Importer suggests joint distribution for large firms

Malta’s largest importers could consider setting up a joint distribution venture with common warehousing facilities to increase efficiency and cut costs, P. Cutajar & Co chief executive officer Tony Zammit Cutajar told The Times Business.

The islands’ longest-established importers have had to adopt new strategies to face up to the challenges of an increasing competitive environment where exclusivity has been eroded. Mr Zammit Cutajar explained how some agreed with his idea in principle, but after considerable investment has already been channelled into vast warehouses it could be some time before joint distribution becomes feasible.

“I am discussing this idea with three of our major competitors to see if we could combine our warehousing and distribution processes and cut costs,” Mr Zammit Cutajar explained. “We might also be able to come to the market with better pricing for consumers, which would make us more competitive. The major six importers have the same customers. We could manage routes and loads much better, and possibly operate a smaller fleet. We could even centralise orders and billing systems.”

Mr Zammit Cutajar is floating the idea even after his own family’s firm has just experienced its fourth move in its almost 150-year history. A logistics team, led by head of operations Adrian Camilleri, completed a major feat by moving all functions into the Capital Business Centre in San Gwann industrial estate in just three days. The move came a year later than planned for bureaucratic reasons. The business centre is also the new home of a handful of other growing firms.

P. Cutajar & Co had moved into its previous base in Mriehel in 1985 but outgrew the premises several years ago. The property has now been released for possible development, and with a footprint of 1,700 square metres and an empty plot at the rear which could accommodate a car park, it could suit a variety of operations.

At the Capital Business Centre, P. Cutajar & Co now enjoys a sprawling ground floor warehouse boasting cold, cool, and ambient storage facilities, besides an internal loading bay for a 40-foot trailer. A retail facility is also based on the ground floor. The offices occupy other floors in the building, basking in natural light and open spaces.

“Here, I realised the value of space,” Mr Zammit Cutajar said. “In Mriehel we were sitting on top of each other, so to speak. The staff is very happy – everything’s new, we have a larger canteen. We have 30 administration staff here and a large sales team. In total, we number 53 people.”

Mr Zammit Cutajar joined the family business in 1965 just as it was celebrating its centenary, and remembers a completely different market place with the firm representing numerous brands in Malta.

The portfolio has been streamlined over the years. Two years ago, the company pulled out of the photography sector which once made up to 40 per cent of its business, as technology changed retail patterns. The family continues to bring to Malta some of the best loved names like Ferrero and Lavazza, and brands under the Bacardi-Martini umbrella including Dewars and Grey Goose, and has a retail arm in Solaris.

“The market has changed completely. This notion of exclusive distributor has ended. Now it’s about pure and simple trading,” he says. “There is no point in stamping your feet and complaining about the competition. It is about adapting to the market, and being as competitive as you can. I don’t even like the term ‘parallel trading’ – as long as importation is legal and transparent, everyone is free to trade. It’s another era – it’s challenging and exciting.”