Farsons: Approaching The Next Major Milestone

Jo Caruana - 21st January 2018

As Farsons gets ready to celebrate 90 years of brewing in 2018, Chairman Louis Farrugia talks about the strengths and challenges facing the company, and the Maltese manufacturing industry.

The Farsons brand remains one of our island’s most iconic and – with a timeline dating back to 1890 – it’s also one of our most historic.

2017 has been a fruitful year for Farsons. Speaking to me from the beautiful new office block within the company’s compound, Chairman Louis Farrugia explains that one of the Group’s major milestones this year was the commissioning of its new beer-packaging hall, which was inaugurated at the end of 2016.

“The first year of operation is always the most important one,” he explains. “You have to learn about the plant, understand its performance and make sure you can reach the efficiency levels that you hoped you could when you planned it. We have been pleased with the results. This plant entailed a €27 million investment, and it has allowed us to roll out new packaging for a variety of products, including Blue Label and Double Red.”

The plant has also helped Farsons to focus on its ambitious export plans and the results of this have been a success – the company now exports its beers to 12 countries, including South Korea, China, Australia, Gibraltar and Israel, and it recently also entered the Italian market in Sicily. “We’re even selling to a number of pubs in the UK,” he says with a smile. “It’s one thing to put plans on paper but it’s another to see them coming to fruition, so we are very excited about these advancements.”

An exciting milestone is fast approaching for the company – 90 years of brewing. “It was 1928 when my father set up the first Farsons brewery in Hamrun at the age of 27,” he smiles. “So we will be celebrating that, followed by the fact that Simonds joined Farsons a year later and Cisk a year after that. We have a lot to celebrate and it is obviously a huge satisfaction to know that Farsons has succeeded in operating for all these years. I am also proud of the fact that, throughout that time, we have been a good corporate citizen and have been of service to the community by employing thousands of people. We have set the scene in the commercial world and have constantly lived by our ethical and quality standards.”

Mr Farrugia believes Malta’s key economic strengths lie in its human resources and, unlike any other Mediterranean island, our diversified economy – with a mixed offering including manufacturing, financial services, tourism, maritime, and newer sectors like iGaming.

“If you look at other islands in the region, they tend to be very dependent on tourism and agriculture,” he explains. “So our human resources really set us apart, as they are so diverse. It is our education system that produces this range of knowledge and which links into the diverse strengths of our economy.”

However, there is a flip side to that, and Mr Farrugia stresses that the island is facing a number of challenges too – especially when it comes to the big increase in employment and the lack of human resources available to the market. “It has become very difficult to hire people,” he says, “which is in turn causing wage inflation that’s hard to compete with. If you want to retain your staff then you have to adjust your salaries, which, as an employer, you have to pay for by raising prices or increasing efficiency. Even with increased efficiency, I think Malta is now bound to face some inflation as a result of the reduced human resources available. With that in mind it looks like we will have to increase our labour supply if we want to experience the same growth levels moving forward, however that also puts pressure on our island and creates problems, especially when it comes to pollution and congestion – two issues that the Maltese public are becoming increasingly aware of.”

Mr Farrugia stresses that if Government’s objective is to take the population up to 600,000 or 700,000 people, there needs to be proper planning. “It cannot be a vision that isn’t documented,” he says. “We’ve never been very good at planning but we must be, otherwise things will get out of hand.”

The Chairman also underlines the need for the rule of law to be observed. “A good economy is essential for investment but the country also needs a stable political environment where the rule of law reigns supreme. But we know that is under duress and that has to be addressed. We cannot ignore these challenges and pretend they don’t exist – if people perceive them to be an issue, then they are an issue.”

He also stresses that business owners need to care about the state of play and to make their voices heard. “If we deteriorate in terms of standards and values, and if we don’t maintain the strong values we have always had, then it is anarchy that we risk and that is bad for everyone. It will eat up the fabric of our society.

“So, if you think you’re not interested in politics or you’re only interested in your family, then you are ignoring the issues at hand; we have to remember that we are all part of one society. I have always looked up to the values of fair competition, the rule of law, free trade and privatisation, and I think these values have worked well for us over the last 20 years. With that in mind it is worth working for the community and not just for one’s self. This is the time to be truthful – we cannot be in denial and we mustn’t be scared to take the decisions that need to be taken.”

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Farsons: Approaching The Next Major Milestone