AX Group consolidating for expansion

Anyone involved in the construction industry is bound to leave a more visible mark on the local landscape. Yet for vision, ideas and initiative few can probably match AX Holdings and its driving force, Angelo Xuereb.

Taking time off from his busy schedule, Mr Xuereb, 54, looked back on a career spanning over 30 years, which started with a pavement contract worth Lm200 in 1975. He won several and the values started increasing.

"Within a year, I had acquired concrete mixers and then opened a quarry to produce aggregate, Hard Rocks, with my brother in 1982," he said.

Following his father's advice not to put his eggs all in one basket, he decided to diversify into tourism. "It took me some time to choose the tourism sector. First I looked at manufacturing, but then chose tourism because I had great faith in the country; that Malta had great potential."

He first built the Sunny Coast Tourist Complex in Qawra, but his next big project, the Suncrest, was so ambitious that people thought he was mad. "The Suncrest was not only the largest in terms of number of rooms but it was the largest private investment at the time - and you must also not forget the political climate," Mr Xuereb said. "This was the early Eighties when government was embarking on nationalisation projects.

"People said I would drive everyone bankrupt but when I was interviewed on PBS I said there was a need for four hotels like it."

Financing was another matter completely, with no bank at the time having a large enough capital to provide the loan, which at Lm2.5 million for the first phase exceeded 25 per cent of their capital.

The Suncrest was completed in 13 months, one month behind schedule, and he is proud that until he obtained the financing most of his subcontractors continued to work for him "because they had faith in me that the project would be financed and that they would get paid".

In 1993 he opened General Precast Concrete, the largest factory of its type in Malta, which he has just sold to Ballut Blocks since, he explained, it had come up for another capital injection, so it was the right time for a disposal.

His next major project was Capua Hospital, with the adjoining Victoria Hotel, incorporating the majestic Capua Palace. This was a first in the area of provision of private medical care. "I always try to be original," he said. "It is more of a challenge."

Capua was a state-of-the-art hospital. "My plan was to help Malta to be a centre of medical excellence in the Mediterranean, with five operating theatres, providing a year-round, lucrative business since these visitors spend more than the average tourist: between Lm2,000 and Lm5,000 a week as opposed to Lm200."

Mr Xuereb may have been ahead of his time, as he has been in many other local projects, and he concedes that the mentality at the time was different, with the public not accustomed to paying for private medical care, when they obtained a medical service at St Luke's for free.

Arrangements were made with medical insurance providers BUPA and PPP for orthopaedic and cardiac operations to be performed at Capua. "Top surgeons like Alex Manché were under-utilised and my intention was to save the government money by utilising their services and lessen waiting times for patients awaiting surgery," he said.

In 1994 he acquired the Verdala Hotel. He is still awaiting a complete permit to redevelop this property and create a beautiful building instead of the existing structure. Meanwhile, Verdala Mansions, next to the hotel, was successfully developed and another development, Virtù Heights, sold simply by word of mouth.

At the time he also bought the Duke of Edinburgh Hotel in Victoria, Gozo, but then sold it.

He was the promoter of the Valletta Waterfront project and is one of its leading shareholders with just under 23 per cent. "I spoke to (Dr) Alfred Sant when he was prime minister and offered to deliver the project on a build, operate and transfer basis.

"It was a challenge to find and assemble a solid consortium, bringing together expertise in the running of cruise and ferry terminals," he said. "It was my idea to have the Laguna concept and it was accepted almost right from the start that the road should pass from the back." He intends to open two new outlets there in the coming months: Tal-Kaptan, with a new theme; and a themed bar with different music every day of the week.

Several of Mr Xuereb's ideas have not been taken up or are awaiting implementation, including the City Gate and Opera House projects, the master plan for public transport for the island, incorporating an underground light rail system.

Yet so many other projects have been a success. His latest development is The Palace, a 155-room five-star hotel - the only one in Sliema. The land is mainly that of the former Alexandra Gardens, but he also had to buy some five other properties for a total area of 2,500 m2. The new hotel will have Palazzo Capua as part of its facilities.

The hotel's original design is supervised by Mr Xuereb, with him giving ideas to the architects and designers until he is absolutely satisfied with the end product. The hotel will be completed in shell form by the end of February and will be open next summer.

Mr Xuereb sees the development in tourism as very much in the five-star category, with lower four-star hotels falling by the wayside. One- and two-star hotels have virtually disappeared, he observed. "It is important to continue improving the product. Tourism has its ups and downs - it is a cycle and will flourish again."

He believes that the low cost airlines are very good for Maltese tourism. The price must be relative to supply and demand, with the supply being brought in, the more the demand. Once the demand will increase more than there is supply, prices will start going up again.

Another project he is developing is at Is-Simblija, Naxxar, a 'sheltered' home complex for the elderly. "This is a little village where people feel safe to live in their twilight years. It is central, secure, with a visitors' car park, chapel, activities room and catering on site."

The AX Group is actively examining projects in Tunisia and Italy. "We are very prudent and will never be pressurised to invest unless we are on solid ground, with everything secured." In Libya he is hoping to conclude on construction, development and tourism projects.

"I am a creative person," he said. "I am always coming up with new ideas and because of this people do not always understand my vision.

"My philosophy for success is: determination, creativity, efficiency and challenge." He remains fully hands-on and is proud of all his projects. He goes into all the details and this is why he believes, in the end, he has a good product. The AX Group is today much sounder, with solid investments, including the Valletta Waterfront and The Palace.

The next generation, his three children, are also being brought into the business: Richard, 31, who has just got married, is a construction manager; Claire, 30, is the general manager of the Victoria Hotel and will also be GM of The Palace; and Denise, his youngest, is still at university studying Business Management and, after studying for a further year abroad, will concentrate on property development.