Issue link: https://maltatoday.uberflip.com/i/712521
45 Events maltatoday, SUNDAY, 7 AUGUST 2016 Opportunity knocks: Malta and commodity trading GILBERT GUILLAUMIER COMMODITIES are a key driver of the global economy; every day, a variety of commodity prod- ucts such as metal ores, gold, oil, wheat, sugar, coffee, cotton and grains are transferred globally from their place of extraction or production, funnelled through a supply chain where they are con- sumed or produced into other finished goods. This cycle of demand and sup- ply is undertaken through a complex process involving sev- eral players such as commodity traders, brokers, trade financers and producers – representing the commodity value chain. In recent years, several com- modity trading firms have faced a number of significant challenges such as increased price volatility, extended regulatory and com- pliance and limited economic growth across several regions, all of which created pressure on the business. As a result, commodity traders have had to employ adequate sys- tems and technologies to manage trades, from their initial execu- tion through to final settlement. Hedging against market price fluctuations, credit risk manage- ment and obtaining a compre- hensive view of the numerous risks affecting the trading portfo- lio have all become key priorities. These factors are affecting the market dynamics in the sense that larger players are increasing- ly focusing on regulatory matters. Smaller players in the industry are, on the other hand, endeav- ouring to find a niche customer base and be able to leverage com- petitive advantages in addressing similar issues such as know your customer or anti-money launder- ing procedures. This may be creating a window of opportunity for Malta by at- tracting small- to medium-sized commodity traders in search of an alternative jurisdiction to base operations. Additionally, Malta can seek to attract international traders aiming to centralise trad- ing and supply chain manage- ment, thereby benefitting from efficiencies and potential cost savings through rationalisation. Today, commodity trading is undertaken through a number of strategic hubs around the globe such as Switzerland, Singapore, Netherlands, Dubai, London, Hong Kong and Houston. This is further facilitated by the fact that certain commodity trade can be location independent, and need not take place at the country ex- porting the commodity. Until now, Malta's geographi- cal position has enabled some degree of commodity trading and commodity trade finance. How- ever, certain limitations in the legislative framework affecting the business, coupled with only a small network of commodity trade participants, are hampering additional growth opportunities. Nevertheless, there are a num- ber of initiatives that Malta could consider in order to further devel- op growth potential in our com- modity trade industry: We need a concerted effort to attract commodity brokers and banks focused on commodity trade finance through measures such as trade missions, active pro- motion of Malta's trade finance services and road shows with key stakeholders; Local legislation underpinning commodity trading needs an ex- tensive and thorough review to create a framework aligned with internationally-accepted regu- lations on commodity trading. Foreign legal expertise may be needed to achieve this; The enactment of a Trade Fi- nance Act which supercedes other regulations and streamlines the legislative process, such as the one in Singapore, is to be serious- ly considered; Malta needs a framework ena- bling the issue of warehouse certificates and receipts that can provide a secure title to stored goods, and which can be used by banks to reduce risk when provid- ing stock financing; Consideration should be given to changing Maltese civil law to recognise security which is created prior to there being an underlying indebtedness or commitment by a bank or secu- rity receiver. This is not currently possible with the existing frame- work and puts the local industry at a disadvantage with respect to other hubs; The litigation process in Malta needs to be improved in order to allow banks to take possession of a security in an efficient and timely manner; A licensing regime for commod- ity traders and brokers should be contemplated; and Consideration should be given to extending the benefits of the Highly Qualified Persons regime to attract global talent to Malta. Many of the sector's leading jurisdictions are based out of the EU. Due importance should therefore be given to providing fast-track visa schemes for third country nationals and automatic visas for those transferring from a company branch in another EU location if they have already worked there for a period of time, to ensure that Maltese traders can recruit the best in the business Malta's ability to achieve trac- tion in the commodity trading sector requires a common policy consensus, a detailed gap analysis to understand what growth trig- gers are needed, and a strategy to tap into the market and reach potential stakeholders with an at- tractive offering. This could have several long- term benefits, making the prop- osition worth considering as a potential sector that could help herald the next stage of Malta's economic vision. Gilbert Guillaumier is an Ex- ecutive Director at EY Malta and head of the local Infrastructure Advisory practice 'Love Your Day' by Cappy AS part of its initiatives to support a balanced lifestyle, GSD Market- ing Ltd, distributors of Cappy fruit juices, nectars and juice drinks in Malta, organised the 'Love Your Day' campaign, to promote the value of breakfast especially at the start of a busy work day. The initiatives were spread out over a number of venues which are catchment areas in the morning for people go- ing to their workplace, includ- ing the Valletta Bus Terminus, the Marsa Park & Ride and the Cirkewwa Ferry Terminal. Promoters in Cappy 'Love Your Day' t-shirts gave out breakfast kits consisting of a croissant together with a Cappy orange juice and a Cappy breakfast information leaflet. "The initiative was welcomed very positively by thousands of people, who were glad to be reminded and supplied with a delicious breakfast to start their day on a good note," said GSD Market- ing General Manager Brian Galea. Sales & Marketing Manager Martin Agius said the next planned initiative is to take the idea to offices and "give employ- ees a happy feeling and a smile to start their day". Cappy is available in orange and apple juices, and strawberry, peach and multifruit drinks. Emirates aircraft flew 432 million kilometres in six months EMIRATES aircraft have trav- elled over 432 million kilometres since January 2016, the equiva- lent of traversing the globe more than 10,700 times. A typical week sees the air- line operating more than 3,600 f lights, with over 96,000 f lights operated in the first half of 2016. Emirates is the world's largest international airline currently serving 154 destinations across 81 countries on six continents operating 252 aircraft. The airline is also the largest operator of the Airbus A380, with 81 of these double-decker aircraft serving over 40 global destina- tions. Over 50 million passengers have f lown on the Emirates A380 since it began service in 2008. Emirates also operates the larg- est family of Boeing 777 aircraft, with 157 of these popular wide- bodies connecting Dubai to 109 destinations around the world. The Emirates Boeing 777 has f lown over 226 million passen- gers since 2004. Emirates operates daily sched- uled f lights between Malta and Dubai on Boeing 777-300 air- craft. Emirates f lies twice week- ly to Malta, on Mondays and Wednesdays, via Larnaca in Cy- prus, and on Sundays, Tuesdays, Thursdays, Fridays and Saturdays the airline operates the Dubai – Malta route on a circular routing via Tunis in Tunisia. The return f light f lies direct from Malta to Dubai. Emirates aircraft travelled over 432 million kilometres since January 2016, the equivalent of traversing the globe more than 10,700 times GreenPak calls for improved waste practices for a sustainable future IN a bid to curb the increase of waste generation resulting from economic growth, GreenPak is calling on localities and busi- ness communities alike to take the next step forward and em- brace sustainable waste prac- tices. Over the past decades, the amount of solid waste in Malta has grown alongside the growth in Gross Domestic Product (GDP). This linkage needs to be broken and the quantities of waste generated by increased commercial activity needs to be decoupled from the growth in GDP. GreenPak Coop Society CEO, Ing. Mario Schembri said: "Till now we have always assumed that the increase in waste gen- eration because of economic growth is an indispensable rela- tionship. In order to achieve real sustainability, we have to shift from this mentality and break the link between economic growth and waste generation." GreenPak, an ERA (former MEPA) authorised scheme, is the largest waste recovery scheme in Malta. The organisation is a founding member of EXPRA, a not-for- profit international organisation promoting the concept that it is industry itself that should take up recycling and let recycling be a burden on government or local authorities. GreenPak has for the past decade been one of 35 national producer responsibil- ity systems operating under the PRO Europe umbrella. GreenPak's CEO Ing. Mario Schembri