Italian company Palumbo took over Malta Shipyards last year, and 17 months later managing director Antonio Palumbo tells Kurt Sansone that all he wants is respect for what has been achieved in such a short time.
Palumbo has been operating in Malta for 17 months. How has the experience been?
We were told that the superyacht facility was a centre of excellence but this was not the case and it’s left us disillusioned
It has been exciting and I am proud to have gone through this experience in Malta because it gave me a lot of satisfaction but also a little bit of bitterness...
Why the bitterness?
We did a lot in these few months. Despite having a long history and a good skill base the shipyard experienced losses. I will not judge the motives, but it certainly had a bad impact on the economy.
I am not the saviour of the country but I do expect some recognition for the work we undertook during these 17 months.
There have been some spurious attacks on our operations.
People, who in the past loved the shipyard and who believe they can do something positive for the shipyard today, engage in criticism, and this creates bitterness in an investor like me.
Are the shipyards still losing money?
I read that Malta Shipyards had accumulated millions in debt over the years. A year-and-a-half later this negative aspect has been turned into positive results.
Since I took over, 250 ships have visited the shipyard and this generated more wealth for the country.
Furthermore, taxpayers no longer provide money to sustain the shipyard and instead I have invested tens of millions of euros.
What financial results has Palumbo achieved in its first year of operations in Malta?
An era ended when we took over. My family and I are proud to be part of the shipyards’ history by taking it forward. In this difficult moment for the world economy we have obtained good results.
Some 250 ships have been here and we are turning a leaf on the negative picture that characterised the shipyard for 50 years.
Have the results lived up to your expectations?
I came here because of my passion for this job. I did not come here only as an investor. In my family’s DNA we have this passion for development in this sector. We love this job and we did not look at this development through the eyes of investors wanting to make a quick buck.
We invested to expand our business and create in the middle of the Mediterranean a great network that brings together Naples, Messina and Malta.
We wanted to develop our activities in a modern, harmonious and organised way. In the long-term we will definitely achieve the desired results.
But you do want to make money.
Money is important because it allows you to make important investments and expand the business. In this sense we want to make money but we are not here to make money without giving anything in return. We have invested money and will continue to do so to grow.
The Maltese docks are much bigger than those operated by Palumbo in Italy. When you took over, some doubted whether a small company like yours could manage a big operation like Malta Shipyards. How do you respond to this criticism 17 months later?
Facts refute the doubts raised. Nobody in the world under the current circumstances would have done what we did. Until now we have serviced 250 ships and this has created economic activity in Malta at such a difficult time.
But what type of work was done on the 250 ships?
They were not all important jobs. But it is a fact that 250 ships came to Malta and these generated a great deal of value-added for the economy. It is not just the Palumbo shipyard that benefitted but also other sectors such as shipping agencies, tug boats, hotels, restaurants taxis, airlines and ship chandlers.
If we weren’t in such a critical economic climate we would be in a much better position.
When you signed the contract to take over Malta Shipyards, the Finance Minister had said that Palumbo would employ some 100 people in its first year of operation. The former shipyard chairman Sammy Meilaq has said that today Palumbo only employs “a squad of 50 people”. What is the truth?
If I were Sammy Meilaq I would desist from saying inexact things. We have more than 100 Maltese workers and I do not know from where he got his figures from.
But I have read the comments on his statements and they speak for themselves. I will not enter into a controversy with him.
But are these 100 employees on short-term six month contracts or are they employed long-term?
They are on contracts. They are people who work and are doing well. They are people who respect the company and the Palumbo family and we respect all those Maltese who want to look ahead towards a better future for this shipyard.
Palumbo was contractually bound to invest around €5.5 million in the first year of operation that came to an end in June. Doubts have been raised as to whether the company has actually invested the money. Are these concerns justified?
People who used to work here for years and visited the shipyards saw with their own eyes the radical change we brought about. We are in line with our contractual obligations but there is strong evidence that is visible to anyone who visits this shipyard.
I don’t know who or how some things are said, and I don’t want to think there is bad faith.
The government has said it is still verifying the investment figures for the first year. Have you had meetings with Finance Ministry officials?
Yes, the ministry officials have visited us and they are verifying the facts. We have nothing to fear. Just as things were visible 17 months ago they are still visible today. It is not as if things can be hidden. We have an open door policy.
The company is also contractually bound to invest €23.5 million in five years. Are you in a position to honour this obligation?
Today, the company can already say that it invested these monies because what we paid to acquire the ship repair and the super yacht facilities is above that amount.
But the €23.5 million is investment, not money to buy the facilities. Will you honour the commitment?
Until now we have honoured all our obligations.
You have an open door policy but what is the relationship between Palumbo and the General Workers’ Union?
We do not have problems with anybody. We respect workers and it is workers who have to highlight any problems they experience. The shipyard is operating in a serene climate with no conflict. There is mutual respect.
We live in a democracy and this has a meaning in life. What we don’t understand is imposition because this is anti-democratic.
Was there any attempt at imposition?
No. I have not encountered it.
You can understand the long history the GWU has had at the shipyards.
History is nice because it instils emotions. But history is old: it is the past. Today we find ourselves on the edge of a new beginning in all senses. We have to compete in a market and act as a catalyst for economic growth.
The past has created problems and we cannot succumb to that. We have the right and obligation to move ahead and look to the future with maximum respect to the different roles people play.
You took over the super yacht facility eight months ago. How is it doing?
It is taking us several months to get the necessary permits for all the restructuring work
We found a very particular situation there. It came to us as a big negative surprise...
What surprise are you talking about?
We found a facility that was in the same condition as the shipyard. We were told that the super yacht facility was a centre of excellence but this was not the case and this left us disillusioned. After overcoming this initial negative experience we are now moving ahead.
But from all the components that made up Malta Shipyards the super yacht facility was the most lucrative.
It was a virtual image that was well drawn up.
This is surprising because the impression has always been that the superyacht facility played an important part.
It came as a surprise for me. Even I believed it was a centre of excellence but it is only now that it is turning into a centre of excellence with the investment we are making, the better organisation we have brought and more professionalism. But we found a very surprising situation there.
Do you have any regrets over investing in the superyacht facility?
No, because when taking a decision you must not go back on it. You have to look ahead and fight for your ideal. We have an advantage because we did not come here to make money. We do not need money but we have this passion for our job.
Unfortunately, my sons have also inherited this damn passion and now also my nephews and nieces who are still children are already speaking about ships and docks. It is in our DNA.
How important are the Malta facilities for the Palumbo family?
I do not see things from this perspective. I am an entrepreneur, not a politician. If our work has to be recognised, that recognition must come from somebody else. It is our right and obligation to do our job properly and any merits or negative outcomes must be borne by the company.
If there are negative aspects it is our obligation to take the decisions that enable the company to achieve progress.
Our advantage here is that we have managed to create synergy between the Anglo-Saxon model operated in Malta and the determination and passion of an Italian.
It can be, and has to be a winning combination that will take this shipyard back to the glory days of the past when it was teeming with work. In all this we want to rope in many Maltese people who want us to succeed, and not those who believe they have the shipyard at heart but who are only driven by envy bec-ause in the past they were not able to deliver what we have managed to deliver in 17 months.
How long will it take to see the shipyard running?
We are already running. Do you realise what we did here in just a year-and-a-half? I can recount many episodes to highlight the changes we have made but one that struck me was that each time it rained these docks were flooded.
I found drain pipes that were obstructed because they were never cleaned in 40 years. Even if it just rained for five minutes various parts of the dock would be full of water because the drainage system was blocked. This is a very small example.
I do not want to be known as the one who saved the shipyard but I do expect respect for the work we have managed to do in 17 months.
Does it frustrate you that people may say things which are untrue?
No, because if I don’t want to hear what bothers me then I should not be doing this job. I am an entrepreneur and I have never responded to attacks levelled against me. I do not want to enter into controversy with anyone. But you are asking me questions and I am obliged to give you answers.
Last week the chief executives of three top manufacturing companies complained about red tape and the high cost of energy that are hindering investment and commercial activity. What has your experience been?
There is a lot of diseconomy. We have paid some €2 million in electricity bills. It is impossible for a shipyard trying to compete in a globalised economy that is crumbling to have such a high energy cost.
This is a big handicap. But even in terms of bureaucracy, my business colleagues were right.
It is taking us months to get the necessary permits for restructuring work. The jobs are not out of this world and it would normally take us 30 days to get the necessary authorisation. But it has been months now since we paid our dues but we are still waiting. There is an aspect of bureaucracy that weighs down on business.
The world economy is in bad shape, the eurozone is struggling to find a solution to the debt crisis and Italy has a new government as a result of the situation. How is the ship repair sector faring in this economic climate?
Everybody believes we are on the edge of an economic chasm and yet in a year-and-a-half we managed to change things.
The change is visible because we cannot hide anything here. And I wonder how some people criticise us despite the changes we have made in a very unfavourable global economic climate. I advise these people to go to the optician and change their spectacles...
Who are these people?
I do not want to enter into controversies. I do not read the newspapers. I am answering your question.
I only want to create the right conditions for a tranquil environment. I understand that Malta is a friend and I am proud to be here.
I feel attached to this shipyard and in some way I have become Maltese. But we cannot go on reasoning things out in a political way; that discourse is gone.
How has the economic crisis affected ship repair companies?
What we can do to try and weather the storm is be competitive on the international market with advantageous prices. The crisis has affected everyone and those who have to spend money go for the best offer.
We have to be organised, flexible, respect delivery dates, be professional in our work and give clients that something more they will not find anywhere else.
Has the Libyan crisis affected the shipyard’s operations in Malta?
It is not just the Libyan crisis that has had an impact. It is the crisis in the whole of North Africa that has dragged on which created instability in the Mediterranean region.
Once stability returns it will help us overcome some of the economic problems.
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