Episode 7 - Collaboration as a key aspect to Internationalisation
Roberta: Welcome to this latest edition of Inside Malta Ghana series. Today with our resident guest Christopher Busuttil-Delbridge, who is the managing director of Evolve Limited, we have the pleasure to welcome Mr. Herbert Friese who is the general manager of Dutch and Co, a Ghana based company, together with Mr. Matthew Spiteri from Maltese company Altern Limited, and co-hosting this session with me is business consultant, Nadia Pace. Welcome, everyone.
Perhaps as is now customary, we can start off with a little bit of an introduction, and also maybe understanding the background of our guests. Perhaps we can start with you have Herbert. Would you like to tell us a little bit about your background and you're working on and also the mission and vision of your company?
Herbert: Good morning. My name is Herbert Friese. I'm the general manager of Dutch and Company Limited, a company registered and based in Ghana since 1993. My background is Hotel Management. I was educated as a hotel operator. And I worked in a numerous amount of countries in the past, including Malta, where I live and worked from 1999 to 2002, as the opening manager of the Golden Valley Hotel in Paceville. In 94 I lived in Ghana for four years, left Ghana for a year in the Netherlands, then four years in Malta, four years in Tanzania. And then we decided privately to come back to Ghana in 2006 on a permanent basis. And at that time, I was still employed with Golden Hotels as Vice President for operations and development for Sub-Saharan Africa. And in that period, I had a lot of dealings with real estate, and obviously exploring the West African market very carefully.
In 2010, I became independent and started my own company called Hotel Solutions. With that company, I did a lot of matchmaking between brands and investors and tourism opportunities in Ghana, West Africa. I stepped into an award winning star resort in the Western Region of Ghana in Akosomo. And then the Ebola crisis started in 2013, which completely collapsed the hospitality market.
I was approached by a Dutch owned company in Ghana that I knew already, Dutch and Co, and they were active in the renewable energy and energy efficiency field. And so since then, I have been there to manager driving the growth of the company. And our primary objectives are to reduce the demand of electricity in businesses by the use of LED lighting, and to increase the supply of electricity by solar energy. And so we are now in 2020. In the meanwhile, we have installed close to two megawatts of solar in the in the renewable energy space in Ghana. And we have a wide network within the sub region of West Africa and in Ghana, when it comes down to projects on that basis. So glad to be part of this team.
Nadia: Undoubtedly, and part of the revolution.
Roberta: A lot of synergies I think, with you Matthew?
Matthew: Yes, definitely. Looking forward.
Roberta: A little bit about your background and what your company does.
Matthew: So Hi, everyone, Matthew Spiteri. I've studied engineering and specialized in in renewable energy and sustainable technologies from the very start. We started altern just over 11 years ago. Our focus has always been sustainability and renewable energy, with a focus on offering simple and effective solutions that are sustainable, both environmentally but also financially. So we try and find the balance between finance and, and environmental sustainability.
We have three main pillars. The first is research where we develop future innovations, it's basically the fuel to our future products.
The second is services, where we help companies, small and large measure, manage and implement solutions in the area of sustainability and energy. Locally, we've had some of the largest companies in Malta, we've worked with the German based companies with, with Hungarian based companies, we've implemented projects in, in offline to through to our base in Malta, both also in Riyadh, Saudi and through the services, we help companies develop their projects in the most sustainable way or measure the energy of their current building infrastructure to be able to manage our energy better. I myself am a certified ISO 50,001 50 002 energy auditor and we try and use this knowledge together with software and experience to be able to implement such projects.
Our third and final pillar is technologies, where we implement a number of sustainable energy technologies mostly based in Malta. Our primary two largest technologies are solar energy. We've, where we implement medium to large scale in the Maltese scenario, PV projects, we've just completed our latest largest project of around over 2.4 megawatts where we also try to close the loop with regard to financial sustainability by also having a pool of, of Investment Partners and offer both, the actual technological know-how, but also the financing for such for such projects.
And, and the second major technology is, is LED lighting, quite, quite in synergy with Herbert, where we started off having a range of products which are either imported or manufactured to our own design in Europe and, and Asia, we still have such ranges. But today, we also use the infrastructure of our partners locally, to be able to develop and manufacture lights locally. We've just launched for example, a 1000 watt LED light which replaces 2.2 kilowatts, some technicalities, sport lighting, so they're implemented into football pitches, sport grounds, large areas, to change current lighting into a more efficient LED lighting with a product that is completely made and developed and manufactured here, here in Malta. And this is where we try and give our unique selling point in the sense that that we can be customizable, without the need of immense high quantities, which is what Asia always requests or without the high costs which mainland Europe will request. So we try and fit in a bit into this, this this this niche, let's put it that way.
Chris: Well done.
Matthew: Thank you.
Roberta: Very innovative as well, and also very much aligned with the overall direction. The climate is very much favouring sustainable solutions. So it's great that you're offering these also tailor made solutions to the market.
Matthew: Yes, definitely. I believe a lot in in, in balance and the concept of it is not true that one size fits all. So I believe that you know, an array of technologies and solutions, customized or tweaked for each specific scenario is the key to sustainability in the broad sense, be it financial be it's just environmental, and whatnot. So this is where we try and create systems which are slightly tweaked or customized for each specific scenario.
Chris: I like where this is going, I think that one size fits one. Maybe very few know that over a quarter of a century ago as well, my passion for science started with alternative energies. I built a solar powered lift at the time, I had to teach myself microelectronics. And even one of the largest research centres I think, and best well equipped research in the world on photovoltaics is in Marsaxlokk, in Malta, and actually it was my company that supplied most of the equipment there and aftersales. So we're quite tied to the photovoltaics and alternative energy space.
I also like something that Mr. Friese said and even you mentioned about collaboration about evolution, about working together and growing and also giving a complete solution your customers. You mentioned financing, for example, as well. This is something that we are seeing even post-COVID. And, you know, people need to do the project and maybe are lacking the financing part. So why not offer and bring companies together that can do alternative things to offer one solution to the customer? So, but I'm sure that we can delve into this type of discussion further down.
Roberta: Certainly, certainly. Matthew, you are primarily based in Malta, right? But you mentioned exploring as well, different markets. I wanted to ask, Chris, you can share your experience in this regard, how valuable and how, how useful our trade missions to explore working in different in different spaces in different jurisdiction.
Chris: Can I say, Can I start? Okay, so I, to me, it's great, it's, it's the first thing that you need to do, but it's also what you make out of them. I mean, if there are 50 people in a trade commission, and 40 are not doing their research before, and their follow-ups afterwards, they might as well go for a holiday.
So you need to, you know, work for that Trade Mission and make the best. But they do offer a great opportunity, safety numbers, and you're introduced to people that you wouldn't have the chance to be introduced to or to meet, if you go alone, for the first time. An unknown country, so the risk is reduced drastically or eliminated, you can say, yes, trade missions are a great start, I joined the first and second trade missions that happened to Ghana. And there if there is a third, I will joining it as well, even though I've been innumerable times to go to Ghana In the meantime, but you can never network enough.
Matthew: And if I may, yes, we've been so primarily our business has been based in Malta or as I've explained, working offline, or in with clients from different countries. Off-site from the actual point of implementation, but we are in a process especially with when it comes to lighting to internationalize. And we've, I haven't mentioned, we've just launched some, just a few months ago, we've just launched a new a new brand called www.shapelamp.com I've mentioned this a bit which gives you it's basically an online platform which gives the opportunity to anyone across the globe to design their very own light fittings. So we've developed a 3d software which gives you the possibility to design your own thing within certain parameters and ordering it anywhere in the globe and basically ask manufacturing and end up receiving a flat back which is then assembled by yourself, giving the opportunity of democratization of design, let's put it that way.
And through these ventures, we are looking at internationalization including Ghana, and we've we haven't been we haven't been to a specific trade mission yet in Ghana, but we are we are looking forward to visiting. We believe in the power of networking. I think it is key as humans it is key to network, but even more so when it comes to when it comes to business. So, yes, definitely open to collaboration. I believe a lot and collaborating with companies already based in the scenario that is why I see I see great possibilities to discuss with Herbert and so the power of network and having key individuals in being knowledgeable on the subject and also based or having already experienced and knowledge of the area is I believe key.
Nadia: And why initially Matthew, are you interested in Ghana in particular?
Matthew: Well, it's there are there are a number of points. So first of all, it's we see it as a natural step into the African market. Be it language, be it sun and I have to I have to be completely honest, I visited Ghana back in 2012 or 2013. Originally to look at the current, the local scenario when it comes to solar energy and sustainability. But then it was put aside for a number of reasons.
But we see it as a natural step into Africa because as I've explained, language political stability, the, the British colony, history tends to tends to, let's put it that way, impose a certain structure, which is relatively, gives a bit of similarities to the Maltese system. And so these are all our all important steps.
We also see a possible opportunity when it comes to, on the broad sense, nationalization of manufacturing. So why certain manufacturing today can only happen in Asia because, of course, because of infrastructure. We believe that Africa can also be a closer to home manufacturing point, when it comes to global internationalization.
This is me looking go on the medium long term, but it's, it's I see an opportunity there. And I see also that, that, that especially the European companies are also moving into internationalizing, certain supply chain productions because of what has happened in the past months with COVID, for example. So there are a number of opportunities that I see in Africa, and Ghana, I believe, is a natural step.
Nadia: Herbert, you've been to both Malta and you know Malta very well as well, and you've been in Ghana now for a good number of years. What do you think are the best countries for business to be?
Herbert: First and foremost, I think there are a lot of similarities. I mean, Maltese are very entrepreneurial. Likewise, the West African and the Ghanaian population. Education is high on the agenda of the countries, both. Both, I think both countries serve as a hub to their respective client markets. I mean, Malta is strategically located between Europe and North, North Africa, and the Middle East. I mean, Ghana is the hub, both by sea and by air for West Africa.
And I think where, where the interesting part is for companies to look at Africa in general, but Ghana specifically, is the enormous growth in population. I mean, the population growth in countries like this grow with two and a half to 3% every year. So that means that the consumer markets keeps on growing exponentially, and we don't have the population here is predominantly young. So that means there's a lot of future prospects for people to hire, or to use your services.
I think where the areas of interest would be energy, obviously, if I listen to Matthew, then it's clear that for example, companies like the Dutch and Co could tap into the technical development of products, the manufacturing base that Matthew’s company provides, that we don't provide. I mean, currently, the cost of manufacturing in Ghana is still relatively high. This is due to high electricity costs. There is relatively, there is a lot of labour, but skilled labour is the challenge, whereby people are educated in the field. And it's a big country. So to get from, I remember driving on a Sunday afternoon around Malta for 45 minutes. But if I drive 45 minutes here, I may have done 300 meters because of the traffic congestion.
So energy is one. Tourism is definitely another area. I mean, the Maltese are masters in hospitality. And this is not because of you guys, I have experienced it myself, never understood really why Dutch people needed to come to Malta to operate a hotel, to be very honest with you. Because we could learn something from the Maltese there. And I think especially on the culinary and the food and beverage side. And on the rooms’ division side, I think for Maltese professionals to come to Ghana and be part of the growth of the tourism industry would be tremendous. I've tried. I've tried to get the Corinthian group to come to mall to Ghana. I've tried to get some other people to come to Ghana, one day.
Another area here is textile. The textile industry in in Ghana in West Africa is very big. However, the textile industry here is not a readymade product that you buy off the shelf. People here make their own clothes or a cloth maker that makes it for them. And I think that there is some brands like Risco and Wooden who have now entered into fabric manufacturing and dyeing fabrics to making readymade garments for people to buy at their own size and wear, and it's a big success and it shows that especially the younger generation and looked for that kind of solution to have ready made products readily available by hand.
And the oil and gas industry. I mean, Ghana has is recently new in the oil and gas industry, but that's what has the legal framework is good. So I think it allows companies that have offshore or a maritime nature to do something. And there is one Maltese company relatively successful here called Handson, and they started recently, but they have made their way into the port, into the transport sector. And it looks like they're growing quite fast within the West African region. So I'm glad to see that.
Roberta: It looks like, there's a lot of opportunity.
Herbert: There is there is.
Roberta: And just also to build on something which Matthew mentioned earlier, the idea of establishing a collaboration as an operator that's coming from outside Ghana, and establishing a collaboration with somebody who's already there, rather than going in and setting up on your own. What would you say are the benefits of that approach?
Herbert: I mean, the Ghana is a good investment climate in the sense that everything is well organized. So from [unintelligible], you go to the Ghana Investment Promotion Centre, to the respective embassy, which you have a Maltese embassy here now, since about a year and a half, which is very active.
So the framework is there that what is not there is very often the experience on the ground. So what you read in the in the investment brochures, and what you read on the internet is for a very large part, absolutely, facts and statistics. However, every businessman when he wants to invest, they want to have up to date statistics in order to prepare that business plan, prepare their projections. And this is where there's that it could be better.
I know that this particular government is working very hard on digitalizing. Most of the services that also allows them to create database to share with future investors now. We have come across a lot of people that have great ideas, great opportunity, and sometimes experience that we lack. And of course, then it would be a complementary way of working together. What we don't like as established businesses is people that would like to link up with us to learn from us to be opening up to our network of people to basically to learn how to walk and run in Ghana, and then only start their own businesses, which is what happens most of the time.
So I think the ethical side of doing business is very important when you do matchmaking in this sense. Collaboration is definitely needed. And it's not only from a technology transfer perspective, but also Matthew mentioned the financing. I mean, cost of financing and gala is ridiculously high. I mean, the average rate of lending is about 23% interest, on your principal sum. So you can imagine that if you if you develop solar projects, for example, that need quite a lot of intensive capex in order to start the project. The access to capital is very little. So we depend on mostly foreign funds that have that we work with to create so called PPA agreements, whereby we act as the EPC contract during the OEM contractor, and whereby the other part of the PPA partner works on the financing side and attracts financing at a lower interest rate and therefore, give a very attractive offer to the client.
I think collaborations would be advisable considering the fact that countries like our amazing countries with amazing opportunities and great people to work with. But there's always the risk of the unknown and the risk of being taken advantage of. And I think therefore, it is good to hold trade missions. What lacks and in trade missions very often is that there's not a wide spectrum of people very often it's like okay, I know this person or I know this company. So therefore let's link them together. But there's actually quite a lot going on, which is informal in Ghana. And that is actually how I know Malta from 30 years ago, very informal and entrepreneurial business climate whereby the rules needed to be written by people that have the right intention of doing the right business. And if you're willing to work on that premise, the world is your oyster again.
Matthew: I met my best contacts in Ghana, at the airport, in Schiphol on my way to Ghana. So then you develop that, you know, so it's, you have to be in it to win it.
Herbert: You need to be present. Ghana is not a business climate that you can operate on remote knowing to be hands on. Yeah, in the business, and surround yourself with people that you can trust, which is, I mean, it's an all over the world. It's like that there's not only between Ghana and Malta. That's the principle of business. But it's an important factor. To stick to your question. The advantage of stepping into a driving car, so to speak, is also that you don't necessarily have to invest the foreign direct investment that you normally need to, when you set up a company from scratch.
The investment laws in Ghana are very protective of Ghanaian businesses that is logical. But over the years, the amount of money that you need to invest, which by the way, you can use as capital requirements once you're established. So it's not money loss imputing an investment that you need to put ahead of your earnings, is steep. And especially if you want to be a trading company, whereby you have the rights to import and export goods, it can go up to a million, a million and a half euros before you can actually start business. So it is stepping into an existing business or partnering with an existing business could save you an enormous amount of upfront capital.
Roberta: So there's a very tangible benefit there. Because that's the other benefits are extremely important as well. But perhaps one it is difficult to quantify, whereas this is a very tangible quantifiable benefit.
Nadia: Valuable insights, Herbert, I must say and Matthew, I think even yourself, you mentioned about the value of collaboration. And similarly, would you like to add something or share anything about what one should be careful about so the three most important things when you're looking to collaborate with someone.
Matthew: Let's start off with an important point following what Herbert has explained. You know, unless you're, you're a super multinational Coca Cola, or anything of the likes, collaboration is, is the only key to grow. We are quite against the silo effect, which unfortunately, sometimes Malta suffers from. And we believe that, you know, you get the people who are either experts in the area or experience in the area to do the respective jobs. And, and, and that is, I think, the, you know, our golden rule whereby, you know, we collaborate on things that are, that offer a synergy that can benefit both. There's also an aspect of trust, there's also an aspect of, of ethics. And it's not always easy, we've, we've, I think we've all been, we've all been, let's say bitten or had our own fair share of, of negative experiences with collaborations. But I think the overall picture, the end result is that that's that overall, the average is a positive one. And, and, and it's key to really, to really collaborate in when it's called, especially when it comes to moving to other countries. Yes, Herbert I agree completely with you that that it's, you know, we've had we've sat on Herbert’s seat here and more than numerous times whereby you know, foreign companies, foreign suppliers, foreign manufacturing companies who are looking at moving to Malta because of the economic climate that we've been experiencing for the past years move into Malta and look at opening a shop here in Malta or establishing business here in Malta. And given they might be in our sector, you know, approaches and whatnot. And yes, a number of times you get people you know, fishing around and then you know, jumping on the bandwagon and taking on their own their own route. But this this, this happened so, so with us having been on the other end of the stick we understand even more the importance of, you know, correctly collaborating with local partners such as such as Herbert and the likes to be able to implement projects, especially outside of the country.
Herbert: There's a saying in Africa, if you want to go fast, you need to go alone. If you want to go far, we need to go together.
Chris: Everything I'm hearing is music to my ears. I mean, I confirm everything that Herbert said, it's exactly been my experience on the ground as well. Having the right partners, the investment, how to come into the market. And I'm very impressed with what both speakers, Matthew and Herbert, the way, they're sharing their personal experience, and the practicality of their tips. I mean, completely open very down to earth. Very well done. Thank you so much. I can only confirm and agree, especially this last point about the collaboration. This is the way to go. I've been harping on this not only between Malta and Ghana, you know, but even companies in between themselves business clusters that make sense. Someone brings the financing, someone brings I don't know the MNEs, someone brings the construction. And together we create a complete project. Of course, that is the way to go.
And if we have to look at it, I've said it before, COVID, has been an accelerator of this, it's an opportunity for us to open our eyes to what lies around us and remove this insularity that is a mind-set that will not get us anywhere.
Nadia: I'm very pleased to hear that everyone is aligned today. In fact, we didn't have to ask much or say anything.
Chris, they must have heard our conversation because just yesterday, we had exactly the same conversation and the same chat about collaboration and the importance for import, how important it is for businesses, especially the ones based locally, when they have complementarity of services or products, to collaborate together and find ways of taking product elsewhere.
So we thank you very much for being with us definitely today. And for joining us and sharing those interesting insights, very valuable, very practical as Chris mentioned. Obviously we hope to meet up very soon and to visit Ghana as well and come and visit you Herbert in Accra.
Herbert: That would be great. Let me know.
Chris: I'll be there in a few weeks. I see you.
Nadia: Thank you. Thank you all for the time. Thank you.