Why Manufacturing In Malta Still Matters

Marie-Claire Grima - 23rd March 2019

Four business leaders within the industry discuss the manufacturing renaissance in Malta and why it’s an exciting time for millennial workers to climb on board.

Over the past two decades, Malta has become a magnet for new industries and economic sectors, including iGaming, financial services and blockchain. While these have expanded and diversified the economy, and given a definite boost to Malta’s GDP, they’ve also had the unintended effect of overshadowing some of the industries which have hitherto been pillars of Malta’s economy, but which are perhaps less visible to the public eye – including manufacturing.

“The manufacturing industry in Malta is now well into its sixth decade as a major economic sector in Malta and continues to attract investment, employ a significant portion of Malta’s labour market – accounting for roughly 13 per cent of all private sector employment – and contribute to a majority of our island’s exports,” says Patrick Cachia, Chairman of the Manufacturing and other Industries Economic Group within the Malta Chamber. “It is now a largely high-value added sector built on technical processes, innovation and advanced machinery, enabled by the fact that the sector’s workers have painstakingly established a strong, world-renowned reputation in precision, reliability and dedication.”

“Even though statistics may show a decline in the sector’s contribution to GDP, this does not necessarily mean that the manufacturing sector’s contribution in real terms is declining,” adds Anton Borg, Managing Director of JB Plastics. “Employment in freight companies, where the work is mainly generated by the manufacturing sector, is normally classified under services, as is the banking sector, where a substantial number of employees are processing transactions related to the manufacturing sector. Not to mention, of course, the foreign income the sector generates. It was always very wise of Maltese governments, including the current one, to safeguard this sector, even when times were challenging and when entire sections of it had to be rethought and re-purposed to fit Malta’s growing economy. It is a big misconception for anyone to think that a country can do without its manufacturing sector.”

Anton Borg, Managing Director of JB Plastics.

Anton Borg, Managing Director of JB Plastics.

“The manufacturing industry that survives today is characterised by companies that were committed to remaining in Malta, in spite of all the setbacks,” continues Marisa Xuereb, Managing Director of Raesch Quarz (Malta) Ltd. “They are companies that have invested heavily in equipment and in their people over the years, companies that have withstood economic downturns, and emerged stronger because of their foresight and resilience. There are no short-term ventures in manufacturing that hire dozens of people today to fire them a few months later because the market went the other way. Due to the substantial investment involved, manufacturing companies set up for the long haul. That is why jobs in manufacturing tend to be more stable and provide a backbone for an economy that is increasingly more dependent on sectors which are by their very nature more volatile.”

So what does Malta’s manufacturing sector strategy consist of? “Through Malta Enterprise, which has been active in the promotion of investment for over 50 years now, Malta focuses its manufacturing strategy on five pillars,” says William Wait, Chairman of Malta Enterprise. “Namely, the attraction of new FDI investment; ensuring that the existing FDI remains in Malta and grows; supporting small and medium enterprises mainly through Business First; supporting the larger Maltese-owned entities to keep growing in Malta and be more aggressive in export markets; and looking at new industries such as life sciences activities, and the production of medical cannabis. I am pleased to state that we have had positive news on all fronts with this strategy, and as Malta’s economy is growing, manufacturing has remained present.”

Marisa Xuereb, Managing Director, Raesch Quarz (Malta).

Marisa Xuereb, Managing Director, Raesch Quarz (Malta).

Despite the opportunities present in the manufacturing field, it’s clear that the industry suffers from a serious image problem, with none of the associated glamour of iGaming, the prestige of financial services, nor the excitement of the tourism industry. “For a number of decades, industrial areas were left to deteriorate and become highly unattractive areas where people freely dumped their rubbish,” Ms Xuereb says. “Technical education was wiped out of secondary education, leaving those who had more of an aptitude for skills than for academics to come out of compulsory education empty-handed. Some of these youngsters still found their way into manufacturing and were trained on the job, gradually improving their prospects, but in the process, jobs in manufacturing became synonymous with youngsters who failed at everything else.”

“This approach made it harder for local manufacturing companies to absorb more advanced technology at a quick pace and for the country as a whole to be attractive to new, cutting-edge manufacturing FDIs. As wages increase, the availability of a skilled workforce becomes imperative for attracting foreign investment. Most of the jobs available in manufacturing today require people who are able to think, able to handle sophisticated machinery, able to learn, and willing to upgrade their skills with the advancement of technology. There are not too many of the traditional machine operator jobs where you press a button every few seconds left.”

Consequently, the hiring crisis across all sectors in Malta has hit the industry particularly hard. “We do not simply have skills shortages, which can be at least partially mitigated by retraining, but we have supply shortages across all sectors and at all levels,” Ms Xuereb explains. “A substantial portion of the growth is coming through the property sector, with rental incomes growing at a much faster rate than wages. This induces a shift of resources out of the labour market and into real estate and property development, which in turn entices labour from other sectors to work in construction. As employees are presented with more frequent opportunities to change jobs, employers try to bridge the gaps by importing foreign workers, who are often even more predisposed to changing job at every opportunity. It becomes very much like a game of musical chairs.”

Patrick Cachia, Chairman of the Manufacturing and other Industries Economic Group within the Malta Chamber

Patrick Cachia, Chairman of the Manufacturing and other Industries Economic Group

The severity of the situation prompted the Manufacturing and other Industries Economic Group within the Malta Chamber to take action. “In collaboration with Malta Enterprise, we have launched a promotional campaign showcasing the numerous rewarding and successful career paths followed by individuals from all walks of life in Malta’s manufacturing industry. This will serve to remedy the misconceptions of both young individuals deciding on their career paths, as well as their parents who often have an influence on their children’s choices,” Mr Cachia says.

“Through representation in the Manufacturing Economic Group within the Malta Chamber, the industry will maintain constant two-way communication with the Minister for the Economy, as well as authorities and bodies such as Malta Enterprise, Malta Industrial Parks, the University of Malta and MCAST, among others. Such two-way communication serves to safeguard and enhance the sector’s competitiveness, which is of primary importance above all else.” Additionally, manufacturing companies forming part of the Malta Chamber of Commerce are supporting numerous education institutions by offering placements and other forms of exposure to career opportunities in manufacturing.

William Wait, Chairman of Malta Enterprise

William Wait, Chairman of Malta Enterprise

Mr Cachia also highlights some of the lesser-known benefits that working in manufacturing can provide, including competitive salaries and the possibility of sponsorships for continuous learning and development. “There is also the possibility of shift work grants, as well as added flexibility in an individual’s private life when compared to nine-to-five office jobs,” he details. “Manufacturing operations offer exposure to all areas of a business, such as logistics, purchasing, HR, finance, production, engineering, R&D, testing, quality assurance, and sales and marketing. It is at the forefront of technological developments and pushing the boundaries of what is possible in terms of R&D, innovation and engineering.”

“Corporations are investing millions in modern factories in which the latest technologies are being introduced,” Mr Wait adds. “The factory of the future will employ more professionals and fewer operators. The perception is changing and will continue to change. All those involved in the manufacturing industry need to understand that they are competing in a very tough employees’ market and therefore need to ensure that they give the best possible conditions to those they wish to hire. Also, they need to ensure that they keep the message live and loud in the marketplace that manufacturing offers long-term, well-paying jobs.”

“The most important skill that is required in manufacturing is the ability to adapt to change and to be willing to open oneself to continuous learning and embracing new challenges with passion. If one wants a rewarding, long-term career, then manufacturing is surely an industry one needs to explore and understand better. The opportunities are varied and endless,” he concludes.

This article originally appeared in The Commercial Courier

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