Maltese operators in the building materials industry were still refusing to coordinate between themselves and were failing to tap niche markets overseas, according to two reports commissioned by the Institute for the Promotion of Small Enterprise.
One of the reports concluded that there was a lack of awareness in the industry as a whole, but especially among sole traders and small companies.
In fact, the report points out that these companies seem to be more concerned with their immediate sales and clients and ignore the fact that they are part of a larger industry.
The reports were released at a news conference at the Economic Services Ministry.
IPSE business manager Vincent Magri said the reports in general concluded that the productivity levels in the sector were still low compared with Europe.
A total of 137 face-to-face interviews and 10 in-depth interviews were carried out among the estimated 400 operators for the first report on 'Basic Metals: Aluminium, Iron and Copper Products'.
Respondents expressed their dissatisfaction with the way government tenders were awarded. This is due to the government's general decision to opt for cheap prices, sometimes low quality, and its failure to set up proper controls in the final product.
From an investment point of view, the major issue appears to be the lack of space and premises. This results in an inability to invest further and expand the business.
The report points out that few companies have a proper business strategy. Carrying out a proper business analysis means an added cost to the company and this is not in tune with an industry whose main focus is on production and immediate sales.
In its strategic overview, the report says that various factors indicate that both the Maltese domestic market as well as the Middle East and North African markets may be developing attractive potential growth prospects.
In addressing untapped opportunities within the EU market, Maltese exporters may benefit from certain advantages. Practically all exported industrial products are exempt from payment of customs duties on entry into the EU.
Therefore Maltese exporters would enjoy a competitive advantage compared with similar goods originating in countries that do not have any preferential trade agreement with the EU.
As an example, Prof. Bonnici said that Maltese tile exporters wishing to sell their product to Tunisia would have to pay 43 per cent in duty. Upon membership, this rate would be halved and there are plans to whittle it down to zero in future.
Among the opportunities awaiting this sector, the report lists benefits derived from the EU's social cohesion funds, the opportunities from free movement of capital, and better access to financing resources.
Among the threats, the report mentions the removal of levies, and the increase in costs due to compliance with EU directives.
The report goes on to make a series of recommendations. For example, it suggests that the main initiative for operators in the aluminium sector would be to secure additional markets through a focus on construction projects undertaken in North Africa.
The second report 'Non-Metallic Mineral Products', focuses on sectors such as stone working. Ten in-depth interviews and 103 face-to-face interviews were carried out for this report.
A total of 50.5 per cent of respondents look at prospective EU membership with optimism, while 36.9 per cent are not optimistic.
The most frequently-identified strengths and weaknesses include competitive prices and production flexibility, against lack of finance and lack of space.
Over 80 per cent of total respondents claim that they utilise less than 75 per cent of their capacity, while half the respondents claim that current capacity utilisation is less than, or up to, the 50 per cent level.
Thirty-seven per cent of respondents believe that the local product was more expensive than imported substitutes, while some 25 per cent argue the other way.
Most companies produce only one product, and two-thirds of respondents claim not to have changed or modified their products in the last five years.
About 18 per cent of respondents export, and a further 14 per cent intend to start exporting in the next four to five years.
The report says that in addressing untapped opportunities within the EU market, Maltese exporters may benefit from certain advantages.
In its recommendations, the report urged those in the cement industry to strive to develop and penetrate export markets.
IPSE chairman George Borg said the findings of the study would enable the institute to devise new schemes to help the operators.
"We are trying hard to change the mentality that operators cannot work together with their competitors on certain projects. Nobody can refurbish a hotel on their own - but if they join forces with others, they will manage," he advised.
IPSE representatives are currently presenting the findings of the report to the operators.