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THE COMMERCE ISSUE Issue 16 December/January 2013

â‚Ź5 WHERE SOLD

Dr Jason Azzopardi and Dr Chris Cardona on business Commerce in the Mediterranean

Finding financial backing

Retail and the euro crisis


Contents 7 Positive indicators

Maltese SMEs were the least negatively affected by the financial crisis. Minister for Fair Competition and Consumers Jason Azzopardi explains why.

13 SMEs: the big picture

96 per cent of Malta’s businesses are micro-enterprises and Malta’s business environment relies heavily on their success. Yet high utility bills, service charges and rent policies are bogging businesses down. Labour spokesperson for business Dr Chris Cardona talks solutions with Veronica Stivala.

17 The Art of War?

Amit Raab takes us on a lighthearted tour of the different traits needed to build a strong business concept and finance it by examining the traits and techniques of successful War General Sun Tzu.

21 Commerce in the Mediterranean

The future of commerce in the Euromed region depends on better education, healthcare and consumer protection, says Reuben Buttigieg.

23 Added value

Prizes, competitions, support and a great aftersales service – Nick Camilleri, Managing Director of Avantech Group, explains how they support their customers.

27 No man is an island

A debt crisis at the heart of the world’s largest export market risks grinding global economic growth to a halt says Patrick Debattista.

31 I’m (future) shocked Is work moving faster than you can? Are you starting to get the

10

of quality publications

YEARS

4 - Money / Issue 16

Welcome

impression that the future is already here, and that’s it’s awful? According to Sean Patrick Sullivan, you’re experiencing future shock.

December and January are the best shop window for commerce. We buy and sell things, exchange our hardearned cash for services, and go on the hunt for the perfect bargain. This is the essence of commerce.

35 A question of leverage

Despite the crisis, have local companies positioned themselves for growth, ask Chris Grech and Calvin Bartolo.

38 Lean processes, fat sales

David Galea explains how you can leverage better returns from your sales function.

42 Having a ball

Rio de Janeiro will soon be in the spotlight, hosting 2014 World Cup games and the 2016 Olympics. Money dribbles around the city.

45 A window into the city’s shopping soul

Let’s involve the creatives in Valletta’s shop windows design, says Violet Kulewska.

46 Making a splash

Photographer Kris Micallef experiments with underwater photography in his latest black and white series.

In this issue of Money, we interview Minister for Fair Competition and Consumers Dr Jason Azzopardi, who explains why Maltese SMEs were the least negatively affected by the financial crisis. The Minister also tackles the tricky utility bills issue – for him, the solution is not to reduce the tariffs but to reduce consumption and invest in renewable energy sources. For Dr Chris Cardona, the Labour Party spokesperson for business, things are not so rosy. In an in-depth interview, he discusses how issues such as high utility bills, service charges and rent policies are bogging businesses down. He proposes some solutions. In this issue of Money, David Galea explores the concept of using leverage to improve sales and Amit Raab takes inspiration from The Art of War to outline the basic concepts in building a strong business concept and finding financial backing for it. Patrick Debattista focuses on some of the effects of the euro crisis on internal and external commerce involving the world’s largest economy – the European Union. We also travel to Rio de Janeiro, interview photographer Kris Micallef and lay out a spread of gifts that you just can’t refuse. Read on and enjoy.

54 New year, new you

End the old year and start the new one in style with Money’s luxury wish list.

56 Season’s feastings

Mona Farrugia hosts the great and the good over champagne and pate at Angelica in Valletta. You can do the same at home.

58 The Bluesman’s blog A presidential election and Hurricane Sandy – it’s been a busy month for The Bluesman.

Distribution Mailbox Direct Marketing Group

Hand delivered to businesses in Malta, all 5 Star Hotels including their business centres, executive lounges and rooms (where allowed), Maltese Embassies abroad (UK, Rome, Brussels, Moscow and Libya), some Government institutions and all ministries.

Cover Credit Photography: Kris Micallef, Stylist: Luke Engerer Hair: Joshua Camilleri Model: Dyan at So Management

For information regarding promotion and advertising call Tel: 00 356 2134 2155, 2131 4719 Email: hello@moneymag.me

Editor Anthony P. Bernard Email: anthony@moneymag.me Consulting Editor Stanley Borg Email: stanley@moneymag.me Design Porridge Email: hello@weareporridge.com Printing Progress Press

Money is published by BE Communications Ltd, 37, Amery Street, Sliema, SLM 1702 All rights reserved. Reproduction in whole or in part is strictly prohibited without written permission. Opinions expressed in Money are not necessarily those of the editor or publisher. All reasonable care is taken to ensure truth and accuracy, but the editor and publishers cannot be held responsible for errors or omissions in articles, advertising, photographs or illustrations. Unsolicited manuscripts are welcome but cannot be returned without a stamped, self-addressed envelope. The editor is not responsible for material submitted for consideration.


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Interview

Positive indicators Maltese SMEs were the least negatively affected by the financial crisis. Minister for Fair Competition and Consumers Dr Jason Azzopardi explains why. Photos by Marc Casolani.

J

 son Azzopardi may be a minister, a but he is also a politician so you have to make allowances for the fact that he tries to sneak a little campaigning into a review of how SMEs have fared in recent years.

“I spent a lot of time in Marsa and they firmly believe there that you do not change a winning jockey,” he says. However, there is a difference between propaganda and pride, and there are certain facts that are beyond dispute. The most important one is that Maltese SMEs really did fare far better through the crisis than their counterparts in Europe. Yes, in an ideal world we would have avoided any recessionary pressure, but in an interconnected world, he says, we should not take our performance over the past few years for granted. ”What made major economies and banks collapse simply did not occur here. Why? Was it because we were lucky or because the government worked hard to provide the right solutions, policies and incentives to help SMEs weather the storm?” he asked. “In theory, they should have been swept away by the unprecedented crisis, operating as they were in a country with no natural resources and with such an open economy. And they did not only survive but they thrived.”

The European Commission reported recently that Maltese SMEs were the least negatively affected by the financial crisis – something Dr Azzopardi described as “a feather in our collective cap”. “SMEs in Malta, Germany and Austria are the only ones that have gone back to pre-2008 levels of employment. They have grown, created jobs and found access to finance, aided by government schemes like the Microinvest Tax Credit Scheme, which until last month had put €12 million into the pockets of 1,600 micro-sized enterprises. When taken with their own investment, this adds up to €28 million. The European Investment Bank said this was by far the highest take-up in Europe of similar schemes,” he says. Another financial solution for SMEs is the JEREMIE package, offered through Bank of Valletta, which offers reduced interest rates and less onerous collateral requirements. So far, after 18 months, the Bank has already approved 400 projects involving loans of €34 million, representing a total investment of nearly €60 million. He says that BOV was already preparing for JEREMIE II once all the funds under the original project are used up, and the government is already in talks with the EIF. Through Microinvest, around 600 new jobs were created, he says. It may

not sound like much, when you consider that one manufacturing giant of the past employed more than that. But while SMEs only create a handful of jobs each, they add up. And they are also more resilient, he says. The government has helped in other ways. For example, it will pay for a substantial part of the expense incurred by a company in training its employees, and it will pay half the salary for the first year for a new employee. Another important milestone was the opening last January of Business First, based in the former St Luke’s Hospital, which has brought under one roof 50 services previously provided by government agencies and departments. It is also planning to open an internationalisation desk soon to help companies export (Malta recently registered more exports than imports – an important milestone). Business First has already had 1,500 contacts but Dr Azzopardi laments that there are thousands of SMEs which have not yet used its services, vowing to raise the profile of Business First as this Malta Enterprise initiative saves hundreds of hours of “running around”. There is another very positive indicator in the SME sector and that is the growing amount of foreign

Money / Issue 16 - 7


Interview

I know that there are people who have been going through challenging times, but there are enough positive stories to reassure us. “One school came up with the idea of a DVD about the heritage of Birkirkara. I attended the launch and was most impressed by the work that had gone into it,” he says. Young Enterprise is also giving presentations to primary schoolchildren, which have been very well received.

direct investment. The latest is British multinational Costa Coffee which has opened an outlet in the airport and plans another eight to 10 outlets, each of which will employ around 25 people. There are also numerous IT companies, a sprouting aviation industry and the mushrooming digital gaming high value-added sector, which is employing hundreds of people and paying well. “We are the envy of many countries. I don’t want to sound euphoric or detached. I know that there are people who have been going through challenging times, but there are enough positive stories to reassure us.” He admits that utility bills are an issue for SMEs but is adamant that the solution is not to reduce the tariffs but rather to encourage companies to reduce their consumption through investment in energy-saving equipment and renewable energy sources.

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“I was recently speaking to one shop owner who reduced his annual electricity cost by 40 per cent,” he says. There is another aspect that Dr Azzopardi would like to tackle: the culture of entrepreneurship. This involves two things: the courage to start up a company and the ability to accept failure. The first is being boosted at various levels. The popular Young Enterprise competition, which has motivated hundreds of post-secondary students, has been given a new lease of life thanks to new state-of-the-art premises at The Point given to the organisation by the government. There are also entrepreneurship courses being offered to secondary school children and, recently, a competition for schoolchildren, which had to come up with a product for which they had to prepare a feasibility study, business plan and marketing plan. This latest initiative was given a budget of €200,000 by the government.

When it comes to failure, Dr Azzopardi would like to see Malta move towards the American mentality – “if someone goes bankrupt, they put it on their CV!” – to the European one which frowns upon failure. “Churchill said that success is going from failure to failure without losing enthusiasm. At the Council of Ministers, an American entrepreneur told us the story of soft drink company Seven-Up and pointed out that the name was coined because its owner had already tried and failed six times before. He was given one last chance and got it right.” It is not just the SME sector which is showing encouraging signs. In the past few years, the number of new trading licences has increased year on year. There are 2,200 more shops than there were in 2008, in spite of cutthroat competition. Bank deposits were up by €300 million between 2010 and 2011, and a further €77 million in the first six months of this year. “The Maltese are travelling more, spending more, saving more,” he said. We have a good story to tell.”


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Interview

SMEs: the big picture 96 per cent of Malta’s businesses are micro-enterprises and Malta’s business environment relies heavily on their success. Yet issues such as high utility bills, service charges and rent policies are bogging businesses down. Labour spokesperson for business Dr Chris Cardona talks solutions with Veronica Stivala.

“Money doesn’t talk,”

sang that great wordsmith Bob Dylan, “it swears obscenity”. By that he meant that money makes things happen faster. But perhaps he should also be singing about the swearing contradictions. I’m talking about the recent paradoxical reports about the state of Malta’s business environment which is booming or failing depending on who you listen to. Although I’m not too sure why Dylan would be singing about Malta’s economic situation in the first place. According to a European Commission report, Malta’s SMEs are doing so well they are setting standards. It said: “Malta leads the EU average in terms of the value added created by SMEs in the services industries. So far, Malta’s SME sector has been much less affected by the crisis engulfing the Eurozone.” The report goes further and “places the performance of Malta’s SMEs at par with those of Austria and Germany”. But that’s not what the World Bank thinks. It believes the truth is the complete opposite, saying Malta is the most difficult place to do business in the whole of Europe mainly because of battles for construction permits, the red tape involved in starting businesses and receiving electricity and enforcing contracts. So what’s the reality? According to Labour spokesperson for business Dr Chris Cardona, there’s truth in both. “We cannot take the reports separately,” he explains. “They complement each other. We all know the economy is not booming. It’s having some problems as most of the world is. So, rather than basing our policies strictly on statistics, we have to grasp the realities of what is happening.”

Money / Issue 16 - 13


Interview

He gives an example by citing Malta’s unemployment rate of 6.5 per cent. To merely quote that percentage and stop there would be very superficial, he says. We have to look closer and see what our labour market is, how many women are participating and what the conditions are.

Malta to Germany, he notes how applying for a permit in Germany takes only four bureaucratic steps and not longer than two weeks for it to be issued. On the other hand, in Malta it takes you 40 bureaucratic steps and at least four months to get a permit.

According to Dr Cardona, the main issue SMEs complain about is that the government is hindering their competitive edge. The natural solution, he notes, is to help this sector achieve more with less burdens. And this is the Labour Party’s flagship – “we will let you work”. By this, Labour obviously does not mean letting businesses do what they want but that the government will not burden the sector further with unnecessary evils.

Dr Cardona says that ensuring people are given an answer within specific deadlines would speed things up considerably. This is just one example of solutions Labour will be unveiling in the coming weeks.

These unnecessary evils are primarily bureaucracy issues. Dr Cardona disagrees with Government’s creation of a one stop shop represented by four government entities. “You don’t cut on bureaucracy by putting all the bureaucratic departments in one basket. You stop bureaucracy by making sure that if you are applying for a permit you don’t need to spend more than what is necessary to have a permit issued or refused. If you are going to apply for utilities you don’t need to wait months to know whether your utilities are going to be delivered or not. You have to be efficient.” Easier said than done, surely. Dr Cardona says Labour’s solution to this is to introduce deadlines. Comparing

Another problem, he notes, is that in the last few years a considerable amount of traders have been imprisoned for infringement of VAT laws. This, he underlines, does not make sense: most of these are bankrupt. “Are you solving problems of bankruptcy and insolvency by sending people to prison?” he asks.

He also laments the state of uncertainty in which the Government has left the industrial, manufacturing and the high value added industry. Introducing higher government induced costs, higher rent charges, proposing a service charge (which existed but previously wasn’t imposed) cannot help the market and the Government could ease on this. Another key solution to bettering the SME industry is to provide an educational link between secondary education and industry. Although there

are institutes such as MCAST which help students make the leap from school to work, there are a number of people who are falling through the loop as it were. These are those who do not have enough qualifications to get into MCAST and end up leaving secondary school and entering industry without any skills. The solution, says Dr Cardona is, “to create something similar to trade schools which will lead people who will never end up in MCAST because they lack the educational requirements to be given the skills they need to enter the lower levels of the industrial sector.” Another solution to making SMEs more competitive is to create clusters. This means that related sectors are held together by the government to form a group and through this be helped with big

issues such as taxes and audits. Dr Cardona’s ideas are plentiful and he also lists the imperative need to attract more highly valued manufacturing in the IT and aviation industry, for example. He also stresses the importance of shifting research and development to be done in-house. Right now a lot or R&D is being done outside Malta, wasting the skills of many highly qualified local graduates. One hopes all this talk about money will be more than just, well, talk.

More protection Customers taking out a new HSBC Malta Life Policy before December 1, 2012 may benefit from a refund equivalent to three months of their policy premium. The offer also applies to policyholders who increase the premium on existing HSBC protection plans before this date. The following HSBC Life products are included under this special offer: Personal Protector Plan, Corporate Protector Plan, Keyman Protector Plan, Shareholder Protector Plan, Loan Protector Plan, Term Rider on Savings and Children’s Plans, and Private Retirement Plans. “This special offer of three months free premium may be put to great use by customers also seeking to benefit from HSBC’s special offer rate of 2.75 per cent on Classic Home Loans,” said HSBC’s Paul Steel, Head of Retail Banking and Wealth Management. For more information visit www.hsbc.com.mt, call on HSBC’s Customer Service on 2380 2380 or visit any of HSBC’s branches in Malta and Gozo.

14 - Money / Issue 16


Valletta | Sliema | claSSicjewellerS.com.mt | 2203 5105


Amit Raab is co-founder of creative studio Moln Industries www.molnindustries.com. He also works as a producer at an ad agency in Stockholm, Sweden.

Business

The Art of War? Amit Raab takes us on a light-hearted tour of the different traits needed to build a strong business concept and finance it by examining the traits and techniques of successful War General Sun Tzu.

Just like anything worthwhile, building a good concept for investors and selling it through is a lengthy process – it requires patience but most of all, it requires motivation and push. The greatest opponent to a new commercial concept is apathy and laziness.

S

un Tzu’s The Art of War is a popular and very old book about the traits and tactics of a good war commander. Very old, like, way before Rihanna released her first album. So I decided to take this ancient wisdom and put it to good use in today’s entrepreneurial market. To achieve this I have taken the five hardest hitting chapters of Sun Tzu’s scripture and recycled them to show five traits and tactics for building up your business concept and finding funding. Here are the five chapters, in no particular order, along with my loose and sometimes far-fetched interpretation and derivation of them, for the sake of good commerce. Sun Tzu, forgive me and thank you.

Chapter 5 Energy In this chapter Sun Tzu explains the use of creativity and timing in building an army’s momentum. But for the sake of this argument, I am going to call this chapter Persistence.

My favourite story of persistence in the business world is the journey of Yngve Bergqvist from coal miner to founder and partner of the Ice Hotel and Absolut Ice Bars. Ygnes started to stray from his day job as a miner and head groups of tourists on kayak tours down the Tourne River in the North of Sweden, first on weekends and finally as a full time vocation. He loved what he did and he did it well. However he had nothing to do in winter and he needed to keep working if he was to sustain a constant and sustainable salary. So Yngve got creative. He developed an ice-sculpting workshop on the river in the winter and enjoyed quite a bit of publicity right from the get-go. The workshop was going well and in full swing by the first night as participants headed back to their hotels. However a few hours into the night it started to rain and a freak weather hike (to 7 degrees) meant the sculptures started to melt. Instead of being down in the dumps about the liquidated art, the participants started to build igloos the next day, a much more weather resistant structure. The journalists and participants stayed in the igloos overnight instead of going back to their hotels and enjoyed an incredible experience. Yngve was struck by the interest and enthusiasm for the concept of sleeping under ice, and from this experience he developed the first ice hotel, built

entirely from ice from the Tourne River. The hotel added even more publicity to this ex-coal miner’s venture and soon tourists from all over the world were arriving in this small icy town to enjoy the magic. At this stage, Yngve wanted to partner with Absolut vodka, as both products are Swedish born and are better served cold. Absolut first rejected the idea, but Yngve didn’t give up and built a huge sculpture of a Vodka bottle in the hotel to represent his idea. Once the global vodka distributor saw this, they were convinced. There are now multiple Ice Bars in every corner of the world. Even when options seemed bleak or when he didn’t seem to have a logical next step, it was persistence within his available resources that got Yngve to his current lucrative and flourished position.

Chapter 12 Intelligence and Espionage

In this chapter Sun Tzu explains the importance of information before going into battle. For the frame of this argument, I call it Get Advice, Get Critique. Do you feel embarrassed to share your ideas before they’re fully developed? Scared someone will laugh at your idea for chocolate flavoured pasta or banana peeling gloves? Don’t be, because the more feedback you get, the more insight you’ll have on the different ways to develop your business model and product. Get input from as many people as you can and try to get as many industry-relevant critics in the mix as possible. This means mentors, potential investors, industry experts, future consumers, your mum, your dad, your cat...

Money / Issue 16 - 17


Business

With so many reviews you’ll have plenty of insight. What you need now is a good filter – take into careful consideration who gave you the advice and where their expertise lies.

Chapter 7 Engaging the Force

to invest in your business, since they probably see a fair share more ‘brilliant’ ideas than the average Joe. Your pitch needs to be clean, hard-hitting and come with a trail of depth into the market and your future business model.

your favour. This doesn’t necessarily mean whoring yourself out to any investor and any opportunity – it means building a longer list of funders that are all viable and interesting for your business.

Chapter 8 Variations and Adaptability

The odds game is a simple concept. If there is one thing we learn from Shake Shack, it’s that there are an endless amount of methods to garner recognition for your product, explore as many of them as possible and be creative.

Sun Tzu delves into the complexities of your engagement with the enemy. However in this case, there is no enemy and you are pitching to investors, so I’ve named it Engaging your Funders.

Here Sun Tzu explains how to respond to changing and unknown circumstances with a successful outcome. I call this chapter Luck and Odds.

First things first, Info@email.com addresses are not real people. If you’re pitching an idea to a company or an investment group, find someone on the inside with a real name and a real job description and make sure they’re the right person to contact.

For every successfully funded story there are countless failures. Studies show successful business owners have a history of failed businesses before they arrive at their final answer, and sometimes new businesses arise from opportunities we hadn’t even foreseen.

Assume the person you send your pitch to has received four similar pitches in the same day before yours hits their inbox, voicemail or doorstep. They are busy human beings, but they are still human beings, with interests, passions and goals, use that to your advantage by engaging them first before sending over your pitch and making sure your pitch is riveting, mind blowing, tantalizing, breath taking... you get the picture.

The highly popular New York burger chain Shake Shack is such a business. A new art exhibition was being set up at Madison Square Park in New York city and the exhibit needed a kiosk as part of its art piece. The city commission thought it would be a good idea to have this kiosk serve real food and started selling basic burgers and hot dogs. They were so good that soon people were lining up for the dogs and not for the art. Now Shake Shack has 16 locations situated in New York as well as other states and even a stand in Dubai.

‘The New York Syndrome’ is what we like to call the symptom of our society today where due to our travelling and internet-connected nature, we have pretty much seen it all. It is harder and harder to surprise the crowd and especially to surprise anyone looking

Luck is too much of an unstable factor to rely on and there are ways to counter this devious element, as any betting man would know, by increasing the odds in

Chapter 1 Initial Estimations

In this chapter Sun Tzu runs through the calculations that can be made to forecast victory and the dangers of straying from them. I have derived it into a tip I call Realistic Estimates. An important factor to take into account before pitching your business to funders is the viability of your estimates. The amount of money you ask for needs to be justified, well thought out and correct. The equivalent of a bad estimate would be a 15-year-old kid coming up to his parents and asking for €3 to buy a school textbook they know costs €40 – either the kid has a loose screw, in which case maybe he should purchase the audio book instead, or the kid is telling fibs and using the money to buy something else. The same goes for investment, if you present a business budget that doesn’t fit your needs, to the investor this seems like either you are lying about your plans and your spending, or you are incompetent.

All set for attack With the new A-Class, Mercedes-Benz is opening up a whole new chapter in the compact segment: markedly emotive in design, with powerful engines ranging from 80 kW (109 hp) to 155 kW (211 hp), and extremely efficient, with emissions from just 99 g/CO2/km. The new model also underlines that for Mercedes-Benz safety is not a question of price – the standard specification includes, amongst other things, the radar-based Collision Prevention Assist system. “A is for Attack: the A-Class is a clear statement of the new dynamism of the Mercedes-Benz brand,” said Ms Bernadette Bonnici Kind, Director at Auto Sales Ltd distributor of Mercedes-Benz in Malta, during the launch of the all-new model.

18 - Money / Issue 16


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Reuben Buttigieg is Managing Director of Erremme Business Advisors and President of the Malta Institute of Management.

Commerce

Commerce in the Mediterranean The future of commerce in the Euromed region depends on better education, healthcare and consumer protection, says Reuben Buttigieg.

L

ast November, the Malta Institute of Management organised the Mediterranean Economic Forum. Attached to it were the Mediterranean Excellence Awards being held under the Distinguished Patronage of HE Dr George Abela, President of Malta.

The issue has never been high on the EU agenda and few actions were taken by southern Europeans to push it up on the agenda of the European Union. This in spite of the economic interest that the EU is always perceived to have in the region.

The Forum saw representations from various countries including Italy, Libya, Tunisia, Egypt, Portugal, Spain, Turkey as well as countries of interest to the Mediterranean or the MENA region. Various sectors and matters were discussed during the forum including the measures the Mediterranean should be taken particularly when it comes to cooperation of Mediterranean countries in stimulating intra-Med commerce. Various concerns and challenges were raised.

Many people were shocked to hear former President of the European Commission and Italian Prime Minister Romano Prodi admitting, after the end of his EU leadership term, that the Mediterranean is not high on the EU agenda.

One of the main issues in the Mediterranean concerns education. There are more than half a billion people in the region being educated by different educational systems and with different educational resources. Today, both developed and developing countries are still not fully addressing the educational requirements. Generally speaking, it seems there is more focus on investment in terms of structure than in accessibility and quality of education. If the Mediterranean is to consolidate its historic importance in trade and commerce, Governments have the duty to address the issues that exist in the field of education.

The situation unfortunately remains more or less the same because there does not seem to have been real progress under the current President José Manuel Barroso. Considering, the various changes that have been taking place in the North African region, all stand to gain with the economic development of the same region. A lot needs to be done. One can mention, for instance, the protection of genuine businesses and consumers alike, particularly less educated or knowledgeable consumers. The North African region must not become the dumping place for big businesses’ products which are no longer popular or wanted in other regions, like the EU. This is a big challenge, especially taking into consideration the current economic situation, which led a number of individual

governments in the EU to take various austerity measures. These actions may in fact be hindering business growth not only in the EU, but also elsewhere. For instance, it appears to be holding back businesses from taking new initiatives in other regions such as North Africa. The EU seems to have lost focus on growth. Certain measures that have been taken may be leading businesses to focus on tax mitigation rather than business growth. The active movement of funds away from the EU seems to be an increasing reality. Is this what Europe really needs and wants? The Euromed region has the potential of turning itself into the largest economic block in the world. The Mediterranean has always been the centre of the world for commerce and trade. The largest shipping activity in fact is in the Mediterranean, through Greece, Malta and Cyprus. Moreover, the very rich history and culture of the Mediterranean make it a distinctive touristic attraction. The region also has the necessary human resources to ensure maintaining its tradition in high quality manufacturing. The region’s health sector has its own special background too. Certain countries can speak of hundreds of years of experience. A case in point is Malta and the health services initiated in our country at the time of the Knights of St John. Such setting, together with present-day knowledge, should not only continue to inspire our drive towards top-quality health care for our people, but also encourage us to help achieve, by word and deed, better healthcare services in those countries of the Mediterranean where standards in this area need to be upgraded. To improve the economic situation in the Mediterranean it appears imperative to look also into the general social issues that are still of major concern. One such matter is the issue of irregular immigrants. Our country has a history of emigration – this helps us understand better the condition and various needs of people seeking international protection or a better life. The human rights and humanitarian needs of such persons have to be protected and provided for. At the same time, solutions need to be found in a framework that also ensures the better living of the Mediterranean population. The challenge is far from easy. Building a healthier economic general situation in the Mediterranean, for instance, may well have the positive effect of less movement of people in the region in search of work or a better life elsewhere. However, on the other hand, it could also mean attracting more people from underdeveloped countries in other regions seeking a better life. There are also, of course, other sectors and issues that need to be considered in the evaluation of the way ahead towards steady development and economic growth in the Mediterranean region.

Money / Issue 16 - 21


Retail

Added value

Prizes, competitions, support and a great aftersales service – Nick Camilleri, Managing Director of Avantech Group, explains how they support their customers.

MONEY How has the Canon brand developed in the past years? NICK CAMILLERI For over 70 years, Canon has pioneered leading edge imaging technologies, from image capture, manipulation and management to image printing, transmission and sharing. Canon is one of only a few brands to succeed as a leading player in both the business and consumer markets, serving individuals, home offices, small and medium enterprises, large corporations and governments with a vast portfolio of print and document solutions. For the past 41 years, Avantech has been Canon’s distributor for their products, adding photo and video products to the portfolio in 2010.

How has Avantech adapted to the latest developments in photo and video? NC The camera area of business is a very exciting and fluid area to deal with. Photography has a huge following in Malta and the local talent is unbelievable, with extremely skilled photographers in many different fields.

Our primary aim was to get closer to people and offer them a forum for photography-related discussions as well as a means to channel any hardware related queries they might have. To this end we launched our blog, canonmalta. blogspot.com and our Facebook page CanonMalta.com, which currently has over 7,300 likes. We have always been careful not to alienate users of other brands, who are more than welcome on CanonMalta.com.

In fact photography competitions that we regularly run from our Facebook page are open to all, irrespective of camera brand. Technology and gadgets are widely available online – why would a customer prefer to buy equipment from a physical shop? NC The only realistic way of competing with the internet is to be as competitive with prices as we possibly can – most of the time we are able to match online pricing and offer extra value to the Maltese customer. What our customers

can expect when they come to us is the best prices we can offer coupled with a first-rate aftersales service – something that we strive to maintain and improve constantly. We recently introduced a Lens Rental Service, which is proving to be very popular. In this way we are accommodating photographers who may only need a particular lens for a few days for a particular shoot or who wish to try a lens before buying. We are working to expand our selection of lenses and camera bodies for rental.

Money / Issue 16 - 23


Retail

Photo by Simon Attard.

current new technology being unveiled at the time. Our latest launch of new Canon technology was held last June when we launched the Canon Cinema EOS system with the EOS C300. This has recently been adopted by the BBC, which is using it for its range of high-definition channels. An annual event we started is a photography competition to mark World Photography Day in August, during which we award substantial prizes to the winners of the respective categories. Through our Facebook page both amateurs and professionals are able to submit their photographs and on it we regularly run competitions with prizes of cameras and gift vouchers up for grabs.

You have recently introduced the Canon Professional Service (CPS) Network in Malta – what benefits does this give to your customers? NC This was a really exciting development for us and something that we started working towards as soon as we assumed responsibility for photo and video equipment distribution. Feedback for this scheme has been very positive.

The Canon Professional Services is a free European programme that offers Canon photo and video users exclusive access to a range of benefits. These include access to CPS technical support at major events, a priority repair service and local CPS support in selected European countries. Free back-up equipment loans during repair periods are also available, subject to certain terms and conditions. Besides the European benefits, locally we offer additional benefits to CPS cardholders, like 24 - Money / Issue 16

Five per cent discount on rental of camera lenses, free “check and clean” on registered equipment during warranty period, priority service with a guaranteed 48hr report response time on registered equipment, and savings on other hardware and consumable products purchased from Avantech. You also organise events during which photographers and other clients can be exposed to, and use, high-end equipment – what has been customers’ reaction to this? NC During the past two and a half years

we have been busy organising events to present our products, engage with photographers – both existing and potential clients – and users of other brands of cameras. In 2010 we kicked off with a Canon We Speak Image event during which we relaunched Canon to the photography community and presented some of the

Something we are really proud of is our stand at this year’s Malta International Air Show. We had a wide range of professional camera bodies and telephoto lenses, of the type used by photographers in major international events such as the Olympics and the World Cup. We wanted to give amateur and professional photographers a chance to use these high performance lenses and the Malta International Air Show was the perfect venue for such an event. A recent event that was well received with photographers was the seminar organised recently on the best use of Digital Photo Professional software, supplied with all Canon EOS cameras free of charge. The seminar was given by Domenic Aquilina, our local Canon Ambassador and was fully booked within days of it being announced. We will be holding more of these in future. The response from the local photography community as well as videographers to our seminars, competitions and special events is fantastic and encourages us to keep on with these initiatives. The support and feedback we get from the Malta Photographic Society and the Malta Institute of Professional Photographers is greatly appreciated and it goes a long way to help us gauge what it is that photographers want and how best to support them.


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Patrick Debattista is reading for an Executive MA in Financial Analysis.

Euro

No man is an island

A debt crisis at the heart of the world’s largest export market risks grinding global economic growth to a halt. The Eurozone crisis has dragged on for over two years, with various countries falling into a downward spiral of negative growth, rising unemployment and unsustainable debt levels. Patrick Debattista focuses on some of the effects of the crisis on internal and external commerce involving the world’s largest economy – the European Union.

A

ccording to Eurostat, Europe’s main statistical arm, exports from the EU to the rest of the world increased by 13.2% year-on-year in August 2012, while imports rose by 4.6%. On the face of it, this seems to be a sign that the European economy is coming back to life after a period blighted by recession and spiralling debt costs. However, if one takes a closer look at the facts behind the figures, an altogether different picture will arise. The year-on-year growth rate for the euro area as at June 2012 stood at a negative 0.5%. This weakness in

activity is partly due to a substantial and pervasive drop in domestic demand, whose contribution to GDP growth has been negative for the past four quarters, that is, 2% annualised (European Central Bank, 2012). In addition, although imports have been increasing of late, thus implying growing external demand, the rise has been at a decreasing rate. One of the few bright spots in the debt crisis has been the impressive performance posted by Germany, whose export-driven economy (it is the world’s third-largest exporter) seems to be holding the whole continent’s head

above the water. Thanks to its conservative economic policy and dogged emphasis on budgetary restraint, Germany has managed to navigate through the crisis with positive growth and a trade surplus of €16.3 billion as of July. Moreover, Germany could well register the world’s largest trade surplus by fiscal year 2012, according to the Organisation for Economic Co-operation and Development (OECD), a Paris-based think tank. However, even Germany’s star seems to be waning of late. The country’s Purchasing

Manager’s Index (PMI), which is an important indicator of business sentiment among the manufacturing industry, has contracted for the eighth consecutive month, from 47.4 down to 46.0 in October. This is well below the 50-point mark that divides future growth in the sector from contraction. Elsewhere, the Spanish index shrank for the 18th month running, while Italy’s PMI completes the gloomy picture with a 15th consecutive monthly drop. These statistics reveal a continuing deterioration in business conditions and are often taken by business managers as a sign of things to come.

Money / Issue 16 - 27


Euro

So what consequences could all this negative news have on the rest of the world? Quite significant ones, analysts reckon. The International Monetary Fund has recently stated that the prolonged Eurozone crisis is weighing heavily on the global economic recovery. In its Economic Health Check, the IMF wrote that the Eurozone is experiencing “a breakdown in the monetary transmission mechanism”, which means that the common monetary policy is not functioning in the way it was originally intended to. This often has the unwelcome consequences of a general loss in confidence by investors in the European market, further hampering trade prospects. In addition, recent data released by China Customs Statistics states that total exports by China increased

by 7.8% from January to July, while Chinese exports to the EU fell by 3.6%. This is a worrying sign for China since the EU is its largest trading partner, export market, and source of technology transfer (International Business Times, 2012). In fact, the National Bureau of Statistics reported a slowdown in economic growth to 7.4% in the third quarter, which is uncharacteristically low for a country now accustomed to enjoying growth rates of 10% and over. Meanwhile, The Guardian reports that the Eurozone crisis could cost the world’s poorest countries as much as €186bn. This includes the knock-on effects from weak growth and austerity in the Eurozone affecting trade, aid, investment and remittances. Furthermore, a 1% drop in global export demand could

“The Eurozone crisis could cost the world’s poorest countries as much as €186bn.”

hit growth in poorer countries by up to 0.5% (Overseas Development Institute, 2012). Being the largest export market for countries in the developing world, the future of much of the rest of the world seems to rest squarely in the Eurozone’s hands. As history has taught us time and time again, no nation in this world is able to live in isolation. As recently as 2007, a seemingly harmless crisis in one remote corner of the American real estate industry – the sub-prime mortgage sector – somehow managed to spread throughout the country like wildfire, eventually stalling global economic growth and plunging the whole world into recession. Fast forward to 2012 and an altogether similar picture arises, this time much closer to home.

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28 - Money / Issue 16


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Business

Sean Patrick Sullivan is a copy writer, content producer, and creative director based in North America. He counts Alvin Toffler, a self-made labourer turned journalist turned futurist, as one of his favourite writers and most significant influences.

I’m (future) shocked

Is work moving faster than you can? Do you feel disoriented and overwhelmed by the waves of information washing over you all day (and night) long? Are you starting to get the impression that the future is already here, and that’s it’s awful? According to Sean Patrick Sullivan, you’re experiencing future shock. Fortunately, there’s something you can do about it.

D

uring high school, much like freaks and geeks all over the world, I was transfixed upon the future. Although I would have denied it at the time, it was a form of escape, away from the unacceptable conditions and circumstances all around me (I was a bit of a snob), toward a shinier, happier 21st century, by which I was convinced everything would look, feel, and work so much better.

Toronto. Everything (and everyone) seemed so slow, harmless, agreeable. Far away from the high-voltage world I had known, I embraced peace and quiet, perfect for throwing myself into magazine writing, and then later, consulting with local small businesses. My thought: Why not take everything I’ve learned at all of these big agencies and share it with the local businesspeople all around me? It was very charitable – and very presumptuous – of me. And that’s where the real trouble began.

By the time I was in my mid-20s, I had effectively elbowed my way into the future. Or so it seemed, given the breakneck speed at which I was moving. I was working in New York City, as part of the fashion and entertainment industries – which, as you may already know, are habitually six to 18 months ahead of themselves, depending upon one’s task and role. Deepening my lust for what was new and what was next, I chose to specialise in the emerging practice of digital advertising. Because it was so new, we made things – no, everything – up as we went along. And, in both agency ateliers and client cubicles, we fought for our vision of the future, as though it already existed and everyone else was too old, too stupid, or too invested to notice. It was liberating and delusional. Exhilarating and exhausting. After a decade of this thrilling, seductive, altogether addictive churn – the endless traffic, the 18-hour days that were over before they began, the chats, texts, and e-mails that never stopped piling up, the mobile devices that seemed outmoded the moment they were unpacked and charged, the technologies connecting us to everyone in our past (even the ones we worked so damned hard to avoid and get away from), and for me, personally, a rapid-fire whirlwind of promotions and accelerations too intense to absorb, much less accept – I collapsed.

Actually, “collapsed” isn’t the right word. More like “imploded”. I simply stopped getting the joke, seeing the point, believing the hype. After a few years, I came to see that novelty was the greatest fetish of them all, quality a very distant second, with fads and trends bolted onto remarkably unremarkable garments, all to create illusion of progress, an amplification of desire, an insult to common sense and personal style, with a twisted new logic that ran something like this: Who cares if extra-wide corset belts flatter every woman’s figure? They’re so last season! Here: Try these ultra-skinny belts instead. They don’t look good on anyone – isn’t that democratic? And, if you don’t like them, that’s fine. In three months, they’ll fall apart and we’ll have something else for you anyway. Seeking comfort and stability – a more old-fashioned pace of life – I made a major move to a rural village outside

If you’ve read my previous column (Fight or Flight, issue 15), then you’ve already heard about my most important small-town client, a fitness-and-wellness centre with aspirations of going global. Looking back, I’m confident they contracted (then later hired) me not for my talent or passion but rather for what I represented to them: Velocity. Transformation. And, yes, the future. Unfortunately, they didn’t know (and I didn’t even think it was worth mentioning) that “going global” didn’t just mean getting bigger and richer. It meant adapting to the zippy pace, hypnotic rhythm, and unforgiving tempo of global markets. Our failure – to predict and shield ourselves from the impact of massive change made overnight – set the stage for a disaster of epic proportions, one that would eventually lead to my termination. Between being hired and fired, a period of approximately six months, our original vision was abandoned, replaced by concerns (all of which turned out to be equally justified and demoralising) that we were: moving too confidently and definitively for our sleepy-headed customers; alienating ourselves from other local business owners, who felt challenged and intimidated by our big-city-style aggressiveness; and failing to capitulate to the cliques and klatches that had incubated over the centre’s 25 years in business.

Money / Issue 16 - 31


Business

The more my ideas were rejected and my efforts ignored, the more confused I became. After all, wasn’t I just doing my job? Of course I was. But I was also doing something terrible, something that couldn’t be glossed over, something that the fashion industry and New York City itself had done to me years earlier. I was giving everyone around me future shock. In 1971, famed futurist Alvin Toffler’s densely, lusciously, persuasively argued book Future Shock defined its namesake syndrome as an unmistakable, overwhelming sense of agitation and hopelessness emerging from “too much change in too little time”. According to Toffler, a perfect storm of technological advances, ranging from agriculture and manufacturing to broadcasting and birth control, was causing culture itself to transform at an exponential rather than additive rate, too fast for the human organism to bear. Over 40 years later, Future Shock remains famous for many reasons. First, Toffler predicted a variety of cultural phenomena (and after-shocks) in an almost clairvoyant manner, including ad-hocracies (pliable, freelancer-driven organisations) and prosumers (consumers who contribute work previously performed by labourers, as when someone uses an automated banking machine).

Second, and more hilariously, he predicted other phenomena, such as disposable paper clothing, that never went far and now seem quaint in their obliviousness. Third, he coined a number of phrases – not just future shock but also mass customisation, paperless office, information overload, and superindustrialism – all of which are used in day-to-day chatter as though the concepts always existed. They didn’t – he imagined them. And by releasing them to the public in highly digestible form, one might say he actually caused or prompted them to come into being. But none of these facts or figures reveals the true genius of Future Shock . It’s important that we recognise it now, because it’s what gives us everything we need to cure future shock in our homes and offices, regardless of how many social, political, or technological changes come our way. The lasting contribution of Future Shock – the element that will be taught in university symposia a century from now – isn’t its look ahead but rather its look back; its sophisticated, mindbending, deeply anthropological analysis of time; how it has been perceived and experienced trans-culturally and trans-historically. And, yes, its intimate relationship with mortality.

When we understand basics like why time moves faster for the elderly than the young – there’s simply more living behind them than ahead of them, placing them closer to their inevitable end point, creating a sensation of accelerative thrust – we start to imagine new coping mechanisms, new cultural practices, new ways to transcend the everyday and connect with our most primal biological and spiritual rhythms. We understand future shock as the inevitable consequence of mistaking the games we’ve chosen to play, and the gadgets we’ve chosen to play them with, as anything other than what they are: games. Games that can be won, lost, played for fun, or walked away from for the sake of one’s own mental health. Do yourself a favour. Find yourself a copy of Future Shock – your choice of print or digital will say a lot about you – and read it from cover to cover. Four decades years later, it does the most magnificent job of illuminating the invisible, almost gravitational, impact of velocity and technology on your business. And, if you’re wondering about me: My client chose not to renew my contract for 2013. According to him, I was “too innovative” and “too intimidating” for anything other than “a big brand in a big city”. May I be candid? I’ve never been so shocked – or so permanently cured of future shock – in my entire life.

Taking the lead The strategic merger announced last August of the automotive and marine businesses of the Gasan Group and the Zammit Group was recently approved by the Office for Competition. The newly formed company GasanZammit Motors Limited formally commenced its operations on November 1, 2012. GasanZammit Motors Limited is operating from the Gasan Centre in Mriehel which now houses all of the automotive and marine brands – an authentic and effective single source offering customers the largest choice of brands and models in all segments under one roof. This merger between two legacy firms with a long history in the automotive business means that the newly formed company GasanZammit Motors Limited now offers the largest variety of car brands and surrounding automotive services from one central location. It also positions GasanZammit Motors Limited as a leader within marine and motorcycle areas, offering a wide choice of internationally renowned automotive and marine brands, namely Ford, Honda, Mazda, Chevrolet, Jaguar, Volvo, Isuzu, Yamaha and Capelli.

32 - Money / Issue 16


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Market Report

Chris Grech and Calvin Bartolo are co-founders of blackdigits.com.mt, a financial website which allows users to analyse the financial statements of local listed companies. Data is available for free. The aim of blackdigits.com.mt is to create a community-based website where users may share their views and knowledge on companies listed on the local market.

A question of leverage Despite the crisis, have local companies positioned themselves for growth, ask Chris Grech and Calvin Bartolo.

D

id the local listed market deleverage?

In an earlier market report we analysed the Malta Stock Exchange Index and concluded that its decline between 2006 and 2011 was mainly driven by lower profits. The credit crisis and a few one-off events such as the BOV Property Fund saga and GO’s acquisition of Forthnet were the primary causes of this decline.

worldwide now spend less and pay their debts instead. Companies are deleveraging their balance sheets and reportedly prefer to hoard cash rather than invest it. Locally, many like to believe that the Maltese economy weathered the storm better than most of our counterparts – this is why we want to analyse to what extent, if any, the non-financial companies listed on the MSE deleveraged

their leverage. Table 1 summarises the movement in the leverage ratio of such companies. Leverage was calculated by expressing total liabilities over equity – a leverage ratio of two means that the company’s liabilities are double its equity.

plc decreased its leverage while Crimsonwing plc was the most aggressive: its leverage increased from 0.3 to two, resulting from a lower capital base and the purchase of VDA Informatiebeheersing BV, a company based in The Netherlands.

GO plc and Grand Harbour Marina plc registered the largest increase in leverage as they invested heavily in Forthnet S.A. and Cesme

Only International Hotel Investments plc, Simonds Farsons Cisk plc and Midi plc reduced their leverage substantially – approximately

LEVERAGE: TOTAL DEBT/ EQUITY

Company

2006

2007

2008

2009

2010

2011

2012

Grand Harbour Marina plc

2.5

1.5

1.6

1.1

3.5

6.7

Island Hotels Group Holdings plc

2.6

2.7

2.8

MIDI plc

5.6

4.7

5.3

6.3

3.0

2.6

Loqus Holding plc

1.1

1.1

2.2

Crimsonwing plc

0.3

0.5

1.3

1.4

1.4

2.0

GO plc

0.3

0.4

0.6

0.7

0.9

1.6

Malta International Airport plc

1.3

1.3

1.3

1.4

1.4

1.5

MaltaPost plc

1.0

1.3

1.4

1.0

0.6

0.9

International Hotel Investments plc

1.4

0.7

0.6

0.7

0.7

0.8

Simonds Farsons Cisk plc

1.3

1.5

0.8

0.8

0.7

0.7

0.7

6pm Holdings plc

1.0

1.3

0.9

1.1

0.6

Medserv plc

0.5

0.7

1.0

0.8

0.7

0.5

RS2 Software Plc

0.3

0.5

0.5

0.4

0.5

Plaza Centres plc

0.3

0.3

0.3

0.3

0.4

0.4

Santumas Shareholdings plc

0.1

0.1

0.1

0.1

In this report we want to analyse another aspect of the financial crisis, which was largely driven by loose credit practices abroad and high leverage levels. After the excess comes the time to sober up – consumers

their balance sheets and if they indeed increased their cash positions. The first observation that struck us is that eight out of 15 companies with equity listed on the MSE increased

Marina (Turkey) respectively. Malta International Airport plc registered a marginal increase in its leverage, driven by the €17m development of Skyparks Business Centre. Within the IT sector, only 6pm Holdings

by 50 per cent each. The tourism and property industries were badly affected by the crisis and it does not come as a surprise to us that IHI and Midi plc are undergoing a deleveraging exercise.

Money / Issue 16 - 35


Market Report

LEVERAGE: TOTAL DEBT/ EQUITY

Company

2006

2007

2008

2009

2010

2011

Premier Capital plc

2.2

3.9

3.7

United Finance plc

3.7

3.6

3.5

3.5

Spinola Development Company Ltd

1.8

2.3

2.1

2.3

2.6

2.5

Mediterranean Investments Holding plc

0.0

0.4

1.2

1.3

1.7

1.8

Eden Leisure Group Ltd

3.1

3.0

1.8

1.8

1.9

1.8

Gasan Finance Company plc

1.7

1.6

1.5

AX Holdings Ltd

1.6

1.7

1.5

1.4

Mizzi Organisation

1.2

1.2

1.2

Corinthia Palace Hotel Company Ltd

1.3

1.0

0.9

0.9

0.9

1.0

Dolmen Properties plc

0.9

0.9

0.9

0.9

0.8

0.9

Table 2: Leverage of companies that listed only bonds on the MSE. Data calculated on the basis of annual figures. When the bonds are guaranteed by another company, the leverage of the guarantor is displayed.

Table 2 illustrates the leverage of companies that listed only bonds on the MSE. The most aggressive in terms of leverage was Premier Capital plc, probably driven by the acquisition of McDonald’s restaurants in Greece and the Baltic region. The increased leverage of Spinola Development Company Ltd is mainly driven from a buildup of inventory and receivables. We mentioned quite a few listed companies which expanded their business and in this light we wanted to analyse to what extent the Maltese listed companies preferred to invest rather than build up their cash levels on their balance sheet. For this purpose we expressed the cash and cash equivalents each company holds as a percentage of its total assets. This analysis is displayed in Table 3. From a population of 25 companies, only seven increased their cash positions. Santumas Shareholdings plc, a collective investment scheme mainly holding property and shares, holds the largest amount of cash as a proportion of its assets (and as seen in Table 1 is the least leveraged company listed on the MSE). From this analysis we draw one general conclusion on the Maltese listed market. Many listed companies over the last five years have positioned themselves to grow their business operations notwithstanding the difficult economic conditions. In principle, this is not an unwise move in the context of an economic environment that may offer bargain prices. In his wisdom, Warren Buffet notes that one ideally buys when others are cautious and is cautious when others are exuberant. We hope that the businesses operations acquired make good business sense.

36 - Money / Issue 16

CASH HOLDINGS AS A % OF TOTAL ASSETS Company 6pm Holdings plc Premier Capital Plc Malta International Airport plc Santumas Shareholdings plc Mizzi Organisation Island Hotels Group Holdings plc Dolmen Properties plc Corinthia Palace Hotel Company Ltd United Finance plc Eden Leisure Group Ltd Simonds Farsons Cisk plc Grand Harbour Marina plc AX Holdings Ltd RS2 Software Plc International Hotel Investments plc Spinola Development Company Ltd Medserv plc MaltaPost plc GO plc Loqus Holding plc Mediterranean Investments Holding plc MIDI plc Crimsonwing plc Plaza Centres plc Malita Investments plc Gasan Finance Company plc

2006

2007 1.2%

2008 1.3%

4.7%

7.9%

3.7%

6.0% 8.7% 11.0% 4.1% 15.4% 7.7% 4.9% 1.1% 1.7% 1.2% 0.6% 0.5% 0.5% 11.9% 36.3% 20.9% 1.5% 1.5% 9.8% 27.9% 5.0% 16.6% 6.8% 6.8% 5.2% 6.2% 5.2% 2.3% 3.0% 30.2% 38.9% 37.1% 14.3% 17.5% 2.7% 41.1% 25.3% 24.4% 8.0% 1.2% 0.3% 33.0% 16.6% 0.4% 4.1% 0.1%

2009 2010 2011 2012 0.9% 4.2% 8.5% 1.8% 8.9% 9.0% 1.9% 7.4% 13.1% 16.0% 17.8% 29.9% 28.6% 1.3% 1.7% 1.7% 0.5% 0.3% 0.7% 12.8% 4.3% 6.6% 4.5% 2.2% 3.9% 6.9% 2.1% 4.6% 0.9% 1.6% 1.0% 0.5% 0.5% 0.6% 0.4% 18.7% 49.7% 9.4% 1.3% 1.5% 1.2% 7.1% 8.3% 6.8% 4.9% 2.5% 2.6% 3.2% 5.7% 3.3% 6.3% 7.1% 2.5% 31.9% 20.5% 13.7% 2.9% 3.9% 4.3% 3.4% 3.7% 0.9% 5.3% 9.8% 10.1% 2.8% 3.2% 1.2% 3.4% 9.3% 7.8% 4.0% 0.1% 0.0% 0.0% 15.5% 0.0% 0.0% 0.0%

Table 3 : Cash and cash equivalents as a % of total assets Data calculated on the basis of annual figures When the bonds are guaranteed by another company, the cash holding (as a percentage of total assets) of the guarantor is displayed.

The views and opinions expressed in this article are solely of the authors and do not reflect the views of the users of the website, its affiliates or of any financial institution.


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Finance

Lean processes, fat sales David Galea explains how you can leverage better returns from your sales function.

I

t may sound obvious – fattening up your pockets requires going lean on your business processes. Unfortunately, as simple as it may sound, translating this simple concept into reality is a much more complex endeavour. In some cases, it’s like asking a chain smoker to quit smoking because it is bad for his health. For those who are adamant in resisting to go on a diet to shed off some layers of fat in their organisation, I would like to use another carrot that adds further motivation towards becoming lean and mean. How about starting from the very process that puts the food where your mouth is? This is the sales process.

Target the right prospects through the right structures The seeds of a healthy sales pipeline are frequently sown following the adoption of an effective targeting strategy. The art and science of segmentation and targeting is best reserved to marketing experts. However, from a process perspective, it’s imperative to have in place a simple and effective structure for collecting data and information to get to know your prospects better. This is largely dependent on the type of business you are operating. On a broad level, codifying your business development endeavours into explicit forms of knowledge may help you to fine-tune your targeting policy by focusing on those segments which, from past experience have proved to be more successful.

Monitor your prospect to sales conversion ratios A good indicator of probability of success is the prospect to sales conversion ratio. The higher the conversion rate, the more viable the segment is for the organisation. On the other hand, the organisation may question why conversion rates are low in certain market segments and may, through further analysis, make alterations to product and service offering in an effort to increase conversion rates. For this purpose, monitoring the performance of this ratio is considered to be of paramount importance. 38 - Money / Issue 16

Trimming down your sales process has a dual benefit. The most obvious benefit is that a leaner sales process reduces your selling costs with a positive impact on your profitability. However on a much larger scale, a more efficient sales process helps you become more effective in securing and concluding sales contracts that will drive up your sales figures. Moreover, higher sales will probably entail higher production volumes of your product or service, which in turn are likely to further increase your efficiency through economies of scale and learning curve effects. I shall highlight some best practices that you should observe in your sales process to make it more efficient and effective.

Specific data collection points will need to be determined across the sales process lifecyle to also monitor intermediate results. Intermediate points in the sales life cycle include preliminary enquiries, serious enquiries, contracts undernegotiation and firmed up contracts. The adoption of basic CRM systems may help organisations obtain such information with minimal administrative costs arising in the process.

Standardise your sales processes While you might be selling a highly diversified portfolio of products and services to your customers, from our experience your sales methods and procedures may be reduced to a limited number of manageable processes (depending upon the type of sales channels) that may be used in a number of circumstances. Standardising your sales processes has a number of benefits. In the first instance, standardisation not only ensures that your sales force is following a common protocol which is aligned to your corporate values, but it also enables fast throughput in the learning process by the sales force in order to be mobilised expediently in the market place. Secondly, standardising and documenting the sales process presents an organisation with an enviable opportunity to critically review sales methods being used and engage on continuous improvement efforts to enable appropriate fine-tuning.


David Galea is CEO of BEA Consulting, a nichebased consultancy focusing on assisting clients in trimming their costs, boosting their sales and formalising their stuctures.

Recruit the right sales force Your sales people are the ambassadors of your organisation. The way in which your sales people behave and act with customers will determine how the latter will view your brand, service and quality of products and services that you sell. For this reason, streamlining costs in your sales process does not mean going cheap on your sales force – it means making a wise investment in selecting the right people who are adequately qualified and have the right experience to represent your values and have a credible track record to sell your products and services. Recruiting cheap unqualified and inexperienced resources is synonomous to wasting precious capital resourees into buying a cheap defective machine which manufactures defective products. In today’s knowledge economy your people are not a cost but an asset to your company. This implicitly means that recruiting the best is not enough. Viable methods need to be devised to motivate and retain the best in the longer term. In this article I have brushed over a few tips which would hopefully make your sales processes leaner and more effective in bringing in some desired results. In so doing we have only touched the tip of the iceberg which does not make justice to a plethora of other equally viable alternatives that may be available for your organisation. Moreover, looking at the sales process to boost your sales adopts a myopic view and the wider marketing concepts should be considered. To borrow Peter Drucker’s words, “Marketing is about making selling superflous.” So in the first instance, you need to make sure that there is a need for the product and service that you are selling in the market place. Finally I would like to conclude with the usual caveat that each organisation has its unique challenges and characteristics and are best advised to seek professional help before restructuring their sales processes. It would be presumptious and indeed preposterous to offer a standardised receipe for success in boosting your sales.

The way in which your sales people behave and act with customers will determine how the latter will view your brand.

Student fare The Institute of Tourism Studies opened its doors to another restaurant, The Vaults in St George’s Bay, St Julian’s. The Vaults is located in the cellars of the Institute’s building and has an open kitchen concept offering a fusion of Mediterranean, Asian and Far Eastern cuisine. All dishes are served a la carte and meticulously prepared by advance level students assisted by lecturers Jesmond Atkins and James Attard. The service is provided by intermediate level students under the guidance of lecturer Claude Scicluna. Apart from the elaborate menu, some specialties are also occasionally served. The Vaults is open only for dinners on Thursdays and Fridays.

Money / Issue 16 - 39


Promo

Investing wisely Bank of Valletta Investment Centres nurture a long-term relationship based on supportiveness and mutual benefits. referred by around eight different branches each. Branches will still sell local equities and bonds, including government stock issues, b ­ ut once customers require an investment advisory service or are looking for more complex products, they will be referred to an Investment Centre, where fully trained and qualified Financial Advisors and a Portfolio Administrator will handle their request.

B

ank of Valletta is planning to open six investment centres, as part of a restructuring of the service it offers investment clients. The first Investment Centre was recently opened on the top floor of the Birkirkara branch and is being managed by Sandra Galea, who has over 15 years of experience with the Bank, and who is herself a qualified Financial Advisor. The intention is for these centres of excellence to look after the clients

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Once the client’s portfolio reaches a certain threshold, they will then move on to the Wealth Management Unit, offering a seamless flow as the client’s portfolio grows and matures. The opening of the BOV Investment Centres is part of a strategy which started with a recategorisation of the BOV Group’s investment products according to their risk and volatility. The concept is very much in line with the Bank’s brand promise, which is based on a long-term relationship based on supportiveness and mutual benefits.

The Investment Centres offer a much more suitable environment in which to discuss such important topics as clients’ complex investment requirements. The Birkirkara centre has a number of discreet meeting rooms which offer privacy, but the fact that it is distinct from the branch downstairs also means that the Financial Advisors are able to focus on their relationship clients without the distraction that is part and parcel of the busy branch atmosphere. The Bank is planning to open the next centres over the coming months.


Available from: Samsonite, Malta International Airport, Arrival /Departure Hall, Luqa | Tel: 2125 7268 Arkadia, Fortunato Mizzi Street, Victoria, Gozo | Tel: 2210 3309


Country Profile

Joseph Blatter, President of FIFA, announcing Brazil’s winning bid for the 2014 World Cup

Having a ball Rio de Janeiro will soon be in the spotlight, hosting 2014 World Cup games and the 2016 Olympics. Money dribbles around the city.

W

e all have a mental image of Rio de Janeiro. Sprawling under the unwavering gaze of the Cristo Redentor statue on top of the Corcovado mountain, Brazil’s second largest metropolitan area conjures up images of the naughtiest of carnivals, skimpy bikinis and young footballers performing gravity-defying tricks and dreaming of one day playing in the giant Maracanã stadium. And favelas high on crime and poverty. And yet, things are changing and Rio is looking better than ever before. The recent discovery of oil in offshore waters has boosted the city’s prospects. Now, giant corporations like Schlumberger, Halliburton and GE are flocking to Rio with huge investments. In fact, as one of the largest metropolitan areas in Brazil, Rio is now in a position to fuel the country’s economy. Together, the 13 metropolitan areas in Brazil house 33 per cent of

42 - Money / Issue 16

the population and account for 56 per cent of the national GDP. Moreover, metropolitan areas are responsible for one-third of Brazil’s exports. Rio’s fortunes have also been boosted by the fact that it will be hosting games from the next edition of the World Cup and the 2016 Olympics. Next year, seven matches in the football World Cup will be played at Rio’s rebuilt Maracanã stadium. The confirmation that Rio will be hosting the 2016 Olympics has generated a flurry of economic activity. The current budget for the Olympics stands at $14.4bn – it’s a massive opportunity for Rio to showcase its transformation and improve its image as a changing city. Brazil also wants to improve its medals tally and the Brazilian Olympic Committee plans to triple its investment in athletes to $175m a year, with the money coming from the lottery, private and government sources.

As part of its preparations, Rio is also committed to build bus rapid-transit links and a new metro line as well as improve the city’s airports and build 10,000 new hotel rooms. Rio is also investing in its longterm future. Firms drilling in the new oil fields must spend one per cent of grow revenues locally on research and development. There is also the recognition that ideas and intellectual property rights encourage innovation. And that’s significant, especially when considering that Brazil was a pioneer in protecting intellectual property. In fact, in 1809, the Portuguese crown had granted authors and inventors exclusive rights to their works in Brazil for 14 years – based on the English Statute of Monopolies, this was the fourth law in the world to protect intellectual property and was intended to develop the colony. However, by the mid-20th century, Brazil had started seeing intellectual property as a threat and had even banned most


RIO DE JANEIRO in numbers

425

635

The Rio carnival involves 425 samba bands performing over four weekends at 350 different sites.

The Cristo Redentor statue weighs 635 tonnes and is the largest Art Deco statue in the world.

The first concessions to develop huge offshore oil reserves will be auctioned in 2013.

There is also 01 the recognition that ideas and intellectual property rights encourage innovation.

Levels of violent crime in Rio de Janeiro state have fallen significantly. Statistics issued by the Instituto de Segurance Publica show that cases of lethal violence are down by 13.2 per cent while death in confrontation with police is down by 27.4 per cent.

13.2%

199k manufactured imports. Then in 1995, Brazil joined the World Trade Organisation and accepted international intellectual property rules. Today, Brazil’s laws on patents, trademarks and copyright are in line with other nations. Education is also high on Rio’s agenda. True, currently, the nation’s education doesn’t achieve great results and 15-year-old’s literacy, numeracy and scientific knowledge and skills are nothing to write home about. However, this year, Brazil’s lower House of Congress approved a National Education Plan which plans to up public education spending to 10 per cent of GDP by 2020. This compares very well with other forward-looking countries – Denmark for instance, currently spends 8.7 per cent of its GDP on education while other northern European countries spend more than seven per cent. Moreover, Brazil also has one of the world’s best systems for monitoring education results and that, together with an increasing awareness about the importance of education, promises good results.

In 1950, the Maracanã stadium hosted a record 199,854 spectators for the FIFA World Cup final. It has now been designed to seat 78,838 spectators.

4 Rio is currently the fourth richest city in Latin America and has the 30th largest metropolitan area GDP in the world, ahead of Rome, Beijing and Barcelona.

Money / Issue 16 - 43


Design

Violet Kulewska studied Interior Architectural Design at the Academy of Fine Arts in Wroclaw and London Metropolitan University. She collaborated with and worked for several design and architecture practices, both in London (Robin Monotti Architects) and Malta (Chris Briffa Architects and Forward-Architects). Now based in Malta, she designs under the name VK interiors & furniture. www.violetkulewska.com

A window into the city’s shopping soul Let’s involve the creatives in Valletta’s shop window design, says Violet Kulewska. Photos by Adrian Abela.

M

y morning walks around Valletta are like a ritual of discovery. The local shops hide many undiscovered fashion trends and a mixed – from stylish to bizzarre – selection of luggage, handbags, jewellery, footwear, eyewear, watches, souvenirs and gifts. But more than the wares, it’s the marketing tactics that catch my eye. Some of these tactics are strange experiments intended to attract the attention of potential customers. I make it a point to observe how the local shop items are displayed – hanging from gates and shutters, stuck to facades, or even dangling from street lamps. It’s probably an easy, fun and quirky way to display items in small shops or boutiques. The most popular tactic is to place the ‘Sale’ tags in the most inconvenient of places. I have often wondered how the owners of these stores manage to do this. It surely requires some kind of acrobatic skill – I imagine them trying hard at all costs, in the literal sense of the word, to attract the attention of the customer.

I have come across even better ways of display or marketing stunts. Some shop owners choose to display all their items outside, often far away from the shop itself. There’s often a large display of bags in one of the streets of Valletta – the bags certainly attract attention, especially if a potential customer stumbles on the rack. The bags presented on the display – poor and unworthy of its unconscious exposure – often do not pass the marketing exam. However, they do make me smile as I sit in the corner café. There are other things which can attract a customer’s attention. For instance window displays which present combinations of different materials and patterns, often unconsciously adapted to the pavement ornaments. You can find many kinds of animal skin patterns, many imitations of zebra, leopard and tiger prints, just next to flower patterns, plants, ‘sophisticated’ silver or gold materials. I even found beautifully composed matching colours dancing shoes: white was dancing with silver, gold with brown, and somewhere on the edge was black.

There is so much going on in Valletta when it comes to retail and visual merchandise. These stores do not comply with any rules. Nobody is asking anyone for any opinions. Skilled designers, architects and artists are not needed here. Each store has its own marketing tactics. But do not give up. There are still a few shops left in the city which for many years have kept their old historical retail image. If you walk along the capital’s streets you will come across a few old shops, which seems to be forgotten. However the shops are open for customers and you can still admire them from the inside and outside. These shops do not offer customers rich designs or complex window displays – however, they do give an authentic glimpse at the architecture and interiors of the past. Just imagine how beautiful the capital city would be if we can help to develop the idea of visual merchandise further. The visual display of goods became necessary to attract the general consumers. That was a long time ago when we involved well-known artists such as Salvador Dali and Andy Warhol to create window displays. Of course, we have our own creatives in Valletta who create surrealistic window displays. But then, everything in Valletta has its own charm, even these ‘surrealistic’ displays.

Money / Issue 16 - 45


Photography

Making a splash Photographer Kris Micallef experiments with underwater photography in his latest black and white series. Photo by Luke Engerer. MONEY Your UNDRWTR exhibition will soon show in Ukraine – but what happened to the vowels? KRIS MICALLEF Some of the vowels can’t swim and so they had to drop out. Joking apart, giving titles to my projects is probably my weakest point. I always take my time to come up with a good name. However, the disemvoweling is intended to make the title reflect the incompleteness of my Cyrus Kuros Star Team underwater photography journey. This project, being my first experiment with underwater photography, is more of an underwater study where I took some time to experiment. While I still haven’t mastered all the skills of underwater photography, the photos still give a pretty good idea of how I picture the underwater world – hence the incompleteness of the word.

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How do human movements change underwater? We’ve all more or less experienced the sensation of being underwater, at least for a couple of seconds. Everything is much slower and calmer underwater. The feeling of being weightless makes us move our body in a certain way – it’s something I find really relaxing. What did you want to capture with this series? I often have dreams about people living in an underwater world and I wanted to start capturing moments which are similar to what goes in my head. What effect does shooting in black and white have on underwater photos? I am a huge fan of black and white, hence my decision to shoot UNDRWTR in black and white. However, colours change drastically underwater and everything looks bluer as you go deeper. To reveal these colours, strobes and artificial lighting would be needed. On the other hand, I much prefer shooting in black and white as it brings out the contrasts, revealing certain details that would be more difficult to notice when shooting in colour, such as the way the light falls on the bodies. What technical difficulties did shooting underwater present? There are various challenges depending on the environment and conditions of the shoot. Shooting in the sea and in a pool provide completely different scenarios. Underwater photography in a pool is much easier as the visibility is better, there are no currents and it is within a controlled environment. Shooting in open waters provides other challenges – visibility is one of the most important considerations when choosing a location for underwater photography. Underwater currents make it difficult for the models to remain relaxed without having to struggle against the currents. Also, currents stir up particles from the seabed, making the visibility poor. The list goes on – but other than that, it’s pure fun and something I always look forward to.

How did UNDRWTR happen? Art curator Anton Miller has been following my work for the last couple of years and recently got in touch with me with a proposal to have my own exhibition in Kiev, Ukraine at Kvartira 57 Gallery. It is being launched on December 18 and will show until January 30. Kvartira 57 is an experimental art space located in Kiev. Promoting Ukrainian and international art, it provides a possibility for the implementation of independent curatorial projects. The space represents exhibition and educational programmes that expand current debates and ideas in contemporary art.

UNDRWTR is a limited edition series which is being exhibited at Kvartira 57, Kiev, Ukraine from December 18, 2012 till January 30, 2013. It is curated by Anton Miller. For more information visit www.krismicallef.com and www.kv57.org

Money / Issue 16 - 47


The Secret Agent Photography: Kris Micallef - www.krismicallef.com Stylist: Luke Engerer - www.lukeengerer.com Hair: Joshua Camilleri Model: Dyan at So Management

BHS coat, €125.00 Celio shirt, €32.99 Mexx jumper, €75.00


Mexx blazer, €159.00 Mexx trousers, €89.95 Mexx shirt, €55.00 BHS jumper, €50.00 Mexx shoes, €109.00


Celio coat, €149.90 Celio trousers, €39.95


Mexx blazer, €179.00 Mexx trousers, €89.95 French Connection shirt, €81.00 Mexx bow tie, €22.95 BHS cardigan, €21.50 Ecco shoes, €144.90


French Connection three-piece suit, €427.00 Tom Tailor shirt, €39.90 Carpisa briefcase, €79.90 Ecco shoes, €134.90


French Connection suit, €365.00 French Connection shirt, €61.00 Bhs v-neck, €22.00 Mexx shoes, €109.00


Gifts

New year, new you End the old year and start the new one in style with Money’s luxury wish list.

Colour it in The Hublot Big Bang Black Caviar is now available in a rainbow of colours, from midnight blue, violet and red to green and lemon yellow. Produced in black ceramic which is designed, cut, bevelled and polished, the bezel now shines with elegant colours, set with either blue sapphires, amethysts, red spinels, tsavorites or citrines which are married harmoniously with the tone-on-tone stitched alligator leather.

54 - Money / Issue 16

The golden liquid Located in Port Ellen on the isle of Islay, Scotland, the Port Ellen Distillery was built in the 1820s and closed in 1983, although it still supplies all Islay distilleries with malt. Due to the closing down of the distillery, Port Ellen whisky, like this 32-yearold, are extremely collectible.


Tie me up Essentially British, essentially elegant. This navy blue tie with white and light blue stripes by Hackett, London is handmade in Italy and is finished in superior thickness. Smart boy.

Walk this way Armando Cabral took the fashion world by storm with shoe collections that, while having a classic silhouette, are modern and contemporary in finish. Cabral’s chukka boots for this season are Italian made in deer leather and suede – luxurious and beautiful.

The upper hand Keep this hat on The fedora adds plenty of personality to your look – moreover, it keeps you shaded from the sun and sheltered from the rain. This rabbit felt fedora from the American institution Paul’s Hat Works is elegant and gives you an instant Mad Men makeover.

An intricately detailed and absolutely gorgeous deck of playing cards in limited edition by Monarch. The cards are soft to the touch and come in an elegant navy blue box with gold leaf embossing. You’re a winner.

Smart sir Founded in the 1930s, this firm is still family-owned and running its flagship store in Milan. Best known for its suits and sportcoats, Corneliani goes for a casual yet structured look – this brown blazer jacket is a perfect example.

Carry on The Bulgari flat messenger bag is practical and lightweight, ideal for carrying your essentials while dashing to a meeting. Crafted in canvas, the bag has a black calfskin trim which adds a touch of classic elegance and modernity.

Money / Issue 16 - 55


Food

Season’s feastings Mona Farrugia hosts the great and the good over champagne and paté at Angelica in Valletta. You can do the same at home. Photos by Brian Grech.

F

or a moment I thought of calling this ‘Let Me Entertain You’, complete with upper case and plenty of exclamation marks – but then I nursed second thoughts. The whole point of entertaining is that people do not feel like anything is being done ‘to’ them. So the ‘me’ does not come into it and this is all about your guests. The idea this festive season is to be a great host and guest.

Come bearing gifts Regardless of what your hosts say, it is plain rude to turn up without a gift. Rather like not leaving tips when you receive good service, turning up not bearing something lovely during the season of giving is something that you are only allowed until you graduate – then the excuses stop. A lovely bottle of wine is always welcome (I said ‘lovely’, not cheap and tacky but has a foreign name so it should be fine) but why not make it original? Last year at Angelica our bestsellers were the Xocolit Chocolate and Chocolate Chilli liqueurs, which sell at the same price as from Sicily. Throughout the year we had customers who still raved about their ‘wonderful present’. Chocolates, such as fine (but price-conscious) ones from the Turin-based Guido Gobino also make outstanding gifts, especially wrapped in their gorgeous gift bags. Never arrive with a cheap something and spend the night on expensive something. If your bottle of wine cost €3, then please refrain from attacking the champagne. Allergy attack There are two kinds of allergies. The first are real. The second are fake allergies which you are only suffering from because it’s fashionable to do so. Leave your fake allergies, sensitivities and complaints at home – you can always pick them up later. It is, again, insufferably rude to give your hosts a list of what you cannot eat, especially if this is a dinner party of, say, 10 guests. Also, don’t discuss your specific diet needs at the dinner table.

56 - Money / Issue 16

Everybody is so bored of this subject yet nobody will dare tell you.

themselves. Pour yourself a glass of champagne before they arrive and chill.

It’s not play time

Plan ahead

If you are invited with children, then ensure your little ones know how to behave, especially if your host does not have any. Jumping on the white sofa, screaming for attention, opening the cupboards for a good rummage and asking for special anything is not on and will ensure that next year you are off the guest list. This is not a playground – it is somebody else’s house.

Nobody has ever been known to refuse free champagne, so chill plenty of it. I’m also sharing some fabulous plan-ahead recipes so that you can relax and think of nothing but enjoying yourself while everybody helps themselves. Paté with toasts, fishcakes, cupcake stands, a nice selection of cheese and salumi, some good crackers: you can prepare or order everything in advance without having to do a thing while your guests are there.

Watch the time Never, ever, turn up exactly on time. You are, very probably, not Swiss, and your hosts will most probably still be having a last-minute panic shower. Having said that, half an hour late is good, but three hours late is very bad. Don’t be a Scrooge If you are doing the inviting, do not be stingy. People are expecting to eat and drink and a little organisation goes a long way. Nobody is expecting you to open the Chateau d’Yquem for the occasion, but a retail-level wine that costs less than €5 will definitely be recognised for what it is by one of your guests.

The washing up Book your housekeeper or cleaner to come in and clear up after the fun. Your guests may be asking you if you want them to wash the dishes but surely nobody, regardless of the amount of Gelish polish on their nails, seriously means this. Getting home safely Book taxis. If you plan to let your hair down, then you should not be behind the wheel. A good time means the whole package and getting home safely and waking up the next day.

Dress up

And finally…

Wear stylish but comfortable clothing. If you are popping in and out of the kitchen, handling pots and pans, being steamed by the oven and rummaging for cutlery, the last thing you want is for your six-inch Nicholas Kirkwood heels to snap and your dress or trousers to split. If you’re tense, your guests will feel it and nobody will relax and enjoy

If you were invited, always send a thank you text the next day. Even your best friends appreciate this. And in the spirit of the times, before you post pictures of the night on Facebook or Twitter, ask your guests if they are happy with this. Some may not be. And everybody deserves to have a great time, during and after the event.


A Christmas table How to make thin toasts In the spirit of keeping things simple, thin toasts are great scoops for paté, soft cheeses and dips. Buy some Maltese bread baguettes a couple of days before. Let them slightly dry out until the next day (the day before your party), then slice them thinly on the diagonal using a very sharp serrated knife, around 3 to 4mm. If you try to do this with fresh bread it will not work. Then, on an oven dish or tray, drizzle some olive oil and sprinkle with Himalaya pink salt and freshly ground pepper. Place the toasts on the tray and drizzle with olive oil, the same salt and pepper on top. Toast until golden. You can also add hard herbs such as rosemary to flavour the toasts. You can heat the toasts for a couple of minutes in a hot oven or simply serve at room temperature. When cut thinly, these toasts do not crumble so your guests’ clothes stay clean. Have something hot going Everybody loves mulled wine and there are hundreds of recipes for it, so I will not bore you. There are, on the other hand, some tricks which are good to know. First of all, use good quality wine. If you use a cheap red the tannins will strip your guests’ teeth of their enamel coating. A nice Chianti usually has a good balance (hint: if it comes in a wicker base, you cannot call it “a nice Chianti”). Then you can either spice as you like or cheat: I use Suki Spiced Citrus Pyramids, adding some fresh orange juice. An easy but scrumptious mushroom and rabbit liver paté Fry a few cloves of garlic in real, salty butter on low temperature. Crank up the heat, add a kilo of sliced mushrooms, fry those, then add some roughly chopped up rabbit livers. Cook until they have lost most of the pinkness. Whizz in a blender, adding double cream and more butter as you go along. Line a rectangular oven dish with cling film, pour the creamy mixture in it and chill. Serve on a long plate accompanying the toasts. Be Parisian If the French are proud to walk into a high-end deli and buy their dessert, you should be too. Panettone, heated and drizzled with chocolate liqueur, piles of nut-based little mouthfuls (we have pistachio, hazelnut and fig, fiocchi and real amaretti at Angelica) fashioned into pyramids, stacks of our chocolate and salted caramel tarts, cut in four with a hot knife to make the perfect mouthful, frozen berries and fruits of the forest drizzled with hot, melted white chocolate – all of these require minimum effort but provide maximum wow and deliciousness.

The chocolate capital Everyone told me that I would enjoy Turin – it’s a city dedicated to chocolate, cafés and heavenly gianduja. I would fall in love. Except that I didn’t. It took me a full two hours to shuttle from Malpensa to the outskirts of Turin (I refuse to travel with Mr Ryan) and by the time I rolled in, I had been up since 8am and it was half past midnight. To eat, I was sent to a horrid pub, which was the only place still open. The hotel, supposedly very high end, did not provide any food at all after 9.30pm, which I found shocking. There were no porters either, so you are basically shown how to get to your room and left to your devices. Thankfully it was very quiet and the bed, albeit small, was comfortable, and I slept very well, with the thought that next day I would make up for it. The following day, I was off to spend the day with Guido Gobino in his factory in Turin doing what 95 per cent of the population would love to be doing: tasting chocolate. A quick tour of the very high-tech factory area later and I found out why their gianduiotti are so luscious: Mr Gobino created and patented not just the flavour or texture of the amazing mix of 63 per cent cocoa chocolate and hazelnut cream but also its shape. It has no rough edges, so if you place it on your tongue and resist biting into it, it starts to melt sideways filling your mouth with joy. The tasting followed with tiny truffles dusted in gold and filled with Barolo, almond, rum and citrus creams. I pretended to take notes. I quickly learnt why their cremino al sale e olio d’oliva has won Chocolate of the Year 2013: it’s the chocolatier’s chocolate, divinely odd and so massively enjoyable. I convinced them to let me stock Guido Gobino’s chocolate at Angelica, no mean feat considering that Mr Gobino has his own boutiques in Italy and is loathe to trust anybody else to market his wonderful products abroad. But business deals over chocolate seem to work. Turin may not have been super exciting for me. Maybe because I am not a Juventus supporter (or truly, a supporter of any other football team) the city failed to ignite any passion in me. So I brought its best offer back to Malta: chocolate. Guido Gobino chocolates are for sale at Angelica, 134, Archbishop Street, Valletta. Tastings available in-café and staff will assemble personalised gift bags for you, starting from just €20. Angelica is hosting relaxed and lovely Christmas and New Year’s Eves parties. Book on info@angelicamalta.com, 7927 5727, 2122 2777. For more details visit www.angelicamalta.com/blog

Money / Issue 16 - 57


The Bluesman is a Maltese sound engineer working in New York.

The Bluesman’s blog A presidential election and Hurricane Sandy – it’s been a busy month for The Bluesman.

N

obody can say that the past few weeks haven’t been eventful. I was tempted to write this earlier and predict the outcome because I was confident that Obama would win but I didn’t want to jinx it. Most people were fixated on the polls but neglected to understand that the samples tested pretty much defined the answers. To twist a saying, “There’s lies, damned lies and polls.” Polls that call people on landlines for instance, would be totally skewed because in the main they only target older folk, rural areas and dare I say, the less tuned in to what may be going on in the bigger picture. Not too many from the demographic who elected the winner hang on to a landline any more. Ironically it took a 34-year-old mathematician, Nate Silver (http://fivethirtyeight. blogs.nytimes.com/), whose compiling of the odds consistently gave the win to Obama. Hmm, statistics? This was the second presidential election that he accurately predicted, much to Karl (spent $490 million of the Republicans’ money) Rove’s disgust and disbelief (made a bit of a fool of himself on Fox denying what every other station had now accepted) and left Romney standing on the dais looking like a groom stood up at the altar. Them good old boys in Texas have brought up the Secession issue again and are calling for Texas to leave the Union, a call now also echoed by the bright sparks in Florida. Without belabouring the fait accompli, the main reasons that the electorate turned away from the GOP can be summed up in a few words: turnout, female issues as propounded by the old and not so old grey faces on the Right, and Romney’s 47 per cent speech that was leaked out by a banquet server and his strategically placed camera. Prior to all this of course was the arrival of Sandy at the mouth of the Hudson. Not a totally unexpected event but one humdinger of an October surprise (what a last minute potential influence on the elections it called), this was a massive, growling 1,100 mile span with roaring wind at around 105mph. Its rating going to Category 2 weakened to Category 1 Hurricane status – by the time it got to us it was a post-tropical cyclone with hurricane-force winds. Instead of hitting the beaches down south it smashed into some of the densest population on the East Coast. A friend of mine who lives on Howard Beach, Long Island, three blocks from the ocean, told me that the water just gushed in from both sides of the street flooding his basement studio and filling the ground floor to a height of five feet. This pattern was repeated on Staten Island and New Jersey many times over. Tunnels, both subway and vehicular, started to get flooded and transformers blew out. One such explosion plunged Lower Manhattan into darkness. A community called Breezy Point

58 - Money / Issue 16

Getty images on the Rockaway Peninsula lost over 80 houses in a fire that started in one house and spread – fire-fighters looked on helplessly because they couldn’t approach through the flooding and almost all the trucks did not have the ability to pump from the water surrounding them. Cell phone service went out in a number of areas, adding noncommunication to the mix as people tried to get help or contact family.

warmed up and the slush melted on the following day. In the aftermath of all this – with a brief gas shortage, electric companies running out of poles and a massive rebuilding operation – the Prez breezed through a worthy re-election. Once again our affable cool dude of a president with charming but feisty Michelle and blossoming daughters by his side gave a victory speech,

“President Obama suspended his campaign and visited the stricken areas – a sharp contrast with Bush’s handling of Katrina.” The Federal Emergency Management Agency (the FEMA that Romney stated should be bid out to private enterprise) moved in quickly. President Obama suspended his campaign and visited the stricken areas – a sharp contrast with Bush’s handling of Katrina. A few days later a snowstorm moved in, adding to the misery of those left sheltering in tents or their powerless houses. Fortunately the weather

thanking his VP, Joe Biden, he smilingly called him the Happy Warrior for his affable but no nonsense grittiness, and all those helpers who went neighbourhood to neighbourhood, door to door in their efforts to turn out the voters. Sure in my industry we had nothing happening for two weeks but it did pick up and hopefully we’ll make up for lost time but losing a gig or two (and internet) as a result, I consider nothing compared to many others.


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teste  

teste de flash 2

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