Issue link: https://maltatoday.uberflip.com/i/1132126
20.06.19 10 INTERVIEW 'People come first, strategy He is McDonald's business licensee in Malta and five other countries, but is also heavily involved in maritime transport, logistics, technology and real estate. Melo Hili speaks to Business Today about Hili Ventures' current and future endeavours, in Malta and abroad MASSIMO COSTA Your group has invested in a wide spectrum of industries. Can you give us a brief rundown of your investments in Malta? Hili Ventures' biggest enterprise under its business portfolio is Premier Capital, the McDonald's Developmental Licen- see for six different countries – Malta, Romania, Greece, Latvia, Lithuania and Estonia. Across these countries we employ over 8,000 in our McDonald's restaurants, of which we have just un- der 150, and growing by 12 restaurants a year. at represents the biggest part of our business in terms of turnover, people and profitability. is particular venture came to the Hili family in 1995, while I myself joined this area of the business in 2005. Under our 1923 Investments arm, we run an Apple business, primarily in Po- land, where we operate 26 Apple Premi- um Resellers under the iSpot brand. We also have a joint venture with another Maltese company in Hungary, where we operate four APRs under the iCen- tre brand. 1923 Investments also includes a tech- nology division – Harvest – where we operate a traditional IT solutions com- pany PTL (previously Philip Toledo), a payment gateway APCO Systems, and APCO Limited, which essentially pro- vides a mix of firewall protection sys- tems and maintains most of the ATMs on the islands. Our logistics business, which also forms part of 1923 Investments, is based in Malta, but we also operate a freight forwarding business in Poland. We have a sizeable joint venture with CMA CGM, the second-largest con- tainer shipping company in the world. Hili Properties' main business re- volves around acquiring commercial property for rental. We have 24 proper- ties across Malta, the Baltic states and Romania. In Malta, primarily we own three office buildings and a restaurant/ office-building. In Romania we own a very large hospital, but of course we are not involved in its operation. Moreover, in the Baltic states we own and rent out several shopping centres which gener- ally contain a large supermarket and a number of various shops. Both the holding companies of the McDonald's and properties businesses and 1923 Investments have bond issues listed on the Malta Stock Exchange. Our group also has an engineering arm, Motherwell Bridge Industries, which offers customised engineering services. We have operations in Malta and Morocco, primarily covering the areas of ports servicing and supplying heavy equipment. We also work with Konecranes, one of the largest crane manufacturers, in locations around the world. We've done work for Konecranes all around Europe, Indonesia, the Unit- ed States, West and East Africa. Which is the most lucrative investment for your group? Profit depends somewhat on the size of the business. Our Romanian Mc- Donald's business is the most profitable in this regard, because we operate 70 restaurants and employ close to 5,000 people in Romania, accounting for over 50% of the approximately 9,500 people employed throughout Hili Ventures. We're growing by seven restaurants a year in Romania. You operate McDonald's in Malta and in other countries under a franchise. How easy or difficult is it to run a franchise of a fast food industry leader? It's as easy or difficult as any other busi- ness. e fact you're operating within a system doesn't necessarily make it easi- er, but it makes it more structured. e way we run McDonald's has taught us a lot – we operate systematically, and what we've done in Malta, we've repli- cated in other places. However, the cus- tomer must be the focus of the business – all else follows after. Which is the busiest McDonald's outlet in Malta and how many customers does it serve daily? Our nine McDonald's restaurants in Malta and Gozo serve 20,000 custom- ers a day. e busiest are those with a drive-through – the one in Naxxar and the one just outside the airport. Are franchises dealing a death blow to independent outlets? I wouldn't necessarily say that they are. What's really gobbling up the high street in general is online shopping – that's a fact – although maybe less so in Malta. Online shopping is more con- venient for some, while others prefer to see a product in person. How much of Maltese culinary tradition would you care to consider for Malta's McDonald's? McDonald's in Italy, for instance, incorporates certain elements of Italian cuisine in some of the burgers they serve. Yes, McDonald's allows markets to lo- calise their food products to a degree. As a matter of fact, a few years ago McDonald's in Malta was offering the McFtira. And in Greece, for instance, we offer the Greek Mac. Wherever we think it's interesting, we are open to such localised products. How much do Mc Donald's traditional main competitors - like Burger King - factor into your business decisions locally? In terms of competition, I wouldn't say there's only Burger King, since there are several franchise businesses. We have a larger operation than Burger King. While we respect competition wherever it comes from, I think we're very much ahead of the game in terms of restaurant experience – be it our drive-throughs or table service, which is something rela- tively new to this industry. It must be kept in mind that several eateries are competition to McDonald's. When we analyse the market, we look at the informal eating out sector, which in- cludes everything in this area – includ- ing kebab shops, pastizzerias, and so on – and we're by far the largest in this sector. But at the end of the day, it's im- portant to be the best, not the biggest. We've just witnesses the opening of another US franchise in Malta - Starbucks. Is this a challenge to you, or is it not your competition? It will compete with our McCafé out- lets, of which we have seven. e Mc- Café operation in Malta is one of the best-performing McCafé operations in Europe – we maintain a very high standard. Which projects does Hili Ventures have in the pipeline, locally and abroad? We do have a couple of projects com- ing up. As we announced recently, we've set up three other business units. e first is Cobalt Leasing, a leasing oper- ation based in London, the business model of which is to lease containers to shipping companies. e second is HV Marine, the mission of which is to take over our Malta and Morocco engineering business and to develop projects related to marinas and yacht repair. It's still early days for this business, since we've started operating it only a couple of months ago. We've also set up HV Hospitality, which has the mission of developing properties related to hospitality. We're about to acquire a sizeable stretch of land on one of the Greek islands to develop villas and tourist-related ac- tivities. We're also well on the way to acquiring the Comino project, which involves taking over the Comino Hotel and upgrading the existing tourist com- plex. e deal is not yet done, but it's well in the making. Was your decision to expand overseas due to the limitations of Malta's small area, or was it purely based on financial return?