CareMalta to build new home for the elderly

A name synonymous with Casa Arkati and the Vassallo Group of Companies has now become CareMalta.

The change comes at a very crucial time in the company's development as an organisation with its own identity. CareMalta is a subsidiary of the Vassallo Builders Group of Companies but the organisation has been restructured in such a way as to form a Group of Companies in its own right, with CareMalta Group Ltd as the parent and property-owning company, CareMalta Ltd as the operator of Casa Arkati in Mosta, Villa Messina in Rabat, the two government homes in Zejtun and Cospicua and Arkati Homecare, a community based caring and support service; and CareMalta Finance plc, as the Group's finance arm.

Ing. Alexander Tranter, managing director and chief executive officer of CareMalta, told The Sunday Times at Villa Messina last week that from a corporate structure point of view, the company looks much neater now and "in a way we have created a bit of a separate identity within our own sector".

Healthcare Services was the name with which the company first started out in 1993, with the opening of Casa Arkati. "More recently, especially now that we are taking this major step in our growth, we thought we should also change the name we've had for nine years into a stronger-sounding name, more associated with our business, a name more related to care," Ing. Tranter said.

"CareMalta is serving as the brand name we are pushing forward in our next stage of development."

The company is planning to develop another private home. It has, in fact, identified two sites - in Sliema and Attard - but only one will be developed initially. The company will choose the one which is more conducive to the attainment of its strategic objectives.

"And also, possibly reach elderly people in a much better way. Although location is important, that importance is relative," Ing. Tranter added.

"And, I think, extending strategically into either the Sliema or the Attard area is a development which we have been considering for some time since they are areas where a lot of old people live and therefore where the demand for our services is higher."

But this also brings with it challenges and hurdles which the company had to overcome. The company's next phase of growth has already started. It is targeting to increase the number of beds the organisation offers by at least another 250 over the next three years.

This increase already started on June 4 this year with the extension of Casa Arkati and more recently with the extension at Villa Messina. These "quick expansions" occurred because the homes were already reaching a rather full level of occupancy and also because the company has built a good reputation in the market.

Ing. Tranter feels that the elderly care sector has been growing in Malta ever since the company entered the marketplace.

"Due to the aging phenomenon, the market for elderly care is there and all indicators point towards growth. The challenges, however, are several. Can the market sustain the price at which elderly care services are provided? How will Government sustain the ever-widening welfare gap? It is my belief that a number of efforts are required to address these issues jointly by the private sector and Government," he argued.

He went on to say that a crucial element anyone developing a purpose-built home for the elderly needs to consider is the feasibility of the project. This is not the tourism market where there are huge volumes of tourists coming to Malta. In this sector, one depends exclusively on the local market where affordability of long-term care is a highly sensitive issue.

"The challenge in this sector is finding the right formula of creating a beautifully looking purpose-built home which is affordable to the elderly on the one hand and which will provide the investor with a reasonable return of this investment. This, of course, is not an easy task," Ing. Tranter said.

The basic philosophy of the company in its expansion plans is to expand in a purpose-built environment (specifically designed for the elderly) and offering in a purpose-built setting good quality care.

The company is not a believer of going into hotels and converting hotels into old people's homes. Hotels are not built for old people but for tourists who come here and spend the least possible time in them. With homes for the elderly, it's the complete opposite.

CareMalta operates two State-owned homes which follow the same care philosophy as that adopted in the other two private homes it operates. The Cospicua home is the very latest, having opened in December 1999, preceded by the Zejtun home, which opened in March 1994.

"What originally started as an experiment in public-private partnership back in 1994 with the Zejtun home, whereby this government-built home was entrusted to the private sector to operate, is something which has become pretty much a way forward in this sector. The Cospicua home followed on the same lines. This is further evidence that the collaboration between the two sectors has created a win-win situation," Ing. Tranter said.

Another new and innovative public-private partnership in elderly care has started this year whereby Government has allocated around Lm100,000 to Lm150,000 in terms of contracting beds in private homes. CareMalta is one of two private companies chosen to supply these beds. In this way elderly persons are allocated to private homes where there is excess demand for residence in government homes.

"Although Government is increasing its recurrent expenditure under this new scheme, it is providing immediate solutions to the elderly without incurring any capital investment, thus providing services to a wider range of older people and a lower total cost," Ing. Tranter said.

CareMalta is the largest investor in this sector today with a total of fixed assets of Lm3.5 million in Casa Arkati and Villa Messina.

"We were quite lucky to form part of the Vassallo Builders Group. This solid backing was extremely important, especially when we came on to the market with Casa Arkati, which was a shock to the system, as known at the time.

"For many it was like a five-star hotel for the super-rich. So we started breaking that culture, that the elderly deserved the right to proper care in a pleasant environment.

"Our original vision, that of offering quality care in purpose-built surroundings, was a shock to the system then, but now it has become the norm and will continue. We are now using this vision together with the solid foundations we've managed to establish over the past nine years to build an exciting future for our company," Ing. Tranter said.

The edge of being the first on the market was and still is a big advantage for CareMalta in offering quality care in a purpose-built environment. Being part of a construction group is an added advantage that has given CareMalta the ability to develop, build and operate its own homes.

"So as to fuel this further development, CareMalta intends, within the very short term, to tap the Maltese capital markets to fund through a bond issue, its next stage of growth. We want to continue to develop properties within budget, refine further our design considerations and continue to operate according to our philosophy of offering quality care," Ing. Tranter said.

Ing. Tranter, a mechanical engineer by profession, feels few engineers are born with an acute business sense.

"My technical background has helped tremendously, mainly in looking at practical ways of solving issues and also dealing with human resources. I am very much inspired by corporate strategy, not only in the operational side of CareMalta's business, but also in looking at different ways available for funding corporate growth. I am very proud that CareMalta will soon become the first in this industry segment to finance its next stage of development through our forthcoming bond issue," he added.

His main speciality, when reading for his Master's degree in Business Management at the University of Birmingham in the UK, was strategic management, an area of focus which seems to be working very well for him.