‘Wage inflation is a major concern to exporting companies’ – Toly Group CFO Nick Xuereb

A lot has been said about Malta’s decision to cap energy prices this year. Despite the recent announcement made by Finance Minister Clyde Caruana, saying that Government will be investing e600 million to subsidise energy and staple food imports in 2023, the Government has stopped short of fully declaring there will definitely be no increases in electricity bills.

Nick Xuereb, Chief Financial Officer (CFO) at Toly Group, explained how his company is getting ready for 2023 in the light of this uncertainty, as companies across the board are looking for ways to soften yet another possible blow. 

Another area where many companies are seeing their cost of sales rising is through increasing wage bills thanks to widespread staff shortages. This issue is not alien to Toly Group either. In relation to this, Mr Xuereb comments on how “wage inflation has become a concern to most Maltese companies,” and it is a “major concern to exporting companies, as this continues to reduce the company and the country’s competitiveness.” Indeed the leaders in manufacturing of packaging and containers is hypersensitive to any pressures that could impinge on its competitiveness on the world stage.

“We think there are two key aspects that need to be addressed to find the right balance,” the CFO added. Mr Xuereb suggested that “the government needs to be very careful in managing inflation, as [this] could have a spiral effect on the economy, if wages are increased at the levels proposed.”

As the company braces itself for the increased company costs brought about by the expected wage increase, Toly has invested heavily in its “processes to reduce [its] CO2 footprint,” Mr Xuereb stated whilst adding that “this investment includes (just under 1,000) PV panels, electric moulding machines with a 90 percent reduction in electricity, smart cooling and several other investments.”

Indeed, Mr Xuereb confirmed that “these investments will help to off-set any negative increases in electricity rates and help Toly maintain its competitiveness.”

Thankfully, the company appears to be very well-prepared for the challenges that lie ahead, and it is in this spirit, that Mr Xuereb looks towards 2023 very positively. “Toly is in good financial health and, if business opportunities are there, and there is the right business justification, investments will continue to be made,” he confirmed.

Looking back at the past two years, COVID-19 has been a major lesson for Mr Xuereb and the whole team at Toly; one which, he believes they’ve come out of stronger than before. “COVID has taught us many lessons, which have helped us in managing our business,” he states. 

“With the team we have built around us, we feel prepared to take on the next challenges and be one step ahead of our competition,” he concluded.