations airlines fly to from the Malta International Airport

Increase in the average number of aircraft daily movements over the past 10 years

11,045 Average number of daily passenger movements in 2013 ie number of passengers who travelled to or from Malta through the Malta International Airport every day

84

Average number of aircraft daily movements at the Malta International Airport

7.2%

Increase in passengers that flew to or from Malta between January and September of this year when compared to the same period in 2013

3,385,808 The total number of passengers that have travelled to or from Malta through the Malta International Airport between this January and September

Source: Malta International Airport OCTOBER / NOVEMBER2014 OCTOBER/NOVEMBER 2014

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CC DESIGN TRENDS

Photos by Ryan Galea

Preserving tradition Since opening its doors earlier this year in the quiet village of Dingli, Diar Il-Bniet has been the talk of town, both for the delicious meals it serves, as well as for its faithfulness to the Maltese way of life. Martina Said meets the designers and the director of this concept restaurant, who together have successfully married tradition with innovation.

E

verything about this place looks and feels authentically Maltese. From the colourfully patterned tiles and wooden table tops to the rows of homemade jams and ‘L-ikla t-tajba’ printed on the wall, it truly feels like a throwback experience, to the times when the family gathered in numbers around grandma’s kitchen table.

Dorianne Kurtchu, Director of Diar Il-Bniet and the mind behind its novel concept,

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says she had been thinking about pursuing a project related to local agritourism for a while, and after doing her homework on Maltese traditions, local food recipes and farming, she concluded that an estate with its own food outlet, that prepares local dishes using its own produce and sells its own products and preserves is actually possible.

With that in mind, she approached Archi+ Studio, led by three partners, Adrian OCTOBER / NOVEMBER 2014

CC DESIGN TRENDS Mangion, Richard Borg and Warren Falzon, to realise her vision for the estate – “the outlet in Dingli used to be a residential home with a small bar and grocery store incorporated within it,” she says.

“I explained the concept I had in mind to the team, which included an open kitchen and a raw, natural design. Some structural changes needed to be made but they succeeded in fulfilling my vision of it.”

Warren Falzon, partner at Archi+ Studio who led the project, says the goal was to offer customers a complete experience, rather than a simple lunch or dinner. “We were quite limited in terms of space, and the client wanted to incorporate her family’s agricultural background into the experience for clients to enjoy. Works began in June of last year, and after obtaining the necessary permits, we began carrying out structural changes to the place – gutting it, breaking

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down walls and installing beams, after which electrical works, plumbing, plastering and restoration of old walls and flooring proceeded.”

Warren explains that the design of Diar Il-Bniet needed to revolve around the particular concept the client had in mind, which included taking customers to the fields where their fruits and vegetables are harvested, as well as gathering small groups of keen cooks for tutorials on Maltese cooking at the restaurant. To facilitate these ideas, he proposed an open kitchen, making it easier for both customers and learners to

“The outlet in Dingli used to be a residential home with a small bar and grocery store incorporated within it.” – Diar Il-Bniet Director, Dorianne Kurtchu

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CC DESIGN TRENDS

“We reused the tiles that were still in good condition to create a sort of carpet in the middle of the restaurant, and instead of buying new tiles off the shelf for the rest of the floor, we got a contractor to create custom-made tiles with a concrete effect to offset the old ones.” – Archi+ Studio Partner, Warren Falzon

look at and observe the chefs at work.

“We also wanted to keep the materials used as raw and natural as possible. We did this by reusing old items that we found there, as well as items the family owned related to their agricultural background,” such as old wooden crates, wicker baskets, decorative cooking pots and glass preserve jars. Warren ensured that some of the original features of the previous establishment were also retained, such as

34

slabs and walls, leaving them unpainted and in their natural state. “So was the case with the traditional tiles, for instance, where we reused the tiles that were still in good condition to create a sort of carpet in the middle of the restaurant, and instead of buying new tiles off the shelf for the rest of the floor, we got a contractor to create custom-made tiles with a concrete effect to offset the old ones.”

Warren says that for him and the team to become more familiar with what Dorianne’s family’s land grows and sells, they visited the fields and took inspiration from them, noticeable from the strings of dried vegetables hung from old hooks over the bar area. “Their way of life and sense of tradition is what helped us meld the entire package and implement it. For example, we noticed they use straw in a lot of things, and translated that into the display; we noticed pumpkins lying around and found a way to integrate them into the décor – we were inspired by how they live, work and cultivate their land.”

Wood also features heavily in the overall décor of Diar Il-Bniet, keeping the look natural and earthy. “We kept the original texture of the wood by giving it a wax matte finish, avoiding shiny varnish so that it feels natural to the touch, and some of the walls were finished with a concrete look OCTOBER / NOVEMBER 2014

CC DESIGN TRENDS

“We wanted to keep the materials used as raw and natural as possible. We did this by reusing old items that we found there, as well as items the family owned related to their agricultural background.”

– Archi+ Studio Partner, Warren Falzon rather than with something smooth like gypsum, giving the impression of something aged and used. We also re-used windows as picture frames, replacing the glass panes with photos, and for the shelving, for instance, as supporting structures, we sourced old iron pipes and painted them black, which are both aesthetically pleasing and within the client’s budget.”

The traditional look of the place, however, is nicely balanced with modern elements, such as food displays, marble tops and modern lighting fixtures, making the entire space both inviting and homely. “You go to this place expecting to relax and enjoy it, as though you’ve entered your grandmother’s house and are waiting to eat an excellent home-cooked meal. The experience is real, and from the start, the end goal was to offer something more to the client, which has contributed to its success,” explains Warren.

“The client was initially concerned with the

OCTOBER / NOVEMBER 2014

location, seeing as it’s not very central, but we believed that if the product on offer is good, and the place is properly done, then it would work nonetheless. The fact that customers can also see, speak to and interact with the owner and mind behind this concept store, who is always present in the shop, chatting and serving people, proves that it is more than just a business to her.”

Warren adds that the greatest satisfaction experienced upon completion

of the project is that it ended up looking just as they wanted it to. “We were concerned at first because often, with a project like this, it is designed a certain way to your liking, but then when it comes down to buying certain items that are a little on the expensive side, the client is often a bit resistant. In this case, however, the client was willing to go the extra mile, so long as it looked good – as in the case of the old gramophone on display in the restaurant.”

The very principles that Diar Il-Bniet are based on are the same ones that were instilled in Dorianne from an early age. “My mother used to cook very traditional dishes using fresh produce from our own fields, and I inherited my grandmother’s passion for jar preserves, both of which we are now implementing at Diar Il-Bniet. I am a very cultural person and love our local cooking culture – I consider myself lucky to have a family that has been working more than 120 tumoli of land at our estates since 1890, allowing us to fulfil this vision.”

She says that the success of Diar Il-Bniet is based on its effortless combination of tradition, simplicity and genuine food, taking traditional farming methods and turning them around to suit an original concept store which is among the first of its kind locally. “All the design and décor elements were kept natural and raw, with a homely colour scheme, traditional shelving, antique décor, and wooden doors and windows, all of which were chosen carefully to complement the homely atmosphere at Diar Il-Bniet.” cc

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CC PROPERTY

The dynamics of the letting industry Jo Caruana speaks to three of Frank Salt Real Estate’s letting agents to get their expert advice on this exciting industry, as well as to learn what investment potential exists for would-be landlords.

T

he letting world has literally taken Malta by storm. It wasn’t long ago that the general consensus was that rental simply wasn’t a popular choice here; most people lived with their parents until they were old enough to jump on the property ladder and buy a house.

Today, though, things are different. Aside from the multitude of foreign residents choosing to rent, there are also many locals keen to move into their own place before they commit to buy. As a result, the demand for rental properties now often outweighs the number of places that are available.

With that in mind, property letting has become a strong industry, with a growing need for letting agents and landlords – as these three Frank Salt Real Estate letting agents will testament.

Simone Magri first joined Frank Salt Real Estate’s letting department a few years ago, before shifting into another career path. However her love for the job and the team led her back to it and, today, she offers unique insight into what the letting industry has to offer – both to agents and to landlords.

“I loved the letting industry from the second I started working in it. But, as I had a

young daughter, I decided to do something else for a while so as to have a more structured schedule. But I missed it! I missed the energy, the highs and the laughter I shared with colleagues when one of us had a story to tell. I missed viewing properties, and meeting and getting to know different people every day. So, a few years and a few jobs later I decided to come back.

“I chose Frank Salt Real Estate for a

“My time in the industry has shown me that there really is no better investment than rental property.” – Simone Magri 38

OCTOBER / NOVEMBER 2014

CC PROPERTY outweighs supply. There aren’t many industries that you can say that about these days, so I would definitely recommend that potential landlords take the plunge and explore what the rental market has to offer.”

“Aside from the long-term increase in the sale value of the property, you can also expect to see a yearly return of five per cent, or more.”

– Neil Gatt Coleiro second time as I know the company and I trust in the good name it has built. I like that it takes what it does seriously. New consultants are given thorough ongoing training, with regular seminars that inform and motivate us.

“I enjoy working in letting specifically because no day is like the other. I love that I get to meet people from all walks of life.

Some end up being more than just clients; they really become friends. I also enjoy the diversity of the job – from advising new buyers looking to put their property on our books for rent, to guiding clients on what property would best work for them. Plus it’s great that I can plan my own time and manage my diary.

“I often work with foreigners looking to rent. I have worked with Europeans and nonEuropeans; most are moving to the island after being offered a job here, others to finish a degree at university or to set up their own business. Thus their demands vary. Some would only consider living in urban areas whilst others prefer quieter places. What they finally decide on is sometimes completely different from what they initially requested.

“My time in the industry has shown me that there really is no better investment than rental property. You purchase at a price and, while the value of that property rises, you rent it out for an attractive return. It’s almost like a double investment, with no losses whatsoever as even the rental value continues to increase. Plus, the demand for rentals is now so high that demand OCTOBER / NOVEMBER 2014

Over his years in the letting industry, Neil Gatt Coleiro has witnessed a steady increase in demand and an ongoing development in the type and number of clients looking to rent. He suggests modernising your property to boost its chances of attracting a high-value client.

“For as long as I have been doing this work, there has been a constant increase in demand for rental properties, so I would say it is definitely worth investing in this sector.

Aside from the long-term increase in the sale value of the property, you can also expect to see a yearly return of five per cent, or more.

“If I had to suggest one tip for interested landlords, it would be to modernise their properties as much as possible. We come across quite a few older looking properties that stay on the market for longer stretches of time and which are under-priced in comparison to their potential. Unsurprisingly, modern tastes are the most popular amongst the clients we service so, generally, by investing a bit more in your property you will make it a lot more attractive to clients, which will in turn give you a substantially higher return.

“There is also a lot to be said for the shortterm rental market, provided that you are prepared to commit the time and resources needed, because it obviously involves people moving in and out a lot more regularly. You’d also need to consider that your property will be used as a holiday home as opposed to a long-term home, so common wear and tear will take its toll relatively quicker.

“Of course, we can help with a lot of that.

We have a great, professional team and, although we all operate from various offices all over the island, I have always found the support I needed, whether for myself or my clients.

“You see, despite the business element of the industry, from our end it becomes a very personal experience given that we are finding people their homes on a daily basis.

We meet people from all walks of life and from all over the world, so learning about cultures, traditions and traits becomes the order of the day, every day. That is just one of the many brilliant aspects of this job.”

Giovanella Abela has worked for Frank Salt Real Estate’s letting department for a few months. She has already fallen for this fast-paced industry and its exciting daily challenges.

“I think the saying that ‘hard work pays off’ must first have been said by someone in real estate – you certainly get out what you put in! A smile goes a long way and ensuring your client feels comfortable and can trust

you is what will set you apart from the competition.

“Letting is very fast paced and, sometimes, a property will be rented out just hours after it comes onto the market. This means you have to be on alert all the time – you have to know both the market and your clients well so that you don’t miss out on an opportunity.

“I came to this job from a client-handling role with an advertising agency and that has helped me to settle in. I am used to the tight turnaround times associated with advertising.

“I specifically chose Frank Salt Real Estate because I knew I would be offered the training I needed to really get started in the industry. From day one I felt part of the team, as well as encouraged and supported.

“This is a fantastic job for people who are organised, interested in property and keen to meet new people. If you are willing to put in the hours and really give it your best shot, then it can be very fulfilling. I think the best feeling in the world was meeting my very first clients a month or two after I had rented a place to them, and have them hug and kiss me in the middle of a busy supermarket.

Most clients really do appreciate your effort and hard work, and you become their friend rather than just their estate agent.” cc

“Letting is very fast paced and, sometimes, a property will be rented out just hours after it comes onto the market.”

– Giovanella Abela 39

CC WEALTH MANAGEMENT

Managing your wealth From investing in jewellery to putting your money into a high-interest savings account, there are several ways to achieve viable wealth management. Here Jo Caruana gets valuable advice from key experts in the field.

W

hether you’ve got millions to invest or a few thousand, every financial manager will tell you that you should be ‘maximising’ your money. And by maximising, they mean thinking about the many ways that you could boost your portfolio by investing cleverly.

So where do you begin?

“In essence, wealth management is exactly what the title implies: managing one’s wealth,” explains FCM Bank’s customer relationship manager Fabio Zuccaro.

“Wealth management is the process of handling a portfolio with the view to safety and growth, performed with the assistance of an accredited professional financial adviser who, through building a relationship with the customer, will recommend how to achieve desired financial goals,” he says.

Naturally, to reach those goals, your

OCTOBER / NOVEMBER 2014

advisors – whatever their area of expertise – will look into your income, outgoings and risk appetite. At the same time, you may also wish to seek help on financial planning, tax advice and legal advice.

“For us, helping our customers to manage their wealth is all about getting to know them,” explains Kari Pisani, private banking manager for Sparkasse Bank Malta plc. “We look at how they achieved their wealth, what their goals and aspirations are, and what their understanding of risk is. With that information our execution can correspond and reflect these idiosyncrasies.”

If you want to get started on managing your wealth, Mr Pisani suggests engaging an advisor and approaching them with an open mind and attitude that allows them to build a tailor-made solution that truly

meets the peculiarities of your specific needs. “Reticence and diffidence in these disclosures is likely to be deleterious in the long run to a positive outcome,” he continues.

For FCM Bank, the focus is on helping customers through instant savings accounts, fixed-term deposits and savings plans. “Looking to stagger fixed-term deposits could lead to earning higher interest rates while retaining some flexibility,” continues Mr Zuccaro.

“Meanwhile, the advantage of including a traditional savings product in an overall portfolio is that the capital is guaranteed, as is the interest rate, so you will know in advance what you will receive, as opposed to more volatile investments where the value can move up or down. As investment advisors explain, diversification is key, so 41

CC WEALTH MANAGEMENT

Diversification could provide an all-round option, including elements such as antiques, jewellery, property or more.

including bank deposits in a portfolio is vital,” he adds.

Of course there are several options when it comes to wealth management, and, while they are very popular, you may prefer to participate in alternatives as opposed to savings accounts, bonds or financial investments.

Diversification, thus, could provide an all-round option, including elements such as antiques, jewellery, property or more.

“From personal experience, this sort of diversification will not promise any instant gains, however it will provide you with the best possibility of increasing your returns once you have invested in a given level of risk,” explains Mark Vassallo, director at Vascas Enterprises Ltd. “It’s very much like the saying, ‘don’t put all your eggs in one basket’, meaning that you should opt to invest in various different assets rather than just focusing on one in particular.”

With regards to the jewellery market specifically, Mr Vassallo explains that diamonds have been proven to provide security, as they constantly increase in value and can be easily converted at any point in time.

“Over the last few years, the diamond investment market has seen a healthy recovery after the recent troubles faced by the luxury goods market.” Due to the fact that diamonds are in high demand and low in supply, this makes them exclusive items, which are then in turn sold at higher, inflatable prices.

“Diamonds are not only beneficial for investors due to their high demand, but also because of the fact that they are not influenced by issues in the stock, oil and bond markets. In fact, you may notice that, even if a country is in a bad political or social position, the price of its diamonds will still remain constant.”

Meanwhile, Nick Bilocca, marketing manager at Frank Salt Real Estate, explains that property can also be a key addition to any wealth portfolio – primarily because property in Malta is appreciating on a yearly basis, making it secure and stable.

“This is not a statement plucked from thin air,” he continues, “but a fact confirmed by the Central Bank of Malta in its Property Price Index. In addition, investors can use their property for the scope of rentals and also get a healthy return in that respect.

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Wealth management tips: From the experts Fabio Zuccaro, FCM Bank “I always advise our customers to take some time and see what savings and deposits they have, and then decide if they are happy with the return they are receiving. If not, then it might be worth doing some research to identify the most appropriate product available to them. Many banks are paying almost no interest on customer savings accounts, but there are other alternatives out there.”

Kari Pisani, Sparkasse Bank Malta plc “Meet with a number of potential advisors to seek the best fit, be open minded when approaching the fact find, make choices in respect of people who are competent and have a reputation for it (advisors that say ‘no’ to an investment bias are probably better than those who say ‘yes’ simply to receive a mandate), be realistic in your expectations about the markets, and ensure you understand the risks without being blinded by the returns. Remember that risk is a function of reward.”

Mark Vassallo, Vascas Enterprises Ltd “Once you have decided to go ahead and invest in diamonds, you must always remember to invest in ones that possess a certificate issued by a reputable international organisation, such as the Gemological Institute of America, the International Genealogical Institute or HRD. It is vital that, before committing to any investment, you have prior knowledge of the diamond’s grade, colour, cut, clarity and carat weight. All this information will be provided by your certified jeweller.”

Nicky Bilocca, Frank Salt Real Estate “Real estate has a low and, in some cases, negative, correlation with other wealth assets. This means the inclusion of property investments in a portfolio of diversified assets can lower portfolio volatility and spread the portfolio investment risks. The huge majority of us will never get rich overnight. It takes long-term investing and a diverse portfolio to build true wealth. Hence there is no reason why not to include real estate as an important part of the equation.”

OCTOBER / NOVEMBER 2014

CC WEALTH MANAGEMENT

Few other investments do that, or get close to the return that property in Malta currently gives them.”

Mr Bilocca explains that it’s also important to bear in mind that property is one of the few investment opportunities where using the bank’s money couldn’t be easier. “The ability to make a down payment, leverage your capital and, thus, increase your overall return on investment, is a possibility – as you could viably take a loan at four per cent per annum and get the property rented out at five per cent, plus capital appreciation. This makes it a lump profit upon purchase.

“Another benefit of investing in real estate is its diversification potential.

Real estate has a low, and in some cases, negative, correlation with other wealth assets. This means the inclusion of property investments to a portfolio of diversified assets can lower portfolio volatility and spread the portfolio investment risks,” he adds.

So, in summation, it is clear that the route towards reliable wealth management is education and diversification. If you plan to kick-start the management of your wealth, or even to build on it, speak to someone you can trust – and then get a second opinion.cc OCTOBER / NOVEMBER 2014

“Don’t put all your eggs in one basket – you should opt to invest in various different assets rather than just focusing on one in particular.” – Vascas Enterprises Ltd Director, Mark Vassallo

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CC FINANCE

Paving the way for the aviation sector PKF senior partner George M. Mangion together with Senior Statistician Lynsey Schembri and Business and Securities Associate Dr Marilyn Mifsud, recently met with Minister for Tourism Dr Edward Zammit Lewis in order to address the simplification of aviation rules, a feat carried out in collaboration with Capt. Pace from Transport Malta’s CAD. The presentation was centric to the highly qualified person’s rules to identify those vehicles that can best optimise conditions to benefit Malta’s economy and generate new revenue streams.

Upon presenting its findings to Minister Zammit Lewis, PKF received accolades for its modest contribution to expand the aviation sector and streamline certain anomalies that in practice may hinder incentive legislation aimed towards attracting foreign direct investment. cc All research conducted by PKF Malta is thoroughly independent and entirely self-financed.

For information contact us on E: info@pkfmalta.com PKF’s Lynsey Schembri, George Mangion and Dr Marilyn Mifsud presenting a report to Tourism Minister, Dr Edward Zammit Lewis

Banks love to help SMEs Throughout all of Europe, SMEs are considered to be the backbone of Europe’s economic activity; the same can be said for Malta. SMEs are split into three main categories, whereby a company falls under the micro category if it employs less than 10 individuals and its turnover or balance sheet total is equivalent to €2M or less.

Subsequently there is the category that is known as small whereby the main factors are that the company employs less than 50 individuals and its turnover or balance sheet total is €10M or less. Finally there is the medium-sized company which is the largest of all and it entails that the number of employees employed within this company does not exceed 250 and the turnover or balance sheet total is less than €50M or €43M respectively. With the exception of very few countries such as Luxembourg, the SMEs sector has yet to reach its pre-crisis levels as most EU economies following the onset of the 2007/8 recession have remained under pressure and are fragile.

But let us talk about how SMEs grow and who they are in real life. A philosopher will tell you about the circle of life; the first steps, studying, try to establish a roadmap, the quirks of destiny to dictate who may succeed, while others may not. But the talented ones OCTOBER / NOVEMBER 2014

try all options, and most probably at some stage to progress in this journey one will require a loan, whether it is a home loan, a study loan, a green loan or perhaps a loan to enter the business world... all this, leading to the quest to become an entrepreneur. Such a loan application at a bank can be rather risky. It is no secret that risks are assessed depending on which area of operation one wants to penetrate – whether it is retail, wholesale, importation, manufacturing or services. This, without any doubt, would be made easier if one had to come from a well-heeled family with plenty of collateral, but we all know that this is not always the case. In fact if one had to consider Steve Jobs, the founder of Apple, he had a modest start financially but was full of good ideas and good intentions. Thus it is thoroughly unfair to quash one’s dream because of lack of funding. Nevertheless this is the situation that many SMEs are facing... more so in times when regulation on bank lending is tightening.

Notwithstanding the fact that an SME can seek to finance itself through different sources, studies by the European Commission in 2013 reveal that 91 per cent of the financing to SMEs in Malta originates from the banks. SMEs that financed

themselves through other sources amounted to a mere 6 per cent. It is important to note that this percentage of 91, although it stands very high, is comparatively less than the one reported in 2011 which stood at 97 per cent in that year. Such a decrease could be caused by various factors. However, it is tempting to agree with Prof. Josef Bonnici, Governor of the Central Bank, who spoke about the conundrum of high bank-loans/charges vis-àvis SMEs. Indeed, with this question in mind, PKF Malta would like to carry out a study to analyse this situation in-depth and construct an impartial report based on data concerning interest charged on loans and attached conditions on sanction letters when lending to SMEs. cc For more information contact Lynsey Schembri, Senior Statistician at PKF Malta on E: lschembri@pkfmalta.com

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CC corporate strategy

Do we have the right strategy?

By Simon Grech Corporate strategy is the direction and scope of an organisation over the long-term, which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations (Johnson and Scholes 2002).

Competitive advantage, strategic capabilities and organisational culture are essential ingredients of the strategy recipe of an enterprise, and we shall therefore first look at them individually before proceeding to study the relationship between them.

Ehmke (2008) sees competitive advantage as “an advantage gained over competitors by offering customers greater value, either through lower prices or by providing additional benefits and services that justify similar, or possibly higher, prices.”

In a nutshell, Ehmke feels it essentially answers the question: why should a customer purchase from this operation rather than the competition?

An industry’s attractiveness is described

by Porter (1980) as being influenced by five distinct forces: threat of entry; threat of substitutes; power of buyers; power of suppliers; and rivalry between competitors.

The author states that there are two forms of competitive advantage a firm can have – low cost or differentiation and that these stem from an ability to deal with the five forces better than competitors. These two forms of competitive advantage can effectively lead a business to adopt one of three potential strategies.

The first strategy refers to cost leadership and revolves around the ability to maintain lowest possible costs for delivering the products or services, maximising flexibility and economies of scale whilst at the same time maintaining market standards that will enable the firm to charge a reasonable price.

To succeed, the firm must be the and not a cost leader.

Differentiation refers to a strategy wherein a firm can sell at premium prices within an industry because it is manifestly superior to competition in a valued attribute of the product or service. The costs for creating the advantage must of course be lower than the premium that can be achieved, which in turn must not be excessive in terms of what customers are prepared to pay for the product superiority.

The third strategy is based on focus.

In essence, this strategy combines the other two but concentrates on a specific target segment wherein cost-leadership or differentiation can be better achieved than by trying to target the wider market.

Hartman (n.d.) defines strategic capability as “a business’ ability to successfully employ competitive strategies 48

that allow it to survive and increase its value over time.” He goes on to say that this capability focuses on the organisation’s assets, resources and market position.

Johnson et al (2011), explain that there are two components of strategic capability, namely resources and competences. They hold that resources are the assets that organisations have or can call upon and competences are the ways those assets are used or deployed effectively. Resources include, for example, machinery and workforce whilst competences may include factors such as flexibility, debtor control and staff motivation.

In his explanation of the resource-based view, Wernerfelt (1984) explains that the advantage of holding a resource may make it more difficult for others to enter or remain in the market competitively. He calls this the resource position barrier. The resourcebased view of the firm holds that sustainable competitive advantage can be achieved if the firm’s strategic capabilities meet the VRIN criteria (Johnson et al 2011). In essence this means that capabilities need to have value, rarity, inimitability and non-substitutability, in order to be effective.

Of course, the absence of a resource may then prove to be a crippling disadvantage.

Moreover, due to the ever-changing nature of the business environment, strategic capabilities need to be ‘dynamic’ if they are to ensure an organisation’s prolonged success.

Organisational culture is defined as “a pattern of shared basic assumptions that was learned by a group as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems” (Schein 2004). In essence, this can be loosely translated to “the way things are done around here”.

Flamholtz and Randle (2011) argue that a strong company culture can be a valuable asset if the values are constructive and

supportive but can also be a liability if they are negative and dysfunctional. The authors go on to state that culture “can even be the ultimate source of sustainable competitive advantage”.

According to Barney (1986) a “firm’s culture can provide sustained competitive advantage if three conditions are met: the culture must be valuable (enable a firm to do things that lead to high sales, low costs, high margins or in other ways add value); rare (contain characteristics and attributes that are not common); and imperfectly imitable (cannot be copied).” Barney insists that a firm with a culture carrying such characteristics must nurture it to ensure that it is not lost whilst also ensuring that changing conditions in the outside world do not switch the culture from an asset to a liability. It is therefore fundamentally important that whilst a functional corporate culture is maintained, the organisation is able to change culture or better still carry a culture that welcomes change when necessary.

In summary, therefore, it can be assumed that a sustained competitive advantage can be achieved by adopting a strategy of optimising the use of internal resources and competences (strategic capabilities), through the creation and maintenance of a functional corporate culture or, better still, through a combination of both factors. cc Simon Grech has 29 years of banking experience and is at present Head of Corporate Services at Banif Bank Malta Plc. He is also the current president of the Maltese Institute of Financial Services.

The research work disclosed in this article is an extract from a study which is partially funded by the Master it! Scholarship Scheme (Malta). This scholarship is part-financed by the European Union European Social Fund (ESF) under Operational Programme II – Cohesion Policy 2007-2013, ‘Empowering People for More Jobs and a Better Quality Of Life’.

Operational Programme II – Cohesion Policy 2007-2013 Empowering People for More Jobs and a Better Quality of Life Scholarship part-financed by the European Union European Social Fund (ESF) Co-financing rate: 85% EU Funds;15% National Funds Investing in your future OCTOBER / NOVEMBER 2014

CC COMMUNICATIONS

Melita’s investment in data centres has created several new smart jobs including IT engineers and other IT professionals

Melita invests in a tenfold data centre expansion The Commercial Courier meets up with Melita CEO Andrei Torriani, to discuss the opportunities that lie ahead for Melita and for Malta in the data centre and co-location business. The company’s latest investment is set to attract foreign investment in cloud computing, online gaming and e-commerce to Malta and will double the country’s data centre capacity.

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ne year to date after launching its new state-of-the-art data centre in Madliena, Melita has announced yet another investment to expand its existing data centre facilities tenfold and to provide high quality data co-location for companies that are seeking to grow their business in or out of Malta.

“Phase A of Melita’s data centre was 50 per cent sold before we opened our doors.

The remaining space was sold within a few weeks from the inauguration of the facility. The market presented the right conditions for Melita to consider additional investments in this area. There is a growing demand for high quality data centre services and coupled with our investments in international connectivity and infrastructure, our expanded data centre will surely offer a high quality product to corporate customers,” explains Melita CEO Andrei Torriani.

Besides enabling Melita to offer more capacity, the space created as a result of this new investment will also double Malta’s existing data centre capacity. “The extension to Melita’s data centre forms 50

part of a strategic multi-million euro investment that the company announced a few years ago. We are rolling out a €60 million investment over a five-year period to upgrade the company’s infrastructure and to strengthen Malta’s connectivity to mainland Europe.”

The extension is currently under construction and is expected to go live towards the end of the first quarter in 2015.

The new co-location space will be housed in a purpose-built state-of-the-art facility adjacent to Melita’s existing data centre.

Mr Torriani mentions a handful of projects that Melita has already completed as part of its strategic investment programme – the submarine cable connecting Malta to Sicily, additional internet links to a Tier 1 provider in Milan (Level 3 Communications) and to the renowned international operator TeliaSonera for enhanced Northern European connectivity, broadband speeds of 100 Megabits available nationwide and super-fast speeds of 250 Megabits per second in select areas of Malta.

“This latest investment in a new data centre continues to solidify the chain of

investments we have already completed to strengthen our infrastructure and to deliver superfast broadband speeds in Malta. High quality data centre capacity, not just quantity, is what Malta needs to attract the right kind of business to its shores,” he emphasises.

While expressing his gratitude to Melita’s international shareholders who have the foresight to invest strategically in developing Malta’s leading quad-play telecom operator, Mr Torriani interprets their multi-million euro investment in Malta as a sign of commitment to the company’s growth and the country’s development in telecom infrastructure. “Malta offers great potential and immense opportunity for growth. More co-location space and strong connectivity are critical infrastructure for the country’s success in attracting new foreign companies to Malta. There are other requirements as well; better quality and very high-end data centre capacity is crucial. We believe that Melita’s data centre facilities are Malta’s flagships in this sector,” says Mr Torriani in an upbeat fashion.

“Our investments are enabling Malta OCTOBER / NOVEMBER 2014

CC COMMUNICATIONS to attract more foreign direct investment into the country and to create new smart jobs. Over the years Melita has evolved into a highly advanced, converged telecoms company providing a wide portfolio of products and services for consumers and businesses, in line with the master plans and objectives set out by successive governments,” he expands.

He welcomes the words of praise heaped upon the company by Dr Chris Cardona, Minister for the Economy, Investment and Small Business during his speech at the inauguration of Melita’s data centre expansion project.

Minister Cardona praised the company for its commitment towards strengthening the country’s telecommunications infrastructure and commended Melita for its vision to continue developing the country’s capacity in data co-location services. He added that through such investment programmes, companies like Melita create an optimum environment for more foreign companies to relocate their operations to Malta. “Cutting edge data facilities, as these developed

by Melita, are particularly attractive for financial services and online gaming operators, who are increasingly finding Malta as a reliable and secure location from where to conduct their business with the necessary peace of mind and state-ofthe-art technical facilities,” stated Minister Cardona in his speech.

Melita’s efforts are also directed at local businesses seeking a reliable

Melita CEO Andrei Torriani

telecommunications partner. “Melita’s strategy is aimed at supporting all businesses in Malta, whether they are local or foreign owned, big or small, through a robust telecoms infrastructure and reliable 24/7 connectivity. This is vital in today’s age where most things we do are somehow dependant on technology,” says Mr Torriani.

After living in Malta for the past five years, Mr Torriani, who is a US citizen, believes that the country was successful in

developing the right framework for the new economy to grow in Malta. He expresses gratitude to all the stakeholders involved in the telecoms industry, primarily the Malta Communications Authority for the development and enforcement of a clear operational framework, and other regulators in the financial services and online gaming sectors for ensuring that Malta continues to offer a well-regulated market for companies operating within these growing sectors. cc

This construction site will house Melita’s data centre expansion. The new high quality facility is expected to go live by the end of Q1 2015.

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Tech Review

From the latest in TV and smartphone technology to the sexiest pair of headphones around, Sarah Micallef brings you her pick of tech trends this season.

01. VPI Nomad turntable As any true music lover will tell you, there really is nothing better than the sound of vinyl. So much so that it’s seen a resurgence of late, with a good number of turntables aimed at lovers of the long play. Unfortunately, many turntables suffer compatibility issues, often necessitating being hooked up to a phono input with special equalisation which is harder to find in digital amplifiers and receivers. This is not the case with the new VPI Nomad turntable, which boasts built-in electronics that translate its phono signal for common amplifier inputs. It also features a built-in headphone amp, should you want to do away with the speakers altogether.

02. Master & Dynamic MH40 headphones These headphones look like they belong in a luxurious gentleman’s club populated by upper class men in the 18th century – they’re that sophisticated.

And featuring high-performance 45mm drivers, noise-cancelling isolation, an easy-to-reach mute button and dual cable ports, they’re more than just a pretty face. The luxury also comes in the form of the materials used to make them – with the headpiece finished in heavy-grade cowhide, the ear cups comprising supple lambskin wrapped around memory foam, and milled aluminium and stainless steel in place of moulded plastic. That certainly sounds like music to my ears.

GADGETS

04. Panasonic Lumix DMC-CM1 With a firm emphasis on photography, Pansonic’s Lumix DMC-CM1 could be a real game changer for photography enthusiasts who are tempted to ditch Apple for Android.

The smartphone’s bright Leica-branded lens and surprisingly huge 1-inch 20 megapixel imaging sensor really add to the aesthetics besides providing the potential for highquality, noise-free images and improved low-light performance you normally don’t associate with phone photography. Apple’s iPhone 6, in fact, continues their trend of deploying a 1/3 inch sensor, a size we have come to expect of premium smartphone cameras. The look of the Lumix DMC-CM1 is unique in that it resembles a quality high-end compact camera while being a lot thinner, though still far thicker than the iPhone.

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05. Ultra HD ‘4K’ LED LCD TCL has recently announced that it will be launching an Ultra HD ‘4K’ LED LCD that makes use of quantum dot technology to create light, resulting in better, more realistic colour, increased energy efficiency and a number of other benefits. If quantum dots sounds a little too astrophysics for you, let me break it down – quantum dots are microscopic materials which boast fascinating properties, and in the case of this TV, when given energy, they emit light in a range useful to help create images on screen. Similar to last year’s Sony XBR X900A which also used the technology, it makes use of blue LEDs wrapped in red and green quantum dots which are embedded in the edges of the television. This technologically advanced TV will initially be available in China, and will hit the worldwide market later on. cc

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03. Everpurse The rise in popularity of crowdfunding platforms like Kickstarter has led to a flurry of interesting projects. One of the hottest ones this year is aimed at busy women who want to charge their phones on the go – the Everpurse. The stylish purse boasts an inductive charging mat with a special charging pocket inside it, which means all you need to do is slip your phone in and violà, it can charge your iPhone from 0 per cent to 100 per cent twice over between charges.

After a full day of running around with your happily charged phone, all you need to do is drop your Everpurse on its wireless charging mat at home and it will re-charge, ready for another busy day. Oh, and the purse also comes in a variety of great colours and linings – how did we survive without it?

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NEWS 01.

Malta Chamber attends third meeting of MCAST Industry Advisory Committee The Malta Chamber’s Head of Policy, Andrè Fenech attended the third meeting of the MCAST Industry Action Committee. This committee was given the role by the Ministry of Employment and Education (MEDE) to oversee the reform of Malta’s apprenticeship scheme. Dr Silvio Debono, President of the MCAST Board of Governors and the person chairing these sessions explained that MCAST had embarked on a new vocational strategy which puts apprenticeships and work-based learning as an integral part of the students’ developments.

The new apprenticeship scheme is being modelled around the German dual system and will primarily focus on the accreditation of work-based learning and will be integrated to form part of the curriculum, while there will be stronger monitoring of the competences acquired during the apprenticeship. The final aim is for all vocational courses offered at MCAST to be linked to the newly amended apprenticeship scheme. A pilot project will be launched in January of next year.

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Malta Chamber participates in Enterprise Consultative Council The Enterprise Consultative Council was convened on Wednesday 3rd September 2014 under the chairmanship of Hon. Dr Chris Cardona, Minister for the Economy, Investment and Small Business. Rachel Bartolo, Sectors Executive from the Malta Chamber attended the meeting which discussed the opportunities and obligations for Maltese businesses with regards to ecommerce and data protection.

When addressing the Council, the Minister reported on the work carried out so far and the milestones envisaged. He expressed his belief that thanks to the Government’s

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support and initiatives, local retailers could overcome the challenges to go online and adapt to cope with today’s business realities.

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Malta Chamber meeting with London Economics chairman Malta Chamber President David G. Curmi and Director General Kevin J. Borg met with London Economics Chairman Alan W. Gray, who commended the approach taken by the Malta Chamber in compiling the Economic Vision for Malta 2014-2020, namely of involving the business community to provide a business agenda to Government rather than have Government supply its agenda to business.

Mr Gray had words of praise for the document that outlined a number of recommendations to Government to bring about economic and social development in the long term. Mr Gray was particularly interested in elements of the Vision, specifically parts that could lend themselves well to European Union funded initiatives.

04.

MCESD presented with Malta Chamber Vision 2014-2020 On Monday 1st September, the Malta Chamber of Commerce, Enterprise and Industry presented its ‘Economic Vision for Malta 2014-2020’ to the MCESD. The Malta Chamber was represented by its President David G. Curmi, Deputy President Anton Borg, Norman Aquilina and Director General Kevin J. Borg. Addressing the meeting which was called by the Malta Chamber, Hon. Helena Dalli, Minister for Social Dialogue, Consumer Affairs and Civil Liberties, praised the Malta Chamber’s work, especially its initiative to compile the Economic Vision for Malta 2014-2020.

In his presentation, Mr Curmi said that the Economic Vision 2014-2020 aimed to

06. give a business agenda to Government rather than wait for Government to provide business with its agenda. This is symptomatic of the fact that the document is the work of 20 of Malta’s leading CEOs and chairmen, making it a technical blueprint for economic development.

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Pre-budget document reflects Malta Chamber’s proposals During a discussion within the MCESD with Hon. Prof. Edward Scicluna, Minister for Finance, the Malta Chamber Director General Kevin J. Borg outlined briefly the objectives of Malta Chamber’s proposals. The meeting was presented with the Ministry’s pre-budget document which was published for consultation.

During his intervention, Mr Borg expressed the Malta Chamber’s objectives for the 2015 Budget, namely bringing the Government’s financial house in order and the safeguarding of the country’s competitiveness.

With reference to the fiscal consolidation objective, the Malta Chamber strongly recommended that this should be done by tackling the country’s structural deficit and debt positions effectively; addressing the abuse in undeclared economic activity/ social benefits; eliminating wastages, abuse, bad planning and mismanagement of public resources; and lowering tax burdens for those who honour their tax obligations in a timely manner.

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The smartest of events This year’s Summer Drinks were held at the Laguna Walk at SmartCity.

This spectacular venue provides a unique and different atmosphere which was enjoyed by all present.

180 members and guests took the opportunity to network at this annual informal event. Among the guests were a number of Government ministers, representatives of the Partit Nazzjonalista, ambassadors and High Commissioners, as well as members of the press.

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Energy issues discussed at Malta Chamber Council David G. Curmi and the Council of the Malta Chamber met with an official delegation comprising the Permanent Secretary from the Ministry of Health and Energy Ronald Mizzi, Enemalta CEO Frederick Azzopardi and a number of senior officials from Enemalta, MRA and ARMS. During the meeting, the timelines and project for the energy generation and distribution reform were discussed. The Government officials explained efforts which are being carried out to ensure a steadier supply of energy and to avoid any future outages. The cost issue of energy was also discussed. The Malta Chamber reiterated its position that tariffs for industry and business need to be reduced as soon as possible, in order to safeguard Malta’s competitiveness, as amply illustrated numerous times by the Malta Chamber.

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Shadow Minister Tonio Fenech presented with Malta Chamber’s pre-budget document Anton Borg and Kevin J. Borg met with Hon. Tonio Fenech, Shadow Minister for Finance. During the meeting they discussed the Malta Chamber’s proposals for the Budget 2015 which were presented to the Ministry of Finance and to the MCESD earlier in September. At this meeting the Malta Chamber elaborated on its two-pronged objectives in this document: putting a priority on public finance consolidation and safeguarding the country’s competitiveness.

During the meeting the Malta Chamber expressed its view that while it agreed with the principle of ‘making work pay’, and for long-term unemployed to be enticed to join the labour force, it objected to topping up the minimum wage, as this gives a distortionary result.

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Art exhibition by Agatha Grima at the Malta Chamber

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In September, the courtyard of the Malta Chamber hosted an exhibition by abstract artist Agatha Grima, which was inaugurated by Prime Minister Dr Joseph Muscat on Wednesday 17th September.

Present for the opening were the President of the Malta Chamber David G. Curmi and members of the Board of Management.

The exhibition, titled ‘Evolution of Consciousness’, followed the trajectory of the artistic experience. The artist admits getting lost in this fantastical world of art, and with each work a new vision is born and a new area of consciousness is celebrated.

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Social measures need to be commensurate with private sector reality “Any new social measures introduced during the next budget, had to be commensurate with realities the private sector was operating in.” This was claimed

by Andrè Fenech, Head of Policy, who attended a meeting with the Minister of Finance, Hon. Edward Scicluna as part of a series of events organised by MEUSAC, to discuss the Europe 2020 strategy.

Mr Fenech insisted that the Malta Chamber agrees with any measures to attract more people to the labour market as long as these did not have a direct impact on the companies’ competitiveness and remained cost neutral. He also mentioned the need to introduce market surveillance measures to counteract illicit trade and tax evasion, the full implementation of the Late Payments Directive and a long-term strategy on pensions, among others.

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Malta Chamber clarifies its position on judicial protest received In an article appearing in the Malta Business Weekly of Thursday 2nd October, the Malta Chamber of Commerce, Enterprise and Industry illustrated its replies to accusations levelled by Virtu Ferries Ltd in a judicial protest filed on 11th June, 2014, in which it accused the Malta Chamber and its officials of publicly making unfounded allegations to its detriment.

The Malta Chamber noted that since the protest had been filed, a clear understanding of the Chamber’s message was demonstrated by the authorities. In fact, the Chamber is informed that certain concrete steps have been taken to address the matter, whilst clear declarations have been made by the Prime

Minister. These concrete steps and clear declarations are consistent with the opinion of the Chamber and its position in favour of the elimination of a serious situation which continues to create unfair competition, tax evasion with consequences, and compromises consumer health and safety.

The article, also expressed in much detail that the Malta Chamber is well aware that forming part of the European single market does not equate to an environment devoid of any legal or fiscal obligations. Within the European Union exists a complex structure of environmental, customs, fiscal and other regulations that need to be observed by all and sundry.

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Malta Chamber and the Health and Disease Prevention Directorate agree to collaborate Officials from the Health Promotion and Disease Prevention Directorate within the Health Department and representatives from the Malta Chamber’s Food and Beverage Processors Business Section agreed to collaborate and assist each other in order to obtain and sustain an overall better level of national health in light of the Food and Nutrition Policy and Action Plan 2015-2020 being launched before the end of 2014.

This agreement was reached at the Malta Chamber, during a meeting between Stephen Bonnici, Joseph Pace and George Spiteri Paris – representatives from the Malta Chamber’s Food and Beverage Processors Business Section; and Dr Charmaine Gauci and Dr Raymond Busuttil, from the Health and Disease Prevention Directorate. The meeting was called to discuss the role and impact of the Food and Nutrition Policy and Action Plan 2015-2020, on the industry.

Following the release of the public consultation document in February 2014, the Malta Chamber’s Food and Beverage Processors Business Section submitted substantial feedback. The industry representatives present were informed that the feedback was well received and taken into careful consideration when compiling the final Policy and Action Plan, resulting in the modification of a number of proposals.

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Malta Chamber and University to support pharmacists for postgraduate doctorate in pharmacy The Malta Chamber of Commerce, Enterprise and Industry, and the University OCTOBER / NOVEMBER 2014

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Chris Cardona, Kazimierz Marcinkiewicz and EY managing partner Ronald Attard.

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Malta Chamber participates in EY attractiveness survey launch

13. of Malta signed a Memorandum of Understanding to facilitate the sponsorship of trainee opportunities for pharmacists who are reading for the post-graduate Doctorate of Pharmacy degree at the University of Malta.

The MOU was signed on behalf of the Malta Chamber by President David G. Curmi and Reginald Fava, Chairman of the Chamber’s Pharmacy Owners Business Section; and on behalf of the University of Malta by the Rector Prof. Juanito Camilleri.

The Malta Chamber is a prime and consistent believer in the need for continuous investment in the country’s human resources.

As indeed underlined by the fundamentals of its ‘Economic Vision for Malta 20142020’, it is only through the “fostering of human development” that Malta can remain competitive when compared to other neighbouring economies. The same applies at a sectoral level as in the pharmaceutical industry which requires a highly educated and increasingly erudite workforce.

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Malta Chamber supports VET reform The Malta Chamber of Commerce, Enterprise and Industry expressed its support for the modernisation of Vocational, Education and Training (VET) systems at the CEDEFOP/DG EAC joint conference entitled ‘Building European VET – Time to Move on’ which was held in Thessaloniki, Greece. The conference presented the findings of CEDEFOP’s latest VET report.

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Marilena Gauci, Policy Executive, expressed the Malta Chamber’s support for the modernisation of VET systems in view of their effectiveness in the improvement of human capital, by instilling the right aptitude, attitudes and skills to further reduce the skill gaps that currently exist.

Furthermore, Ms Gauci highlighted a number of initiatives the Malta Chamber is involved in, for the establishment of strong business-academia links to help prepare students to meet changing labour market needs and innovative systems.

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Alastair Campbell at the Malta Chamber On the eve of the EY annual conference, the Malta Chamber of Commerce, Enterprise and Industry welcomed Alastair Campbell, renowned communications expert and strategist, at the Exchange Building in Valletta.

Mr Campbell was shown around the building by the President David G. Curmi, as he took a keen interest in the history of the Chamber and the building. Also visiting was Polish former Prime Minister Kazimierz Marcinkiewicz. The guests signed the visitors’ book in the President’s room.

Mr Curmi and Mr Campbell addressed the media and spoke about Malta’s prospects and visibility in the international arena. Also addressing the media were prominent speakers from the EY conference, Minister for the Economy

The Malta Chamber of Commerce, Enterprise and Industry participated in the EY annual attractiveness survey launch. The conference was organised in conjunction between EY and the Malta Chamber.

Malta Chamber President David G. Curmi delivered the welcome speech in which he spoke about the economic successes of the past, and how these cannot be seen as guarantees for economic successes in the future. He discussed how the Malta Chamber is striving to create an environment conducive to economic development and growth, through its Economic Vision 2014-2020.

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Malta Chamber lists members’ concerns to PM On Wednesday 15th October, Prime Minister Dr Joseph Muscat attended a dialogue session with members at the Malta Chamber of Commerce, Enterprise and Industry. These sessions are organised from time to time to provide members with an opportunity to voice their concerns about matters of trade and economic relevance. The Prime Minister was accompanied by the Minister for Finance Prof. Edward Scicluna and the Parliamentary Secretary for Small Business, Dr José Herrera.

During his welcome address, the President of the Malta Chamber David G. Curmi

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roads and electricity supply. In terms of ‘ease of doing business’ alone, Malta ranks 103rd in the world, and in the last place within the EU28,” he said.

17. thanked the Prime Minister for accepting the Malta Chamber’s invitation to the dialogue and proceeded to illustrate a number of issues of current concern to members.

Mr Curmi said the country needs to be vigilant against the loss of its competitiveness and that it must avoid situations whereby any erosion of it is selfinduced. “Malta slipped six places in the World Economic Forum Competitiveness Rankings published last month and now stands in the 47th place. According to this report, Malta scored weakly in terms of ease of doing business, innovation, labour market efficiency and certain aspects of infrastructure including

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Education is an important pillar for economic growth For the Malta Chamber, education is one of the most important pillars upon which our country’s economy must continue to grow, ultimately leading to the betterment of business and society at large. Enhancing the capabilities of our workforce through improved education is that which provides Malta with improved long-term competitiveness.

This was Marilena Gauci’s contribution on behalf of the Malta Chamber of Commerce, Enterprise and Industry, while attending a round-table conference on the Internationalisation of Educational Services in Malta. The event was organised by the National Commission for Further and Higher Education.

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Courtesy visit to the President of Malta On 13th October members of the MEUSAC Core Group were invited for a courtesy meeting with H.E. MarieLouise Coleiro Preca the President of the Republic at The Palace in Valletta.

Chris Vassallo Cesareo and Andrè Fenech attended on the Malta Chamber’s behalf.

During the meeting, members present had an exchange of views on MEUSAC’s role as well as on various issues currently on the EU agenda. The President explained the need to bring European matters to the fore and expressed her interest in meeting core group members on a regular basis.

Her Excellency explained the need for all EU member states to discuss social matters and not to forego what Europe has gained over the last 50 years in terms of social well-being for short-term economic gains in view of the ongoing crisis. She said that the two are intrinsically linked and could not function one without the other.

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NEWS Internationalisation

01.

Libya Action Committee continues to address issues facing Maltese businesses Members of the Libya Action Committee met with Hon. Dr Chris Cardona Minister for the Economy, Investment and Small Businesses, Neil Harrison, Head of Central Visa Unit and Joseph Mizzi to discuss issues concerning Maltese companies in light of developments in Libya.

Minister Cardona assured the Libya Action Committee which was represented by its chairman Frank V. Farrugia, that though the issue of visas was not in his Ministry’s remit, he would support the Committee and exert pressure from his side on the matter.

Minister Cardona added that the biggest concern is that the Maltese Government currently has no main contact point in Libya – there is no official communication between Malta and Libya at the moment.

He also informed Committee members that all types of transportation means have been, at the time of the meeting, turned down by Government for security reasons.

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The Malta Chamber joins other business organisations in calling for the implementation of WTO agreement ICC – the International Organisation of Chambers of Commerce – recently issued a statement stressing the potential benefits of the Trade Facilitation Agreement which was agreed upon at the end of 2013, but still remains to be ratified and implemented. The benefits include a $1 trillion boost to global GDP through increased trade as a result of reduced transaction costs. This could generate as many as 21 million new jobs.

Eurochambres, for its part, is currently working on a position, which states: the associations of this statement wait impatiently for WTO members to put in place all necessary measures for the ratification of the Agreement on Trade Facilitation. We attach the highest importance to this agreement which will diminish bureaucratic obstacles at the border and significantly reduce costs for economic operators worldwide.

03.

High Level Delegation from China Foreign Trade Centre visits Malta Chamber A delegation from the China Foreign Trade Centre visited Malta and attended a meeting with Malta Chamber representatives to discuss possibilities of organising trade fairs in Malta, and possibly investing in a fairs and conventions centre. This meeting was also attended by representatives from Malta Enterprise, the Counsellor’s office at the Chinese Embassy and the Chinese-Maltese Chamber of Commerce.

Member of the Board of Management, Tonio Casapinta, and Director General Kevin J. Borg welcomed the delegation and explained that Malta was an attractive place to organise fairs and conventions largely due to English being an official language and Malta’s strategic location. These advantages were already reflected in the large number of English language students from both Europe and the MENA region who choose to study in Malta, as well as the growing number of conventions and events being organised in Malta.

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New Maltese Ambassador to Hungary The newly appointed Maltese Ambassador to Hungary, H.E. Giovanni Miceli, met with the Vice-Chairman of the Internationalisation Committee, Tonio Casapinta and Klaus Pedersen, Internationalisation Manager. Those present discussed the best way to promote business between Malta and Hungary, and agreed to keep the lines of communications open, so as to facilitate any business enquiries between the two countries.

The non-resident ambassador was accompanied by the First Secretary from the Ministry of Foreign Affairs, Dennis Grech.

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Libya Action Committee meets with Minister George Vella to discuss several Libya-related issues Members of the Libya Action Committee met with Hon. George Vella, Minister for Foreign Affairs, to discuss various issues concerning Maltese companies in light of developments in Libya.

Chairman of the Libya Action Committee, Frank V. Farrugia, gave an outline of his Committee’s efforts, aimed at finding solutions to the issues faced by Maltese companies affected by the Libya crisis.

The Committee also presented a number of ideas for the Minister’s consideration.

06.

Business Council established between Malta Chamber of Commerce and Omani counterpart During the second business delegation to the Gulf during 2014, the Malta Chamber of Commerce, Enterprise and Industry signed a special agreement with the Oman Chamber of Commerce and Industry for the establishment of an Omani-Malta Business Council. Tonio Casapinta, Chairman of the Middle East Business Council who signed the agreement on behalf of the Malta Chamber of Commerce, said this was a very important step for Malta as it underlined the importance of this region especially for Maltese entrepreneurs that wish to expand their business in this part of the Middle East.

Mr Casapinta said that it was extremely important to set up such councils, however these need to be supplemented with a constant visibility for Malta in the region, with regular visits and events. “We hope OCTOBER / NOVEMBER 2014

06. that the signing of this agreement will be the beginning of an increase in business linkages between Malta and Oman,” Mr Casapinta concluded. The agreement engages both sides in meeting annually and exploiting ways and means for expanding their trade cooperation. It is expected that an Omani Chamber-led trade mission will visit Malta in the coming months.

07.

Strategic Partnership with Dubai Chamber signed The Malta Chamber of Commerce, Enterprise and Industry, entered a Strategic Partnership Agreement (SPA), with the Dubai Chamber. The agreement was signed by Tonio Casapinta, Chairperson of the Middle East Business Council on behalf of the Malta Chamber at the Dubai Chamber in Dubai.

It is the first time the Malta Chamber has signed a Strategic Partnership Agreement with another Chamber. The SPA is a more comprehensive agreement than a Memorandum of Understanding or a Cooperation Agreement, as it spells out specific areas of collaboration, as well as a roadmap for what goals have to be achieved in the coming years. This part of the agreement has to be renewed annually.

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BUSINESSEUROPE congratulates Malta Chamber of Commerce

In a communication with the Director General of the Malta Chamber of Commerce, Enterprise and Industry Kevin J. Borg, the Director General of BUSINESSEUROPE Markus J. Beyrer congratulated the Malta Chamber and by extension the whole of

the country on occasion of the golden jubilee of Malta’s independence. “We continue to appreciate the involvement of the Maltese business community in the BUSINESSEUROPE family and are looking forward to exciting times,” Mr Beyrer said in his communication.

In his reply, Mr Borg said that 2014 is an important year marking several important milestones of Maltese history. With reference to the 50 years of independence, Mr Borg said that Malta managed to build itself a vibrant and diversified economy out of nothing. “We, as an organisation, are very eager to preserve our economic success and competitiveness, and this is reflected in every initiative we take at local and European levels.”

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Malta Chamber participates in SME Assembly in Italy The Malta Chamber of Commerce, Enterprise and Industry participated in the 2014 SME ASSEMBLY in Naples which was titled ‘Growth through enterprise: Exploiting the opportunities ahead’.

The Malta Chamber was represented by the SME and Family Business Committee Chairman Frank V. Farrugia and Head of Sectors Lino Mintoff. The assembly discussed the role of digital technology and how this can encourage business development and growth in SMEs.

10.

Delegation of German Manufacturing companies visits Malta Chamber A delegation of German manufacturing companies composed of 26 delegates representing 13 manufacturing companies visited the Malta Chamber on Friday 3rd October. The companies form part of a clustering organisation called WviB. This organisation seeks to encourage synergies between small and medium sized manufacturing companies in South West Germany. The delegation was in Malta on a fact-finding mission.

During their visit at the Malta Chamber, delegates were given a presentation by Malta Chamber Director General Kevin J. Borg, as well as Armin Eckermann, member of the German Maltese Business Council.

In their presentation, Mr Borg and Mr Eckermann explained the history and role of the Malta Chamber, and gave the delegation a summary of the reasons for German manufacturing companies to set up in Malta.

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Is it opening time for extended shopping hours?

Would the extension of shopping hours encourage consumers to shop more locally?

Or would this move simply serve to confuse the market and increase costs for retailers?

Jo Caruana investigates what some of the industry’s key insiders really think.

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e all know the frustrating feeling of needing to buy something after hours or on a Sunday – perhaps a last minute birthday present, or a snap purchase you simply have to have. Of course, we’re used to the situation though, and have been for years: the huge majority of shops in Malta are closed after 7pm and

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on Sundays, which means we just have to wait.

But is it time that shoppers be given the flexibility to spend their money at a time that suits them?

A recent Government white paper is proposing exactly that. It puts forward the idea that all shops currently not allowed

to open on Sundays will be able to do so between 6am and 5pm, provided that they remain closed on another day chosen by them. It also proposes that shops should be able to open during Carnival and on Easter Sunday, as well as on other public holidays (except for Good Friday). Plus, it would enable retailers to stay open until 10pm on OCTOBER / NOVEMBER 2014

CC the DEBATE Thursdays, Fridays and Saturdays without having to seek permission.

So, is this increase in hours the next natural step for Maltese retail? Those in the industry appear pretty divided.

“It is our opinion that, yes, along with increased flexibility when it comes to timings, this is a good move,” says Simon Gatt Baldacchino, Chief Operations Officer of United Group of Companies and Managing Director of United Department Stores Ltd. “We need to realise that, in today’s world, time is of the essence and fewer people than ever have time because of work and family commitments.”

On the other hand, Reginald Fava, Chairman of Chemimart Group, is adamant that shopping hours should not be extended. “I see no benefit to it whatsoever,” he states. “Not when it would just be the shops that would be required to extend. What about banks and Government departments? If shops need to stay open for the convenience of shoppers, then all publicserving entities should have to stay open too. If this is the route we want to go down, then we should extend everyone’s working hours over seven days.”

Echoing Mr Fava’s sentiments is Christine Pace, Director of Dorkins Ltd and Fashions Ltd, which together operate 13 retail outlets around the island. “There is no doubt that I am against this proposed extension,” she says. “An increase in shopping hours does not necessarily equate to more sales.

Despite several concentrated attempts over the last year to improve sales by extending business hours, they have always failed to produce any significant results (except for during Notte Bianca in Valletta).”

Sitting somewhere between the two above opinions is Lionel Lapira, CEO of the Plaza Centres, who believes that retail should be placed on a level playing field with other industries, such as dining and hospitality.

“Restaurants and hotels aren’t obliged

“Slicing the local market into more portions is not going to improve anything, but will rather produce smaller portions for everyone.” – Dorkins Ltd & Fashions Ltd Director, Christine Pace to pay double pay on Sundays or after hours, so why should we?” he questions.

“The market needs to evolve to address the needs of consumers and, just like patrons want to be able to dine out throughout the week, I feel that they should be able to shop when convenient too. Across Europe the legislation has changed to be more flexible and I think we need to do the same. If retail hopes to remain a major contributor to our GDP, then we have to move ahead. That said, from our own internal research we have found that the small majority of our retailers would actually prefer to remain status quo (and closed) on this issue.”

Contrarily, Edwin Borg, Chief Executive Officer of The Point, feels that, in general, most of the mall’s retailers are keen to open on Sundays. “However they feel discriminated against,” he says, “because, while in the catering industry Sunday salaries remain unchanged, in the case of retailers they need to pay twice as much.

So if, for the benefit of consumers, retailers choose to open on Sundays but their overall sales remain unchanged, this will prove to further erode their profitability because costs will rise, yet revenues will stay flat.

“Locally the revision of trading hours

“All players within any market need to compete on a level playing field.”

– The Point CEO, Edwin Borg OCTOBER / NOVEMBER 2014

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CC the DEBATE and Sunday trading are sometimes spoken about like the wheel is being reinvented in some way,” he continues. “Sunday trading, even in the local retail market, is already here and has been here for many years now.

The issue lies with the fact that it has only been available to a minority of the retailing community.

“In the past, various ‘exemptions’ have been made by the authorities to allow retailers to trade on Sundays if they operated in specific localities or if they sold merchandise within specific product categories. This has distorted the market because these retailers have been able to do business on Sundays whilst their peers, operating from other areas or within different product categories, could not. The proposed changes still do not address this anomaly because shops choosing to trade on Sundays will need to remain closed on another weekday. This essentially means that they lose the business on a day when labour costs are at standard rates and gain it on a day when labour costs double. This may not work for most retailers.

“That said, if Sunday trading is eventually extended to the retail business, retail workers will join the ranks of catering and hospitality businesses, and other retail businesses to mention but a few, who have been operating on Sundays for many years now.”

Mr Lapira echoes the sentiment that it is unfair for some retailers to have the competitive advantage. “We all know that, thanks to a loophole, one shopping centre has been opening from Monday to Sunday

“If this is a Government suggestion, then I would like to see the Government leading by example and extending its hours.”

– Chemimart Group Chairman, Reginald Fava and from 10am to 10pm for years now. They have gotten over the challenges, so why can’t their advantage be extended to other players in the same market? Whether those players want to open up or not is another story, but the law should be the same for everyone.”

Asked whether he sees potential for increased turnover thanks to the proposed extension, Mr Fava stresses that he does not. “This will not increase opportunities for boosted sales but it will increase expenses,” he says. “We all know that Malta’s pool is what it is and longer shopping hours won’t change that; but what about electricity bills and increased wages? How will we manage those?

“Yes, in the short term, it could increase employment, but it would also increase employment if bank and Government employees were required to work longer hours too. As this is a Government suggestion, I would like to see Government leading by example. If they go ahead, I will be more than happy to reciprocate.”

Mrs Pace is also adamant that an increase in hours will not increase turnover. “It will not create new jobs and it will not help businesses gain lost ground,” she says. “The local market is already quite limited; slicing it into more portions is not going to improve anything, but will rather produce smaller portions for everyone.

“In addition, operating costs, which are already considerable, will now be much

higher. Remember that wages to cover these extended hours will practically double, and finding staff to work these hours is a lot more difficult than most people realise.

Youngsters want to enjoy their leisure time and more mature staff want to spend time with their family. I would be seriously concerned that with the introduction of these extended hours we will push local employees away.”

Mr Gatt Baldacchino, meanwhile, does accept that expenses will rise, but still believes there will be some benefits for retailers. “The increase in trading hours will hopefully generate increased footfall, and this should in turn register some growth in turnover,” he says.

“That said, I do doubt that this upturn will be substantial as we have to accept the limitations of our marketplace. Extended hours may also help us gain some shoppers who would otherwise purchase their goods online, but, in truth, I don’t honestly feel that many online shoppers will revert to in-store buying simply because we are open longer.”

When it comes to the challenges retailers face over online shopping, Mr Borg explains that they are here to stay.

“Online shopping is a new channel in the retail market that has helped to grow the overall retail business but which has, in this process, eaten away market share from the traditional high street and shopping centre retailers,” he says.

“The increase in trading hours will hopefully generate increased footfall, and this should in turn register some growth in turnover.”

– United Group of Companies COO & United Department Stores MD, Simon Gatt Baldacchino 68

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CC the DEBATE “Online retailers are free to trade from pretty much anywhere they want to into the local market – 24 hours a day, seven days a week. They do not need to pay trading licences, they pay no VAT locally and, broadly speaking, face none of the administrative restrictions that constrain the operations of the traditional local retailer.

“So yes, I do see extended shopping hours as a positive recommendation in this respect, as well as because the local family demographic has changed. In a context where mothers are encouraged to return to work and that number is growing year on year, longer hours of retail are a convenience and a necessity.

“This has been addressed in the new proposal but, for some reason, only on Thursdays to Sundays. I fail to understand the rationale behind the different approach taken with respect to Monday to Wednesday, and my honest opinion is that closing hours should be relaxed Monday straight through to Saturday without distinction.”

Mr Lapira agrees. “I think the white paper still misses the mark. The Government is also proposing that, if retailers open on Sundays, they will be obliged to close on another day. Just like hotels don’t close one day a week, I don’t think this makes sense for us – it will simply serve to confuse shoppers. One shop will be open on Sundays but closed on Tuesdays, while the shop next door will be open Monday to Saturday. As far as I am concerned, when we joined the European Union it was to open the market, so why are we closing it internally?”

Raising a different concern, Mr Fava is resolute that Sunday should remain a special day for families. “There is no doubt in my mind that this move would further destroy family life,” he says. “As things stand, if every member of the family is working – and, in most cases they are – then Sunday is the only day they can be together.

I would be very sad to see my staff working extended hours and losing their only day with their family.

“That said, if the extension does come through, then what choice will I have but to lengthen the hours for Chemimart? While the extension won’t be enforced as such, no businessman can afford not to do what the company next door is doing, so it will be an indirect enforcement.”

Meanwhile, looking to the future of the industry, Mr Fava has other ideas about what could improve it. “Education and training,” he says. “So often it is drop outs that join this industry as a last resort – it shouldn’t be that way. As a general rule, my foreign employees bring more to the table because they are trained in the art of retail – they wear a smile and they take pride in their role. We don’t need extended hours to boost the retail industry, we need education OCTOBER / NOVEMBER 2014

“Whether or not a retailer opens up on a Sunday should be up to them, but the law should be the same for everyone.”

– Plaza Centres CEO, Lionel Lapira that highlights what service is really all about.”

Mr Gatt Baldacchino also believes there is more that retailers should be doing to attract local buyers. “It’s all about the retail experience,” he says. “Whether this comes down to the innovation of their outlets or the excitement of their products, it has to be thought about. With so much competition out there, customer experience is key to making people want to shop with you.”

Mr Borg agrees that retail is all about the personal approach – and that the future should focus on that. “Despite incredible ongoing technological advances, most shoppers have still preferred the in-store store experience,” he says. “No one can really tell what new technologies will be available in the future and, as these technological options proliferate, bricks-andmortar stores may indeed play a smaller role. But at its heart retail was, and remains, a people’s business, with traditional core principles focused on maximising the value of human interactions.

“Retailers should therefore capitalise on the use of information technology themselves to improve analytics and drive better performance, support retail

managers by reducing their administrative burdens and letting them focus more on field-based activities, highlight the value of their front-line staff and, most importantly, deliver a meaningful experience to store customers. Independently of all the latest technological advancements, it is these fundamental retail principles that will always be the hallmark of successful retailers,” Mr Borg adds.

“And, at the end of the day, we know what works: good customer care and attractive offers and promotions,” says Mrs Pace. “I believe that that is where our focus should be – on really keeping our clients satisfied.”

Finally, Mr Lapira throws another note into the debate. “When all is said and done, do we really understand what consumers want?” he asks. “In my opinion it is vital that we know the way the man on the street is thinking… does he want extended shopping hours and will he really make use of them?

Before going any further I think it is the Government’s responsibility to consult consumers and carry out the necessary research from their perspective. Then and only then will we have the information we need to move this debate forward,” he concludes. cc 71

CC retail

Timeless fashion Brooks Brothers CEO Luca Gastaldi talks to Martina Said about the fashion brand’s iconic history spanning almost 200 years, its launch in the Maltese islands, and his all-time favourite item across all collections.

Photos by Valentina Lupo

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he long established brand of Brooks Brothers, known for producing such timeless pieces as the readymade suit, button down shirt and repp tie since 1818, has dressed some of the most influential figures in recent history, such as F. Scott Fitzgerald, Clark Gable and Audrey Hepburn.

“I took on this new venture as CEO of Brooks Brothers three years ago – a brand which I always considered to be among the most iconic in the world,” says Luca Gastaldi.

“I was initially overwhelmed by the role, as although I expected the brand to speak for itself, I didn’t expect its history to be such a beautiful novel. You constantly learn new things, including people we had the honour of dressing and sometimes, we learn such things through customers who know the brand so well, which is extraordinary.”

The recently launched Brooks Brothers store in Republic Street, Valletta, embraces all that the brand represents – it is located in a prime spot of the island’s historic city adjacent to St George’s Square, its glossy wooden shelving and gold rails are a

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reflection of the luxury items in store, and a carefully selected number of newspaper cuttings have been neatly framed and hung around the shop to tell customers its intriguing story.

The clothing items on display exude a sense of quality and luxury, and although four new collections are designed each year, Mr Gastaldi says “I am surprised each time because every collection is new and different, but yet consistent with previous seasons. The

“Brooks Brothers is a lifestyle brand, and all this time, we have been very consistent with what we present to our customers.”

– Brooks Brothers CEO, Luca Gastaldi

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CC retail opening of every new store is a great reward and joy for me. I never expected we’d open a store as beautiful as this in Malta, in the most striking location in Republic Street.”

Mr Gastaldi says that one of the most captivating aspects of this brand is that the clothes it creates are consistent and enduring – “Brooks Brothers is a lifestyle brand, and all this time, we have been very consistent with what we present to our customers. We do not aim to be different from what we were in the past, and position ourselves as democratically luxurious, as the brand does not discriminate against customers’ country of origin, profession or religion. The brand suits people who identify themselves with understated and timeless

elegance, which is evident in its 200-year history.”

The company’s lineage dates back to 1818, when Henry Sands Brooks opened the first store, H. & D.H. Brooks & Co., on the Northeast corner of Catherine and Cherry Streets in New York City, his childhood home. His eldest son, Henry Jr., took the helm upon his father’s passing, and when his younger brothers Daniel, John, Elisha and Edward assumed leadership, they changed the firm’s name to Brooks Brothers. The brand introduced ready-made clothing in 1849 and, a year later, adopted The Golden Fleece symbol as its trademark. Among its many achievements, Brooks Brothers had the distinction of outfitting 39 of the 44 Presidents of the United States.

Asked about his favourite single item pioneered by Brooks Brothers, Mr Gastaldi says “it is certainly the button down shirt, which is the brand’s most iconic look, which influenced men’s wardrobes significantly. The company founder used to travel to the UK to buy merchandise then resell it in Brooks Brothers’ shops in New York. While in the UK, he would often attend a polo match and noticed the men wearing funny shirts with button holes on the flaps to avoid the collar flapping on their cheeks while riding. That inspired him to adapt it to men’s wardrobes, and it was a success.”

He adds that Brooks Brothers became an innovative brand by introducing new styles and fabrics into the fashion world; ones that no one even knew about, and has nurtured a consistent growth around the globe without rushing. “We have 50 stores in 17 different countries, and the potential for further growth is huge. But we want to grow in a healthy way, and ensure that whatever we do from a business perspective is done in a long-lasting manner,” says Mr Gastaldi. “The company owner, Claudio del Vecchio who is Italian but is based in the US, defines himself as a captain who has to steer his ship and crew for a period of time, but the crew should be able to continue well beyond the captain’s years, when he is no longer there. That is his vision – long-term and without short cuts, because it is the best way to sustain quality and reliability.” cc

STYLE

Fashion Forward

REVIEW

04. Stylish travel

Fashion trends this winter cleverly enable us to balance comfort and style, sheltering us from the cold, while still looking great in the process. Martina Said looks into the latest musthave fashion pieces.

01. Smart sweaters Look out for chunky knits in block colours, which are winter essentials for every man and woman’s wardrobe. Wear the sweater alone or over a patterned shirt, and team it with anything from slim fitting or box trousers to pencil skirts worn with a nice heel. For an extra touch of glamour, wear a statement necklace that contrasts nicely with the shirt and sweater, and that is appropriate for daytime office wear.

02. Printed blouses Our wardrobe choices for the office needn’t be limited to solid colours – liven up your office environment with a boldly patterned blouse teamed with plain trousers or a patterned dress in on-trend autumn colours, such as mustard, teal, wine and grey.

For the men, a lightly patterned sweater will have an equally effective impact and take a neutral outfit up a notch.

03. Practical satchel bag Satchel bags have made a fashionable comeback and make a great accessory for men and women, especially as daily office wear. Besides being incredibly useful for compartmentalising items due to that little bit of extra space that they offer, they are stylish and classic in leather browns, blacks and blues.

The iconic Pro-DLXTM business range from Samsonite® is the epitome of a power briefcase. The collection is tough enough to handle the modern globetrotter’s hectic schedule, smart enough to organise one’s belongings effortlessly, and stylish enough to keep travellers looking their business best in all circumstances. The latest series, the ProDLX 4TM, delivers the same performance but is now lighter and finer tuned than any of its predecessors. The Pro-DLX 4TM collection is available at SAMSONITE MALTA, Arrival/Departure Hall, Malta International Airport, Luqa. T: 2202 1401. Opening hours: Monday to Sunday 8am-8pm. Paying customers are entitled to free parking.

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05. Slippers for heels Heels look great with any outfit, but sometimes comfort must come before style - or you can marry the two with a pair of stylish flats like suede slippers.

As an on-trend alternative to ballet flats, you can wear them at the office with a pair of fitted trousers and loose blouse, or keep them in your bag for a comfy alternative should you need them.

06. The classic blazer Whether or not you often wear a blazer to the office, it is a statement piece of clothing that never goes out of fashion.

For men who consider it a must to wear a blazer to work, this is one of those pieces that can be matched with many outfits, just like a navy blue blazer, and makes a great dress-down option paired with dark jeans and a plain shirt. cc

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STYLE

REVIEW

Finishing Touches Adding colourful and quirky details to your work environment could make a world of difference to your perception of it. Martina Said picks out some innovative items that will brighten it up.

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01. Ornamental bookends If your bookcases are brimming with books and you’ve resorted to leaving others lying about, expand your storage options with a fun set of bookends that are convenient and ornamental, capable of turning a wall shelf, desktop or counter into a makeshift bookshelf. Decorate your office desk with a fun and quirky set, such as ceramic animal bookends, worded bookends or even fantasy or mythical creature bookends carved out of wood, that add a personal touch to your desk.

02. Attractive sleeves

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Tablets and laptops have become essential items for attending business meetings, but you needn’t resort to a plain and boring cover in order to look professional. Opt for a smart sleeve or pouch with a touch of your favourite colour or in a pattern of your preference, in a sturdy canvas fabric or enduring leather. Be careful, however, to not get carried away – you wouldn’t want people staring at your cover instead of paying attention to your speech during a meeting.

03. USB hand warmers It is an ingenious idea and ideal for those who put up with constantly cold hands throughout the winter, even when indoors. These cute toast hand warmers heat up by simply plugging them into a USB port, and within minutes, you can feel warmth enveloping your hands. The level of heat can be adjusted to low or high, and your fingers are free to move without hindering your productivity.

04. Personal pencils It’s the little things that make all the difference, and a quirky set of pencils could be just the right dose of humour to liven up your day. These charming wood-engraved pencils impart significant daily reminders, decorated with gold foil text that is unique to every set. You can purchase them online or, for an added touch, get them personally engraved, although you will probably be less likely to use them if they’ve got sentimental value.

05. Quirky tape dispenser Your colleagues will be asking you for the tape each time they need it with an original dispenser that is different and unique. There are many varieties of quirky tape dispensers, and, just like an original pencil set, one dispenser could make for a light-hearted desk accessory that renders your working space or desktop a little more interesting than the rest.

06. Wall art A colourful piece of wall art could transform the look of any room, taking bare walls from plain to inspiring in an instant. Depending on the style of your office and on the general consensus of your colleagues, invest in a piece of wall art that could be anything from an inspirational quote or framed picture to a relevant design or collage.

What’s important is that it enlightens your work space, rather than looks out of place, so be sure to give it a little thought to guarantee that it fits the bill. cc

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CC EVENTS

Time to get merry Believe it or not it’s that time again… time to consider your options for this year’s festive staff event. And from themed parties to team-building days out, Jo Caruana discovers there are all sorts of options to help your company celebrate the successes of 2014 in style.

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ome companies’ Christmas events are the stuff of legends. Perhaps because they were so innovative that the guests are still talking about them 11 months later, or because they helped the team to bond so well that it changed the whole office dynamic for the better. Either way, the organisers did something right.

OCTOBER / NOVEMBER 2014

So, this year, why not plan ahead to ensure you give your team the Christmas event they deserve?

“There are lots of great reasons to start planning now,” says Michael Zammit Marmarà, director of sales and marketing at the Paradise Bay Resort Hotel. “Aside from ensuring you get the venue you want because it still hasn’t been booked up,

“These days there are companies set up to help with party planning if you would rather not do it yourself, or you could opt for a day out instead – whether a sporty activity with a meal at the end, or something more relaxing, such as a day at the spa.”

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you could also secure an early-booking discount which means your budget could go further.”

Meanwhile, it’s important to move away from the mind-set that a Christmas event is ‘just a party’ – it is so much more than that. Aside from motivating your team beforehand (by giving them something communal to look forward to), it will also give them something to talk about afterwards.

Mistakes to avoid when planning a Christmas event Think ahead to avoid these pitfalls when organising your Christmas party – you’ll be glad you did!  Don’t leave it to the last minute. This is a busy time and everyone (and everywhere) will get booked up. Now is the right time to set a date, book a venue and inform your guests.  Don’t make it inconvenient for your guests. Think about transportation, for instance, and consider the date so that your team doesn’t need to be at work the next morning to hit a major deadline.  Don’t skimp on the food.

Whether it’s a dinner, activity or reception, serve up enough food. It doesn’t need to break the bank, but there should be enough of it to ensure no one goes hungry – especially if lots of drinks are being consumed!  Don’t hold the party in your office. Yes it may be tempting to save money on venue hire and just have your event then and there – but don’t!

The last thing your team will want is to spend another late night at the office – no matter how beautifully you have decorated it.  Don’t think inside the box. Even if your team has really enjoyed the sit-down dinner at your favourite restaurant that you have hosted for them for the last 10 years, that doesn’t mean you can’t consider an alternative this time around. Corporate traditions are great, but mixing things up will excite your staff and give them something to look forward to.

Maybe instead of dinner you could book a team-building day, a night’s stay at a hotel, or even (if you’re feeling particularly generous) a weekend trip overseas. They will definitely appreciate it.

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CC Events

Aside from that, it can also play a big part in shaping the way your team sees the company and your gratitude for their hard work. This is the company’s chance to stop and say ‘thank you’, and to put time and effort into making your team feel wanted, appreciated and to let their hair down.

“I have witnessed the positive impact of staff parties,” continues Mr Zammit Marmarà. “It’s the ideal time to show appreciation for the hard work the staff have invested through the year. Plus, if OCTOBER / NOVEMBER 2014

you choose to invite clients too, it’s also an ideal opportunity for your team to meet those clients in a more laidback atmosphere.”

Veronica Zammit Tabona, managing director for Villa Arrigo Ltd agrees. “It is important to socialise with clients and to get to know your customer, and your staff is also a key aspect to your business. They should both be rewarded and Christmas is the ideal time to achieve this,” she says.

Then, when it comes to choosing the type of event, there are all sorts of

“I have witnessed the positive impact of staff parties.”

– Paradise Bay Resort Hotel Director Sales and Marketing, Michael Zammit Marmarà

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“My advice would be to pick an adaptable venue, choose a theme, and then develop your event around that.” – Villa Arrigo Ltd Managing Director, Veronica Zammit Tabona

options available to you. These days there are companies set up to help with party planning if you would rather not do it yourself, or you could opt for a day out instead – whether a sporty activity with a meal at the end, or something more relaxing, such as a day at the spa.

Finally, it’s important to consider what will work best for your team – as there’s a huge difference when it comes to organising for a group of five close-knit employees, versus planning for a hundredstrong team of people who don’t know each other very well.

“There are so many options out there that you really don’t need to limit yourself in any way. My advice would be to pick an adaptable venue, choose a theme, and then develop your event around that.

The sky is the limit, so enjoy it,” adds Ms Zammit Tabona. cc

Autumn Food Lust Besides cooler weather and stylish clothes, this season brings with it a refreshing variety of seasonal foods and hearty ideas that are as versatile as they are delicious. Martina Said looks into the latest food trends that are causing a stir.

01. Coconut water Coconut water is the latest health craze. Low in calories, naturally fat- and cholesterol-free, with more potassium than four bananas, and super hydrating, it is no surprise that people are rushing to stock up on this super drink, also dubbed ‘mother nature’s sports drink’. Naturally refreshing, coconut water is made with the clear liquid extracted from the centre of young, green coconuts.

It has a sweet, nutty taste, and is lower in calories than most sports drinks.

02. Dessert pizza This mash-up dish requires you to put everything that you know and love about pizza aside in order to enjoy it. The dessert pizza is becoming increasingly popular as a dessert menu option – an unsalted pizza base is smothered in white or dark chocolate (generally nutella) and topped with fruit or icing sugar, or alternatively drizzled with honey or syrup as a base and sprinkled with sugar. Just like savoury pizza toppings, the options for a dessert pizza are endless, and can include anything from crushed biscuits and fruit to molten marshmallows.

FOOD&WINE

03. Home-made jams and chutneys Little jars of home-made goodness are also making it big of late, often given as wedding favours or thank you gifts at Christmas time. The number of innovative recipes for jams and chutneys are endless, such as bacon jam, which makes a great match with burgers or accompanied with a slice of bread; rhubarb, ginger and raisin chutney, which is a delicious accompaniment to roast lamb or pork; and apple and onion chutney with dried cranberries and apples, that pairs excellently with a cheese board.

04. Pumpkin love This versatile vegetable has to feature in your diet at least once a week while its available, and you’re likely to miss it when it’s no longer in season. Pumpkin soup, pie, pumpkin-filled ravioli, cookies, cheesecake, and pumpkin pancakes are all delicious and easy to make, nutritious and incredibly tasty. If you cannot source a pumpkin, most dishes could also be made using squash varieties.

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05. Spice-infused honey This current food trend picked the perfect time of year to make some waves.

Some of the most popular concoctions are honey infused with red pepper, ginger, garlic, chipotle and a variety of festive spices that offer a little extra kick. It could be used with pretty much everything, including hot tea, desserts and even as a glaze with fish or chicken.

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Apples are underrated, and seeing so much of them at this time of year should remind us to use them more frequently in our daily diet. Classics like apple pie and apple crumble always make for a delicious dessert, as do boiled apples topped with honey or custard, which make a flavourful evening treat. Apples could also be incorporated into savoury meals – sliced thinly and eaten with sandwiches, or paired with different meats and cheeses. cc

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CC make the headlines

Global trade now poised for sustained recovery  Worldwide trade to accelerate in period of long-term growth  Trade growth to average 8 per cent annually over the medium term  China to double its lead in global merchandise exports by 2030  Special focus on India: the world’s fastest growing exporter Emerging from a period of stagnation triggered by the global financial crisis, world trade is set to resume its growth trajectory in 2016, presenting fresh opportunities for businesses that have positioned themselves to benefit, a new study from HSBC Commercial Banking shows.

Exporters and importers in cyclical sectors, such as transport equipment and metals, will be the first beneficiaries as the pace of growth in cross-border commerce recovers to 8 per cent in 2016 from just 2.5 per cent last year, according to the HSBC Trade Forecast.

Details of the latest HSBC Trade Forecast were given during a business event held

in Malta in the first week of October, and which was addressed by Steve Box, Head of Trade and Receivables Finance – Europe, HSBC Bank plc; Michel Cordina, Head of Commercial Banking at HSBC Malta; and James Woodeson, Head of Global Banking and Markets, at HSBC Malta. Dr Chris Cardona, Minister for the Economy, Investment and Small Business also addressed the audience.

Looking further out to 2030, the Forecast projects that global merchandise trade will more than triple as astute companies capitalise on increasing productivity and consumer wealth in the emerging markets.

Increasingly robust economic conditions in the US and the UK, along with a gradual rebound in the eurozone, will give many international businesses a platform on

which to build during 2015. In the short term emerging markets growth looks more vulnerable – while still rapid in relative terms – reflecting a combination of structural challenges and political uncertainties in Eastern Europe and the Middle East.

By 2030, however, China is expected to increase its overseas shipments five-fold as it strengthens commercial ties with emerging Asia, the Middle East and North Africa.

China currently exports 1.4 times more goods than Germany and the US by value, and will widen this gap to almost three times US exports.

India, meanwhile, is likely to be the world’s fastest-growing exporter from 2014 to 2030, and has the potential to move from the 14th largest exporter of goods by value to the world’s 5th largest. cc

With a unit of over 50 full and part-time employees, Bajada New Energy brings together the best in electrical and mechanical engineers, architects and civil engineers, licensed electricians and qualified installers, all backed by a team of professionals in the operations department for maximum efficiency and prompt response.

Bajada New Energy does not only import branded solar systems, but also specialises in the production of stainless steel boilers for solar water heating systems of domestic sanitary water.

Solar Systems Ltd production line started in 2003 and takes place in Marsa Industrial Estate. The ISO 9001 certified

plant covers an area of 1,500 square metres where the boilers and the insulated copper closed circuit pipes are processed.

The product, from conception to design and manufacturing, is self-sufficiently managed in Malta with mostly EU raw materials. Qualified workers and an international staff allow Solar Systems Ltd to establish its presence with knowledge and professionalism in the solar thermal industry. cc

Bajada New Energy – Malta’s market leader in the renewable energy sector Malta’s market leader in the renewable energy sector, Bajada New Energy has been established since 1989. For these past 25 years, we have brought knowledge and experience to the Maltese islands when it comes to clean solar power systems with a secure return on investment.

We represent world leading brands in renewable energy to offer first-class solutions for any size of photovoltaic systems, and are committed to finding you the best solution for your budget whether it is a solar system on roofs, façades or open spaces.

Yesterday and today – committed to bringing you the best possible service Bajada New Energy employs an experienced and dedicated team to support you throughout the process from project enquiry to installation by qualified installers, all the way to service and maintenance, as well as safeguarding returns.

OCTOBER / NOVEMBER 2014

Bajada New Energy Ltd, 42B, Marsa Industrial Estate, Marsa.

T: 2180 7123; F: 2122 8955; W: www.bajadagroup.com 91

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Third DHL Life Sciences Dialogue in Malta Over 60 representatives from Malta-based pharmaceutical companies registered for this year’s 3rd annual DHL Life Sciences Dialogue held on 24 September.

Minister of Finance, Prof. Edward Scicluna, opened the event. His address focused on Malta’s role as a logistics crossroads and on the Maltese Government’s support to the pharmaceutical industry on the island.

The focus of this year’s conference was ‘Logistics in the 21st century’ and ‘Key Logistic Trends in Life Sciences post 2020’. Further, views were exchanged on experiences after one year of the new EU Good Distribution Practice (GDP) Guidelines for transportation of Life Science Products.

Mario Zini, Managing Director, DHL Global Forwarding Italy and Malta, discussed how his region is preparing for the changes in 21st century logistics. Emphasis is on customers’ requirements for better shipment in transit

visibility as well as the increased automation of logistics processes.

In addition, the Life Science Industry sees a shift in markets and development of so-called orphan drugs, or personalised medicines, for the treatment of rare diseases, which will require new distribution methods.

And, of course, the revised (2013) EU GDP Regulations impact transportation.

DHL OCEAN SECURE, DHL Global Forwarding’s enhanced ocean freight service for temperature controlled Life Science shipments, generated high interest.

Similar to DHL THERMONET, which was

the focus topic in the 2013 Life Sciences Dialogue and concentrates on Life Science temperature-controlled shipments sent by air freight, DHL OCEAN SECURE provides enhanced visibility, including temperature, of Life Science ocean shipments throughout the global network.

As in the previous two years, the DHL Life Sciences Dialogue was jointly hosted

by B.A.S, Ltd., the exclusive agent for DHL Global Forwarding in Malta, and DHL Global Forwarding’s Life Sciences team.

All participants look forward to the 4th Life Science Dialogue in 2015. cc

couples who will book their wedding cars during the fair.

Knowing full well that the tastes of our clients vary, couples will have the opportunity to make arrangements to view the other vehicles that the company can supply, but which due to limitations cannot be on display, after the fair closes its doors.

This can be done by making an appointment to view the vehicles at our premises in Qormi at the couples’ convenience. Clients may also phone on M: 7960 1601 to fix an appointment.

Our experienced staff, who will be manning the fair stand, will be able to offer extensive advice to suit couples’ requirements for all types and size of weddings.

The size of its fleet allows Meli Car Rentals Ltd to cater for a number of weddings simultaneously, without fear of failing in its high standards.

Moreover, its complement of experienced and qualified drivers, is sure to deliver a professional and superior service which is to be expected of this long-established company. cc

Meli Car Rentals showcases its bridal cars at MFCC Weddings Fair Once again the MFCC will be holding the Annual Weddings Fair in Ta’ Qali between 6th and 9th November 2014.

This popular event, which attracts large crowds on the four days it is held, serves as a showcase of all the items and services that are important to render any wedding a memorable and successful one.

Meli Car Rentals Ltd, with its exclusive selection of Rolls Royce Vehicles, BMWs and Stretched Lincoln Limousines, will this year once again be found on Stand 51 in the Main Hall.

Not only will the company have on display two of its popular bridal cars; but it will also be offering special deals to those

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An innovative approach to logistics and freight transportation You might not think that the field of logistics and freight transportation is one in which there can be very much innovation, but you’d be wrong. There are some companies out there with new ideas, a modern take on the age old problem; how to move things from point A to point B in as little time and with as much efficiency as possible. Express Logigroup is one such company. But while the company may be new, CEO Jonathan Vella prides himself on being an old hand at the logistics game, and is determined to use his copious experience – he has worked in logistics solutions for over 20 years – to forge his team at Express Logigroup into something great.

Brought up on the old way of doing things, he aims to apply his practical knowledge to produce a new method of working in the industry.

FCM Bank launches online banking services

State-of-the-art website will give clients access to online services FCM Bank has launched its new online banking, providing customers with a fast, simple and straightforward system to review and manage their accounts at the click of a button.

The company has three main spheres of operation.

Express ColdMoves is aimed at pharmaceuticals, using appropriate equipment and purposely trained personnel that ensure an uninterrupted supply chain.

The product is managed by highly qualified personnel and its processes are constantly audited by independent auditors who are brought in the organisation.

Express DailyFresh carries fresh produce, most of which comes from Italy. The product is a dedicated set of services aimed at the transportation of fresh food and other perishables. Express DailyFresh ensures strict segregation of cargo whilst in transit, and ensures that it remains at a constant temperature throughout the whole supply chain.

Express JustInTime has been designed for anyone who plans on a short-term basis and still benefits from maximum possible savings.

This product is an innovative yet practical transport solution for those businesses that require an express but yet economical delivery when compared to courier and air freight solutions. This product optimizes on the best combination of transport routes and network of partners which enables the company to provide demanding customers with JustInTime deliveries. Perfect for

a direct communication channel so that customers may send secure and convenient messages straight to the bank.

“Throughout the development of this portal we have put our customers’ experience first and created a facility that will really be of benefit to them,” continues Mr Ma. “We have thoroughly planned and tested the system over several months to ensure that it is safe, efficient, user-friendly and as straight-forward as possible.”

those shipments that are time critical, yet benefiting from a budget freight solution.

Express Logigroup is in the process of joining a larger group in the logistics segment and will shortly be servicing through a 4,000sqm transit warehouse in the northern Italian region, capable of handling a through put of pharmaceuticals shipments moving into the central continent.

Customer-oriented initiatives will also be launched through the company’s website www.expresslogigroup.com. From next year customers will be able to obtain a user name and password, create their own online quotation, place bookings and obtain a delivery order through a simple procedure. cc

“At FCM Bank we are continuously improving the bank’s services and technologies to help our customers save more and improve their experience. This is only the start of our technology programme, and there is much more to come,” he concludes. cc For further information, contact FCM Bank on Freephone 8007 3737 or visit www.fcmbank.com.mt

This platform has been customised for FCM and will be available to all customers of the bank.

“We believe this to be the next step in our evolutional growth,” explains Vincent Ma, Chief Operating Officer of FCM Bank.

“24-7 online banking has been developed to help make our customers’ lives much easier and allow them to manage their accounts anytime and anywhere.”

FCM Bank’s new service will enable customers to view and monitor their savings accounts online, and will give them the ability to transfer funds to their linked bank account. The website will also provide 94

OCTOBER / NOVEMBER 2014

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A Look at the High Yield Bond Market During an interview held with Uli Gerhard, who manages the Insight High Yield Bond Fund and is responsible for the high yield product, Mr Gerhard commented that “given the low interest environment, the High Yield market provides opportunities to improve returns. It is crucial that one focuses on good credit stories where companies have a positive rating trajectory and in names that generate free cash flow after capital investments.”

Mr Gerhard further stated that given the low interest rate environment, the hunt for yield continues with many players like fund managers, running bench marks mandates.

In recent months, investors have been pricing good credit risk at low yields whilst poorer credit has, until recently, been priced too tightly. With regard to the risks involved in investing in the High Yield

Bonds, Mr Gerhard commented that whilst in selected areas there is an element of risk, it all depends on how one invests and on what part of the credit spectrum one invests in.

Mr Gerhard stated that “a careful stock selection allows you to generate superior return, in particular in BB/B space, with an in-depth credit analysis being vital to avoid credit losses.” Mr Gerhard concluded by stating that “like any market, High Yield is cyclical and as such will have good and bad years. From our end as fund managers we want to pick names that do well with low default risk, in order to produce superior return over the cycle.”

VFM is a company jointly owned by Bank of Valletta p.l.c. and Insight Investment Management Limited, one of the UK’s largest asset managers and a BNY Mellon Asset Management company.

Set up in 1995, VFM is responsible for assets under management of over €722 million* across liquidity, income, income and growth, growth and absolute return focused investment solutions.

According to Matthew Sullivan, a Director at Sullivan Shipping Agencies Ltd, “whilst Malta will probably not be in a strong competitive position against the traditional large scale distribution networks already present on the continents, primarily due to the lack of road and rail connections to the main trading cities, there are however a number of lucrative niche areas involving logistics that should be developed.”

He further believes that the main drivers for this industry will be local importers and distributors who should exploit their OCTOBER / NOVEMBER 2014

VFM is licensed to provide Investment Services in Malta by the MFSA. The Vilhena Funds SICAV plc is licensed by the MFSA and qualifies as a UCITS. Issued by VFM, TG Complex, Suite 2, Level 3, Brewery Street, Mriehel BKR 3000, Malta. Tel: 21227311, Fax: 22755661, Email: infovfm@bov.com, Website: www.vfm.com.mt. Source: VFM

* as at 30th September 2014

Is logistics in Malta feasible?

Over the past months there has been a lot of hype over Malta’s future in the logistics industry.

Dr Josè Herrera, Parliamentary Secretary for Competitiveness is looking at the development of the logistics industry as a pillar for overseas expansion and HSBC, in their recent Global Trade Forecast, spoke about the “tremendous opportunities being generated in shipping and logistics for Malta to exploit”.

The opinions expressed herein should not be interpreted as investment advice.

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 full 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. cc

expertise in the products they trade and their strong relationships with international manufacturers and suppliers to develop logistics opportunities in and out of Malta.

“In the past years, local importers and distributors have been accustomed to working in an extremely competitive environment and have done this by understanding their products and markets better, as well as experimenting with new trading partners and suppliers in different regions of the world, in a search for the right balance between price and quality. This huge intellectual property should now be used to identify other business opportunities overseas.”

This export business is today facilitated with the expansion of ecommerce and other innovative logistic solutions which whilst offering a reach to new markets allow for a contained level of investment. “We have

already seen a number of local success stories in this field, where a number of local businesses are distributing products in North Africa and Europe in various sectors from clothing and sportswear to pharmaceutical and heavy engineering products. Their business model relies on efficient and tailored logistic solutions, where the added value is not necessarily in the large capital investment but rather in their knowledge of their products and distribution requirements.

We further believe that this business model could also be replicated to an ecommerce environment.”

Sullivan Shipping Agencies Ltd has developed a number of competences in freight and logistic, and through its Logistic Plus Services as well as its Online Solutions, will be the ideal partner to discuss and develop opportunities. cc For more information contact us or visit www.sullivanshipping.com.mt

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Managing the replacement of a core IT Business Application

By Eric Muscat It is inconceivable that a project of any size or complexity is run without a project manager in the same way that it is inconceivable for a vehicle to run without a driver or some form of mechanism for the control of its speed, direction, stops and starts. However in my experience of projects with a high IT content, a significant number do not have someone firmly in the driving seat, even for projects of strategic importance to the organisation and of significant cost and value. A project without leadership will not meet the desired or agreed deadline, nor will it come in on budget, and it will certainly not meet the business objectives.

IT Project Management is much more complex than most business leaders realise and will often make the difference between success and failure. A good seasoned project manager is fundamental to a successful outcome. He should be able to bring the project team to work together towards the common goal through strong leadership, crisp and frequent communication, and sensible, rapid decisions.

Over the course of a project many issues will emerge that require attention and action but there are some that are common to most projects and should be identified and addressed as early as possible.

Roles and responsibilities It is important to agree the project structure upfront with a definition of roles and responsibilities including communication channels. A project is delivered by the project team under the control and management of a project manager who is typically supported by a project management office.

The steering committee provides direction and key decisions including the approval of key deliverables. The project sponsor champions the success of the project and leads the steering committee. The project manager needs to ensure control of team members who are typically well experienced in a specific function of the organisation, otherwise the project may result in rapid and extensive deviations from the agreed approach and structure.

strategy as well as the production of user and other documentation. The plan is not expected to be at a level of granularity that is impossible to manage although it needs to provide team members with clear deadlines.

Due to the wide range of considerations in the planning process many issues arise at this early stage or can emerge later as the project progresses. Although the plan is important it is not set in stone so can be revised, taking into account new information and new realities.

Conflict management Conflicts often emerge in projects that span many areas of the business and that have multiple stakeholders as they can have different objectives and opinions on priorities, resourcing and how the project should be run. Good project management is about how these conflicts are addressed and resolved, and the mitigating actions to prevent them from becoming serious issues. There can also be conflicts within the project team in terms of the resources and the time and effort required to complete the tasks that have been assigned. The project manager must remain alert and quick in devising solutions to rectify these conflicts,

otherwise energies are spent without having the project move forward.

Communication The importance of communication is often overlooked and every effort should be made to ensure communication is effective through early planning and the establishment of communication structures and channels.

Issues in communication arise when there is a lack of clarity leading to misunderstandings and lack of direction. Every effort should be made to communicate complex messages clearly, especially when those receiving the message are not familiar with the subject or the issue. Communication should be delivered in a timely manner and not left until the last moment as this puts undue pressure on the recipient. Regular structured communications should be devised and sent to the project team informing them of decisions that have been made. This is especially important if the team is dispersed and so would not pick up this information in the normal course of business. Inaccurate, late or confusing communication can lead to poor team morale and a lack of project control which in turn makes it very difficult for a project to succeed.

Replacement of a core IT system is largely about management of the change process. The skills necessary for such an endeavour include the understanding of IT systems, understanding the business area that the system aims to address, project management and control, together with a heavy dose of people management and verbal and written communication skills.

A tall order indeed, making IT project management a significant challenge. cc Eric Muscat is a Partner at KPMG in Malta. He has extensive experience in delivering substantial change programmes within an IT context.

Planning The planning process is the tool that enables the production of a detailed project plan which is the basis from which to run the project. The plan is based on an extensive analysis of the tasks that will deliver the project, their dependencies on other tasks and resources, together with the effort required to complete the tasks. This analysis should also consider the organisation’s capabilities, available resources and the required deadlines. The project plan will include details on the migration of data from the current to the new system, the testing 98

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CC MEET THE ARTIST

Of self-expression and loving what you do Sarah Micallef speaks to artist and illustrator Karen Caruana about her artistic journey of discovery, and finding the tools she needed to convey her thoughts through her work.

“W

hen I was young, I used to paint for attention,” Karen Caruana reveals, looking back on how her artistic journey began. “I had low self-esteem and since I felt that I was good at something, I would focus on it. As time went by, I began to paint to express myself. As others might express themselves with words on a diary, I would do so through my paintings.”

The soft-spoken artist never studied art as a young girl, she recalls, as it wasn’t offered as an option at school, despite it being always what she wanted to do.

“I used to draw the teachers instead of paying attention to what they were saying.

I sometimes used to draw people in the canteen too, or paint on my friends’ bags using acrylics.”

It was a little while later, while working in statistics, that Karen had the opportunity to take art more seriously. She attended evening classes at the School of Art in Valletta for seven years, going on to get a diploma in Fine Art, and slowly started realising her potential.

Having always drawn on her own steam, attending the School of Art served as somewhat of a rude awakening for Karen, she recalls, with a laugh. “I learned that I didn’t actually know how to draw!” It was here that she began learning the techniques she would come to implement in her future work.

“At first, I used to draw in pencil for the most part, and I aspired to focus on realism and detail. As time went by however, and I met people who were more involved

Photos by Alan Carville

and knowledgeable in art, it broadened my horizons.” She was introduced to the work of John Pitre, whose focus is on fantasy art, surrealism, and sociopolitical commentary, and was hooked. “I realised I wasn’t really expressing myself in the way I wanted to. There were a lot of things I wanted to say, that were not coming through in my work.”

With this realisation came OCTOBER / NOVEMBER 2014

experimentation. She moved from pencil to colour, which she considers a big step, explaining, “you have to train your eyes to see colour in reflections and things in which you don’t normally see it.” Apart from using colour, Karen also began experimenting with technique. “I started looking into lowbrow art and pop surrealism, which went on to help me express myself in the way I wanted,” she 101

CC MEET THE ARTIST

“I always ask myself, ‘if I had all the money in the world, what would I choose to focus on?’ and the answer has always been painting. I would spend it all on paint and supplies.”

says. Besides Pitre, Karen credits the work of Francis Bacon, Mark Ryden and Van Gogh with having influenced her technique significantly.

And what would she call that technique?

Possessing elements from a range of disciplines including figurativism, contemporary art, expressionism, conceptualism and pop surrealism, Karen’s work is the product of a collection of influences that is of her own creation. “I try to find a middle road between disciplines that normally don’t make much sense together,” she explains.

In 2006, Karen showcased her work for the first time within ‘Memento mori’, a mixed media collaborative exhibition in Valletta, which she looks back on fondly, saying “this really paved the way for the 102

rest of my work, through the people I met and learned from at that time.”

Then, three and a half years ago, the artist made the big decision to leave her job to focus exclusively on her art.

“Everyone told me it would be crazy to leave my job and a stable income – it wasn’t a decision I took lightly,” she says.

Choosing to put her art first, Karen took the plunge and dedicated herself to her art full-time, which came with its own challenges. “There are a lot of commitments I didn’t take up in order to focus on what I need to focus on,” she maintains, referring to the fact that she lives at home with her parents and does not travel as often as she used to. Despite these drawbacks however, she does not regret her choice, rather, she is resolute

in the fact that it was the right thing to do. “I always ask myself, ‘if I had all the money in the world, what would I choose to focus on?’ and the answer has always been painting. I would spend it all on paint and supplies.”

In fact, as soon as she left her job, she admits that her once great desire to travel reduced. While acknowledging that it is good to visit new places and experience different cultures, she came to realise that once she began to dedicate her days to what she loves doing, the need to get away became far less great. Speaking of the risks involved, she says, “being safe does not interest me at this point in my life. I might need to get a part-time job to help sustain me in the future, but I’m taking it as it comes.”

Part of what helped her make the decision was a project she was working on at the time, and one that she looks back on as one of the highlights of her journey thus far. “I was asked to do the illustrations for a pair of Adrian Grima’s recent publications – Din Mhix Logħba and Vleġġa Kkargata.”

Targeted towards young adults, the books were beautifully complemented with Karen’s otherworldly illustrations, and were very well received.

OCTOBER / NOVEMBER 2014

CC MEET THE ARTIST

While it may be obvious that her preferred subject matter is people, Karen’s work also reflects her emotional climate, and often makes use of symbolism to convey a message. She refers to one of her older pieces, which shows a depiction of her head on a Playmobil figurine, flanked by identical figurines on either side. “That goes back to a time when I felt like I didn’t fit in with the people around me, before I met the creative group of people that went on to inspire and teach me so much,” she explains.

Indeed, the fact that her paintings generally reflect her emotions at the time she is painting means that she is able to identify and recall what she was feeling at

OCTOBER / NOVEMBER 2014

“I am drawn to innocence in faces… that innocence of someone who is just starting out in the world. I feel like that myself in a way, with every subject I choose to focus on, there’s a thirst for knowledge and seeing things in a new light.” a particular time by looking at the resulting work. “There was a time in which I used to meditate a lot. The expressions of the characters in my paintings from that time

are calm and serene as a result, and the colours are peaceful and cool.”

I point out that the majority of the faces in her paintings appear innocent and childlike. She acknowledges this, explaining, “I am drawn to innocence in faces… that innocence of someone who is just starting out in the world. I feel like that myself in a way, with every subject I choose to focus on, there’s a thirst for knowledge and seeing things in a new light.”

Speaking of subject matter, I ask about her creative process, which, she admits, can be lengthy. “It’s not always the same,” Karen maintains. “I go through a period in which I research about something in particular, like bees, for example. I become very interested in the subject and do a lot of research – sometimes for up to a month. I compile reference pictures and take photos, and bring them together into something that makes sense. I use Photoshop to figure out how things go together, and then I begin sketching. Once I’m happy with the sketch, I transfer it onto the canvas.”

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“My advice would be not to make lots of plans for the future because life tends to change your plans.”

Moving on to her present focus, Karen tells me that she is working on material for her first solo exhibition, which she hopes to hold next year. “I’ve been saying I’m going to do a solo exhibition for a couple of years now, but looking at the work, I think the work itself shows me that it is ready to be exhibited. I’ve always done things in my own time rather than set rigid deadlines that will stress me

out – decisions come easier that way.”

In fact, her advice to aspiring artists is just that: “My advice would be not to make lots of plans for the future because life tends to change your plans. Focus on what you see yourself doing if you had all the money in the world, and do it. In time, if you continue to do things you don’t really want to do; it will take its toll.” cc