Month: December 2020

As the public-private entity dedicated to helping Malta-based businesses go international, TradeMalta has witnessed closely the hardships, and hard work, of local companies with international business that have fought to cope with the economic fallout caused by the Covid-19 pandemic.

The degree of which, however, has varied from company to company, and from industry to industry. TradeMalta Chairman, Stephen Sultana, says the degree of internationalisation of each company also plays a part in its coping abilities.

“In general, I would say that companies that do not depend exclusively on one or two export markets for their survival have fared better than others. I would also venture to say that companies with a diversified product-service portfolio have been able to better cope with the challenges posed by Covid-19.”

The Chairman adds, “all in all, many companies in Malta have shown remarkable resilience in the face of this adversity. That said, resilience is not indefinite and the longer it takes for some degree of normality to return, the more difficult it becomes for those companies most directly impacted to remain viable. Fortunately, with the prospect of a vaccine in our sights, the uphill struggle to recovery seems a little less daunting.”

Zooming in on sector-specific responses, Mr Sultana says that, in the nine months or so since the start of the pandemic, not all industry sectors have been impacted in the same way or to the same degree.

“Companies directly and indirectly associated with the travel, transport, tourism, leisure and hospitality industries (in Malta and abroad) have been significantly impacted, as have the companies that supply products and services to these industries,” he asserts.

“The knock-on effect has been significant. In Europe and Malta, retail sales, and by implication the demand of a range of consumer goods and services, have also been hard hit. Some of this demand was shifted to online purchases, but a good portion of this demand has remained frozen as consumers wait for the current economic uncertainty to pass.”

By and large, Mr Sultana says that Maltese companies involved in international business have responded well and have certainly not taken the crisis lying down.

“On the contrary, many companies (in different industry sectors) have over the past few months gone into overdrive in their quest for new business, to counter the loss of business and drops in sales in Malta and abroad. We know of companies who are now consciously targeting potential export customers in markets and countries where the impact of Covid-19 has not been as severe, or in markets and regions that have managed to bring the pandemic under control.”

While some sectors have fared better than others throughout this time, Mr Sultana adds that each company is unique, and even companies within the same industry sector have adopted different coping strategies to the challenges posed by Covid-19.

“For example, some companies have put on hold product development initiatives as part of internal cost control measures, while others have taken the opposite route of developing new products and services in order to hit the ground running once an acceptable degree normality returns sometime during the course of 2021,” he asserts.

“Broadly speaking, one can say that companies with a diversified export product-service portfolio and a diversified export market base were probably in a better position to adjust to the Covid-19 induced market fluctuations and to absorb the repercussions of the pandemic on their international business.”

Sharing his thoughts on survival strategies for companies to adopt in this precarious time, Mr Sultana asserts that there is no ‘one size fits all’ type of prescription. However, based on his interaction with companies that utilise the services offered by TradeMalta, there are coping mechanisms that may have general applicability.

“First, take time to review your business model and your existing export strategy and identify what strengths, weakness and vulnerabilities Covid-19 has exposed, and try to address these in a systematic fashion,” he states.

“Second, stay close to your existing export customers, even if sales have dipped or stopped and be especially aware of what your competitors are up to, bearing in mind that your customers and clients overseas are probably also feeling the pinch of Covid-19 and are therefore more vulnerable and probably more receptive than usual to offers or proposals from competitors.”

The Chairman continues by suggesting using the time in hand to research new export markets, identify new opportunities and work on identifying new potential customers within new and existing markets.

“Fourth, develop action plans on how to tackle or enter these new markets in anticipation of a return to normality, but don’t wait until things return to complete normality before implementing such plans. Initiate practical contact-making and new lead development now, so that when things start to return to normal, one can hit the ground running.”

If the Europe-wide roll out of the vaccine does indeed take place within the next four to six months, Mr Sultana believes things should improve quickly, as travel and social activity restrictions are eased and as pent-up demand for a variety of goods and services is released.

“While things will not change overnight, even with a vaccine close at hand, companies can continue to pursue their internationalisation strategies with the comfort of knowing that there is a clear end in sight. This will provide companies with the required confidence to ‘get out there’ and continue where they left off.”

Speaking frankly about 2021 and the challenges the new year is expected to bring to those involved in international business, despite the imminent availability of a vaccine, Mr Sultana says uncertainty is top of the list. “The resilience that many companies have shown in Malta and across Europe thus far can’t be maintained indefinitely. The longer it takes for a reasonable degree of normality to return, the greater the likelihood of an enduring recession which would obviously put further stress on companies and the economies in which they operate.”

“However,” he continues, “judging by the growing number of companies utilising the services of TradeMalta during past months, we’re optimistic that once things start to return to a modicum of normality, many economies, including ours, will rebound fairly quickly.”

While the persistence of the pandemic has brought about widespread hardship, it has also presented opportunities for new ways of doing international business and establishing, strengthening and maintain business relationships.

“Ultimately, all business, particularly international business, is based on trust and personal relationships. The Covid-19 induced restrictions on travel and physical interaction have forced companies to seek alternative or ‘digital’ means of establishing and maintaining such relationships,” says the TradeMalta Chairman, namely through virtual platforms of communication. “What was previously an exception has now become the rule, and this new way of working has been embraced by the vast majority of companies.”

He adds that companies are also warming to the idea of taking part in virtual exhibitions and networking events, where companies can use digital platforms to showcase their goods and services and enter virtual discussions with interested parties.

“A growing number of enterprises, particularly SMEs are embracing this novel approach to international business. If executed properly, it can prove to be a cost-effective export development tool,” Mr Sultana continues. “Trade Malta is also gearing up in this area and there are plans to organise a number of virtual Trade Missions during the course of 2021 and beyond.”

“Due to the effects of the pandemic, retail trends have shifted in the past months. Similar to the rest of the world, Maltese consumers have shown a preference to online solutions for their consumer needs” said The Malta Chamber President, Perit David Xuereb in a comment to Malta Today.

He also noted how this pandemic has impacted each and every sector differently especially in terms of traditional retail. “Certain sectors remain struggling while others are recovering slowly although revenues of previous years remain a distant ambition. The high fashion sector is suffering, with Chamber members reporting a drop of 50% of sales registered in this sector” said Xuereb.

This being said, other industries are slowly but surely recovering. “On a more positive note, beauty products seem to be on demand even though not on the same levels as last year. Moreover, luxury items such as watches and jewellery, have registered a positive trend,” said Xuereb.

“The drive towards a more digitally-savvy economy was reflected in an increased demand for electronic goods, as well as a drive towards contact-less business,” continued Perit Xuereb

The President however stressed that more needed to be done to revitalise the capital as “Valletta remains sluggish across the board, when compared to other shopping destinations, even though the start of the festive season did provide a much needed impetus.”

“The Covid pandemic was a blessing in disguise as it allowed us, to pause and reflect on the true priorities that we may have disregarded in the past, on both a personal and business level,” said The Malta Chamber President Perit David Xuereb this week. He was addressing HR Gig 5, an event on the subject of human resources organised by StreetHR, last week.

Perit Xuereb noted how the pandemic allowed us to truly realise the importance of values such as trust and compassion, in order to promote mental health and physical wellbeing at the workplace. The Chamber President continued by saying that “acknowledging such values can drive us towards a different but better future.”

“As a Chamber of Commerce, we have always believed in having a vibrant and innovative education system, that is the main prerequisite of a sustainable economy,” said Xuereb, as he mentioned the ever-increasing gap between the skills taught in educational facilities and the skills required on the job.

“Only by bridging this gap can we ensure that our human capital is well equipped and knowledgeable enough to address new operational developments and needs at the place of work,” said Perit Xuereb.

Framing his comments within the Economic Vision ‘A Smart Sustainable Island’, which The Malta Chamber published earlier this year, The Chamber President noted how “Covid-19 helped us fine-tune this vision and offered us the opportunity to reflect on the lessons learnt.”

Xuereb said that aiming towards such ambitious objectives will only be fruitful if the right resources are empowered by targeting younger generations and their ability to appreciate such a vision for the future. He also underlined the importance of focusing on their mentors who helped pave the way and who have a vast array of experience to share.

“We therefore simply cannot undermine the importance of the creative talent and respect towards educators at all levels of education and their incredibly vital role in, not only teaching but also inspiring students to achieve more. This can only be achieved with a curriculum which reflects the current realities” said Perit Xuereb.

“Understanding the changes going around us is simply not enough. We must challenge the status quo to drive the education preparedness our future generations deserves. Investing in diverse, creative, flexible, problem solving and talented human capital with varying skill sets will definitely support sustainable economic growth motivated by the ambition of a more digitalised and green economy,” concluded The Chamber President.

During a meeting between the President of The Malta Chamber of Commerce, Enterprise and Industry, Perit David Xuereb and the Minister for Research, Innovation and the Coordination of Post Covid-19 Strategy Owen Bonnici, both parties agreed that innovation and research are crucial for a better economic future for Malta.

During the meeting, The Malta Chamber’s President, Perit Xuereb spoke of the strategic importance this new ministry will hold in drafting a holistic strategy for the country post-Covid. This strategy will enable the country to start a new path towards economic recovery, one which is based on a number of key principles namely sustainability, digitalisation and innovation.

He added that the Chamber had already carried out extensive work in this regard through its internal policy committees, chief amongst them the Chamber’s Think Tank. He offered the Chamber’s and its members’ full support to the ministry’s efforts in terms of the post-covid-19 strategy.

Minister Bonnici thanked The Malta Chamber of Commerce for this positive and fruitful meeting where the importance of research and innovation was highlighted, also in the context of the strategy for Malta after Covid-19.

Dr Bonnici said, “This meeting confirms what both sides strongly believe – that research and innovation should be at the forefront of our country’s social and economic agenda, also in paving the way forward post-COVID-19. We are committed to working closely together to better the lives of families and businesses”.

Both parties agreed on further work between the respective entities in the relevant sectors that were discussed during the meeting.

The Malta Chamber has partnered with VISTAGE Malta to support business leaders in Malta to enhance decision-making through market insights. The CEO Confidence Index is renowned to predict market trends, effectively giving businesses a head-start in their economic area of interest.

“This significant resource is being made exclusively available to the Chamber members” said Malta Chamber CEO Ing. Edward Chetcuti. “Through the creation of the VISTAGE Malta CEO Confidence Index initiative, the initiative shall collate data from CEOs and entrepreneurs to obtain market insights and possible scenarios for future change. It has shown to be effective in predicting economic trends, derive insights that aid decision making and give a global comparison to individual country markets. This will certainly be another great tool in the arsenal of value adding, which is available to Malta Chamber members”, said Ing. Chetcuti.

“Vistage is the leading CEO network in the world, and supports decision-makers across 20 economies through research and peer-to-peer advice and knowledge sharing. Our goal is to support local businesses with insights and thought-leadership so they can make smarter decisions that impact us all. However, it only works if we all sustain a collaborative mindset and share our knowledge and experiences, through surveys like this, for the benefit of our local economy. I encourage every business leader to contribute, in order to benefit.” Explained Nathan Farrugia, MD for Vistage in Malta.

The CEO Confidence Index has supported business decision-making in the US by providing feedback from business leaders consistently, on their views of the economy, policy, and operations every quarter. Published in the Wall Street Journal as well as an array of digital platforms, the CEO Confidence Index collates insight and sentiment from leaders in a researched manner that allows for better strategy, planning and investment decisions. It has shown to pre-empt market shifts by 6 months, making it a very powerful tool.

The Confidence Index will now provide the same insights for the Maltese economy through the partnership of the Malta Chamber and Vistage Malta Networks. Other European countries are expected to follow, to allow us to compare both global and European economic trends.
All anonymised data will be analysed by Vistage Research, to then generate reports that will be co-presented by Vistage Malta and the Malta Chamber.

Interested in shaping your business future? Get in touch! Send an email to mel.aquilina@maltachamber.org.mt to get started.

The Malta Chamber of Commerce, Enterprise and Industry launched a call for Service Providers to support businesses who want to take advantage of Malta Enterprise’s ‘Business re-engineering and transformation scheme’. With applications closing on the 9th of December, this is your last chance to apply.

Click here to download the Business Re-Engineering and Transformation Scheme Guidelines and Application

Following evaluation and approval, interested service providers shall be included in a Recommended List which is being compiled by The Malta Chamber, to serve as Consultants for both the Business Re-Engineering & Transformation Scheme in the case of SMEs and other Schemes in the case of Larger Enterprises. The Malta Chamber has been entrusted with this task by Malta Enterprise.

Both members and non-members of the Chamber may apply to be on the list of Service Providers until end of business of the 9th December 2020..

By being on this recommended list, clients of such service providers applying for the business re-engineering scheme will be fast-tracked in their application, as the due diligence process of the Service provider would have been carried out by the Chamber.

In May 2020, The Malta Chamber proposed a Business Re-Engineering & Transformation Scheme as a measure ahead of the June 2020 Economic Recovery Plan. The aim was to support companies hard hit by Covid-19, to benefit from the opportunity to ‘stop and think’ and engage in a detailed analysis of their current business operations and services and re-think, re-structure, re-invest and hence re-engineer their business objectives through a number of actions derived from this very important process. This exercise leading to a professional business plan would help businesses leverage their entrepreneurial talent as well as their resources and assets to adapt and possibly turn this Covid period into a true opportunity for improvement and growth.

The Malta Chamber President, Perit David Xuereb welcomed the Minister’s request, and reiterated the importance of motivating businesses find their way through the tough challenges posed by Covid. “It is those businesses that are agile and most likely to change and adapt that will survive the pandemic and identify new opportunities for sustainable business development and growth” Perit Xuereb said.

“It is indeed extremely important for businesses to be nimble and adapt to changes and shocks on an on-going basis. Seeking new energies and business strengths within any organisation will ensure sustainable response to unexpected shortcomings and changes as well as all other challenges during the life of the said businesses. The more agile a business is, the greater the chances of intelligent response that will lead to economic recovery and growth. Business process re-engineering and business transformation enables any business concern, small, medium or large, to better align its activities to its ambitions, strategy and vision within the landscape of the realities of the time” the Chamber President said.

It is highly unlikely that we will forget 2020 very easily. The year that started quite unremarkably, turned out to be an unprecedented unfolding of events that took the entire planet by surprise. 2020 seriously put world economies to the test, and brought global social systems to their knees.

With the spread of Coronavirus, in the early months of 2020, the world was forced to rethink its priorities as it grappled with an ignored and forgotten force of nature that took everyone unawares. Locally this was no exception, as the virus forced the country into a partial lock-down.

The Malta Chamber, while itself already designing and managing an internal restructuring process, embraced this time to become closer to its members than ever before, as well as reach out to entirely new business sectors which had developed or reorganised over the recent years. The pandemic brought about a positive sense of collegial thinking and a very strong appreciation for aligned personal and business sector energies.

In fact, 2020 was a year which offered an undeniable opportunity to truly focus on what matters most as driven by the core values of The Malta Chamber.
COVID is still very much a reality and numbers are not showing any sign of slowing down. Yet hope reveals itself bright on the horizon as a number of reputable research institutions are in advanced stages of commercialising their vaccine solutions, with distribution systems being deployed as early as December of this year.

This sheds light on a very important matter. As we all look forward to a new form of stability, will we be going back to the ways of old, and simply place this challenging year behind us? Shall we throw away lessons learnt in the past months? I hope not. Shall we benefit from the sacrifices we have made as a business community as derived from strong life principles such as honesty, integrity and respect for each other, our employees and our loved ones?
The COVID 19 crisis pushed us into a tight corner, the only way out of which was a heightened sense of courage, ingenuity and flexibility. Some of us were agile in pivoting their entire business model from one sector to the next, as they saw opportunities there for the taking. Our Chamber of Commerce has nurtured, supported and motivated this value and will continue to do so even after COVID in order to enshrine this ambition of becoming better at a personal level and also at a corporate level during every day of our lives.

This is why the Chamber worked hard to support and promote a Business Re-engineering Scheme to the Government in July. The objective was to ensure that all businesses will embrace the opportunity to analyse and test their economic models led by business leaders who embark on a personalised restructuring journey aimed at smart and sustainable objectives to develop into resilient business models. The scheme was launched in November, and we are convinced that it will make a real difference for businesses, the national economy and the quality of life of our nation.

This is an excerpt from the upcoming Economic Vision magazine, which will be delivered to members in the coming days. In this edition of Economic Vision the country’s foremost political and business leaders will reflect on the challenging yet insightful year behind us, while expressing their ambitions and plans for the one ahead.