These past few days I have spent quite a bit of time discussing old and new models of manufacturing, in the context of my professional role at the Bortex Group. The long-established garments manufacturer, which Sunny Borg pioneered in 1964, was forced to decide to discontinue its remaining production of menswear in its Malta plant, as the final stage of its repositioning to an updated model of operations, which will see it retain a very strong presence in Malta.

That will come through its 'superstructure' functions, its refurbishing and international distribution of garments produced in China, and its well-established local retailing, currently carried out from three shops.

Sunny set up Bortex in the early stage of Malta's industrialisation thrust. The government of the time had informed him he would no longer get licences to continue with his jeans importing business. The reason was that a foreign jeans manufacturing company had set up a subsidiary in Malta. That brought to fuller life the man's entrepreneurial spirit.

He set up Bortex to target international export markets. In time a leading Dutch manufacturer, Van Gils, was brought on board as a major partner. Thereby the Bortex model of local direct investment for export gained from a transfer of knowledge achieved through Sunny's shrewdness. Van Gil moved on, and Sunny Borg brought in a new major foreign name as a major shareholder. The early model saw a shift.

Next plc is (and remains) a very well established retailer in the UK, listed on the London stock exchange. It added value to the Bortex enterprise in terms of enhanced market access. Next wanted to be sure of an established supplier, while Bortex had the opportunity to increase sales to it.

As with all good investment, the relationship was based on the arm's length principle. Next would only purchase from Bortex, despite being one of its shareholders, if price, quality and service were competitive.

That helped Bortex to hone its capabilities to ward off competition. Initially, that competition came, among other places, from within the UK itself. Later on, UK manufacturers began downsizing and eventually exiting, in the face of the growing competition from overseas. There came a time when the third Bortex model had to make way for a new one.

Next did not wish to retain a manufacturing capability. They wanted to concentrate on the core business, retailing. They moved out of Bortex on amicable terms, and the company became totally locally owned.

It redoubled its efforts to enhance its position as a major supplier of garments to the UK and other markets. Competitive forces were tough and increasing.

Towards the end of the Nineties market forces signalled that the company had to start thinking, fast, of moving towards a new model. It was investing steadily in state-of-the art equipment in Malta, and in its committed human resources, to bring about increased efficiency and higher productivity, and translate that into healthy unit cost.

That notwithstanding, competition from lower unit-cost countries meant that international clients demanded lower supply prices. The paradox of supply prices declining steadily alongside rising costs had to be countered with a new model, one based on a mix of domestic and overseas production to attempt to get a competitive average supply cost. Bortex set up a plant in Tunisia, a location not without its dose of ongoing difficulties.

Soon enough, even that model did not suffice, whether for Bortex or UK manufacturers, who also attempted it by getting productive capacity in eastern Europe. Clients discovered the China phenomenon and demanded, no other word for it, that they be serviced at drastically reduced prices.

Bortex reached out to the Chinese model, twinning it to the model it was running at the time - a mix of production in Malta and overseas.

Under the onslaught of relentless market forces, production in Malta had to decline, until a decision was taken to phase it out completely. The present model took shape. Bortex was among the last remaining of the major producers, along with VF, the latter day successor of the Bluebell company whose arrival in the early Sixties had spelled the end of Sunny Borg's jeans importing business, and heralded the birth of Bortex.

Most of the other participants in the Malta manufacturing industry had succumbed to the harsh market process in which competitive prices rule the roost. VF Malta, I understand, remained profitable, but not as profitable as it could be elsewhere.

That, it seems, is why its foreign owners decided to close it. They were not prepared to put up any more with the opportunity cost of lower profits than what could be made elsewhere.

In the process, Bortex was putting up with losses from its dwindling production in Malta. The decision to phase it out was inevitable. The repositioning of the company to the latest model with which to compete for survival is, I feel, of general interest.

The model is based on Malta as its core element. A strong team of human resources, 92-strong, which includes a good proportion of graduates, fulfils the key functions of design, product development, marketing, sales, sales administration, financial management and overall administration.

Often on the move to deal with old and new clients, the team is continually building up a large base of human capital in which knowledge is the driver.

That knowledge starts within the capabilities of each individual, and is then consistently added to through market exposure, and relevant training. Bortex remains a strong and growing presence among retailers of men's garments and accessories, ladies' wear and kids' wear.

Leading European names recognise and turn to its capabilities, while demanding that they be supplied at competitive prices. That is done with production out of Tunisia and China, which takes place under the management and supervision of key Bortex personnel.

The repositioned model recognises the basic imperative to satisfy clients not only at the right price, but also in the right manner. Taking a very keen price as given, clients want just-in-time deliveries, the right to "call off" such supplies as they need, in restricted quantities rather than taking an order as a whole, and a fast response time to changing requirements.

To meet those demands, Bortex ships the output from its Tunisia capacity directly to clients, some 800 suits a day, plus ladies' and kids' wear, but brings its China output to Malta, some 1,000 suits a day, and set to rise when the new model achieves a better equilibrium.

That equilibrium should see Bortex striving to expand business in the brands it handles directly, specifically under a licence from Rochas, and in association with Charlie Allen, a top UK designer.

The Chinese production brought to Malta, remains "Made in China" but has value added to it here, through some 34 focused operators, before being distributed to the foreign clients of Bortex, according to their timelines and other exigencies.

Of the value added element in the output handled by Bortex, around a fifth arises out of the activities of the model in Malta. Around Lm3.5 million will thereby be contributed to the Malta's gross domestic product annually, largely in the form of wages and salaries.

The three Bortex outlets in Malta include one at its Malta factory, which has a function intimately related to its new model. Clients want to know what they are buying. The shop serves as what is known in the trade as a "mock shop", better understood as a showcase, where the whole range of Bortex design and product development capability can be displayed and seen "in action".

The parade of models referred to above walks along an economic stage. It has very little to do with politics. It would help the manufacturing industry, as everyone else, if government-induced costs were lower. In cases where the brutal market has brought about extreme unction for local production and caused "footloose" industries to relocate in lower-cost countries, government action cannot stem the outflow, no matter how well intended.

That grim reality should not become fresh political fodder, Rather - I feel as an economic analyst and a commentator - the political debate should be forward looking. The textile sector has dwindled in Malta, as it has dwindled in so many other countries. There are other parts of the manufacturing sector that will come under competitive pressure.

The political debate should range far and wide on how to start broadening the skills base of the employees, around 17,000, who remain in the manufacturing sector. A number of manufacturing enterprises will come under fresh competitive pressure.

I hope that some of them will find it possible to reposition to the Bortex model, or a better one, so that Malta can continue to be a strong part of their strategic plans.

Whether they do or not there is a threat that, without retraining, part of those who depend on the manufacturing sector will risk becoming 'obsolete' when the sword of Damocles falls. It is not at all enough or sensible to speak of such growth as is taking place in the economy.

May there be more growth, but it will be occurring in areas that require different skills to those currently employed in swathes of the manufacturing sector.

There could very well be a mismatch between demand and supply. That has already been evident for years in the composition of the registered unemployment fugues. A large chunk of the unemployed consists of workers with basic skills, unrelated to the market demand for human resources.

That is not a situation unique to Malta, which is why various economists elsewhere used to advocate specific jobs programmes for the unskilled.

The best programme is timely development of the individual. That has to be done through the education system, but for those already in employment and facing the prospect of eventual lay-offs, different programmes are required.

The developing economic situation brings into sharper focus the need for another new model - in the political sector. A competitive model that focuses on the realities of the threats and opportunities that come about from the rest of the global economy.

The more the political parties compete on how to do things best, the better for those who cannot, on their own, do much about the implications and effects of relentless economic change.

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