Medserv chairman Anthony Diacono was recently in Sharjah to complete the $45 million acquisition of Middle East Tubular Services, which has pipe handling and servicing bases in Sharjah, Oman and Iraq. Vanessa Macdonald asked how this step, which doubled the size of Medserv, ties in with the group’s strategy in Malta.

What was the intention behind the acquisition: new geographical areas or new services?

It is mixture of both obviously. The company always wanted to diversify its geographical footprint but more important, I think, is the synergy between the two companies and the added-value it can give both ways.

$45 million is a huge amount. How long will it take you to recover your investment?

The figure in my head is 4.2 years, but we sincerely hope that we can improve on that.

You raised $45 million at a time when oil prices are low and Iraq is still high risk. What made you take this huge leap?

We take a very long-term view of the industry. Our view is still that this is the industry to be in. Yes, oil prices are restructuring and yes, the industry is restructuring to meet this new reality. Everyone is downsizing and it is a very nervous market out there. But we see this as an opportunity not a threat.

METS is the first step. The Middle East is a target achieved and our strategy team is already thinking of other areas and other businesses so that we can offer our clients better value going forward.

You are looking at Trinidad and Tobago, East Africa and the Middle East. Isn’t there the danger that you are spreading yourselves too thinly on the ground too quickly?

It is not exactly a quick process. We have been working on the Middle East now nearly two years. When we say we are looking at other areas it does not mean we will announce something tomorrow.

This business has long lead times, and so do we. We are accelerating our development because there is opportunity now. What everyone is referring to as a downturn can also be looked at from the other side: is the glass half empty or half full?

I think it is half full and the opportunity to make certain moves is now. You lose the opportunity if you wait until it is comfortable.

So fortune favours the brave – or the foolhardy?

(Laughs) I am obviously optimistic. We look at everything extremely seriously and the board is very good at this now. We have a solid board back in Malta. We know where we are going to be in five to 10 years’ time.

One of the surprises is that the events in Libya were not a disaster for you but rather were turned into a positive…

You will find that in every situation in life, when there is a very difficult event, it creates a lot of opportunities – but you have to react to them. We try to put ourselves in our clients’ shoes to identify what they are going to need, either to suffer the least damage or to continue operating in the new scenario.

So we analyse the situation and make sure that we are always adding more value for the client in the real circumstances of that time.

The situation in Libya is unfortunate – many of our friends are stuck there waiting for things to settle down. Companies had invested billions there and needed to continue and we offered a way to do so without losing their investment.

Our order book in Malta is full for three to five years.

What did you do with your base in Misurata? You had a 30-year lease there…

We took a decision. We needed to pull out and did so in agreement with the Misurata authority. We shut down our base and brought our equipment out, also in agreement with the authorities there.

We did, however, keep our office in Tripoli which is still functioning and servicing companies, as they still need to have a base to operate from out of Libya.

We will be the first back in Libya when things settle down. We don’t know whether it will be in Misurata, Tripoli or elsewhere. In my opinion, the Libya of the future will be different to the Libya of the past. So we will have to rethink where we need to be. As usual, we need to follow our clients to give them the best possible solution and there is more than one in the new Libya.

Your facilities in Malta are saturated, both in terms of office space for your clients and in terms of storage space. Have you got room to grow in Malta?

That is very true. We are saturated, which is the price of success. But I’m finding a lot of support from the authorities in Malta. They react very fast when we need space.

While we were in the Middle East, I got a call asking for storage for tons and tons of pipe in Malta. Again, just a call to the authorities resulted in help so that we can accommodate the request. So far, we still have areas we can use.

There has also been a lot of investment in our warehousing, to rationalise the way we use space. We are now going higher and higher, obviously in line with the relevant standards to make sure that we do not put anyone at risk.

I am not really seeing an issue in terms of meeting our clients’ demands. There is still space in Malta that can be used more efficiently which will allow us to take on new business.

One of the limiting factors is the quay. The Freeport has just had its quay extension request turned down by Mepa. Is that a problem?

Yes, it is a limiting factor but in my opinion there are still some quays that can be regenerated with some investment to create more deep water quay space.

It is very important that the few quays we have in Malta are used extremely efficiently. We should not make mistakes and give quays to white elephant projects.

We will be back in Libya when things settle down. We don’t know whether it will be in Misurata, Tripoli or elsewhere

The group had situations in 2015 where our clients needed quay space. We did not waste any time trying to do that out of Malta, but used Greece and Cyprus. The world has become small and we find good quay space elsewhere which meets our clients’ demands.

The clients know what Medserv offers and when we recommend a location – which is not necessarily in Malta – they know we are offering the best solution.

Now, with the METS acquisition, we can also start considering the Middle East as part of our solution.

You extended your lease at the Freeport a few years ago. However, given the nature of your operations and the fact that you’re thinking long term, why didn’t the group express any interest in Marsa Shipbuilding?

We went there and we examined the site and did our assessments. But we thought that the investment we made where we are today could not be bettered anywhere else in Malta.

So we decided not to bid.

If you do require more hinterland or quay space, is there the possibility that you will collaborate with the winning concessionaire, Ablecare?

I never say no to anything. If it makes business sense, we will consider it. My mission is to increase value to our shareholders. My mission is to make sure that we keep the strong dividend policy we have in place. And that way all the stakeholders will benefit from it. If it makes good business sense there is no reason we would not consider any solution.

Anthony Duncan is now getting on and let’s say you are on the way to getting on. What about succession?

We – and the board – are very conscious of that. We are referred to as the ‘white-haired brigade’ in the company. We are supported by young professionals coming up who do all the work and they are also now being involved in the company’s strategic processes.

So yes, succession planning is in place. We know the way forward. There are different options but the bottom line is always the same: this company has its own identity. It is not tied to either myself or Anthony Duncan.

There is a team and I intend to make myself totally redundant. Although I am still involved at strategic level I can assure you that the company can continue post-Anthonys!