The manufacturing industry in Malta has always been an important contributor to the Maltese economy. The industry in the past years managed to overcome a number of challenges due to Malta’s attractiveness to new industries and economic sectors. The industry evolved in a way that nowadays the focus, through investment in advanced technology, is on high-end manufacturing processes.
Throughout the past few months, the local manufacturing industry has continued to operate, even if under strenuous circumstances. The industry, due to the new challenges brought about by the COVID-19 pandemic, had to adapt to a new way of operating - a new reality subject to a number of restrictions and future uncertainties.
It is well known that manufacturing jobs are one-site and for obvious reasons cannot be carried out remotely. The social distancing measures that had to be implemented by local manufacturers, together with the slowing down of the global economy, trade restrictions and limited travel left an impact on the operations of the local industry players.
Notwithstanding the future uncertainties being faced by the industry, it is now the time to prepare a post-pandemic strategy. This period of slowdown should provide the headspace and capacity to rethink and reconfigure business operations.
It is being noted that those domestic manufacturers that have a diversified customer reach are faring better than those who generally trade exclusively with a specific niche of customers. Demand is more volatile in these times and thus, dealing with different sets of customer groups may have its benefits.
The COVID-19 pandemic has demonstrated the need for manufacturers to have a geographically diversified supply chain. This obviously helps to mitigate the risks of being dependent on any one location.
The financial support provided to manufacturers by the Government through the various schemes - in particular, the COVID-19 wage supplement scheme and the Malta Development Bank COVID-19 Guarantee Scheme, proved to be essential for businesses to continue to be operational, and maintain the skilled workforce.
It is essential that manufacturers utilise the slow down period to understand the strengths and weaknesses of the current supply chain in an effort to move away from being dependent on single or few suppliers. A geographically diversified supply chain could become a fundamental component of future business models.
Monitoring demand signals is crucial at this point in time. Such signals provide a good basis for manufacturers to prioritise production and consumer demands. Also, manufacturers should establish and address customer risks and gaps.
Identifying new activities or operations that add value to the business and to its customers. This may be achieved through investing in latest technologies, adopting digital processes (whenever possible), and improving non-efficient sections of the operations.
Senior Manager, Assurance, PwC Malta
Tel: +356 2564 2621
Senior Manager, Tax, PwC Malta
Tel: +356 2564 2526
Tax Partner, PwC Malta
Tel: +356 2564 6897
Assurance Partner, PwC Malta
Tel: +356 2564 7194