NEWS | Wednesday, 18 June 2008

To grow or not to grow?

Joinwell’s new showroom in Qormi will certainly involve a considerable investment. And yet, the new building will be making good use of underutilised space at their present factory. Centralisation will also put on the market their former outlet in Sliema, along with another property housing the current Printex factory in Qormi. Is this expansion, downsizing or merely an intelligent course of action? DAVID DARMANIN finds out.

The Galeas, who have been running Joinwell since foundation in 1947, may not be the frenzied sort but some of them are certainly hard workers.
Vince Galea is the only one of the five founding brothers left active as a first generation director. Active might be an understatement actually. Rumour has it that in spite of his 77 years of age, the first person in and the last person to leave the building site of the new Joinwell showroom is none other but Vince.
These are busy days for his son Martin too, who besides heading the Federation of Industry and heritage NGO Din l-Art Ħelwa is also on the forefront of his family’s business operations. Martin is so busy that during the time of interview he’s managed to juggle a double-scheduled meeting with the ability of someone who’s done it many times before. He may still need a P.A. though.
Cousin Andrew seems to be mainly concerned with manufacturing, operations, distribution and similar headaches, especially at moments like during the time of interview, when an unexpected power-cut halted back production at the cost of sending off some of his 30 odd workforce home for the day.
For a moment one would suspect that the absence of lighting in common areas and offices was upon initiative of Martin, the environmentalist on the board.
But “any environmental initiative currently undertaken by Joinwell is governed by legislation. We haven’t taken initiatives on our own because we saw they can impact on our costs. I don’t think greening the furniture industry at the moment could be commercially driven,” Martin asserted.
Investing in eco-friendly measures may also be the last thing on Joinwell’s mind right now, especially when they just have entered an investment to develop a showroom adjacent to their factory in Qormi, costing them just under €2 million.
“Joinwell was founded by George Galea, my uncle, some time after WWII. George was the eldest brother of five. At the time there was a lot of war damage, so Joinwell was initially involved in the reconstruction, repair and manufacture of doors and windows. In the early 1960s the brothers had agreed to start producing G-Plan under license. This was also the time when Maurice de Giorgio had entered as a shareholder. It was in these years that Joinwell experienced real growth, it had started taking contracts for Verdala, the Hilton and the likes,” Martin said.
“In the late 1970s we had also acquired the license to start producing reproduction furniture with Bevan Funnen, and we still do.
“George, who passed away recently, was the brains behind the company. He was the entrepreneur among the five brothers. He always came up with new ideas. His brothers and Maurice made up the team that made it all happen. We have pioneered in providing, not only a good product, but also an excellent service.”
Indeed, in the days of when quality service was unheard of in Malta, Joinwell was not only reputed for promising to deliver by a set date but also for respecting that promise. Decades down the line, it is still very hard to find furniture suppliers respecting the delivery date.
The current Joinwell showroom is a three-storey building situated in the heart of Sliema. One of course wonders whether it would be a pity to sacrifice location for more space. On the other hand, the Qormi premises spans some 12,500sqm – and whereas it used to house some 300 employees when the manufacturing industry was at its strongest, the headcount at Joinwell now tops 100.
“We moved away from Sliema because the premises there was too small”, Andrew Galea said in a defensive tone. “Sales of imported furniture have increased since the market opened.”
Yes but so did competition increase, and if anything plummeted it was certainly manufacturing.
“Most competitors think importation of furniture is an easy industry, until they start seeing the difficulties arising from after-sales,” he said.
“We have a factory here, so it’s easier for us because we’re equipped. We can install and maintain faster and better.”
Certainly, that Joinwell still owns a fully-fledged production line is advantageous, on many fronts.
“We have also exported furniture on occasions. Corinthia Bab Africa in Tripoli for example, used our furniture. Bevan Funnen, from whom we have a license to produce furniture, often give us contracts for manufacturing on design, besides the ongoing under-license agreement to build their furniture and sell it directly,” he commented.
In reaction to the manufacturing crunch in Europe, Joinwell have pursued three distinct courses of action. First, they started representing top-notch European furniture brands like Esprit, Arte M, Bontempi and Rolf Benz. Then, they have created a partnership with FXB and Fino in order to undertake projects of substantial size – such as the contract at Mater Dei. Thirdly, they got involved in high-end contract work for super yachts.
“We take work in conjunction with shipyards in Malta. While they do the outfitting for super yachts we do the woodwork, cabins, furniture, upholstery and inside flooring. Besides the actual construction side we also carry out maintenance on the woodwork. We have ships that have been coming in for three years running,” said Financial Controller Robert Abela.
Among the acclaimed super yachts fitted with Joinwell furniture one finds the Paloma, the Olympia and the Gardenia – the latter being one of their major clients.
“Way back, retail furniture was based on specific-design, one-size models. Firms at the time did not have the possibility of importing their own furniture, so really and truly there was no competition, and we’d set the market ourselves. Now time has changed,” he continued.
“Imported modular furniture now fits into rooms of any size and dimension, unlike the older type of furniture. G-Plan eventually went out of fashion, even on a design front. People want more colours and more variations now. Just to give you an idea we now have kitchens that come with 600 colour variations,” he said.
As Martin popped in for a minute in between double-scheduled meetings, he said: “G-Plan did not move ahead with the times. In fact, the whole British furniture industry is suffering at the moment. Funnily enough however, some of the furniture we import now is bringing back the G-Plan style.”
Going back to the showroom project, Abela explained that: “The decision to move was mainly based on the fact that we needed to centralise. The operation, in terms of cost of transport and communications will be much more feasible now. A showroom in Sliema did offer the perks of a prime location but when you consider all factors you see that none of our competitors are based in prime locations. We also have the advantage of being placed in a very visible spot. There’s a lot of passing traffic here. The way the showroom is designed will also attract attention. The façade slants, and that will ensure more visibility. Aesthetics also played a very important role in setting up the new showroom. We did not want another box. It’s much more attractive this way and it stands out.”
Indeed. The job was commissioned to Demicoli and Associates architect Andrew Vinci, who collaborated with Kris Briffa on interiors.
“The structure in Sliema was not ideal for today’s furniture market. It was small – especially when considering the size of our competitors’ showrooms,” he continued, adding that the block has already been rented out “for retail purposes, but nothing to do with furniture.”
Word on the street is that the building has been taken over by bathrooms and ceramics importers Satariano.
Joinwell also own Printex, based in another massive property opposite the Qormi premises.
“Printex will also eventually move on to the Joinwell side, factory and all. I guess the property there will either be sold or developed,” he explained.
As Martin finally freed himself up from the meetings, he joined in with the discussion and started a show round of the new showroom, which is now very close to completion.
“The second generation is slowly taking over the business as Vince, my father, is the only one out of the five brothers who is still involved in the company,” Martin said.
While directors increase, the family widens and cousins start getting involved in the operation, Joinwell are now operating more on the lines of a public company – witnessed by the decision to appoint Joe Zammit Tabona as their external chairman. However, Martin declares that going public “is not on the cards at the moment.”
Asked whether, in a hypothetical scenario, he would recommend his children setting up shop in the furniture industry, Galea said: “I think there are easier businesses to go into at this moment in time. It is not easy to enter in manufacturing. There are faster growing industries, for sure, although every industry has competition.”