Rimus Riley expands to cope with exports - June 21, 2007

Rimus Riley is planning a phased investment of Lm800,000 over the coming two years in anticipation of demand to produce biscuits under private label to several European countries, even as its current export markets in France and the UK expand considerably.

The investment will increase production efficiency and treble current output per shift.

The latest contract means its biscuits will be on the shelves of over 700 supermarkets across the UK over the next weeks.

The company, which makes savoury snacks as well as biscuits, was started in the mid-1970s by Rino Muscat Scerri. Its history shows the importance of having someone at the helm ready to stay the course - through thick and thin.

The optimism now is a far cry from the tortuous start to the business. Mr Muscat Scerri originally imported foodstuffs, including biscuits and Tato's Snax, but when the government banned imports of snacks to protect local production, he found his livelihood put on hold. His first idea was to start manufacturing Snax in Malta on behalf of Tato's. It did not work out but a friend of his at Tato's suggested him to the Riley brothers of Scunthorpe, who made crisps and had recently taken over distribution of Tato's in the UK.

Riley's came to Malta and within five minutes, he recalled, they reached an agreement; the company was set up with a 51 per cent shareholding for Mr Muscat Scerri (whose initials RMS eventually became the Rimus in Rimus Riley).

He set up production in a Nissen Hut in Corradino with just five staff. At first, sales of Snax were a huge success but within a few months sales slumped unexpectedly. He had to lay off most of his staff but he and his production manager kept things going.

He then had a stroke of genius, which saved the company. He bought tiny toy figures from a company in Italy and slipped one into each packet. Sales surged up again and the company has never looked back again.

"I remember one woman complained because she broke her dentures on a toy - and we realised that we had to have something on the packet saying that there was a prize inside! But that was the only negative thing. Those toys turned things around when it looked really bleak," he said.

Buoyed by his success, he moved on to baked products and the workforce grew. By 1978, he had moved to Bulebel and introduced crisps. Two years later he invested Lm300,000 in the first wafer-producing equipment on the island.

At that time he was still importing biscuits but when a local company started up in this field in 1983, he was faced with the loss of 50 per cent of his turnover.

"I didn't think twice," he said. He commissioned an expert to identify the right equipment - a Lm400,000 investment - and the Regal biscuit brand was born, rapidly building up a considerable market share.

By now, the Riley brothers had retired and Mr Muscat Scerri had bought them out. It was time for the company to grow again. The company secured a few contracts to places like Saudi Arabia, Kuwait and even Scotland. The years passed with slow but steady growth. Then came another challenge: The removal of protective import levies as Malta moved closer to EU accession.

"We had two choices: To close down or to invest in yet more machinery so that we could become more efficient and expand the market by exporting. At first, when the levies were removed we lost a lot of the market and the production workforce of 90 fell to 35.

"But we realised that we could not compete on conventional biscuits; we had to come up with unique products."

This strategy worked and by 2005, with the assistance of Malta Enterprise, Rimus Riley was exporting three million packets a year to France under a private label, as well as to other countries like Ireland, Croatia, Portugal and Cyprus.

The company recently sent a first consignment to another supermarket chain in France, which in turn is the central buying house for numerous outlets in various European countries. Again the initial feedback was very positive.

This April, the company had its largest breakthrough yet: the UK. The contract is for up to four million packets a year, depending on sales, and Rimus Riley has already come up with six new products.

"It is important not to get carried away and put all our eggs in one basket. The British company had wanted to buy our full output but I prefer to keep other clients as well," he said, adding that he had a Greek supermarket chain interested in both biscuits and snacks.

The company will have to introduce a third shift to cope, bringing its workforce up to 120. He is already fretting about the lack of qualified technicians. In the meantime, the local market has also regained previous levels, something that makes him quietly proud.

"We say that Regal is the 'biscuit with a heart'. This comes from the fact that it is a family company and that I put my own heart into it. My son Kynan is now running the Rimus Group and takes much of the credit for our success."

His daughters Bernice Micallef and Charmaine Fenech work for other companies forming part of the group, while Juanita Bencini is a partner at KPMG.

Now 72, he still spends hours in the research department coming up with new recipes or tweaking existing ones.

"I think the future is a real challenge for the family but I think that if you look at our past, you will understand why we are confident about the future."