While the Government’s recent measures, implemented to buffer businesses during the coronavirus crisis, have “certainly helped” Gozitan companies, the situation is still dire on Malta’s sister island as demand has plummeted across all sectors, Gozo Business Chamber CEO, Daniel Borg, said.

Mr Borg’s comments follow a survey published mid-March – a week before the third spate of Government measures were announced – which revealed that half of the businesses on the island said they would have to shut down if the COVID-19 outbreak persists.

While he underlined that the Chamber has not, since then, conducted another survey to see how the more recent financial package affects these results, the CEO said he understands the new measures to be helpful, in that they took “into consideration the specific circumstances being faced by Gozitan businesses.”

Daniel Borg

Daniel Borg, CEO of the Gozo Business Chamber / gozobusinesschamber.org/about-us/

Yet, companies operating in industries as varied as manufacturing and printing, as well as those overseeing supply chains are still faced with steep challenges, particularly since, even those who have not been ordered to close have had to scale down substantially and face liquidity issues – problems which are also being faced on the mainland.

“For instance, businesses manufacturing furniture are seeing people refusing their deliveries and the installation of their products at this point in time, while small scale printers, who depended on the printing related to events such as feasts, holy communions, confirmations, weddings and so on, have seen their business come to a complete halt. And, in terms of the supply chain, if you source your goods, for example, from Italy, where companies have had to close down, you will have to scale down your operations,” he said.

But, he emphasised that businesses in Gozo “are not competing at a level playing field with their Maltese counterparts because of the added costs they face in their day-to-day operations especially when it comes to the transport between the two islands,” Mr Borg explained. He underlined that these expenses were not only a result of transportation prices but also in terms of the time lost in transit between the two islands – “idle time which cannot be utilised,” he noted.

Moreover, “businesses in Gozo have a smaller market”, he stated, pointing out that – for example – while the tourism sector in Malta experienced increasing profits, all year around, Gozo still suffered from seasonality.

“Many Gozitan businesses have had to work harder to remain competitive throughout the years, with the result that they have benefitted from a reduced profit margin, which, at this point in time, leaves them more exposed to the risks as they are not in a position to cushion the present blow,” he explained, saying that Gozitan companies, by their very nature, “are micro-enterprises, who are more exposed to certain risks than larger concerns.”

In addition, the island faces losses in industries which were still trying to get a foothold in Gozo, before the crisis hit, such as the gaming sector, whose revenue stream has dropped and shifted to more online-based product verticals.

So, how are companies in Gozo currently dealing with the crisis? “Obviously businesses are trying to reinvent themselves. This is especially true when it comes to supermarkets, restaurants and hotels, where we have seen a shift towards home deliveries,” Mr Borg said. “However, since this crisis is affecting demand in all sectors, the difficulties are greater. This is particularly so for those falling under ‘Annex B’ or those which are not being included in any of the annexes.”

When asked what sort of advice Gozitan businesses struggling during the pandemic should receive, he said it was “difficult and presumptuous to give any form of advice at this point in time” but would limit himself to some suggestions.

“For those who have the possibility, a change in business model might work, though this takes time, and not all can afford it,” the CEO asserted, urging caution and underlining the necessity for thorough consideration of any decision. This was particularly important when it came to staff considerations, since “employees are the most important element of any organisation.”

Looking ahead, and as the representative of Gozitan businesses, Mr Borg said that the Chamber “will continue to see that the businesses’ interests are safeguarded in such a way that will ensure their survival during this particular difficult situation. However, as a Chamber we are seeing beyond this point: we have already starting thinking, not only of mitigating measures, but also of other initiatives which would ensure that the Gozitan economy would restart following this pandemic,” he concluded.

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Written By

Rebecca Anastasi

Rebecca is the editor of The Malta Business Observer and Business Agenda. She has interviewed stalwarts of the business community, and is interested in politics, current affairs and their effects on culture. On a parallel track, she is also a filmmaker, with over 16 years of industry experience. She loves food – though not necessarily cooking – and having passionate conversations about the latest film and book titles.