Balearic Islands Economy and Businees Special, with some relevant actors interviews
MALLORCA CAPRICE. The Mediterranean exclusivity.
Mallorca Caprice started four years ago releasing a thorough guide of some of the Island’s most exclusive products and services. Now we are including Ibiza in this project in order to cover the demand in one of the most exclusive islands of the Globe.
On top of showing the best of our Mediterranean paradises, we are starting a new path: the thematic notebooks Special Caprice, so that we can offer you hot and interesting news in the Balearic Islands. Following the successful Gourmet from last year – publishing the best gastronomy in the island -, we present Invest in Mallorca, in your hands right now. Here we illustrate some of the islands typical places and opportunities to invest.
Once again, we want to thank our sponsors and businessmen, and, specially, Daniel Lacalle, whom I met in a conference in Palma’s Caixa Fòrum and to whom I most heartedly thank for collaborating with Mallorca Caprice.
This is the way we reinforce our will to show the world, on a regular basis, the different sides of Mallorca, informally but rigorously and taking care of quality, making a rich Mallorca Caprice guide, a model in our island, and opening up to future projects.
Mallorca Caprice. We are Global.
Since 1999 he has been leading this publishing company in charge of the digital journal on economy and tourism ibeconomía.com and its German version ibwirtschaft.com through which we announce the big business actions carried out in our islands.
As it is indicated in this supplement, we are an empowered company. Our biggest handicap, which is insularity, made us develop differently. Living, working and investing in the islands is just something else.
Tourism is key to understand the identity of the archipelago, but we are also different in technology, innovation, training, navigation and investment. The islands are undoubtedly the best place to invest.
Thanks to our collaboration with Mallorca Caprice, in this article we are presenting a representative sample of the most significant companies and public figures in our business structure.
We hope you find it interesting.
With a long career focused on the main areas of large companies as well as portfolio management, and having written several books, the economist Daniel Lacalle is now a familiar face in the media, whom we requested his analysis on many different subjects. We had the chance to go over with him some of the issues of special interest for potential investors in Mallorca.
What growth perspectives do you see for the real estate market, especially internationally, after the crisis?
The real estate market underwent a much needed and very healthy correction after a bubble that was unparalleled by any global economy, as it reached the point of comprising 12% of the GDP. Therefore, growth must now come from added value, because there are still hundreds of thousands of homes unsold in Spain.
We must understand that the real estate sector is not going to have the elements that led it astray from the reality of supply and demand. But this does not mean that there is not enormous potential in a sector that goes beyond the predator model of constructor-developer seeking volume for volume’s sake, and focuses on added value, quality and meeting the patent needs of its clients. Any company that focuses on business as it always was before the debt craze will find opportunities to succeed.
What do you think of the reactivation of this market through Socimis (REIT)?
Socimis were an essential element in the reactivation of a market where the bursting of the bubble left very clear opportunities, almost bargains, on high quality assets. However, these Socimis have proliferated and not all of them have a clear growth model. I think that those that are focused on very specific niche sectors in a market that they know very well will have opportunities, even in the long term. But we must be very selective and choose good managers with clear projects and a definite history of attractive operations.
What do you think are the strong and weak points of the Balearic Islands as an investment destination, as opposed to its Mediterranean competitors?
The weakest is the enormous bureaucracy and slowness of the Administration, and a tax system and regulations mistakenly aimed at hindering investment and ignoring competitor markets.
The strongest point is a very important comprehensive tourism and culture offering. A huge potential to transform a tourism industry that still has much room for improvement in quality and added value. It also has huge strengths in a very diverse services sector, and excellent professional lawyers, consultants and financial advisors. Lastly an export spirit and a huge potential to connect with countries with the highest growth rate.
In the Balearic Islands the issue of diversification of the economy is often discussed. What do you think are the keys to achieving this?
Although it may sound strange, the tourism sector is precisely the one that will bring about a change in the growth pattern. In the Balearic Islands it has been proven that political control and subsidies have not helped to bring about that change in the last 25 years. We should not demonize tourism, rather we should understand that it is the pillar and the launch pad for many more companies, from different sectors, to come into the Balearics, because those entrepreneurs see good infrastructures, quality services, ease of connection with the world and, if there is a good environment, they will see all the advantages created by tourism to install their business in the Balearics.
Therefore, we should see tourism as the reference for our economy, and let’s facilitate the creation and settlement of new companies with higher added value from an attractive and welcoming tax and administration standpoint, and not from what I call the “bureaucratic tsunami”.
At CaixaBank we want to make our international client’s lives easier and more convenient. We want to make them feel at home. And that’s why we’ve set up HolaBank.
HolaBank is a new scheme to provide high-value financial support, advice and guidance suited to the needs of every one of our clients.
To do this, our HolaBank branches have expert advisers who speak different languages and a series of exclusive financial products, like the HolaBank Living Solutions account, reduced-rate mortgages, cards to suit different profiles, insurance and alarms to protect the home, the car and more.
What’s more, our clients can be part of HolaBank Club, a club offering services and discounts for their everyday life, focusing on the family, the household, spare time and so on.
If for example our clients need help at home, we can them to find people, with up to 3 hours a year free through our Handyman service, putting them in touch with professionals to perform a range of tasks, as well as arranging connections to any utilities they may need.
And because your family and the time you spend with them is very important, our clients can also get discounts on restaurants and car hire, and also have a telepharmacy service and online veterinary advice.
All this so that our clients only have to concern themselves with what really matters: making the most of life.
Martin Aleñar is the Dean of the Bar Association of the Balearic Islands from 2012. He was re-elected last December for second time.
In relation to foreign investment, how can we assess legal certainty in the Balearic Islands?
Like all of the Spanish regions, we are having difficulties in attracting foreign investment. One of the reaons is the slowness of the Spanish Commercial Court System, which blocks many business conflicts. The difficulty of acquiring financial resources and the overabundance of legislative activity that constantly changes the laws and prevents the market to find trust and credibility are the other elements to consider.
It is beyond any doubt that current laws regarding business activity are not only unstable but also extremely diverse depending otn the different regional governments or, even, on the local authorities.
What legal measures could be encouraged to reinforce investment in the Islands? In which economic sectors should they be applied?
I believe that the autonomous government should encourage, on one hand, economic, tax and labour measures that would, first, make it easier to invest; second, create jobs, and, third, bring recovery of consumer spending; on the other hand, the autonomous government should simplify administrative tasks, which are absolutely necessary to ease the economy and to lead the Balearic Islands into the top most interesting places to invest.
It is evident that economic activity must fulfil labour, environmental and other requirements but it is also necessary to admit that administrative procedures regarding investments and businesses must be simplified and rationalized, and should encourage, for instance, the concept of responsible statement.
In my opinion, new effective support measures for entrepreneurs should also be adopted and public policies of economic backing increased, to help in the first stages and the good development of new businesses.
I also find the establishment of efficient export and globalization support measures very necessary, if we are to follow the present global situation. I firmly believe that businesses that choose globalization or export enjoy better growing possibilities. In fact, most of them were better off during the recession because they worked in several countries and, therefore, they didn’t run the risk derived from selling products or services in just one country.
It would be a good idea to increase extrajudicial resolution of commercial conflicts, by promoting arbitration clauses in contracts, agreements between organizations or mediation procedures. In that aspect, in case of conflict, I encourage all employers to use the Mediation Institution of the Balearic Islands professional service, a body comprised of the Mallorca, Menorca, Ibiza and Formentera Chambers of Commerce and the Balearic Association of Lawyers and Notaries. The Mediation Institution was specifically founded to provide extrajudicial resolution of commercial and civil disagreements through negotiation between parties, which is, compared to a court resolution, much faster and also has the power of maintaining commercial relationships.
Last, I find it absolutely necessary to support new strategies and measures that make the Balearic Islands a pioneer region in the development of new technologies, especially those related to the tourist sector. I believe we have a great potential we must take advantage of, so that everybody in this sector considers the Islands a model.
What legal and tax changes do you expect that might favour the expansion of any company located in the Balearic Islands?
I am unaware of the intentions regarding the Balearic administrations, but I would recommend, on top of above mentioned measures, the Local law of the Balearic Islands to be encouraged; also, to boost tax measures that would, first, reduce costs derived from insularity (and plural insularities); second, allow an increase in high-quality residential investment; and third, attract investors.
Bartolomé Deyá, dean of the Faculty of Tourism in the University of the Balearic Islands (UIB), is an expert in his field. Deyá knows much about the constant evolution of one of the Balearic Islands’ most important sources of income.
What is your opinion on the present touristic situation?
Somebody known worldwide in the tourist sector, recently said to me: “I love to come to Mallorca because, in my opinion, you can breathe tourism all day long here: in every place, every hour”. No surprise that the Balearic Islands are one of the top touristic destinations in the globe.
Is academic education really so important?
Definitely. Well trained professionals are key in such a competitive sector. Training is essential if we want to guarantee the sector’s continuity. That’s the reason why the Faculty of Tourism of the UIB has made a strong compromise with society and is firmly committed to training in excellence. We want to offer qualified training in order to keep the sustainability of the present economic and social model in mid and long term.
How are you going to achieve that?
To start with, in order to improve our student’s linguistic competences and the international approach of the courses we are giving, we have created an international bilingual group: students receive most of their subjects (around 80%) in non-native tongues (English, French or German).
Everybody speaks about “globalisation” …
Yes, it is important. We believe in our studies’ globalisation. Each year, more than a hundred students, from over twenty-five different countries, drawn by our good international university ranking, end part of their studies with us… There’s a rich multicultural environment in our faculty. Also, many students from the Balearic Islands (and their numbers keep growing every year), decide to study abroad. Two dual-degree programs with two reputable universities have been agreed: one with the University of Applied Science, Worms (Germany) and another with the University of Ningbo (China).
Does the Faculty engage in practical training in companies or is it all just theoretical learning?
The Faculty does not only teach theories. Not at all. We have a close relationship with businesses and we have encouraged the hiring of prestigious professionals in the Islands touristic sector to work as professors. On the other hand, we have tried to establish good terms between the Faculty and employers. For instance, I like to stress the fact that Melià Hotels International made a strong commitment in creating the Melià Hotels International Chair in Tourism Studies and has invested nearly a million euros in the last fifteen years, to help training and investigation in our university. The cooperation of other firms like Logitravel, Actua group-ibeconomia.com, Viva Hotels and Resorts and BC Tours has also been very important. Thanks to this cooperation we have been able to create the Logitravel awards to the best students, the Actua Group – intereconomia.com Award to the best final project, the Viva Hotels and Resorts grant for student mobility and the BC Tours awards to the best touristic cruise route. All these different collaborations have not only helped our students very much but have also contributed to the promotion of excellence and improvement among them.
Planisi Group is about to celebrate its 70th anniversary. It has been a long way since Bartolomé Planisi, founder of the company in 1947, decided to build cylinder head gaskets for motors, which next day were delivered on a bike by his wife. In the 60’s he opened his first store, Can Planisi, in Plaza de España, Palma, and managed to become a model for the hardware trade.
Thanks to the team of good people that have been backing this firm, and thanks to their trust in innovation and permanent improvement, Planisi has been able to grow and diversify, keeping its unique trends: a friendly, special and personalized service that gives solutions to any customer’s request, no matter its complexity. This trust is the key factor that has allowed Planisi to stay for many years as a reference point for the hardware sector in spite of the strong competitiveness that exists.
Planisi is now run by brother and sister Gabriel and Francisca, and it has launched a new corporation image to impulse the company’s fundamental and original value: entrepreneurial spirit. Taking into account that co-workers and customers have always been, and will always be, the firm’s most important asset, the memorial slogan is specially dedicated to them: “Seventy years, THANKS TO YOU!”.
Planisi wants to challenge the future and keep growing so that, in years to come, the firm will still be a model in good service, diversity, specialisation, technical support and personalized attention, and maintain the excitement that has lead this Majorcan business for three generations.
Carmen Planas is, from 2014, the President of CAEB (Confederation of Business Associations of the Balearic Islands), the sole Balearic organization that represents companies of all sizes – big, mid, small, micro and self-employed – and sectors in the Islands.
What are the President’s goals?
Since the beginning I knew that we had to reinforce the independency of the CAEB; we also had to modernize it and, through the Impulsa Foundation, make knowledge-based and informed decisions, whether public or private, so that we could transform our economy according to the globalization criteria.
Why did the CAEB create the Impulsa Foundation?
We wanted to increase our businesses’ competitiveness. Not long ago, the Islands GDP per capita was the highest in Spain. We must increase competitiveness in the Balearic Islands because, if our firms improve, citizen’s wealth will improve as well.
What’s the most urgent challenge in the Balearic economy?
To recover former standards of wealth and well-being. We must take action immediately so that, united, the public and private sectors attract investments and supply trust and legal certainty. Only in this way can our businesses grow and create permanent and quality employment, which is what we as employers and the society wish and ask for.
How is the Islands’ economy doing?
Two years ago, when I accepted the responsibility of becoming president of the Balearic businesses representatives, we were in a recession. Today, our society is recovering. There’s still much to do but our economy is positively evolving and growing; it’s creating employment and more social security affiliations, which is a good sign because it means that Balearic employers are doing their homework and they’re doing it well.
You are always defending the Islands’ employers…
And I will always defend them because we are the ones that create employment. We start up new businesses, we invest, we take risks and, in our competitive efforts, we generate wealth and contribute to social well-being. Employers take responsibility for being the leaders of our society and do everything they can to improve the society.
But you also defend the employee…
I come from a business family has always had the employees’ interests at heart. My father told me that if employees feel a part of the company, everything goes better. The human factor is key in any enterprise. The majority of the Balearic businesses are family run; the employer is just another employee and knows that a motivated and satisfied staff, working in a safe and healthy environment, increases productivity.
What are employers asking of the government?
Dialogue. Public administrations shouldn’t make decisions behind the employers’ back. New taxes and measures that cause legal uncertainty don’t encourage investment nor competitiveness nor, therefore, employment growth. Economy needs stability and legal certainty.
What would you say to young entrepreneurs?
To fight for their vision. We must all promote entrepreneurship so that young people should consider business creation as a quality career opportunity. We must contribute, from all sides of society, to enhance the employer’s prestige so that our youth understands that starting up a business is fundamental to keep the welfare state we live in.
Brújula is a team consisting of 140 people that at the moment are distributed in our main of-fice in Palma, in Chile carrying out some projects and in some offices of our clients. We like to focus on the business of our clients. Therefore, on the basis of the specialization in the knowledge of said business, we bring more value beyond technology regarding Consultancy & Solutions. We use information systems as a lever in order to achieve our goals.
When we started in the year 2000, we made an approach that was breakthrough. Basically, it had two main pillars: commitment to Internet, as an essential tool that companies would use for management and absolute freedom. Thus, our clients and Brújula team stay with us be-cause they want to and not because of a subscribed binding contract.
We have an enviable atmosphere and climate that brought about the creation of one – off tour-istic knowledge. It has built up a set of productive sectors concerning said knowledge with special regard to technology. Both from Brújula and ICT, we do our best to set these skills through the innovation and the globalization of our companies. A tendency also shown by the touristic companies. The development of the global concept “Smart Islands” gives public envi-ronment a room for improvement in order to offer more digital touristic information featuring homogenous content.
All these features make the Balearic Islands a perfect place for investment, especially non-seasonal projects. Although, in order to affront investments is indispensable to set out if the infrastructures that we have are the most suitable.
What are the attractive aspects of Mallorca’s restoration sector, investment wise?
European investors are increasingly choosing our restoration sector, not only because Mallorca is a safe destination, but also because of the great amount of tourists that come here (more than twenty million a year). On top of that, Palma de Mallorca is in vogue; it is considered the capital of the Mediterranean Sea and of all the island’s gastronomy. This allows us to expand the season longer through the year; in fact, a number of restaurants are opening all year long.
Mallorca’s gastronomy has not reached a wide recognition among tourists yet, not as it deserves: what kind of initiatives is Restoration Mallorca developing in that direction?
It is true that Mallorca’s ensaimada and sobrasada are the most famous specialties of our cuisine, but we have other excellent products that deserve promotion, as well as great restaurants, chefs and even a Hotel School. Seven Balearic restaurants hold eight Michelin stars, which places the Balearic Islands amongst the first in Spain in that ranking.
But there’s still a lot to do. Among other initiatives, we must mention TaPalma, which will be celebrating its 12th edition this year; an agreement with the Balearic Barmen Association that will encourage joined training actions; “Enjoy PalmaSailing” project; another agreement with the Mallorca’s fishermen guild that wishes to promote sea food all year round; and saboreamallorca.com, a web platform we are developing right now.
In jointure with the Innovation, Investigation and Tourism Department and the Chamber of Commerce, we will also develop the Gold seal of quality for bars, restaurants and cafeterias in Mallorca that acquire local products, and we are already working with the Mallorca’s Wine and Cuisine Academy to get back old local récipes.
Do you think there’s enough official support in that aspect? Is more support needed in other áreas?
It isn’t enough. We are working with the Administration, but Mallorca’s cuisine, the small cellars and the local gastronomy need a lot more of support, because, for instance, making wine is much more difficult here than in La Rioja [a large wine region, located in the Middle North part of the Iberian Peninsula]. We believe our products should be present in all tourism fairs.
What role do you believe gastronomic tourism might have in the so much wished deseasonalisation of Mallorca’s tourism?
A very prominent role, undoubtedly, because gastronomic tourism is increasing. This kind of tourism, together with culture and sports, is one of the most important areas to work with in order to reach deseasonalisation. It is a fact that restaurants from Mallorca are receiving recognition all over the world and many of them make a difference by consuming local products, in order to encourage gastronomic tourism and prolong the touristic season.
José Luis Roses is the present owner of Bodegas José L. Ferrer. This family cellar has been in the business since 1931, producing wine in the Binissalem area. Ferrer family has run the cellar since Jose Luis Roses’s grandfather founded it until now, with his children helping out.
They currently have 120 hectares, covering around 400,000 vines of different sorts. This cellar gives more and more importance to local varieties. They have the red sort: Mantonegro or Callet; and the White one: Moll or Prensal Blanc.
Jose L. Ferrer company produces five different sorts of ranges: José L. Ferrer, the more traditional and well-known; Veritas, a reference in the Hotel, Restaurant and Catering distribution service; DUES, that mixes a local and a foreign variety in three different wines; Pedra of Binissalem, ecologic wine; and the youngest, Ferreret, made of 100% one red sort of local varieties.
“We are very much into innovation and creation of new wines, but it’s been years since that we expanded into wine tourism, further from our core business, which has always been wine production”, declares José Luis Roses. The privileged location of the cellar, in the centre of Mallorca, just twenty minutes away from Palma, and the ten or so million tourists that came to the island year after year, made them think about offering a new experience, one that would make Mallorca’s wines better known.
“In the past three years, visits to Bodegas José L. Ferrer have increased nearly a 40%, which is close to 18.000 people. The increase is mainly due to a better supply that includes more opening days and hours, multilingual staff qualified in enology and refurbishing the cellar so that it could welcome tourists”, points out the current owner. They also opened a shop were all their wines and many other Balearic products could be purchased.
One of the most advantageous aspects of this kind of offer is that it helps to de-seasonalise tourism. Their busiest months lie in April, May, September and October, which is quite significant for Mallorca, because visitors will gradually find more activities than just the beach and the sun.