Factories found for all new projects
A total of 110 projects were approved by Malta Enterprise in 2006 and so far in 2007, creating 3,573 jobs and representing a total foreign capital investment of Lm59 million, Malta Enterprise (ME) chairman Alec Mizzi said. "2006 and 2007 have both...
A total of 110 projects were approved by Malta Enterprise in 2006 and so far in 2007, creating 3,573 jobs and representing a total foreign capital investment of Lm59 million, Malta Enterprise (ME) chairman Alec Mizzi said.
"2006 and 2007 have both been excellent years, both in terms of the quality and the number of projects," he said during an interview.
"For example, we recently had the inauguration of the Malta Audio-Visual Production Centre which, while only expected to employ around 15 people, will produce audio-visual material for Nestlé advertising, with a multimillion liri turnover. They are also talking about other multinationals using this facility. It will generate new skills and complement our fledgling film industry.
"Of course, we have had bigger successes in terms of investment & employment, like Lufthansa Technik & HSBC call centre, creating over a thousand new jobs between them."
The new projects are only part of the story - and not the part that brings Dr Mizzi most satisfaction...
"The number of expansions is an even bigger feather in our cap. These people were already in Malta so their plans are not based on promises but on their actual experience of Malta and its workers and a sound assessment of the reality," he said, ticking off the names of some of the recent ones that made the news, such as Methode, Dedicated Micros and De la Rue and pharma companies Actavis, Siegfried, Arrow, Amino, Medichem and Combino Pharm.
"The pillars of our industrial base like ST, Playmobil, Trelleborg and Toly are also continually expanding their activities. Once companies experience Malta, and our flexible and highly trainable workforce, they tend to want to expand here. All multinationals in Malta tend to carry out the more sophisticated processes here."
Some expansions were concluded almost as soon as the original project took off, such as the HSBC call centre, which raised its job forecast to 500 as soon as the original 240 were recruited.
The number of expansions is not accidental: ME has placed much more emphasis on relationship management to support companies that are already in Malta.
As time has gone by, ME has also had to adapt its focus to reflect the national policy trend away from low-skill level manufacturing.
"When we evaluate a project, we try to give as much encouragement as possible to companies that have a value-added per employee of at least Lm11,700," he said.
He stressed that this did not constitute a minimum threshold as companies offer more than just value-added - such as job creation.
Dr Mizzi is also the chairman of Malta Industrial Parks (MIP), which has also adopted a new approach in tandem with ME.
"The government appointed the same chairman for both organisations in order to ensure closer cooperation," he said.
The first task was to clean up its books: MIP is the largest real estate management company in Malta by far, managing three square kilometres of land and over one million square metres of factory space.
There were many administrative issues that were not being enforced, such as payment of rent and up to date insurance. There was also abuse, with tenants using factory space for activities like importation and storage.
Over the past three years, MIP has already evicted 21 tenants and repossessed over 36,000 square metres of factory space. Since 2005, MIP has allocated around 70,000 square metres of factory space to new industrial establishments or expansions and invested heavily in the improvement and construction of custom-made factories.
"We do not take a heavy-handed approach. However, this is taxpayers' money. Both ME and MIP are beefing up their monitoring and compliance divisions to make sure that public assets are used in the correct manner.
"We also must ensure a level playing field. It is not fair that one person stores imported goods in factory at a reduced rate while his competitor has to pay commercial rates to store them in a warehouse. That space should be freed up to be used by genuine industrialists who are going to create employment and generate wealth," Dr Mizzi said.
While this compliance exercise was underway, MIP was still faced with constant demands for new factories. In many cases, it paid for the new premises itself, recouping the money through rent over a lease period (as in the case of Lufthansa Technik). It also reached agreements with several investors for construction of the factories to be left in their hands, albeit working to an approved budget and through a standard government tendering procedure.
This has greatly speeded up the process and investors with very specific standards found it very reassuring to monitor progress at every step of the way. But even though MIP does not have any pending requests, having found sites for all the newly-approved projects and for the 15 relocations from the Ricasoli site, the situation is still far from satisfactory.
"We feel that the time has come to prepare new factory stock. Factories are an extremely important part of the package we offer - in some industries more than in others. "It takes the best part of two years for a company to develop a factory from scratch. We want to be in a position to have state-of-the-art factories ready, with keys in hand so that they can move and find water and electricity, broadband connections, the lot," he said.
MIP went through a selection process and identified TBA Periti as its technical consultant. The idea is to build new factories using a formula based on two-storeys underground for parking or storage, two for production and one for business space (such as research and development).
"We are going to build general use ones and pharma ones in Hal Far, engineering ones in Mosta Technopark (which has enough space to double its footprint) and smaller units, which can be taken up as multiples. So there will be a lot of flexibility," he said.
We are also looking at the former Dowty factory in Mriehel, which is a considerable size. We are in the process of deciding how best to use it. One possibility is business space - not offices but space for functions which do not need traditional factory space with high ceilings and loading bays. MIP is keeping well away from the provision of office space, as it does not feel it should compete with the private sector that caters for this sector.
"Once we complete these, we will look at the Corradino Industrial Estate."
Once it has created a bit of breathing space, MIP will be able to move on to the final phase: Giving existing tenants the option to move into the newer factories - thereby freeing up the older factories for upgrading or refurbishment.
"The ones we have now are built on one-storey with surface parking - but this is very wasteful of space. It was not an issue in the 1960s and 1970s but things are different now as land is fast becoming a very scarce resource.
"Of course, the new state-of-the-art factories will come at a higher rent but at least there will be a choice."
"2006 and 2007 have both been excellent years, both in terms of the quality and the number of projects," he said during an interview.
"For example, we recently had the inauguration of the Malta Audio-Visual Production Centre which, while only expected to employ around 15 people, will produce audio-visual material for Nestlé advertising, with a multimillion liri turnover. They are also talking about other multinationals using this facility. It will generate new skills and complement our fledgling film industry.
"Of course, we have had bigger successes in terms of investment & employment, like Lufthansa Technik & HSBC call centre, creating over a thousand new jobs between them."
The new projects are only part of the story - and not the part that brings Dr Mizzi most satisfaction...
"The number of expansions is an even bigger feather in our cap. These people were already in Malta so their plans are not based on promises but on their actual experience of Malta and its workers and a sound assessment of the reality," he said, ticking off the names of some of the recent ones that made the news, such as Methode, Dedicated Micros and De la Rue and pharma companies Actavis, Siegfried, Arrow, Amino, Medichem and Combino Pharm.
"The pillars of our industrial base like ST, Playmobil, Trelleborg and Toly are also continually expanding their activities. Once companies experience Malta, and our flexible and highly trainable workforce, they tend to want to expand here. All multinationals in Malta tend to carry out the more sophisticated processes here."
Some expansions were concluded almost as soon as the original project took off, such as the HSBC call centre, which raised its job forecast to 500 as soon as the original 240 were recruited.
The number of expansions is not accidental: ME has placed much more emphasis on relationship management to support companies that are already in Malta.
As time has gone by, ME has also had to adapt its focus to reflect the national policy trend away from low-skill level manufacturing.
"When we evaluate a project, we try to give as much encouragement as possible to companies that have a value-added per employee of at least Lm11,700," he said.
He stressed that this did not constitute a minimum threshold as companies offer more than just value-added - such as job creation.
Dr Mizzi is also the chairman of Malta Industrial Parks (MIP), which has also adopted a new approach in tandem with ME.
"The government appointed the same chairman for both organisations in order to ensure closer cooperation," he said.
The first task was to clean up its books: MIP is the largest real estate management company in Malta by far, managing three square kilometres of land and over one million square metres of factory space.
There were many administrative issues that were not being enforced, such as payment of rent and up to date insurance. There was also abuse, with tenants using factory space for activities like importation and storage.
Over the past three years, MIP has already evicted 21 tenants and repossessed over 36,000 square metres of factory space. Since 2005, MIP has allocated around 70,000 square metres of factory space to new industrial establishments or expansions and invested heavily in the improvement and construction of custom-made factories.
"We do not take a heavy-handed approach. However, this is taxpayers' money. Both ME and MIP are beefing up their monitoring and compliance divisions to make sure that public assets are used in the correct manner.
"We also must ensure a level playing field. It is not fair that one person stores imported goods in factory at a reduced rate while his competitor has to pay commercial rates to store them in a warehouse. That space should be freed up to be used by genuine industrialists who are going to create employment and generate wealth," Dr Mizzi said.
While this compliance exercise was underway, MIP was still faced with constant demands for new factories. In many cases, it paid for the new premises itself, recouping the money through rent over a lease period (as in the case of Lufthansa Technik). It also reached agreements with several investors for construction of the factories to be left in their hands, albeit working to an approved budget and through a standard government tendering procedure.
This has greatly speeded up the process and investors with very specific standards found it very reassuring to monitor progress at every step of the way. But even though MIP does not have any pending requests, having found sites for all the newly-approved projects and for the 15 relocations from the Ricasoli site, the situation is still far from satisfactory.
"We feel that the time has come to prepare new factory stock. Factories are an extremely important part of the package we offer - in some industries more than in others. "It takes the best part of two years for a company to develop a factory from scratch. We want to be in a position to have state-of-the-art factories ready, with keys in hand so that they can move and find water and electricity, broadband connections, the lot," he said.
MIP went through a selection process and identified TBA Periti as its technical consultant. The idea is to build new factories using a formula based on two-storeys underground for parking or storage, two for production and one for business space (such as research and development).
"We are going to build general use ones and pharma ones in Hal Far, engineering ones in Mosta Technopark (which has enough space to double its footprint) and smaller units, which can be taken up as multiples. So there will be a lot of flexibility," he said.
We are also looking at the former Dowty factory in Mriehel, which is a considerable size. We are in the process of deciding how best to use it. One possibility is business space - not offices but space for functions which do not need traditional factory space with high ceilings and loading bays. MIP is keeping well away from the provision of office space, as it does not feel it should compete with the private sector that caters for this sector.
"Once we complete these, we will look at the Corradino Industrial Estate."
Once it has created a bit of breathing space, MIP will be able to move on to the final phase: Giving existing tenants the option to move into the newer factories - thereby freeing up the older factories for upgrading or refurbishment.
"The ones we have now are built on one-storey with surface parking - but this is very wasteful of space. It was not an issue in the 1960s and 1970s but things are different now as land is fast becoming a very scarce resource.
"Of course, the new state-of-the-art factories will come at a higher rent but at least there will be a choice."
Investment 2006-2007 | |||
2006-2007 | Number of projects | Forecast Capital Investment (Lm) | Forecast Employment |
Foreign - New | 31 | 24,907,818 | 1.394 |
Foreign - Expansions | 22 | 23,152,649 | 1,323 |
Local - New | 25 | 4,862,597 | 369 |
Local - Expansions | 32 | 5,846,768 | 487 |
Total | 110 | 59,129,832 | 3,573 |