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25.04.19 14 EU FUNDS AN inconspicuous building on a corner in Zachary Street in our capital city used to be home to a number of offices. But through the help of an EU scheme, the site was turned into a picturesque bou- tique hotel. e CEO of Sterling Jewellers Alfred Fenech, whose family-owned business Sterling Group has operated in the sil- verware and jewellery business for over 100 years, said that this concept was very successful – and made possible through the funding injection. In fact, he explained that the costly art on the walls, which gave the hotel its unique Valletta theme, would proba- bly not have been feasible if not for the EU-funded scheme. e enterprise successfully imple- mented a project under the Business Enhance ERDF Grant Schemes co-fi- nanced through the European Regional Development Fund under Operational Programme I – 'Fostering a competitive and sustainable economy to meet our challenges'. It had ventured into different retail areas such as fashionwear, catering and restaurant management and others and has now diversified even further its activities by introducing in its portfolio the provision of tourism products and services related to the promotion of nat- ural and cultural heritage. Specifically, the business benefited from the SME Diversification and In- novation Grant Scheme, which aims to incentivise SMEs to adapt and become more resilient and address market chal- lenges whilst offering timely support to nurture the right environment for busi- nesses to grow. On a visit to the hotel, EU funds parlia- mentary secretary Aaron Farrugia said that the business has successfully diver- sified its portfolio, now having opened up accomodation of a high standard in Valletta – a UNESCO site. "is is a clear example of a business which is making excellent use of European funding in- struments in order to provide a service to the country and the economy. In this case, EU funds were utilised to also im- prove our country's touristic product." He explained that the business made good use of funding opportunities by submitting a sound project proposal un- der the SME Diversification and Innova- tion Grant Scheme with the aim to de- velop high-end tourism accommodation in the heart of the capital city. e ideal location of the hotel has also done the project many favours. It of- fers its client base a superior experience in the heart of the capital city in close proximity to most of the capital's amen- ities and attractions. is diversification strategy – apart from adding much need- ed quality room and bed capacity in the capital – has provided a new alternative revenue stream for the enterprise. Another successful result of this pro- ject focused on the nature and location of the building, which provides an ex- cellent accommodation business and in so doing the beneficiary has diversified its business interests. is diversifica- tion activity is assisting the beneficiary to maximise its asset base and tap new business opportunities. is enterprise is only one of the suc- cess stories of SME Diversification and Innovation Grant Schemes. e target groups for these schemes are micro, small, and medium-sized enterprises, with the aim of ensuring that SMEs sus- tain a high level of resilience through their ability to adapt to rapidly chang- ing market demands. ese businesses need to innovate and keep up a steady investment momentum which is crucial to Malta's macro-economic and compet- itive performance. Businesses, particularly small ones, face a number of challenges, and this is where the need to innovate and diver- sify becomes crucial. is is the key to sustainable and competitive economic activity. rough this scheme, businesses can opt for the diversification of the output of an existing establishment, implement a fundamental change in the overall pro- duction process, or even start a new eco- nomic activity related to the diversifica- tion of the activity of the establishment, the adoption of solutions that are new or significantly advanced. Funds from the scheme have been used by a number of enterprises for leasing or renting of premises, construction, pur- chasing equipment, patents and licenses, as well as wage costs related to the wage of change manager employed specifically through the project to drive the neces- sary change through the initiative. e scheme is demand-driven and managed through an open rolling call. Diversification through EU funds Sterling Jewellers CEO Alfred Fenech (above right) told parliamentary secretary Aaron Farrugia that the floor-to-ceiling art would probably not have been economically feasible without EU funds

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