Down 'memory' lane

What do a water pump, a computer, a crane, a measuring instrument, a printing press and an airconditioner have in common? Hardly anything, you might say, but delving deep into their electronics you might find that they all have memory boards in their singular systems initially manufactured at the MSC Malta plant in San Gwann.

One of Europe's main high-tech distributors since its origins in 1979, MSC Vertriebs GmbH has made a name for itself as one of the leading high-tech distributors of electronic components in Europe.

The German manufacturers were lured to Malta in 1992 by the Malta Development Corporation (MDC). Ms Angela Zammit, who was then working at the German desk of the MDC, and who is now a director of MSC Malta, was instrumental in bringing over this investment.

"I was working for MDC and, after researching the German company's product I realised they were paying 14 per cent duty on integrated circuits (ICs) imported from outside Europe," Ms Zammit told The Sunday Times last week at her offices at the San Gwann plant. "In fact, even today, these chips are mainly manufactured in the United States and the Far East.

"Malta at the time charged no duty and still does not, so we approached the company and the decision to set up shop here was taken. Besides, there was also an attractive incentives package to go with it, but I must say that the duty-free condition was the major deciding factor."

MSC Malta's origins were humble but profits immediately ran high. Their first export consignment was in May 1993 with a total workforce of three operators, one technician and two directors, Ms Zammit and a German engineer, Rudolf Weser, the then production manager from MSC headquarters who helped set up the Malta plant, which covered just 260 m2 in San Gwann.

MSC Malta was producing memory modules for computers like mad and was the first company to introduce Surface Mount Technology (SMT) in Malta. SMT is the technology used to place electronic components on a printed circuit board automatically according to the desired specifications.

"In the first five years we used to produce the full range of memory modules, exporting some Lm30 million worth of memory modules to our mother company in Germany. We used to serve as an extended workbench of our parent company with the marketing and sales carried out in Germany," Ms Zammit said.

What happened after the first five glorious years was that duty barriers in Europe were removed and Malta was no longer a viable location. The island's competitiveness was diminished. The production of memory modules was thus shifted to Scotland where MSC have one of their four production plants worldwide, besides an extensive distribution network ranging from England to Turkey, covering all Germany and central Europe.

This is when MSC Malta had to change to attract industrial electronic projects, which was a niche market. The company started to produce boards for local industry, which previously had to be imported by the respective local factories. They now have 45 different orders going to several companies locally and overseas.

"In today's world everything works electronically, from your washing machine to air-conditioners, television, etc.," Ms Zammit said. "Everything works at the push of a button. Since we had the SMT machinery already in place, previously used for the sole production of computer memory modules, we retrained and recruited employees to concentrate our efforts on these industrial projects and we are now fully geared up to take up any project.

"In a way, we are still manufacturing 100 per cent for export because we supply the local industry with our products, which after being value added at their respective plants, are in turn exported to their global markets." MSC Malta also exports their products directly to the US, Japan and, mainly, Germany.

"We are also given contracts by our parent company, but we do not depend totally on them any more. We have, in the meantime, developed our own marketing division and we source our own projects that we contract ourselves and deliver directly to our clients without the parent company being involved at any time," Ms Zammit said.

Sixty per cent of MSC Malta's production is now direct contracts brought about by their marketing division who market two types of electronics technologies: fully automated SMT technology and Through-Hole Technology (THT).

Whereas SMT needs a relatively low workforce to program and man the machines, THT is the conventional way of building up a board manually and so is based on human resources.

This is where components, which couldn't be handled by the machines, are painstakingly added on to the boards manually. The boards are then rigorously checked and tested at the testing department before being moved on for quality control.

The development of new technologies and branches within the plant gave rise to a "gradual and lovely expansion" and the company now employs 40 full-timers, who undergo ongoing training at a new plant covering 2,042 m2 equipped with the usual amenities found in the electronics sector such as anti-static carpeting, soffit ceilings and air-conditioning.

MSC also do their part to safeguard the local environment, and chemicals used in a cleaning process at the end of the production line are returned to the manufacturer in Germany and not dumped locally, ensuring that the whole process is a relatively clean one.

Although MSC has been a success story throughout, it is becoming more and more difficult in today's competitive world.

"Malta has many factors against it. Being a small island in the middle of the Mediterranean we do not have a supply industry, that is local companies to supply us with the raw materials. We have to import or airfreight all our raw material, from all over the world at a relatively high cost, work on them, and ship out the finished product again, sometimes in under 48 hours and yet remaining as cost-effective and efficient as possible," Ms Zammit said.

"Competition from the Far East is being felt with clients demanding cheaper prices. We really have to fight hard but the Maltese are very productive, fast learners, and good workers, which is our major asset. We have to be productive to ensure everybody's future."

With the establishment of our own purchasing department together with the project department we ensure that the production and quality departments deliver our made-in-Malta products to the highest quality standards approved in Europe and America, thereby making MSC Malta Ltd. a valued supplier to international firms.