Consolidated Biscuits has just sent its first consignment to UK giant supermarket chain Morrison's of its Healthline range of sugar-free biscuits - but it almost missed the deadline because the container missed its shipping slot twice.
The container was delivered to the Freeport on December 28 and should have reached Tilbury a few weeks before the deadline. However, managing director Joe Pace said that it was not loaded on two consecutive weeks and in the end, the company had no option but to re-load the container and send it on another ship to Felixstowe.
"It is not that easy to re-route a container once the ship bypasses Malta or does not have enough space for local cargo. The container may belong to the original shipping line or it might be buried under two or three others. And booking it via other ports in the first place means more cost and longer transit time. As it is, we could have lost the whole one-year contract - and faced penalties - as Morrison's would have had shelf space booked," he said.
"In the end, we had no choice but to retrieve the container, re-load it and send it to Felixstowe, at an additional cost of €635. The situation with regards to UK port connections is terrible - not only for export but also for the importation of raw materials: There are delays of up to three or four weeks. We simply cannot stock that much raw material as it is so voluminous."
The issue of connections to UK ports was brought up during the recent Federation of Industry conference and talks are underway with Investments Minister Austin Gatt on possible solutions, one of which is understood to be a government guarantee.
The Morrison's contract comes at an important time for Consolidated Biscuits, which had doubled its capacity a few years ago to cope with a huge contract for private label savoury biscuits for Fox's. The contract was so large that it caught them unprepared and it took a few months for the company to get all its resources and structures in place to be able to cope with the new business - without compromising its existing clients.
No sooner had the factory ratcheted up production but Fox's reviewed its marketing plans and decided to focus on its core business of sweet products.
"The reduction in orders brought about shortage of production load for a short time. They advised us that they intend to keep selling Bistro but that there might be a different marketing strategy. We are now awaiting further news.
"This was a difficult period as we had increased our payroll by about 40 people, ranging from graduate managers to technicians. It was always my firm belief that we need a critical mass to keep the company going. We would prefer to have a larger amount of smaller accounts rather than one massive one and even before this happened, we were looking for other business. The pressure that one big client can have on a company can be devastating. However, with the outstanding cooperation of all our employees, we did very well as we did not lose any other clients, although there were some delays until things settled."
Consolidated has a number of other projects in the pipeline, many of which are close to materialising, including one for a German client who wants private label diabetic products as well as Consolidated's own range.
Mr Pace is also very excited about the potential of a fabricated crisp which looks like a real crisp, being made for a small British company. The first shipments have already been sent and the crisp is finding its way into top supermarkets. A few weeks ago, it was also accepted for the Club Class snack on a leading airline.
"This is a very hi-tech patented product. Although it has just 5 per cent fat content, the taste is as rewarding to a consumer particularly when one compares it to the normal crisps that have around 30 per cent fat. The prospects are great. The product is a real breakthrough. At the moment, this is the only factory anywhere in the world that is making it," he said.
Another big project, which he said could turn out to as big as Fox's, is also imminent with a British company, which is planning to stop producing itself and to outsource.
"We are talking about an extra shift for the whole period of a three-year automatically renewable contract."
Consolidated is also dynamic on the local market, which has reacted very positively to a new take on a traditional product: The pepper flavoured galletta in the Tal-Furnar range. "What in the past was only made by bakeries on small trays is now being produced in a commercial scale. The success of the plain galletta encouraged us to consider more interesting flavours, with new ones to be launched in the coming weeks, and overseas markets.
"The Maltese are used to the texture of the galletta but it is hard to sell as a concept to other countries. As soon as we feel that we are ready to offer a suitable range, we already have people lined up in France. The ball is in our court. And we have ways to make the texture softer if necessary."
The projects will bring yet more challenges. The company now employs 150 people but is already finding it hard to recruit employees in certain categories.
"We need to find the best way to promote the skills that manufacturing needs, particularly if we are looking at big investments in coming years. There are not enough students in the technical fields. We only found one apprentice to sponsor even though we could have offered three places!
"Manufacturing in Malta has survived the move from low value-added and there are exciting prospects. The demand is there and it should grow even more."
The container was delivered to the Freeport on December 28 and should have reached Tilbury a few weeks before the deadline. However, managing director Joe Pace said that it was not loaded on two consecutive weeks and in the end, the company had no option but to re-load the container and send it on another ship to Felixstowe.
"It is not that easy to re-route a container once the ship bypasses Malta or does not have enough space for local cargo. The container may belong to the original shipping line or it might be buried under two or three others. And booking it via other ports in the first place means more cost and longer transit time. As it is, we could have lost the whole one-year contract - and faced penalties - as Morrison's would have had shelf space booked," he said.
"In the end, we had no choice but to retrieve the container, re-load it and send it to Felixstowe, at an additional cost of €635. The situation with regards to UK port connections is terrible - not only for export but also for the importation of raw materials: There are delays of up to three or four weeks. We simply cannot stock that much raw material as it is so voluminous."
The issue of connections to UK ports was brought up during the recent Federation of Industry conference and talks are underway with Investments Minister Austin Gatt on possible solutions, one of which is understood to be a government guarantee.
The Morrison's contract comes at an important time for Consolidated Biscuits, which had doubled its capacity a few years ago to cope with a huge contract for private label savoury biscuits for Fox's. The contract was so large that it caught them unprepared and it took a few months for the company to get all its resources and structures in place to be able to cope with the new business - without compromising its existing clients.
No sooner had the factory ratcheted up production but Fox's reviewed its marketing plans and decided to focus on its core business of sweet products.
"The reduction in orders brought about shortage of production load for a short time. They advised us that they intend to keep selling Bistro but that there might be a different marketing strategy. We are now awaiting further news.
"This was a difficult period as we had increased our payroll by about 40 people, ranging from graduate managers to technicians. It was always my firm belief that we need a critical mass to keep the company going. We would prefer to have a larger amount of smaller accounts rather than one massive one and even before this happened, we were looking for other business. The pressure that one big client can have on a company can be devastating. However, with the outstanding cooperation of all our employees, we did very well as we did not lose any other clients, although there were some delays until things settled."
Consolidated has a number of other projects in the pipeline, many of which are close to materialising, including one for a German client who wants private label diabetic products as well as Consolidated's own range.
Mr Pace is also very excited about the potential of a fabricated crisp which looks like a real crisp, being made for a small British company. The first shipments have already been sent and the crisp is finding its way into top supermarkets. A few weeks ago, it was also accepted for the Club Class snack on a leading airline.
"This is a very hi-tech patented product. Although it has just 5 per cent fat content, the taste is as rewarding to a consumer particularly when one compares it to the normal crisps that have around 30 per cent fat. The prospects are great. The product is a real breakthrough. At the moment, this is the only factory anywhere in the world that is making it," he said.
Another big project, which he said could turn out to as big as Fox's, is also imminent with a British company, which is planning to stop producing itself and to outsource.
"We are talking about an extra shift for the whole period of a three-year automatically renewable contract."
Consolidated is also dynamic on the local market, which has reacted very positively to a new take on a traditional product: The pepper flavoured galletta in the Tal-Furnar range. "What in the past was only made by bakeries on small trays is now being produced in a commercial scale. The success of the plain galletta encouraged us to consider more interesting flavours, with new ones to be launched in the coming weeks, and overseas markets.
"The Maltese are used to the texture of the galletta but it is hard to sell as a concept to other countries. As soon as we feel that we are ready to offer a suitable range, we already have people lined up in France. The ball is in our court. And we have ways to make the texture softer if necessary."
The projects will bring yet more challenges. The company now employs 150 people but is already finding it hard to recruit employees in certain categories.
"We need to find the best way to promote the skills that manufacturing needs, particularly if we are looking at big investments in coming years. There are not enough students in the technical fields. We only found one apprentice to sponsor even though we could have offered three places!
"Manufacturing in Malta has survived the move from low value-added and there are exciting prospects. The demand is there and it should grow even more."