‘Businesses will need to prepare themselves to be able to deal with the changing landscape’

Norman Aquilina is the Group Chief Executive of Simonds Farsons Cisk plc, a position he has held since 2010. He Aquilina also forms part of the Council and Board of Management of The Malta Chamber of Commerce, Enterprise and Industry, and previously held the post of Senior Vice-President, apart from also being a former Chairman of the Chamber’s Manufacturers Economic Group.

“I expect 2023 to be a rollercoaster year,” Norman Aquilina affirms. “With a tall order of ongoing challenges, along with the anticipated turbulence, businesses will need to prepare themselves to be able to deal with the changing landscape. They will, more than ever before, need to plan and clearly position themselves to ensure they can resiliently navigate through the uncertainties.”

His comments were featured as part of Business Now Winter 2022/2023 edition’s cover story, which seeks to tackle the impossible: predicting what will happen in 2023.

Currently, the Maltese economy, and businesses on the island, “are still having to deal with some remaining post-pandemic economic spillover,” he says. In the case of Simonds Farsons Cisk plc, the most challenging and disruptive issues over the last few months of 2022 “have undoubtedly been inflation, uncertainty in terms of supply, along with consequential supply chain issues, and the consequences of a tight labour market.”

Moreover, there are other factors to consider, when attempting to formulate a business forecast for 2023: “the potential spread of geopolitical conflict, the outcome of the energy crisis, which is not likely to be sorted in the short term, the consequences on the elevated levels of public debt and its repercussions on the economy, the rising cost of finance, continued uncertainty in supplies, a tight labour market, and more.”

Indeed, “this does not augur too well for 2023,” he says, adding that there are also cost of living concerns, “which some may feel are being mitigated through the wage growth being experienced. However, when considering the inflationary pressures, we could very well end up in a wage and price spiral which will disrupt consumer demand along with many businesses.

This, together with the tight labour market, may result in companies being forced to take on higher payroll costs than they can realistically afford with all the consequences on their financial sustainability and, hence, future prospects.”

Despite these challenges, there will be opportunities for businesses on the island, he says, which Simonds Farsons Cisk Plc will attempt to fully exploit. “Once the dust settles – and, indeed, after any period of turmoil – comes opportunity, and we are well geared to pursue such opportunities even if we, simultaneously, need to deal with some remaining challenges which 2023 will certainly offer.”

The company will, in this regard, “be moving ahead with several investments both within the environmental field and others, as we have done over the years. Likewise, we will continue to invest in those areas which, we feel, will give us a stronger market reach and presence in places where we still see growth opportunities. All this, with the aim of rendering our group business model more robust and competitive along with being better structured to meet the challenges and opportunities of today, but more so of tomorrow,” he asserts.

Looking at the wider manufacturing industry, Mr Aquilina explains that issues persist – “the manufacturing sector has been going through challenging times over these years, and, in many instances, struggling to be able to compete within a liberalised and highly competitive international scenario.”

Yet, as a result, opportunities for growth may emerge, but this requires initiative on behalf of the parties involved: “Given the local absence of raw material, those manufacturers that remain dependent on the local market are likely to struggle to progress, hence the need to internationalise. This, however, requires ongoing investment to ensure a highly efficient operation. So basically, those manufacturers that opt to stay on the back seat will continue to struggle, whereas those manufacturers that are in the driving seat will have the opportunity to compete, innovate and ultimately progress going forward. It will not be an easy ride to succeed for manufacturers, but it is one that can be achieved, as long as the right strategy is firmly in place and related investments made,” he says.

Concluding, Mr Aquilina says that while 2023 may be a difficult year to predict – “given the extent of the moving parts” – a commitment to sustainability might help the Maltese economy weather the storm. “Over these years our economic gain has brought along a number of concerning social and environmental consequences. This has now brought into serious question our economic sustainability along with a growing debate on the need of a new economic model. It has become more and more evident that we need to move away from a construction-centric economic model. Achieving a sustainable and successful economic model needs to be built more on brains as opposed to cranes,” he says.

Thus, “starting from 2023, we need to embark on a determined drive in which our future economic prosperity, social well-being and environmental advancement are built on the investment in education and the further development of our skills and capabilities. This is the much-needed longer-term direction to take during 2023 and beyond, if we truly want to hold on to our competitive edge, along with a good quality of life.”

Click here to read Malta Marriott Hotel & Spa General Manager Alex Incorvaja’s outlook for 2023 as part of the same Business Now magazine cover story

This feature was first carried in the Business Now Winter 2022/2023 edition. Business Now magazine is the sister brand to BusinessNow.mt, both produced by Content House Group