Shipyard meets turnover target

Malta Shipyards achieved its turnover targets last year and reduced its losses as projected, but this year would be particularly challenging, Public Investments Minister Austin Gatt said in Parliament yesterday.

Replying to questions in Parliament by Nationalist MP Jason Azzopardi and Labour MPs Noel Farrugia and Evarist Bartolo, the minister said the beginning of the year was the best that the shipyard had for three years.

While turnover targets were achievable this year as well, the challenge which Malta Shipyards faced was to improve the bottom line position. In order to further reduce its losses the shipyard needed to venture into more specialised and profitable work and it needed to raise productivity.

Competition such as that posed by shipyards in Croatia and Turkey meant that Malta Shipyards was not competitive in ordinary ship repair - a welder in Croatia was paid a third that of a Maltese worker.

Unfortunately, Dr Gatt said, productivity was still not at the levels needed for Malta Shipyards to achieve the profit margins necessary to further reduce its losses.

While last year's performance was encouraging, turnover having reached Lm18 million, the test this year would not be so much about raising turnover but about bringing in new work and raising productivity which would reduce losses to a projected Lm4.6 million from Lm8 million last year.

Asked about work on superyachts, Dr Gatt said this sector was doing well but Malta Shipyards was not yet where it wanted to be. Much depended on reputation, and progress in this area was made in the past two years when the yard was involved in work on some of the best European-based yachts and had shown that it could deliver on time and according to the required standards. The workers had shown they were qualified and dependable.

Indeed, Dr Gatt said, he wished that this sector could be de-coupled from the work practices employed on ordinary ship repair. Everyone needed to be convinced that progress would come about with greater specialisation and different work practices.

Pressed by Mr Farrugia to explain his comments on productivity, Dr Gatt pointed out that much of the progress made so far had been due to cost cutting. Analyses showed that much remained to be done for what were considered to be normal productivity levels to be reached. Malta Shipyards needed to reduce its fixed costs if it did not want to run into major problems in the achievement of its profitability targets. The reform process had so far been uneven, with 90 per cent of the changes completed in some departments while others were lagging at 30 per cent. The problems of productivity did not just involve workers, but also many middle managers who were not trained in management.

Dr Gatt stressed the need for multi-skilling, saying work was cyclical and there were times when particular skills were strongly in demand, and others when they were not. It was for this reason that Malta Shipyards, like others, was increasingly seeking part-time and contract workers who were engaged only when they were needed. That was why the Malta yard had periodically to seek foreign workers. Maltese workers were not available for this type of work.

Over the past few months Malta Shipyards sought to recruit 40 apprentices. But despite applications to the ETC and media advertising, only six turned up and only two had stayed, Dr Gatt said.

He said the industrial atmosphere at the shipyard had improved substantially since the collective agreement was signed, but everyone needed to realise that more remained to be done. What was good for the past may not be good now, and the shipyard needed total flexibility with workers having as many as four skills.

Dr Gatt reiterated that the government did not believe it should continue to subsidise the shipyard beyond 2008. That was neither viable nor legal, he said.

Targets had so far been reached and everyone's cooperation was needed for the process to be continued.