The Business Observer Newspaper 28th July

NEWS

Issue 56

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July 28, 2016

Distributed with Times of Malta

One of the largest asset management companies in the world, Franklin Templeton, was scouting out Malta recently. Its executive vice president Gregory McGowan saw plenty of potential. see page 3 >

NEWS Banks are not fully passing on the benefits of quantitative easing to SMEs, according to the Central Bank of Malta, with interest rates still too high. see page 5 >

EU/US deal would boost exports by 23% Vanessa Macdonald Maltese exports to the US would increase by 23 per cent by 2030 as a result of an agreement between the US and the EU on trade – but its GDP and investment would decline.

A study by the World Trade Institute on the effect of the TransAtlantic Trade and Investment Partnership (TTIP) currently being negotiated between the US and the EU showed that the deal would increase the GDP in all the member states by an average of 0.5 per cent – except in Malta which would see a decrease of 0.3 per cent.

“The reason for the national income decline for Malta is that it is situated along the ChinseWestern Europe trade route, and trades more with China and Canada.

“As such, some small trade diversion effects away from China and Canada – who are not in TTIP – could explain this decline,” the report says.

The US is Malta’s second largest market for goods exports outside the EU (11.8 per cent) and for services (14 per cent). Around 2,000 jobs in Malta are linked to US-controlled firms compared with the 25,700 from all foreign firms, although the 2011 figure for US investment in Malta showed only €0.8 billion.

The deal would bring other benefits to the EU, such as reduced consumer prices, wage increases and a small decline in income inequality. Some sectors would be affected more than others, the study found.

The report said that prices could go down in Malta by 0.7 per cent for cars and by 0.6 per

“TTIP is the most ambitious trade deal ever tackled”

NEWS

cent for chemicals, and that electrical machinery exports would increase by €38 million.

Overall, consumer prices in Malta would go down by 0.2 per cent, the third highest drop among the member states.

TTIP is the most ambitious trade deal ever tackled, representing a third of world trade.

The US exports €160 billion to the EU, while the EU exports €187 billion across the Atlantic. TTIP would increase that by eight per cent for the former and six per cent for the latter, no small matter when you consider that the bilateral trade already sustains some 15 million jobs.

Although it will remove tariffs across a wide range of products and services, these are already very low on average between the EU and the US, so much of the impact will come from non-tariff barriers: from lengthy and complex customs procedures to frustrating certification and duplication of regulatory inspections.

Continued on page 11

Malta International Airport has voluntarily published its corporate social responsibility report, but should this become mandatory for all companies? e larger ones will soon not have any option… see page 10 >

CASE STUDY ere is as yet no licence for renting out multiple rooms in an empty house, and Casa Rooms founder omas Cremona thinks that although social media reviews can be very effective, it might be better to have a proper structure. see pages 12 and 13 >

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‘Malta should target investors in Africa’ The rising middle class in Africa will result in a number of projects for which Malta could be the base – but it needs to be patient and build up its profile slowly, executive vice president of Franklin Templeton, Gregory McGowan, said.

“The lower class in Africa is rising very quickly and they are going to need the same products as those in Europe do and which those in Asia are also seeking now.

So there is definitely an opportunity there in my point of view.

“When the Japanese came to Europe, they used Luxembourg – but there is a whole new wave of financial institutions coming this way now. Why not get in the mix and see if you can compete with the other jurisdictions?” he said.

“I think it is a great opportunity to be very open-minded and creative.

It can have tremendous dividends.

These things take a long period of time; they do not happen overnight. But, if you set your goals, it would certainly be achievable.”

Sources involved with encouraging his visit to Malta gave a frank assessment of the window of opportunity: “No jurisdiction has yet been established as a pathway to Africa. Mauritius has political issues and Dubai is also not perceived as a safe jurisdiction from an investment point of view. All in all, Malta is geographically closer and is a member of the EU. It could be very well positioned for some kind of bilateral agreements with countries to attract international players who have an eye on Africa,” the sources said.

Franklin Templeton, which traces its roots to 1947, is one of the world leaders in asset management with over $900 billion under management, on behalf of over 25 million private, professional and institutional investors. Mr McGowan was in Malta for a preliminary visit to check out its potential but was coy about his impressions.

“We do a number of jurisdictions around the world, so it is not new to us to be evaluating on a constant basis what is new and different out there. Change is the essence of our business. We have

to keep on top of what is new and different and to assess it and see if it fits it with where we are going in the future.

“We are still collecting all the information but there are new things going on in the world.

There are major financial institutions from all over Asia coming west. Perhaps Malta fits into that programme,” he told The Business Observer.

He ticked off a number of things which could be of interest, from product development to fintech.

“Can fintech companies get licences here? That could be of interest to our clients or to us,” he pondered.

Mr McGowan explained Franklin Templeton’s approach: “We tend to focus mainly on publicly traded securities. But we do have other pockets that are quite substantial. We are always looking for opportunities. Clients come to us with a list of factors they want and we evaluate where that best fits within our organisation. And if we cannot do it, we look at where

“Everyone is chasing yield which brings its own danger and risk. e best we can do is make sure that we clearly explain to our clients what the risks involved are”

else we could do it. We are pragmatic like that.”

He expressed very favourable first impressions of his meeting with the Malta Financial Services Authority, saying this was a key factor in any decision about future collaboration: “The most important thing from my point of view is the ability to have an ongoing dialogue with the regulator and for him to see the point of view of the business. That is more important than taxes. We need to be in a jurisdiction where our point of view is accepted or at least considered in a very professional manner and from what I am seeing, this is the case here,” he said.

His visit here comes at a difficult time for those seeking a return on investments. He said that for some time the coverage of stocks had been declining, which was a big concern for markets which require not only the ‘ask’ side of transactions but also the ‘bid’.

“It is a concern globally but particularly in the US where the coverage is getting less and less.

Quantitative easing can be both a benefit and a detriment. If money leaves the banking system, it has to go somewhere. Money market funds successfully disintermediated banks many years ago and this was actually the catalyst for growth in the industry.

“Everyone is chasing yield which brings its own danger and risk. The best we can do is make sure that we clearly explain to our clients what the risks involved are.

That is always a challenge and we always need to be vigilant that we are disclosing the precise risk involved with their investments.”

Indeed, Franklin Templeton takes a conservative approach, for which he makes no apologies: “It can be boring but most investors that work with us expect to have their money managed carefully.

They expect us to put their interest in front of anyone else’s – including our own. We are ‘steady Eddies’ and I think that is why we have a fairly solid shareholder base which tends to stick to us,” he smiled.

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Banks not reducing financing costs Local banks are not fully passing on the benefits of quantitative easing to SMEs, according to the Central Bank of Malta.

Ten per cent of Maltese SMEs still believe that interest rates were too high in 2015.

Having said that, this was the first time that the regular survey carried out by the European Central Bank on SME access to finance found fewer respondents saying that interest rates were higher.

Twenty-one per cent of domestic SMEs reported that interest rates had gone up, 16 per cent reported that they had gone down and 63 per cent said that they had not changed.

These contrast with the EU, where almost half said that they had remained unchanged and only 14 per cent reported an increase.

The Central Bank of Malta, in its analysis of the survey, blamed this on the local lenders: “[EU figures] reflect stepped up efforts by the European Central Bank to stimulate the eurozone economy through quantitative easing incentives and negative interest rates. “…These measures seem to have impacted SMEs across the European Union much more significantly than domestic firms, supporting evidence of incomplete pass-through in Malta.”

“ese measures seem to have impacted SMEs across the EU much more significantly than domestic firms, supporting evidence of incomplete passthrough in Malta”

SOURCE: SAFE (2015)

The CBM also noted that while 11 per cent of firms in the EU reported that additional costs – such as charges and commissions – had gone down, none of the Maltese did. In fact, 22 per

cent reported an increase while 74 per cent reported that they had not changed.

The ECB report found that the amount of SMEs that opted for trade credit trebled between

2014 and 2015, increasing from 15 per cent to 45 per cent. This rate is more than double the EU average of 20 per cent although the rates vary greatly between member states.

The demand for bank loans, however, was not affected by this trend, and almost two-thirds of SMEs in Malta still opted for this method of financing. Most SMEs required some form of financing with only 17 per cent relying on retained earnings.

The survey also looked at actual access to financing and found that only 10 per cent found it to be a pressing problem. Only eight per cent of firms that applied for bank financing were rejected.

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‘Time for a different EU with regards TTIP’ Vanessa Macdonald in Brussels The headline about Thilo Bode on the Politico newspaper left in my Brussels hotel room was unequivocal: “The man who killed TTIP”.

And the road in front of the Commission building where trade talks are underway was littered with glitter and confetti, left there by protesters early in the morning who proclaimed: “TTIP – Game over!” One of the stakeholders representing European dairies opened his presentation at the session regularly dedicated to lobby groups with a line in the sand: “No TTIP without better protection of our Geographical Indications (GIs) in the US”.

The loud public furore over the Transatlantic Trade and Investment Partnership has been raging virtually from the start of the negotiations three years ago.

The more cynical in Brussels say that NGOs were left without a suitable whipping boy and that trade deals were the perfect new campaign. Standing up to globalisation? Capitalism? America?

What’s not to like?

Perhaps a clue comes from the posters put up around Schuman Square by Friends of the Earth, urging that it was ‘time for a different EU’, which puts stopping TTIP in the same list as #Fossilfree and #Refugeeswelcome.

Of course, facts rarely get in the way of a campaign once it gets rolling. Looking back, many of the red flags could perhaps have been handled better from the outset: whether American GMOs would flood the EU market? Whether corporates would exploit the dispute mechanism

to sway government environmental policies by threatening litigation? There are now myriad handouts available, published not only by the EU and the US but also by German trade institutes, for example, categorically debunking some of the myths and reassuring people about their fears. They are clearly too little, too late, judging by the protests still underway.

This is not the first trade agreement being negotiated by the EU, but it is the largest: Compare this to the agreement just reached with Vietnam or Canada, for example. Its ambitious scope is perhaps what has made it a target but those involved in the talks – including the rapporteur for the European Parliament’s trade committee, Bernd Lange – believe it would be foolish to settle for a “TTIP Lite”, even if that means going over the proposed end-2016 deadline.

The deadline is not arbitrary: it coincides with the end of President Barack Obama’s term, and while Clinton’s team withdrew its support for the agreement, it might be swayed. The Trump team has made it clear that it is not keen on trade deals. Full stop.

In spite of the protests, the EU and US teams, led by chief negotiators Ignacio Garcia Bercero and Dan Mullaney respectively, carried on with the 14th round of talks last week. Over the past rounds, the negotiations have gone step by step, narrowing in from broad concepts to identifying the regulatory, technical and legal requirements of each aspect, to involving the stakeholders in each. Now, there is at last a consolidated text taking shape, albeit with several as yet unre-

“e loud public furore over the Transatlantic Trade and Investment Partnership has been raging virtually from the start of the negotiations three years ago”

A SIGN OUTSIDE THE EUROPEAN COMMISSION OFFICES IN BRUSSELS.

solved sticking points included in brackets. Clearly all the lowhanging fruit has already been picked so the remaining talks will involve the sectors which most impact and most controversy, from selling American-made Parmesan, to public procurement contracts.

But there has been progress.

One of the major points brought up by protesters has been the dispute mechanism, which the European Parliament committee made clear would not have been

acceptable in its original form.

Now the EU has put forward a completely revised version based on an ‘investment court’ which was described by the EP committee’s shadow rapporteur Marietje Schaake as being so good that it should be applied to the hundreds of other trade agreements now in force in the EU. But the US disagrees with many of its points, preferring arbiters to judges, and seeing the opportunity to appeal as being, bluntly speaking, a waste of time.

The protesters will no doubt be out in force again for the next round – which will be scheduled after a ministerial meeting in Bratislava in September – but inside the Commission offices, the midnight oil will be burning through the summer as negotiators plough through the reams of paper to come up with solutions which will be politically acceptable to as many stakeholders as possible. As far as they are concerned, TTIP is far from “killed” and certainly no “game”.

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INDUSTRY FOCUS

Freeing up trade Prime Minister Joseph Muscat last week told a conference that he favoured creating a series of free trade warehouses rather than extending the Freeport further inland. The part about the Freeport did not go down very well with the UĦM but the idea of free trade zones – and the logistics sector that it would nurture – has been long anticipated by the freight sector.

Peter Bonavia, the general manager of Carmelo Caruana Co. Ltd, is one of many who spoke to The Business Observer saying that the creation of zones would serve as a catalyst for the growth of logistic services, mainly sea and road freight.

“Considering the geographical location of Malta, it would be expected that the growth will be mostly in ocean freight but one cannot exclude that road and air will also benefit.

“Malta as a logistics hub combines the advantages of being a gateway to the European Union and also of being a short distance away from the main ports feeding the North African countries.

“Another advantage which a country like Malta should leverage is the short distance connecting the main hubs – the airport, the Freeport and the economic zones.

This is a considerable advantage since in practice it should save considerable costs on commuting and manpower,”

he said, warning, however, that Malta still lacked the infrastructure required.

Kevin Attard, the CEO of Attard Holdings, agrees that Malta’s location makes it a natural crossroads for logistics – stressing that this would grow on the achievements of the past.

“Malta is extremely well connected on daily basis to the rest of the world by air and sea and Ro-Ro ferries which over the past years have brought imports and exports to the next level,” he said, although he too warned about some shortcomings, picking on bureaucracy: “It is about time that we change our mentality and reduce the additional bureaucracy – and inflated charges – if we want to attract foreign

“Malta as a logistics hub combines the advantages of being a gateway to the European Union and also of being a short distance away from the main ports feeding the North African countries” companies to make more frequent use of Malta.”

He pointed out that major players had already made considerable investments but that their actual and potential contribution were not being appreciated.

Speaking about bureaucracy, he said that although Malta had always been on the frontline of innovation when it came to customs procedures, this remains one of the most important pillars for the industry as the most

important competitive advantage for a hub was its transit times.

The need for ‘fast track’ customs procedures was also picked up by John Zerafa, the director of Freight Zone Logistics, who said that Malta had much to gain by being competitive in both costs and time.

“Malta is continuously competing with other European & Mediterranean ports and must ensure that its ports, inbound/outbound freight, and transport charges are commercially viable – coupled with ‘fast track’ customs procedures,” he said.

Freight Zone Logistics is actively involved in transhipment from Asia to Europe and he believes that the right infrastructure

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– including warehousing facilities in free trade zones – would facilitate this activity.

However, the changes would have unintended – and positive – consequences for other economic sectors: “We would expect to see a rise in cargo movements in and out of Malta. As a consequence of the rise of cargo volumes, we may experience a reduction in the overall freight costs,” he said.

It would also bring in more competition for local operators: “The logistical infrastructure is pivotal if we are to attract international traders and freight logistics companies to use Malta as a distribution hub i.e. by road, sea and air, as a gateway to Europe and North Africa. On the other hand, in today’s exceptionally competitive world, free trade zones in the Mediterranean are only successful if they are competitive.”

The issue of customs was brought up by another operator who wants to see concrete change: Franco Azzopardi, the chairman and CEO of Express Trailers, explained that customs bonded stores currently serve the purpose of warehousing outside customs zones.

“The main advantage of bonded stores is that it economises on customs warehousing costs – which are based on the value of the cargo rather than on volume. That said, under the current bonded stores regime, administration and also formalities in terms of customs supervision remain a burden.

“Free trade zones are a welcome proposal. However, it is still unclear what will differentiate them from the legacy bonded stores. No mention seems to have been made yet of both regulatory port workers fees, and also terminal charges. Will these cost burdens remain the same?” he said.

Mr Azzopardi also pointed out that for non-EU destined cargo, the bottleneck could be the amount of private warehousing space available, properly supported with the set-up in terms of

“Free trade zones are a welcome proposal. However, it is still unclear what will differentiate them from the legacy bonded stores. No mention seems to have been made yet of both regulatory port workers fees, and also terminal charges. Will these cost burdens remain the same?” equipment, IT and management.

He also worried that the road capacity to handle carriage from port to warehouse and back could be strained – depending on the volumes being envisioned.

“We do not seem to have a researched opinion on the scalability of this capacity. It all depends on the quantities being attracted to Malta.

“If the cargo is warehoused in a FTZ for onward clearance and carriage to EU countries, it is most probable that roads, and Ro-Ro connectivity will be

affected. The capacity of the roads to handle any envisioned magnitude remains a function of that envisioned magnitude of additional cargo.

As for the capacity of Ro-Ro mode of shipment to mainland Europe, there is still a lot of volume both in trailer space and on the vessels that can be utilised for the purpose,” he said.

The need to get proper data and to plan accordingly was also brought up by Kurt Camilleri, managing director at O&S Shipping Ltd.

“Developing Malta into a logistics and transhipment hub would certainly attract bigger freight movements and lure foreign trade and investment, but one must look at a long-term plan which is well-defined, with more flexible and practical laws,” he said.

While the current infrastructure seems to coping well, they would require investment in personnel, machinery, new technologies and possibly even land to support the industry, he said.

“With regards to roads, one must have the proper infrastructure

and connectivity between the ports and the free zone warehouses. Increased freight traffic must not conflict with other daily routines such as tourists passing through MIA and people accessing the industrial estates and factories close by.

“Freight lanes, road, rails and tunnels are all possible means of transport, but as I said, one has to study this well.”

He also believed that this could have a positive effect on other sectors in Malta: “Where there is demand there’ll be supply. Air lines, shipping lines and freight carriers will follow to meet the demand for connectivity to and from the islands. Local industry might benefit from more frequent sailings, shorter transit times and new destinations.

Attrans sales & business development manager Kevin Filletti praised the possibilities, sure that all the effort would be worth it: “The opportunities for Malta with its strategic position in the Med and as an EU member state are immense.

“The logistics sector could be one of the island’s main industries and would create new job opportunities. We could attract various commodities as an FTZ eliminates bureaucratic requirements such as customs tariffs and quotas.

“We could use our sea connectivity from the Far East to warehouse goods in Malta under FTZ and then despatch by sea, road or air to mainland EU or North Africa.”

A typical activity carried out in an FTZ area is the onward supply relief (OSR). This is a VAT exemption on importing goods to Malta from a non-EU Country.

Once despatch is done, duty is paid in Malta and cargo can travel freely in the EU under free circulation.

“Considering the imbalance of trade between importation & exportation FTZ would help trailer operators like us decreasing our costs on north bound routes.

This could close the gap between import/export.”

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SMEs should not be forced to report on CSR – Chamber The Chamber of Commerce, Enterprise and Industry believes that non-financial report – reporting on corporate social responsibility – should be limited to large companies, stressing that most SMEs are already far more socially engaged than perceived.

Malta has to transpose Directive 2014/95/EU on disclosure of non-financial and diversity information by certain large companies and groups by December 6.

The government has not yet decided on the options left up to the member states: “Malta is in the process of transposing so the said Directive is still a work in progress.

However, unlike the case of EC Regulations, that are directly applicable, the transposition of Directives allows a degree of flexibility to member states to adapt to national legislation,” a ministry spokesman said.

Directive 2014/95/EU entered into force on December 6, 2014. The disclosure requirement applies to large public-interest entities with more than 500 employees. This includes companies listed in EU markets, as well as some unlisted companies, such as credit institutions and insurance companies. It is estimated that approximately 6,000 companies are affected by the Directive.

Member states have the flexibility to adapt it to their respective national circumstances, within the limits of the Directive. For instance, they may allow information to be disclosed in a separate report, rather than in the management report. Member states may also require that the information be verified by independent assurance service providers.

The chamber has maintained over the past decade that corporate social responsibility (CSR) should remain voluntary and should not be made legally binding: “This allows them to retain flexibility to find the most efficient means of how to apply such measures within their operations. Experience has shown

“Publishing our sustainability report is the first step towards making our business more accountable to a stellar performance” that if there are additional rules originating from legislation there will be an unnecessary cost and burden for enterprises,” it said.

The Commission has specifically targeted large, listed companies, public interest companies and credit institution such as banks.

“Given these criteria, it is clear that the impact on Malta-based companies will be minimal seeing how some of them are already compliant of their own free will. The chamber believes that this is the right way to go about it and that the legislation should not be further extended at this stage to include smaller sized enterprises,” it added.

The chamber has carried out extensive research in the last four years on the subject of CSR and found that local SMEs are already managed in a responsible way, “many a times unknowingly, they are socially engaged and tradition-

ally participate in the life of their local community”.

“The ethical values of the business owner often play a role in the responsible attitude of SMEs. Even more so, enterprises also commit themselves to respect the environment. In fact, many enterprises are taking actions in this regard. Although this should not be the prime motive behind taking such activities, one still has to take them into account,” it said.

The chamber’s reference to the fact that many large companies already report on CSR is borne out by both those which are local – like Bank of Valletta and Malta International Airport – and others like HSBC and Vodafone, whose foundations follow the international group’s approach.

A spokesman for HSBC Bank Malta said the listed company issues its annual report and accounts,

in which it discloses information about its corporate sustainability programme and investment, in the community.

A Bank of Valletta spokesman explained that its decision to publish a report on CSR was quite revealing: “When we decided to commit ourselves to CSR principles, we realised that a lot of the requirements were already being done by the organisation, even if not formally. In this regard, CSR brought structure and uniformity to these initiatives.

“The debate as to whether or not sustainability reporting should be mandatory has been ongoing for a number of years, and there are still diverging views on this subject.

From our experience, we tend to favour the view that this form of reporting should remain voluntary.

Although one may argue that by enforcing reporting, companies will have to do it, there is the counter-ar-

gument that mandatory reporting will be compliance driven, with most organisations reporting the bare minimum, rather than making a genuine effort.

“It is important for any organisation to undertake CSR because it has an active role to play in the communities in which it operates. Reporting must remain a tool, with the main objective being instilling a caring culture within the organisation,” the spokesman said.

The airport is the latest local company to issue a comprehensive stand-alone report, the first since it voluntarily adopted the Global Reporting Initiatives standard – established by an international independent standards organisation. The MIA report, independently assessed by PwC, covers everything from human resources and recruitment, to financial and environmental sustainability.

“Since Malta International Airport is such a key player in the tourism industry, we chose to take a more strategically relevant approach to our corporate responsibility,” MIA CEO Alan Borg said.

“It is for this reason that we adopted internationally-respected GRI standards in our CR reporting and voluntarily opted to have our CR Report independently audited.

“In doing so, we are voluntarily and in a completely transparent manner reporting both our successes and shortcomings which will, over the medium term, help us remove, reduce or mitigate our negative impacts and improve or build on our positive ones,” he added.

“Naturally, there is always room for improvement and we are confident that we can draw on last year’s lessons to build on this positive momentum in our CR efforts.

Publishing our sustainability report is the first step towards making our business more accountable to a stellar performance, across our economic, environmental and social impacts, for the benefit of the tourism industry and Malta as a whole.”

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TTIP: a blueprint for future deals?

Continued from page 1 This is expected to have a disproportionately positive impact on SMEs which often do not have the resources to cope with these barriers – and who tend to give up early in the export process.

Since the deal is between countries with similar levels of development, with high standards of quality and consumer protection, as well as labour laws, it is seen as a blueprint for future deals.

“The consequences of failure are bigger than just economics. I think this is an important symbol of the US and the EU standing together. It’s about our ability to work together to bring our ideas of openness, public participation in government, and of a market economy, and to show that you can take two systems that are not identical and find a way forward that preserves their integrity, but also find a way to creatively mesh those two systems in a deeper way,” US Under Secretary of State Cathy Novelli explained to The Business Observer.

“e consequences of failure are bigger than just economics”

Most other US trade deals involve countries with lower living standards – resulting in a haemorrhage of jobs along with pressure to reduce wages, which has made them deeply unpopular in many states.

Since the US and the EU have roughly similar standards, this would not be the case with TTIP, which would see both high-skilled

wages and low-skilled wages increase in all but three member states (Romania, Czech Republic and Estonia).

The WTI study is far from the first about TTIP but, as negotiations continued, it adopted a less ambitious – and therefore more realistic – model.

The 14th round of talks has just concluded in Brussels, with the

bulk of the issues already sorted, but as with any deal, these represent the quick wins and least contentious while the last few issues will prove harder nuts to crack.

See also pages 6 and 15 In The Business Observer of August 11: TTIP’s hurdles

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Room with a view In just a few years, Thomas Cremona has managed to make his fledgling company, Casa Rooms, into the third largest property management company for Valletta in terms of portfolio, and he is crossing his fingers that by the year end he will be the top one.

Don’t scoff. This is a man known for his determination, a trait which made him the first Maltese to row across the Atlantic five years ago, a gruelling 34-day trip made even harder by the fact that he was seasick almost the whole time.

The trick, he confided, is very simple: preparation, 18 months of it in the case of the rowing challenge, for both sponsorship and fundraising, for media awareness and for the physical and psychological readiness. Indeed it is this approach which has put his company on the map in such a relatively small time.

“The problem was getting someone to believe in me. When I started the project I was only 21,” he said, breaking into a smile.

“You have to be persistent – a pest! – and slowly things start to work out. I learned a lot about the drive to have a dream and to take the risk. You can do something if you put your mind to it.”

An accountant by profession who overcame leukaemia at the tender age of four, he was working with KPMG but the entrepreneurial urge was already itching.

He was intrigued by the property market but realised that owners were afraid of not getting paid. He decided that solving this problem – through a property management company – would actually be quite interesting, and Casa Rooms was born.

The economies of scale are against you when you set out in this field. Clients need 24/7 care and he admitted, with another chuckle, that he has not had a Sunday off for over a year.

CASA ROOMS HAS ABOUT 40 PROPERTIES ON ITS BOOKS, MOSTLY LOCATED IN VALLETTA.

“One of the clients managed to lock himself out on the balcony in the middle of the night but as the key was in the door, we could not open up from outside. In the end, we had to find a locksmith in the early hours of the morning!

“Another time I had to wash all the dishes after a short let as the turnaround was too tight for the cleaners to cope with it all!”

The Maltese market is very interesting for owners as legislation does not limit the amount of time that you can offer lucrative short lets, as happens in other countries. And for host families, the Malta Tourism Authority actually has a scheme of fiscal incentives. Mr Cremona said that the legislation here is actually one of the strongest ones, when it comes to owner protection.

However, there is a gap in the market that concerns him: the sector has scope to grow but is being hampered by the lack of clarity with regards to room-by-room accommodation, something that is widely done for English language students.

“The British have a system and you can pay an extra fee to rent to unconnected people. Here there is a licence for host families and for holiday furnished premises. But there is no licence for room-by-room where the host does not live on site. The Malta Tourism Authority is not very happy about it – but obviously the price you get from renting room by room is much more than for the property as a whole.

“This is getting more important as the price of rentals has gone up and people can no longer afford to rent a flat on their own any more. A landlord can rent it out to one person who then rents out to his friends – so the landlord ends up renting to all sorts of people he has no control over. Each tenant should have the same rights,” he pointed out.

“You have to be persistent – a pest!... I learned a lot about the drive to have a dream and to take the risk.

You can do something if you put your mind to it”

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The MTA may not have a formula for roomby-room rentals but it is very conscious of the need to enforce and its team of six inspectors has grown to about 21. And whereas it used to take a week to get a licence, it is now taking a few months.

Apart from the fact that the authority is scrutinising properties much more, demand is spiralling, with prices being driven up by the citizenship programme applicants who need to pay a minimum rental amount, artificially pushing up prices, which pulls up prices along the chain.

Short lets also drive up the prices for long lets, he stressed, with many owners doing short lets for the summer months and then finding a long let – often expatriates still looking for a permanent home – for the nine months of winter. For properties that command less than €1,400 a month, this formula is very enticing.

“But people are busy. So we are there to make sure that the experience is hassle free.

They get a forecast indicating how much they should make over a year and they also get a monthly report, with their cheque. They give us the key and then it is up to us, which is very important as most of our clients tend to be people who live outside Malta or who are very busy,” he said.

Casa Rooms already has some 40 properties on its books, so the economies of scale have really started to kick in. It now has two people in the office and outsources around six cleaners, a handyman, plumber and electrician. The company looks after arrivals and departures – around 100 taxi trips a month – the cleaning, linen, etc.

“It is becoming extremely competitive. ere are 20 blocks being developed [in Valletta], with four or five units each. We are now expecting the impact of the dozen or so boutique hotels to be fully felt”

Since many of the short let clients find properties through AirBnB and Booking.com, good reviews are critical.

“They are better than anything that the Malta Tourism Authority can impose as they make or break you.

“We once took over a property which had terrible reviews and although tenants were willing to give us a chance as we had only just taken over, there were many times I wondered whether it would have been better to drop the profile and start again! On the other hand, you can

THOMAS CREMONA. PHOTO: MATTHEW MIRABELLI

have an average property but if you get five-star reviews throughout. you can push up the price.

“Reviews tend to pick on cleanliness. They are usually quite well prepared with regards to the furnishings as there are pictures on the site. We get a lot of comments on water pressure and they are sometimes overwhelmed when the experience is a bit too Maltese as our buildings tend to be very humid, and hot in summer and cold in winter!

“It is also about matching expectations as some want a concierge service. When they

call asking for all sorts of things, it is up to us how we handle it. We do our best,” he said.

Mr Cremona has been able to add a unique selling point for owners through his market analysis, which is so detailed that it has enabled him to pick up very small shifts of up to a euro per person per night in Valletta, his biggest market.

“It is becoming extremely competitive.

There are 20 blocks being developed, with four or five units each. We are now expecting the impact of the dozen or so boutique hotels to be fully felt,” he warned.

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e Business Observer is Malta’s leading business newspaper distributed with Times of Malta every fortnight.

Editorial Vanessa Macdonald, Assistant editor, Times of Malta.

EDITORIAL

Time to put Unicredit shares to better use A unique window of opportunity may just be about to open – and the government needs to think carefully about what its strategy will be to exploit it.

Over the past years, banks which required a bailout by the government were forced to relinquish their overseas operations. This is only fair: why should taxpayers support an operation in another member state?

This is why Volksbank had to sell its bank in Malta, why Banif is desperately waiting for its buyout to be concluded, and why Lombard’s Cypriot shareholding is eventually going to be up for grabs.

And now it seems that Unicredit may have to be bailed out – or ‘in’ – which would almost certainly mean that it will have to sell its 14.45 per cent stake in Bank of Valletta.

The Unicredit shares derived from the 40 per cent of the new bank taken up by the Malta Development Corporation when it was formed in 1974. MDC had in turn sold shares to Banca di Sicilia with the remainder going to the Maltese public. In June 2006, Capitalia took over the stake from Banco di Sicilia and, just over a year later, Capitalia merged with Unicredito Italiano by way of incorporation.

However, over the years, Unicredit has done precious little to help BOV, apart from having a representative sit on the board. It has not touched its shareholding – either selling or buying – and has not offered any strategic potential. Other foreign banks came to Malta and still Unicredit remained a sleeping partner, hiving off considerable dividends but giving little in return, a sad oversight at a time when BOV could so sorely have done with leverage to grow its international presence to compete against its bigger and better branded rivals.

Now, a number of Italian banks including Unicredit are floundering, with over €200 billion in non-performing loans – and that is just loans where the debtor is deemed insolvent. Total impaired loans – a wider net including cases where the debtor has temporary problems or has fallen into arrears – are €360 billion, a third of the eurozone’s total.

Bailouts are now no longer possible, with the EU member states having to opt for bail-ins – but given the amount involved, that may be hard to enforce. Italy is proposing solutions (there is even talk of creating a ‘bad bank’ to absorb losses) but how it saves the bank is less relevant to Malta than the fact that Unicredit might be forced to sell its shares.

UniCredit appointed French investment banker Jean-Pierre Mustier as its chief executive in June but he faces an uphill struggle. The bank’s shares have fallen more than 60 per cent this year, weighed down by investor concerns. Mustier – who took over on July 12 – said he would draft a new strategic plan to boost UniCredit’s capital and profits. Reuters has already reported that it was expected to sell local online bank Fineco, Polish unit Pekao and asset manager Pioneer. Selling the BOV shareholding to raise capital – Unicredit’s core capital ratio is 10.5 per cent – might be an option.

The government needs to be prepared: should it buy the shares itself, thereby increasing its own shareholding to a level that might make BOV interesting to a strategic partner? Should it float the shares to the public, diluting the ‘perceived’ government influence that is tarnishing its reputation? And what about the need to prepare for the National Bank compensation?

Unicredit ploughs off a healthy dividend, in return for providing a director on the board, while hanging tightly on to its shares. Surely there are smarter partnerships possible, which would serve BOV better?

Publishers Allied Newspapers Ltd. Content House Group Ltd.

Advertising Enquiries Tel: 21 320713 Email: info@contenthouse.com.mt Advertising Sales Matthew Spiteri Head of Sales Petra Urso Publications Sales Manager Kurt Cauchi Rose Caruana Advertising Sales Executives Lindsey Ciantar Marvic Cutajar Advertising Sales Coordinators Printer Progress Press Ltd.

BUSINESS OPINION

Seeking growth in America

Tanya Sciberras Camilleri The extent to which negotiations on the TransAtlantic Trade and Investment Partnership (TTIP) will pick up momentum following the Brexit referendum remains to be seen. It would appear that the EU’s negotiating position may have suffered a setback following Britain’s decision to leave the EU. Another factor which may slow down matters is the impending US presidential election, since it is unclear whether Obama’s successor will continue to support the negotiations.

However, we are keen to know how our members in Malta may benefit from TTIP and the benefits it holds for Maltese entrepreneurs keen to expand their business in the US. The aim of TTIP is to eliminate barriers to trade between the two blocs. Barriers may take the form of a tariff – but then tariffs between the US and the EU are already relatively low. The challenge lies in the elimination of non-tariff barriers, examples of which include quotas, foreign exchange

“e jury is still out regarding the ultimate benefits of TTIP on the EU economy and on Malta” controls and administrative and bureaucratic measures. These non-tariff barriers push costs up, and may even prove prohibitive at times, particularly to SMEs which would not have the resources and are therefore disproportionately affected by them.

The Maltese Chapter of the American Chamber of Commerce (AmCham) was set up 12 years ago and its members typically have business ties with the US, or are professionals who offer their services in the US. During the past few years, AmCham has been closely following events in relation to TTIP and has

watched the unfolding of negotiations since 2013 when President Obama and then EU Commission President Barroso jointly announced that the US and EU were giving the green light for negotiations to commence on creating a transatlantic business partnership between the two blocs.

As far as I am concerned, the jury is still out regarding the ultimate benefits of TTIP on the EU economy and on Malta. It would be extremely shortsighted if TTIP were to be reduced to a battle about food standards, without considering the benefits to consumers and the jobs that the part-

nership would create on both sides of the Atlantic.

What is the point, for example, of a car or a pharmaceutical product to have to satisfy two safety licensing standards (EU and US), when these are substantially the same? TTIP would signify the elimination of these double licensing requirements and would standardise products, bringing down costs with the reduction being passed on to the consumer.

The interim report on the benefit of TTIP commissioned by the EU was published in May this year and indicates that the economies of all member states will grow as a

result of the implementation of the agreement, with the prediction that EU exports to the US would rise by 27 per cent During the negotiating stage, it is important for entrepreneurs, particularly those already doing business with the US, to highlight those barriers which they may encounter in trading with the US. This is extremely important since barriers may be subtle and not that easy to detect in niche sectors.

This is where AmCham feels it can be relevant to its members.

AmCham Malta has organised a number of events for its members on the subject, the last one in June, where a local ministry official gave a presentation to its members about TTIP and its potential effects on Maltese business.

AmCham wishes to reach out to new members and be the interface between Maltese businesses exporting to the US, and the Maltese government and EU institutions.

Moreover, AmCham’s role is also that of being a first port of call to US businesses wishing to venture into Maltese business territory.

AmCham Malta is also a member of AmCham EU and is therefore able to represent its members indirectly in European fora.

The proposed partnership is a truly ambitious one and presents an opportunity for Maltese businesses, while Malta should also study the potential of becoming the entry point for US businesses wishing to enter the EU. Tanya Sciberras Camilleri is the president of AmCham.

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APPOINTMENTS

Medserv succession announced Medserv has named Karl Bartolo as the designate CEO, planning a proposed three-year handover from incumbents Anthony Diacono and Anthony Duncan, who currently share the role.

“Now that the company is growing, the responsibility and duties are growing with it and we felt the necessity to split it. I will keep my role as the chairman of the board and, for now, as the CEO of the group. Mr Duncan will remain an executive director, whose main responsibility will be finance and compliance – an increasingly complex role,” he said.

The succession plan for the top job is only one of a number announced by the oil and gas company, whose heads were described recently by Mr Diacono himself as the “white-haired brigade”.

Mr Diacono said that the succession plan was finalised following input from consultants as well as senior management, over a period of time.

“The end result may seem evident at the end of the day but it is always good to challenge assumptions,” he told The Business Observer.

“It will also ensure that what we are doing will be accepted by the most important element of the company: its management.”

Mr Bartolo has been with the group for years and, until recently, was the chief financial officer, although over the last few years he has been increasingly involved in the management of the company.

The three-year handover will give Mr Bartolo time to grow into the role as the group expands exponentially, making sure that it is a seamless experience. It will also give the group the opportunity to seek a new chief financial officer.

“ese changes will carry us through the next five to 10 years” The group also announced other changes: chief operating officer Godwin Borg has also relinquished his post but will stay on as a consultant, enabling the company to tap into his considerable experience in Libya, as well as giving technical input. His post will be restructured to reflect the company’s growing international operations, boosted most recently by the acquisition of METS in the Emirates. He has also been appointed to the board.

There will now be regional managers, with Godfrey Attard looking after the Mediterranean (Cyprus, Egypt, Sicily and Portugal); Simon Lanzon looking after Malta and Libya with Mr Borg’s help; Gareth McMurray looking after the Middle East and the integration of METS and Medserv; and Chris Clark taking over international operations, with the company still waiting to

hear about its bid for work in Trinidad and Tobago, as well as other markets.

“These changes will carry us through the next five to 10 years.

Will Karl make me redundant? I will be pushing him as hard as I can to make sure he does, at least

from the CEO function!” Mr Diacono smiled.

“Will I retain an active role within the company? If I am enjoying myself as much as I am today, I have absolutely no problem staying on as chairman, if the board will have me.”

KARL BARTOLO (LEFT) AND ANTHONY DIACONO

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e Business OBSERVER |

July 28, 2016

STOCK MARKET REVIEW

MIA upgrades its 2016 passenger forecast

Edward Rizzo

On July 13, Malta International Airport plc issued a company announcement and held a press conference during which it announced its June traffic results and an increased passenger forecast for 2016.

June was yet another record month (the 51st consecutive month in which MIA registered record passenger traffic) with an increase of 6.8 per cent to 490,381 passenger movements when compared to the same month in 2015.

As a result, during the first six months of the year, MIA registered an increase of 195,574 passenger movements (equivalent to +9.8 per cent) over the same period last

year to 2,183,089 passenger movements. The growth was driven by a 7.4 per cent increase in seat capacity and a 1.8 percentage point increase in the seat load factor to 80 per cent.

MIA’s CEO Alan Borg explained that the high seat load factor was indicative of the strong demand for travelling to and from Malta.

Malta’s top market remains the UK, with 612,413 passenger movements (equivalent to a market share of 28 per cent), followed

by Italy (21 per cent market share) and Germany (13 per cent market share). The markets which registered the largest growth were Poland, Turkey and Switzerland, following the introduction of new

flights and increased flight frequencies.

However, these three markets still have a share of only three per cent each.

During the recent press conference, Borg also explained that the double-digit growth in passenger traffic during the first three months of 2016 is in line with the strategy of attracting more travellers during the winter months and promoting Malta as a year-round destination. The Tourism Minister shared the same remarks and added that the air route development programme showed the concerted effort by all stakeholders involved.

Minister Edward Zammit Lewis singled out the growth registered in the Polish market and remarked that the diversification of source markets was another important initiative being undertaken by the minstry, the Malta Tourism Authority as well as MIA.

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STOCK MARKET REVIEW

In terms of airline movements, Ryanair registered a remarkable 37 per cent increase in passenger movements (equivalent to 202,691 passengers) to 744,391 passengers. Ryanair was the primary contributor to the strong growth in passenger growth at MIA during the first six months of 2016 and it is the first time that Ryanair’s market share surpassed that of Malta’s national flag carrier. Alan Borg stated that this was not a surprising achievement given the fact that Ryanair has become the largest airline in Europe.

Essentially, the strong growth by Ryanair and the additional traffic by Wizz Air and Turkish Airlines offset the decline in passenger traffic by Air Malta and Easyjet.

MIA’s CEO explained that the 8.1 per cent drop in traffic by Air Malta was due to a slowdown in Germany and Russia while Easyjet deployed less seat capacity to Rome and Belfast.

Following the 9.8 per cent growth achieved during the first six months and the upcoming winter schedule now in hand, MIA revised its traffic forecast for 2016. On January 18, MIA had issued its 2016 passenger growth forecast at +2.4 per cent. During the press conference on July 13, the CEO of MIA reported that the company upgraded its forecast to +7.5 per cent equivalent to 4.97 million passenger movements. This represents an additional 240,000 passengers from the forecast earlier this year.

The revised forecast takes into account traffic development for the 2016/2017 winter season and other important factors that generally impact the aviation industry.

Ryanair is expected to contribute to a large part of the growth envisaged in the coming months and the upcoming winter season as it is commencing five new routes and it is also extending 11 summer routes to winter.

Other airlines that will be increasing capacity in the coming months include SAS, Vueling, Swiss, Wizz Air and Turkish Airlines.

Borg emphasised that the seat load factor may weaken due to the additional capacity being deployed in the months ahead.

Understandably, the Brexit effect was also mentioned during the press conference. The CEO of MIA confirmed that the company was in touch with all operators in the industry and, at the time, no changes in bookings were recorded.

While the uncertainty following the referendum result may impact consumer confidence in the months ahead, Borg claimed that no significant changes are expected to passenger volumes.

The Tourism Minister also remarked upon this very topical development and stated that he is not envisaging any major impact to tourism figures in the short to

“e double-digit growth in passenger traffic during the first three months of 2016 is in line with the strategy of attracting more travellers during the winter months and promoting Malta as a year-round destination”

medium term. However, he claimed that all stakeholders are vigilant on global developments and specific marketing efforts are being launched by the Malta Tourism Authority after the summer season. In the words of the minister, the recent

developments continue to highlight the volatility and competitive nature of the airline and tourism industry.

The numerous shareholders of MIA now await the publication of the interim financial statements due on August 17. Undoubtedly, these should show another record financial performance following the 9.8 per cent growth in passenger figures during the first half of the year since passenger throughput is a key determinant of the company’s profitability. In fact, income from the passenger service charge accounts for almost 70 per cent of overall group revenue. The relationship between passenger figures and revenue was again confirmed

by MIA on May 17 as it disclosed some key financials during the first quarter of the year. Indeed, this was the first time ever that MIA issued key quarterly financials.

MIA reported that during Q1 it registered a 5.1 per cent increase in revenue to €11.59 million while profits grew by 7.6 per cent to €1.46 million.

Shareholders will also be very attentive to the interim dividend being declared.

During the past eight consecutive years, the company maintained a stable net interim dividend of €0.03 per share. MIA’s policy is of adjusting the final dividend once the annual financial statements are published in Q1 of the following year, with a corresponding movement in the final dividend based on the profitability for the year as well as capital expenditure plans and the outlook for the year, among other considerations.

In February 2016, MIA had announced that the final dividend in respect of the 2015 financial year that was being proposed for shareholder approval was being reduced by 12.5 per cent from €0.08 net per share to €0.07 per share. The final dividend paid in 2015 (for the 2014 financial year) had been somewhat of an outlier as it had surged by 77.8 per cent over the previous year’s net dividend. MIA’s share price has corrected by 10.7 per cent since the record intra-day high of €4.76, incidentally on the day of the publication of the 2015 annual financial statements on February 24, 2016.

Despite the record passenger movements in recent months, the decline in the share price is ample proof, once again, of the responsiveness in equity prices to dividend declarations. This is an important consideration for all companies on the Malta Stock Exchange as well as the potential new issuers contemplating an equity listing on the MSE. Edward Rizzo is a director at Rizzo, Farrugia & Co. (Stockbrokers) Ltd.

Rizzo, Farrugia & Co. (Stockbrokers) Ltd, (RFC), is a member of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This report has been prepared in accordance with legal requirements. It has not been disclosed to the company/s herein mentioned before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities to which this report relates (other than executing unsolicited client orders) until such time as the recipients of this report have had a reasonable opportunity to act thereon.

RFC, its directors, the author of this report, other employees or RFC on behalf of its clients, have holdings in the securities herein mentioned and may at any time make purchases and/or sales in them as principal or agent, and may also have other business relationships with the company/s. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Neither RFC, nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof and no representation or warranty is provided in respect of the reliability of the information contained in this report. © 2016 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved

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BUSINESS UPDATES

Nectar rebrands following 25 successful years On the occasion of its 25th birthday, import and distribution company Nectar has undergone a complete rebranding.

The new branding encapsulates the company’s development throughout the years and visually demonstrates its evolution. Its colour tones have been modified in order to mirror the company’s bright and vibrant attitude towards the creation of its produce.

The symbol which extends from the logo makes reference to Nectar’s global connections and nature’s infinite goodness which lie at its core. The icon resembles a honeycomb which represents the resilient structure

of the business, while inspiration was also derived from the worker bee; whose dedication and commitment is a reflection of the work ethic and collaborative perseverance that have come to define Nectar.

Tracing its steps back to 1991, Nectar has always worked towards one clear goal: excelling in the industry. The company aims to achieve this vision through a mission that promotes best practices, excellence, society and teamwork (BEST). Nectar prides itself in its work ethic and commitment to high standards – sentiments which are perfectly exemplified through its long-standing slogan, ‘Excellence in distribution’.

LOFT turns 4!

Furnishing boutique Loft celebrates its fourth birthday this week and is sharing the celebratory mood with new and existing clients. For this week only, one can enjoy a complimentary glass of Prosecco and benefit from a 10 per cent discount on all in-store items until Saturday.

Situated in Naxxar, Loft offers an alternative perspective on refined living through its extensive stylish collections of indoor and outdoor furniture and accessories.

Founded by creative director Josette Schembri-Vella, Loft quickly became a vehicle for her to be able to project her panache and inventiveness, while giving clients the opportunity to explore their own creativity.

Whether it’s designing and furnishing one’s dream home, to adding a touch of style or vintage elegance – Loft is the go-to place.

Loft also provides the option of full interior design services. More information can be found on the boutique’s website by clicking on the ‘services’ tab.

Some exciting updates will be revealed in due time. However, the company thought it best to leave its esteemed clients with a hint of suspense and anticipation.

e irsty Barber opens with a bang Malta’s first 1920s Prohibition-style bar opened its doors to the public on July 22 with a grand opening night.

The Thirsty Barber enjoyed a full house with hundreds of people filling the bar, enjoying live music and a swing DJ, as well as some of the finest cocktails on the island created by highly professional mixologists. A personalised Thirsty Barber cake was made by the fantastic Bernardetta M Rylko.

Another highly successful night followed, with another full house, displaying a more than promising future on the cards for the bar. The Thirsty Barber Facebook page has more than

5,000 likes already and is setting its own trending hashtags including #thethirstybarber, #canyoukeepasecret and #donttellthefeds.

The bar is also promoting its special offers such as the aptly-titled ‘Absinthe Minded Wednesdays’, offering discounted prices on all drinks during ‘Prohibition o’Clock’ (7–8pm).

The bar serves all sorts of drinks, from cocktails to spirits to beer. Doors are open to anyone over the age of 21, and while entry does not require booking, one can still book VIP tables to secure a great spot where you can sit back and enjoy an authentic 1920s atmosphere in true Prohibition style.

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BUSINESS UPDATES

Muscats Motors appointed importer for Jaguar brand Best transport solutions for all types of services With 40 years of service under the guidance of its founder Philip Attard, Attrans has established itself as the leading transport company on the island. Now, in its second generation and under the control of Philip Attard Jr, Attrans offers a wide range of services to its various clients, providing logistical solutions to and from any European and North African destination.

The company is spread over 25,000sqm in Żebbuġ, Malta, which house its offices, workshops, parking and warehousing facilities. In addition, subsidiaries Attrans Italia, located in Genoa, and Attrans BV and Attrans North Africa, located in Alblasserdam and Breda

(Netherlands) respectively, are all fully equipped with administration offices, workshops, parking and warehousing facilities.

Attrans Ltd’s fleet is currently made up of 45 tractor units and over 350 trailers. It comprises various types of vehicles for the different services Attrans offers and is currently increasing by around 30 units per year. Attrans believes that continuous investment in its fleet has placed the company one step ahead of its competitors, providing it with the best possible transport solutions which unfailingly meet clients’ requirements and serve customers efficiently and effectively seven days a week, 365 days a year.

Muscats Motors Ltd is once again taking over the role of importing and distributing the prestigious car brand Jaguar, in addition to Land Rover, the other Jaguar Land Rover (JLR) brand. Muscats Motors has been the sole importer and distributor of Land Rover in Malta since the 1950s.

JLR is the UK’s largest automotive manufacturing business, built around two iconic British car brands: Land Rover, the leading manufacturer of premium all-terrain vehicles, and Jaguar, one of the world’s premier luxury sports saloon and sports car marques.

“Jaguar was part of the British Leyland Group which was represented by Muscats Motors in Malta until 1995, when the importing licence of Jaguar was transferred to Gasan after the Ford acquisition of Jaguar,” says Kenneth Mizzi, managing director of Muscats Motors.

“Recently, Jaguar Land Rover decided to designate only one representative for both brands in Malta, and Muscats Motors was appointed.”

Mr Mizzi added: “We are very proud to represent such a prestigious brand and since Muscats Motors is the leading importer and distributor of premium cars in Malta, Jaguar fits perfectly within our portfolio.”

Muscats Motors is found in Rue d’Argens, Gżira; tel. 2326 4584/5; e-mail: info@mml.mizzi. com.mt; website: www.muscatsmotors. com.mt.