Malta Is Upgrading, Expanding and Clustering Industry

As part of a diversification and ‘future-proofing’ strategy, Malta is doubling down on its position as a top strategic manufacturing and industrial hub in the Mediterranean.

With over 25 years of experience in property portfolio and capital expenditure management, Karl Azzopardi has been CEO of Malta Industrial Parks since 2016. Prior to joining MIP, he was head of operations and management at Valletta Cruise Port, which followed his tenure as Director of Malta’s new National Interactive Science Project. Azzopardi has worked for a number of private real estate firms, as well as on the Valletta Waterfront project. He is an MBA graduate, having specialised in Project Management and Business Administration

From crafts and toys to pharma and aviation, Malta’s sixteen industrial and business zones play host to quite the variety of tenants. While the island-nation may be known far and wide as a hotbed of financial services, iGaming and, most recently, blockchain technology – having even been bestowed the moniker “Blockchain Island” – Malta has also adeptly carved itself a niche within the advanced manufacturing space.

In fact, directly and indirectly, manufacturing contributes an estimated 25 per cent to the Maltese economy.

Albeit being the EU’s smallest Member State, for what it lacks in geographic size, Malta has benefited immensely from its location on the map – strategically positioned in the Mediterranean Sea –  at a crossroads between mainland Europe, North Africa and the Middle East.

However, with a total area amounting to a mere 316 square kilometres, space on the island-nation is, arguably, the country’s most sought-after asset, and its allotment resides at the core of Malta’s manufacturing strategy.

In charge of promoting the island-nation as the place to do business and selecting the best candidate companies, is Malta Enterprise. Allocating and developing industrial spaces, however, falls within the mandate of Malta Industrial Parks (MIP). Working in synergy, these Maltese organisations compete head-to-head with other leading European jurisdictions in attracting top-tier investments.

“Malta Industrial Parks is the proactive landlord that hosts eligible projects approved by Malta Enterprise,”explained Karl Azzopardi, CEO of MIP and former property portfolio and capital expenditure manager.

And yet, what does it take to earn a coveted place at Malta’s industrial table?

According to the CEO, the top factor taken into consideration is quality job creation. After that comes the value added to the local economy, especially in relation to export industries, followed by the right balance between foreign and local investments.

“If the project ticks those boxes, the likelihood is that it will be eligible for allocation of industrial space”, claimed Mr. Azzopardi.

Growing Upwards

“Creating the micro-economy. Creating the right ecosystem. The opportunity of collaboration. The right mixes.” Karl Azzopardi, CEO of Malta Industrial Parks

Developing industrial areas in a place as small as Malta, though, comes with a few challenges. With occupancy levels hovering around the 95 percent mark, MIP is taking a vertical approach and turning out a second advantage for tenants: clustering.

“We have to ensure that the specific site is optimised in a way to accommodate more than one or two or three operators, and that leads us to the clustering proposal that we are currently working on”, said Mr. Azzopardi.

“By creating the right clusters there can be efficiencies within the same industrial state of operators.”

On the other hand, the country’s size also works out to be a strong factor in favour of its industrial parks: all are geographically very close – mere minutes away –  from a seaport or an airport.

The estates managed by MIP around Malta and Gozo total some 4 million square metres, and are made up of not just industrial estates, but aviation parks and craft villages as well. In fact, one of the two craft villages is getting a facelift thanks to co-financing from the European Regional and Development Fund.

Galvanising Investments

“We’re promoting the ‘Made in Malta’ process through creative manufacturing, which is crafts.” Karl Azzopardi, CEO of Malta Industrial Parks

Ta’ Qali Crafts Village is home to a number of traditional Maltese artisans. The 13.3-million-euro project – due for completion in 2020 – is revitalising the area. The number of workshops will expand to 70, attracting ever more tourists and ensuring a long life for Maltese artisanship and the businesses themselves. What’s more, and to further reintegrate the importance of local craftsmanship into society, the Ministry of Education will make the Ta’ Qali Crafts Village a star destination for school fieldtrips.

It isn’t just crafts that are due for longevity; MIP is attempting to ‘future proof’ the economy in general by creating more office, business and manufacturing spaces for other targeted evolving industries, too.

The industrial estate at Xewkija, Gozo’s main industrial zone, is undergoing a two-pronged 12-million-euro development (also co-financed by the EU). Firstly, fifteen new business workshops are being built and developed for industrial activity. Secondly, a 4,000 square metre multipurpose facility is being prepared to serve as an innovation hub.

Meanwhile, the Ħal Far Industrial Estate on the main island is already a well-established base for toy manufacturer Playmobil, and several pharmaceutical companies. Now, thanks to legislation passed in February 2019 legalising medical cannabis production, several new companies are due to take up residence in a new medical marijuana production cluster at Ħal Far. Malta Enterprise has already approved over a dozen investment projects, and operation is expected to begin later this year.

The Safi Aviation Park is growing, too. British aircraft manufacturer Britten-Norman will soon be joining the 240,000 square metre aviation cluster, with a one-million-euro investment. Long-time residents include Medavia, Aeromaritime, Lufthansa Technik and SR Technics, who have contributed to Malta’s firm position in the maintenance, repair and overhaul (MRO) sector. In summer 2018, MIP and Malta Enterprise signed a contract with SR Technics to build a 30,000 square metre six-bay hangar, with a price tag of 35 million euros.

Adjacent to the aviation park, the Malta International Airport is also in line for some major investments. MIP is currently drawing up a new master plan for the airport, as well as for the surrounding clusters, to improve efficiency and infrastructure, including connectivity between the main cities, ports and harbours.

With over 3,400 manufacturing companies already established on the island, and having been chosen as the location of choice by leading high-end manufacturing players spanning from the USA and Europe, all the way across to Asia, what is evident is that Malta has succeeded where other small island-jurisdictions have failed.

Combining the strengths derived from its proximity to both European and African markets, with its innovative regulatory framework, cluster-based strategy, and highly skilled – yet comparatively low cost – human capital has enabled Malta to circumvent its small geographic size to become a niche production centre. And while space may be an asset in short supply, MIP is making sure that those manufacturers that are awarded a piece of Malta’s desired industrial area, not only reap the benefits of their investments, they also add value to the local economy.

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Editorial Staff

South EU Summit's editorial team is comprised of an international team of journalists and communication specialists with wide-ranging areas of expertise. We pride ourselves in developing firsthand content, and undertaking personal interviews with the most influential players in each market.

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