SPEECH BY THE HON. JOSEF BONNICI, MINISTER FOR ECONOMIC SERVICES, AT THE OFFICIAL INAUGURATION OF FAL MALTA LTD, AT MOSTA TECHNOPARK, MOSTA

It is a pleasure to officially inaugurate this new factory which is another quality addition to the more than 55 German companies that operate in Malta. This is the second enterprise with a high value added component, which I had the honour of officially inaugurating in less than a week.

The inauguration of FAL Malta is another testimonial that reinforces Malta's decision to continue intensifying its efforts on the identification and attraction to our island of companies that operate in sectors that have a high value added, not only in monetary terms but that also require a high level of technology and skills for their operation.

FAL Malta forms part of the very dynamic FALCOM group which is extremely active in the ever expanding field of communications technology. FAL Malta will be manufacturing GSM modems and GSP receivers many of which will be sold to prestigious international customers, thus taking the Made in Malta label world-wide. The growth experienced by this sector in recent years has also been reflected in FALCOM's growth, which has been doubling its turnover every year ever since it was established five years ago. I augur the same for the Malta operation.

This government sincerely believes that Malta is a very profitable location to operate from. International companies which have decided to invest in Malta, have managed to reach their targets much faster than was initially planned. This is mainly due to the positive investment climate that exists in Malta and the willingness and ability of the Maltese worker to learn and adopt new technologies. These factors are ultimately reflected in companies' profitability and productivity.

Today many companies have adopted Lean Manufacturing techniques which enhance their ability to compete and prosper in the face of constant and ever changing challenges posed by today's international marketplace.

We are confident that FAL Malta will join the ranks of these companies. This potential has already been demonstrated by the company's commitment to their Malta subsidiary, which has been equipped with the latest technology and equipment available on the market.

The company today employs 20 persons, which is already ahead of what had originally been planned. The workforce is entirely Maltese and is made up of highly skilled and experienced individuals.

Another encouraging decision taken by FALCOM is that of locating a Research and Development department in Malta. This confirms the good level of training and technical skills available.

Government is very much aware of the fact that we need to ensure Malta's competitivity in order to be able to attract more foreign direct investment and facilitate the expansion of those companies already operating in Malta.

For this reason the Industrial Development Act has been revised substantially in order to ensure that Malta will adhere to its international obligations while at the same time enhancing its competitivity. We have made sure that the new incentives available to industry encourage and reward ongoing investment in Malta. For this reason we have introduced a system of investment tax credits which when coupled with the favourable rates of tax being offered to companies operating in our target sectors, can result in minimal taxation for a number of years.

Other incentives include a value added incentive scheme, soft loan and interest rate subsidy scheme, special provisions for small businesses and incentives relating to training and job creation.

It is very interesting to note that a leading German bank has recently published data which shows that Malta has the largest amount of foreign direct investment per capita among the applicant countries wanting to join the European Union. It is our objective to maintain this status.

Interest by foreign and local investors over the past years has been very encouraging. Last year the Malta Development Corporation approved 45 new

projects and a dozen expansions of existing enterprises which between them will account for a projected capital investment of Lm 20.6 million and will create an additional 1,600 new jobs within three years.

The drive for new projects, although not an easy task, is bearing fruit considering the fact that the number of projects approved last year was the highest in the past five years. I am also glad to note that so far this year, the Malta Development Corporation has already approved 14 new projects and four expansions, which together will account for a projected capital investment of Lm3.4 million and an additional 638 new jobs spread on a three-year period.

Total investment in the manufacturing sector has gone up from Lm23.4 million in 1998 to Lm 74.7 million last year. This sector has also registered an increase in employment of 600 in the same period, while exports by the sector shot up by almost Lm265 million last year to nearly Lm977 million and local sales increased by more than Lm2 million to Lm195 million.

I would like to conclude by thanking the community of German investors that exists in Malta. This community is the largest community of foreign direct investment and the 55 companies that operate in Malta employ more than 3,000 persons. I can safely say that German investment in Malta has helped to shape and transform the Maltese industrial scenario, forging a strong work ethic and imprinting the traditional German industrial culture admired world-wide.

I take this occasion to pledge our support for your operation and to wish you every success in this venture.

Thank you.