"Fast Track" programme of assistance launched for industry

by Angela Fabri

The Institute for the Promotion of Small Enterprises (IPSE) yesterday launched a new scheme with the aim of assisting manufacturing enterprises to restructure themselves in view of the removal of protective levies in the local market.

It is estimated the scheme will be valid for around 15 firms and IPSE is budgeting between Lm400,000 to Lm700,000 for its "Fast Track" programme of assistance.

As the first removal of levies takes place, the government is to monitor the prices of goods. The Minister for Economic Services, Josef Bonnici, said yesterday that the prices are expected to fall not only because of the removal of the levies but also as a result of competitive pressure.

Prof. Bonnici said that if local companies are to compete and keep their market presence, they will have to reduce their prices.

In July, IPSE launched a number of programmes aimed at the restructuring of industry when the government had published a list of levies that are to be removed in different phases.

Prof. Bonnici said yesterday that levies on products falling under certain categories will be eliminated completely. These are paper products, hosiery, footwear and chemicals.

The Fast Track Programme of Assistance aims to help companies who produce these goods to restructure so that they can strengthen their position in the local market and allow them to be competitive.

The programme will stimulate the enterprises to market their products and will reimburse up to 65 per cent of the marketing costs involved. Each enterprise will have to submit a 'Market Consolidation Plan' identifying those activities which will be financed by IPSE.

Furthermore, the enterprises involved in the new programme will be entitled to have all employees trained even in work not directly related to their specific post, in order to increase their skills. During training financial assistance equivalent to 90 per cent of the gross wages will be paid by IPSE but the maximum will be Lm2,000 for each employee.

IPSE will also assist the enterprises in the sourcing of primary materials and spare parts. In addition, all eligible enterprises are to submit a business plan and subsequently IPSE will offer further assistance by reimbursing the equivalent of up to 50 per cent of the actual bank interest charges on the enterprise's loans and overdrafts.

The aim of the programme is to allow the enterprises to be better equipped to face new challenges, to provide better working conditions for all employees and to increase competition. Consequently, local products will measure up to imported products.

In order to be eligible for the scheme the applicant companies have to reduce the price of their product by 15 per cent. If the price is reduced by 20 per cent or more, up to 50 per cent of interest of the client's loans will be reimbursed

The outgoing President of the Federation of Industry Joe Caruana Curran, said the plan for industry was very important since companies needed a transition period.

Mr Caruana Curran said the aim of restructuring was to enable industries to find niches so that they could be competitive both in the local markets and in the export markets. "We are happy to have such assistance," he said.

The FOI President highlighted the importance of the programme and said this Maltese scheme would help Maltese industrialists.

The chairman of IPSE, Lino Callus, who outlined the fast track programme said this investment will lead to long-term benefits for the Maltese economy in general.

So far IPSE has 350 companies registered as prospective clients and others are submitting their business plans for approval. "It is an ongoing process which will also lead to cultural change," he said.

The government had envisaged the removal of levies to take place by 2003. Prof. Bonnici said that at times the levies were a burden on consumers.

The minister said that companies that were protected in the local market were the least likely to make investments. "We have found out that for every Lm1 spent on investment by industries who sell to the local market, export companies spend Lm6. Moreover, there is a tendency for companies who export to pay higher salaries," he said.

Prof. Bonnici said that IPSE was doing a very important job. He said it is gearing itself up for next year's challenges and will give entrepreneurs a chance to look abroad for new opportunities.