Philip Toledo Ltd, one of Malta’s leading ICT companies, is the only Maltese firm to have opened an office in Dubai. Six months into its Middle East operations, CEO David Catania talks to Liz Ayling about the opportunities and challenges of going multinational.
David Catania was appointed chief executive of Philip Toledo in April last year, having worked with the company for nine years, and is the first non-family member in the role.
He now helms a vastly different company from the one he took over in the role just 12 months ago. Philip Toledo Ltd (PTL), in business since 1946 and viewed as a mainstay of the ICT industry in Malta, has shifted almost overnight from local firm to multinational. It now serves some 400 new clients in a vast geographic region spanning the UAE, Kuwait, Saudi Arabia, Jordon, Bahrain, Qatar, Oman and Egypt.
Philip Toledo seized an opportunity presented by one of its brand partners, Retail Pro International, to develop a market for its products in the Middle East. PTL didn’t take the decision lightly without evaluating the risks, but neither did it make the move in half measures; its offices are in Dubai Internet City alongside global brands like Cisco, IBM, HP and Oracle.
Mr Catania says that the choice of location was part of a clear strategy. It sent out strong signals that PTL was investing for the long term and had the resources to back up its claims. Trust is crucial to doing business in the region. “The world’s best are located in Dubai Internet City; we feel welcome there too,” he says. He credits the offices of the Maltese Consul in Dubai, Anthony Tabone, for their support and in paving the way for PTL to get off to the right start in the region.
Mr Catania is a seasoned executive with a background of 25 years in the local ICT industry. A Henley Management College MBA graduate, he has a strong track record of strategic leadership, making a significant contribution to PTL’s growth over recent years, particularly in the areas of vertical software solutions and consultancy.
PTL’s experience in Dubai Internet City is a case study of how Smart City Malta can work says Mr Catania. “We aren’t the Ciscos of this world, but we’re alongside them. It’s the mid-tier firms who are important in making these ICT enclaves work, not only the big names. Dubai is awash with large brands and small-scale developers from the Indian sub continent. Interestingly, the region is a relatively virgin market when it comes to mid-ranking brands like a Retail Pro,” he says. He is quietly confident that Philip Toledo Middle East is on course to turn a profit in its first year.
It is important to look at PTL’s local credentials to understand how the firm made this move to the Middle East with such surety. “Malta had a direct role to play in creating the climate for Philip Toledo’s Middle East expansion. Our move was fuelled by our commitment and investment in brand and customer relations in our home market. Whether we’re in the Middle East today or further afield in the future, our local clients remain of vital importance to us,” he explains.
“Our relationships in Malta are very much a two-way flow; we can put back into our Malta business the know-how we gain overseas.”
Philip Toledo has been adept at customising its various brands’ software to meet specific needs of local clients. This expertise has proved its edge. “Retail Pro International liked our Malta model; our ability to leverage our knowledge base to harness potential and grow their business. This is why they chose us to develop their new market. For Retail Pro, we weren’t a small company in a small country,” explains Mr Catania.
It is a model that he sees others in Malta replicating. “The country has talented ICT personnel and has proved an ideal test-bed for applications. By putting the two together, we’ve managed to add value to our international brand partners that is way beyond what is expected given our local market size.”
While it is common for Maltese firms to trade overseas, he says, few make a critical, strategic investment in a strong physical presence abroad. “The weakness of many local ICT firms’ overseas ventures has been highlighted in recent years with the credit crunch and recession. Several have had to retrench to Malta, which shows how important the local market is for us all.”
PTL has had project work abroad in the past, in the UK and North Africa for instance, which helped in its learning curve in the Middle East. With an investment in landmark offices in Dubai manned by staff representing five nationalities, PTL is in a whole new ball game. Despite its inherent strengths, starting operations in the Middle East was a massive undertaking for PTL. “We serve a vast market from Dubai with clients like the Al-Futtaim Group which has 600 outlets, not a chain of six as we might see in retail locally,” he says.
Philip Toledo has to flesh out the Retail Pro opportunity with solid results in a short time frame. Catania says that there was no honeymoon period. The firm had to perform from day one generating leads in a huge market where it was a largely unknown entity, and handling unprecedented volume sales. “PTL is now in the business of extended partner networks backed up by channel sales managers; roles and responsibilities it never needed to assign in the local market.”
The firm’s move to a multinational is having a ripple effect throughout its business. Other brands in PTL’s portfolio are recognising the firm has the capabilities to support them internationally. PTL has been approached to represent a key brand in the eastern Mediterranean and is extending its own products, such as its hotel and hospitality software, further overseas.
It is early days for Philip Toledo in the Middle East, and not without risk, but David Catania is confident that the move to a multinational is permanent. “The Middle East creates a way of doing business in the future,” he says, summing up the significance of the Dubai-based operations. “Our challenge was whether to remain as we are or do something radically different to take us forward. Remaining static is not an option these days.”