Joinwell was building up a very good reputation for itself among the tightly-knit yachting community. Each superyacht that had work done at the Malta Super Yacht Services left here singing the praises of its skilled carpenters, who created the flawless interiors demanded by the most demanding of owners.
But then MYSS lost its momentum when Malta Shipyards was being privatised and even when it was eventually taken over, it never really recovered.
“It was a big mistake to let it slow down rather than to sell it as a going concern. There is still work but barely a quarter of what there was a before,” Joinwell managing director Martin Galea said.
“It was a lucrative and very highly-skilled niche but there are not as many boats coming to Malta for complete refits – which is where the woodworking contracts come in.”
The reduction in superyacht business was a blow for Joinwell, which had seen the sector as a promising alternative to its once flourishing manufacturing presence.
Just a few years before EU accession, it employed around 150 people, and like the other furniture manufacturers, the removal of levies meant a complete rethink of its strategy.
It took on leading brands and started importing, invested €4 million in its iconic 3,000-square-metre showroom in Qormi five years ago, and started leasing out space in what used to be its factory footprint.
“We still have around 40 people working on the manufacturing side but this is now only around a fifth of our turnover,” he said, adding that the 40 redundancies were very sad for the family company to impose.
“We gave them a very good termination package... And then we just whittled down the rest of the workforce by not replacing those who left.”
The superyacht work was complemented by bespoke furniture and hotel lobbies, and by contract work locally and internationally as part of the consortium with Fino and FXB.
We were forced to change our business as we were facing a new world model
But retailing is now the big earner – although Mr Galea was quick to point out that it is not as lucrative as one might think.
“There is a perception that it is easy to import furniture but people fail to take into account the massive investment required to maintain a well-stocked showroom, to train staff, to make up for damages and to have a good level of customer care. They overestimate our profit margin,” he said.
Of course, it doesn’t help that so many locals are buying from Sicily, although they tend to be customers who would anyway probably not go for Joinwell’s high-end German brands, he said.
“Selling furniture is not only about buying it. It is also about after-sales and, if you do not buy through a reputable firm, you might not get the support you expect. One person bought anItalian kitchen and then came to us to try to get him spares!”
It would be interesting to know what Mr Galea’s impression of accession would be had the superyacht business flourished. As it is, he still believes that it was necessary and that local firms could not simply have buried their heads forever.
“Manufacturing of furniture was always going to be a loser in the long-term. But other sectors did well and moved on.
“So our sector was justified collateral damage,” he shrugged.
“We were forced to change our business model as we were facing a new world order with new challenges, different purchasing patterns, online sales. And it is still changing now. The way of doing business will keep evolving.
“But did the EU make it easier to do business? I don’t see that there were any advantages, except perhaps for streamlining of some VAT and customs procedures. But the transition went quite smoothly and, apart from the wrong decisions taken with the Drydocks privatisation, it has created new jobs, new industries... Long may that continue!”