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Breaking into high value, low volume services

Robert Aquilina, CEO and Chairman of Salvo Grima Limited

The spectacular Maltese Grand Harbour, with its majestic vessels and towering fortifications provides a stunning backdrop to one of Malta’s most dynamic family-run firms, Salvo Grima Group. Now owned and managed by the fifth and sixth generations, Salvo Grima is a thriving group of companies always looking to expand and diversify. MaltaProfile talks to Robert Aquilina, CEO and Joseph Peregin, Senior Manager, Projects.

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Founded in 1860, when Salvatore Grima purchased a British ship chandlery business from his employer, McDowall & Co, Salvo Grima Group has moved from strength to strength, expanding from ship and yacht supplies to a comprehensive range of travel retail, logistics and distribution services both locally and overseas.

Could you give us an overview of the company, its background and key operations?

Salvo Grima dates back to 1860 and originally focused on supplying ships with foodstuff and other provisions. Building on its experience and success over the centuries, the company has been steadily expanding its operations into other related areas including freight holding, warehousing, duty-free shopping and distribution of excise goods. Apart from consolidating our Maltese operations, Salvo Grima is continuing to develop and expand ventures which are beyond our shores. Over the past few years, Salvo Grima has been providing travel retail, duty-free and luxury yacht supply services in Palma de Mallorca, Spain and is also involved in bulk provisioning in Holland. In addition, the company has been operating in Libya since 1983, and this was our first real diversification outside Malta for the export business. We still do business in Libya, even with all the challenges it presents.

Which sections of your business do you see as providing the greatest opportunities for growth?

As can be seen from our dynamic history, Salvo Grima is always open to new opportunities, whilst consolidating its core business. In terms of growth, the tobacco logistics business in which we recently gained a foothold definitely offers opportunities for us. We are also open to duty-free opportunities. We’ve had a presence at Malta International Airport since the new terminal was opened, so we would like to consolidate our position there. Since Malta joined the EU, the travel retail business has changed; in fact, there could be other opportunities outside the Schengen area. Although for many years we have been supplying ships that come to Malta, in both harbours and even as they pass by Malta, what we call off-harbour, we have expanded beyond this now. Our latest expansion has been in Holland, in an area very close to Rotterdam, where we have acquired a logistics operation which enables us to supply ship chandlers and wholesale food suppliers across a wide geographic area, sometimes even as far as the Falklands.

What is your investment strategy for the coming year?

In 2014 and 2015, Salvo Grima acquired new ventures and expanded its operations, so 2016 expected to involve the consolidation of our business and investment in our staff to prepare for further growth. We are especially keen to see an expansion in our range of clients by making the most of the logistical advantage of our new base in Holland, where we can supply very 

competitively by procuring products directly from a wide range of producers. Our forte is our knowledge of customer requirements, especially in the ship supply sector, and our ability to supply mixed container loads where necessary. We are also focusing on reaching the high standards and updating certification to supply caterers specialising in food for military camps and humanitarian efforts.

We are competitive in supplying clients with all the items they need, ranging from household goods and food to very specific technical equipment which we source from suppliers all over the world. Apart from large quantities, we are even able to supply small amounts of a large variety of different foods and technical equipment where necessary.

What major events or changes have influenced your sector the most?

Political unrest in North Africa has influenced many sectors in Europe, both positively and negatively.  Malta has seen a 27% increase in the number of cruise passengers visiting the island, for instance, which is a large boost for our travel retail sales as well as for tourism-related services in general. At the same time, the civil war in Libya has obviously changed the playing field there completely, and while we are still able to trade there, we are concurrently focusing more on European operations.

We need to look more at stability now rather than just opportunities. From the shipping point of view in Malta, the sector has definitely grown because of better infrastructure, which has given it a big boost. The amount of ships calling in or off Malta has increased. This has given us more opportunity to supply ships.

How do you view Malta as a good place to do business?

Malta is an excellent place to do business and is expected to register further economic growth over the next years, as confirmed by data issued recently by the European Commission. Last year, Malta’s economy grew by 6.3% which is a significant achievement in view of the current unstable financial climate in Europe. The Malta shipping sector is also strong: last year there was a record 14% increase in the number of ships registered in Malta for instance, and Valletta Cruise Port received a prestigious Best Mediterranean Cruise and Destination Award. Salvo Grima is doing well and taking opportunities, and we would fully recommend Malta as a place to do business.

What type of foreign direct investment would you like to see more of in Malta and why?

More FDI in the shipping sector will create opportunities for us. If the airport expands, and it seems that it will, there will be more opportunities for retail outlets there. There is talk of a second oil base, if this materialises, it will give us more opportunities in the shipping business also. We want to remain realistic, Malta is already quite densely populated, so any opportunities have to be on the level of high value, low volume services. Our infrastructure is good and high-end when it comes to ICT for example but at the same time other parts, like the road network, limit us. I think we can afford to be selective in the kind of FDI that we need. As long as it is in sync with the general plans of Malta, we at Salvo Grima, can benefit in some cases directly, and in some cases indirectly.

How do you assess the availability of a skilled workforce in Malta for your sector?

Malta has a large supply of multi-lingual, skilled workers – Salvo Grima is run by a team of specialised, high-end individuals. However, we sometimes find it challenging to find the right people to work for us. The shortage of workers is obviously the down side of the country’s success, and a result of our low unemployment levels. The majority of our employees are Maltese, although we have a few who are international. Obviously the fact that we are an EU country has helped Malta get a massive influx of EU nationals, and industries like gaming have grown steeply on this trend.

What are your expectations for Malta’s economy in the coming years?

I think financial services will definitely continue to grow. So there is some uncertainty. When it comes to manufacturing, I think as long as it remains high-tech, pharmaceuticals will have a future. The rest is volatile; the gaming industry is volatile. I think the most important factor for economic growth is stability. If the government manages to retain a sense of stability and avoid hiccups or dramatic changes in any policies, so that whoever comes here, gets what they are expecting and no surprises, then there is no reason to halt Malta’s economic development.

Robert C. Aquilina joined Salvo Grima in 1973, before being appointed a Director in 1974. This was followed by his appointment as Managing Director in 1998. Robert has been the Chairman and CEO since 2003. Robert has also been an Executive Director of: Unipol Holdings Ltd since 2000, Travel Shopping Ltd since 2002, Top Three International Ltd since 2007, Top Three Overseas Ltd since 2007, Travel Stores Ltd since 2008 and Nordic Offshore Services A/S Denmark (NOS) since 2009. Joseph Peregin joined the Logistics Department of Salvo Grima in 2004 after 15 years in the printing industry. He has since become part of the executive team where he is responsible for projects - determining valid proposals and facilitating new opportunities. He is also the point of contact for Salvo Grima’s Libya representation. 

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