26 July - 1 August 2001

MDC to set up rep desks in UK, France

• Strategy being developed to target investment from these markets

by David Kelleher

While many gauge the success or otherwise registered by the Malta Development Corporation on the basis of the number of new projects coming to Malta, little attention is given to those companies already based in Malta that are consolidating their position and growing.
In an interview with The Malta Business Weekly, the chairman of the MDC, Lawrence Zammit, there were numerous successful stories in Malta.
“There is a tendency to focus on the number of companies the MDC attracts to Malta, however there are many unsung success stories in Malta,” Mr Zammit said. Giving an example, he said that one company with manufacturing plants in northern Europe, Malta and in eastern Europe has decided to consolidate its Malta plant and close down the other two.
“This is a clear example of a success story, one of many that do not make it into the papers. One cannot base success solely on the number of new companies coming to Malta,” Mr Zammit said.
Last year, a total of 57 projects in 13 different sectors, were approved by the MDC. The majority are Maltese, German and Italian companies. Asked why e-commerce and Internet companies were not targeted by the MDC, Mr Zammit said that all approved projects were listed as
target sectors in the Business Promotion Act.
“If you look at the BPA it does not target e-business specifically. It
targets a wide range of sectors and we have targeted these sectors. This is an important consideration. However, if there are companies in other sectors not listed in the BPA, we will surely help them,” Mr Zammit said.
He added that the MDC was very happy that Malta is looked at favourably by a number of companies abroad and that these are preparing business plans for possible investment in Malta.
“A number of companies already in Malta are expanding and growing. I think that the fact that once they have been here and experienced what we can offer, and as a result of this they are able to grow their business, that is a positive sign.
“The BPA targets a wide range of sectors and most projects have been approved in these sectors. There are other areas that are not target sectors for example denim products, that are experiencing an upward trend in the market in Malta. The last thing we should be doing is not helping them exploit opportunities in the market. Most companies who set up in Malta have reached their targets earlier than expected,” Mr Zammit said.
Asked why most investment came from Germany and Italy, the MDC chairman said that traditionally these two countries have been the major source of investment for a number of years. He added, however, that the UK was also a major investor and came second after Germany.
“This also reflects the type of marketing efforts we have had over the past few years,” he said.
The MDC has not rested on its laurels and it is slowly spreading its representation in a number of countries, including France.
“At present, we have a direct presence in Munich and in Milan. This year we also opened an office in Washington. We are also focusing on other countries. We have appointed a desk officer for France and now have a strategy on how to attract French investment. We are also concluding negotiations to have a direct presence at our embassy in Paris,” Mr Zammit said.
“With regard to the UK we have appointed a desk officer but this needs to be followed up with a strategy. It is not just a case of having representation but it has to be coupled with a strategy. Today we have re-focused our strategy. I firmly believe in one-to-one marketing, what we call micro-marketing,” Mr Zammit told The Malta Business Weekly.
Asked if the MDC looks solely at companies that can create job opportunities or their impact on the economy, he said that one has to look at a number of facets – job opportunities, the land required by the com-pany and the impact on the economy.
“You also have to look at the multiplier effect and environmental issues. Creating jobs is not the only reason,” he said.
More than 1,700 job were created last year and a total of 34,000 square metres of factory space provided to companies. Although satisfied with the results, Mr Zammit feels that much more can be done.
“What is satisfactory is very subjective. I am satisfied with the results but one can always do better. It is not easy because other countries are now very active on the market, especially east European countries. Our traditional manufacturing sector is still going strong with many ‘old’ companies still here. We have to allow companies already here to grow. Most export companies in Malta are showing growth and this should not be seen to result in job creation alone. They are growing by developing new products or re-investing in better or new equipment,” Mr Zammit said.
“I don’t think we Maltese fully appreciate the ‘Made in Malta’ mark. Today, high-tech equipment – a wide range of products – all have a ‘Made in Malta’ component or microchip. The Made in Malta mark is increasingly finding its way into products. The encouraging thing is that there is interest in companies here and the BPA has helped a great deal. In fact, we are in the process of setting up a unit that is basically an investment after-care unit to take care of those companies that have invested here,” he added.
Lack of space for companies is another problem. The waiting list for factory space is quite long and the MDC is not helped by the fact that some factory space is being used for purposes that were not listed in the letter of intent given to the tenant.
“Yes, this is a problem and at the MDC it is still an issue. Tackling the problem is an ongoing process. We have to sensitise the business sector and the public that land is limited and we have to make good use of it,” he said.
Comments were made in the local media that the MDC was to blame for a company to lose out on a sizeable investment because the corporation was not able to provide factory space.
“At no point did the GWU criticise the MDC over the Dowty issue. If anything it was an editorial comment in the GWU newspaper. The GWU knows that we have done and still doing our best to meet Dowty’s requirements. In fact, there is an extension that is being built to their Marsa plant. We have also initiated the process of building a new
factory for them and we have also earmarked other factories for their requirements. Essentially the claim that Dowty did not get the investment that had been initially
mentioned because of the MDC is unfounded as we have already
stated. We have a good relationship with the company and we are doing our best to meet their requirements,” Mr Zammit said. However, Mr Zammit stated that it was not in anyone’s interest to transform this issue into a polemic.
The MDC is also giving due consideration to an e-business culture.
“What we have is an knowledge-based economy task force which is trying to focus on companies that make use of technological developments in order to create systems that are used in products. So far we have focused on traditional manufacturing of final products or components. For these components to work you need to have the systems and we are now focusing on those companies that are developing these systems,” Mr Zammit added.
Asked why the MDC has not continued marketing the Business Promotion Act locally, Mr Zammit said that the corporation’s present focus was on attracting companies from abroad. However, a number of
promotion activities were also held for the local industrial sector.
“We are constantly promoting the BPA abroad and we are also working on strengthening the links with what we call multipliers, for example accountancy firms and business consultants. We are very eager to get them to promote the BPA to their clients and this is happening. This is a very positive sign,” Mr Zammit added. He concluded by saying that the MDC’s work is question of balance between facilitating the expansion of companies already operating in Malta, the promotion of new foreign direct investment and assisting the development of the Maltese-owned manufacturing sector.