NEWS | Wednesday, 21 November 2007

A hopeful manufacturing industry

A National Statistics Office report published in April of this year clearly outlines that in spite of the practical collapse of the textile manufacturing industry in Malta over the past years, manufacturing enterprises in Malta cumulatively registered an average of 9.9% increase in sales over 2006.
The textile industry alone registered a 42.1% drop in sales over the same year. Lay-offs at Bortex, VF and Denim, with which over 1,500 employees were made redundant in less than two years, are symptomatic of the situation in the textile sub-sector of Malta’s manufacturing industry.
As a whole, albeit an increase in sales, the number of people employed in the manufacturing industry plummeted by 5.4% in 2006. What is interesting however, is that the total amount paid out in gross wages within the manufacturing industry as a whole increased by over Lm300,000.
Outward relocation, particularly towards the East, has evidently brought about new trends in Malta’s manufacturing industry. Statistics reveal that although the industry employs less people, we have fewer low-earning employees and a higher quantity of better-paid employees. That said, the gross annual salary average within the industry has only increased to Lm6,502 per person from Lm6,137 in the previous year. It would be right to assume however, that within a local context the manufacturing industry is becoming more lucrative by using more skilled, specialised and qualified resources. Malta seems to attract the attention of foreign companies opting for product development or manufacture of specific products such as Radio, TV and Communication equipment; Chemicals and Chemical Products as well as Publishing and Printing – all of which require resources with certain skills that are better paid and perhaps not as easily found in Asia.
In 2005, Toly Group International opened a new factory in China. In 2008, the same company shall be inaugurating a third manufacturing plant in India. Toly’s factory in Malta however, employing just over 400 employees, did not seem to register a drop in its number of employees.
“The challenge for Toly to remain in Malta is to find the right balance with China. We know that we cannot compete with China on labour costs. So in Malta, we have to focus on creativity and innovation”, says Toly Chairman and CEO Andy Gatesy during his opening speech last week at an inaugural event of two new units for Malta’s branch.
Since Dr Zoly Gatesy founded the firm in the late 1960s, Toly products has established itself in the world of luxury packaging. Among others, Toly supplies names like Avon, Boots, Chanel, Elizabeth Arden, Nina Ricci, and The Body Shop. With sales of over €5.5 million, in 2006 Chanel alone accounted for 22% of the conglomerate’s business. One of the units inaugurated was in fact a project that cost in the region of €500,000 in order to improve and keep the production of Chanel’s products in Malta.
“As the world of luxury goods is getting more and more sophisticated, Chanel are demanding their suppliers to continuously improve their quality standards. As a result, the operations team here in Malta decided to build a brand new unit and re-layout the manufacturing process”, Gatesy explains.
During the same event, Minister for IT and Investment Dr Austin Gatt said that “It may be coincidence but in the last few weeks Malta Enterprise has approved two new engineering projects which both have operations in low cost countries but both have chosen Malta as their destination for higher value added production.”
“Yet change remains relevant and unavoidable and knowing this Toly re-invents itself every time it is faced with a challenge and in the process, creates an opportunity out of every challenge. The manufacturing industry in Malta needs to do just that”, he adds.
Other companies that have significantly contributed to (and benefited from) Malta’s manufacturing industry would typically include :
Actavis
Driven by a considerable investment from its parent company, the Malta facility of Actavis employs around 400 employees. The facility is regarded as a key contributor to the Actavis group of companies, selling a number of branded generics as well as other generic pharmaceuticals.

Hetronic
The Malta facility of Hetronic was originally planned as a small factory producing standard radio-control models for its mother company. Nowadays, the Malta plant is the group’s key manufacture base. The Malta branch is also responsible for group purchasing and logistics as well as the provision of training and technical support for the Mediterranean, Middle-East and the whole of Africa.

Methode Electronics
Recently awarded the Supplier of the Year Award from General Motors and a Recognition of Achievement Award from Ford Motor Company for high mileage improvement.

Playmobil
According to CEO Helga Ellul “Malta has, in the last years, built up a good infrastructure of technical support companies. If you need qualified and highly trained labour at a reasonable cost to carry out product-development sales and marketing as well as production, then Malta is the place to invest in.”

ST Microelectronics
With 26 years of experience in Malta, ST serves a wide range of customers in America, Europe, Asia Pacific and Japan, with a manufacturing machine that responds efficiently in Quality and Service to the exigencies of all worldwide customers. This manufacturing machine runs seven days a week, twenty-four hours a day. The Malta plant is one of the most important Back-End facilities for the Group serving a range of key customers in the electronic industry throughout the world.

Trelleborg Dowty Malta
Produces and sells over 25 million premium O-rings per week globally with its main markets being in Europe and North America. It specialises in the design and manufacture of sealing solutions for the automotive market.

Cardinal Health
Recognised as the Plant of Year for 2005, the Malta Manufacturing subsidiary is one of twenty-eight facilities within Cardinal Health’s Medical Products Manufacturing segment. Cardinal Health Malta began its operations in 1995. The facility manufactures Medivac Suction Line Canisters, which are used during and after surgical procedures to collect patient fluid. These products are sold internationally. The plant’s production output has grown steadily from 3.2 million canisters in 1996 to 12 million canisters in 2005.