Chairman (Gibunco )

Gibunco was originally an underwater engineering and ship repair company, but has since diversified into petroleum, shipping and property development.Can you tell us how all of these different businesses can to be?

All of these companies came to be as a natural progression and extension of our first services, which was underwater cleaning and engineering.We initially started (in 1965) cleaning and services ships in order to improve their traveling speed in the water because in those days, the faster the ship, the more trips it could make, and thus the more money it would generate.I must also note that in those times, the fuel costs of operating a vessel were practically nothing at all.Today, times are very different and fuel costs amount to over 60% of the total running costs, therefore, now our services aim to improve ships’ fuel efficiencies.

After working as a marine engineer, I then worked for several years as a civil engineer at which time I was exposed to the building and construction industry, which explains how we ended up in the property development business.

Related to the fore mentioned cleaning and engineering services, we then began to sell oil to the some of the same ships and companies that we worked on with cleaning and engineering services.We began to do this in 1985, when we bought Scamp from Exxon, which included all the equipment and delivery systems they had.In 1989, we had 200,000 tons of bunkering done in Gibraltar by companies like Shell Gibraltar, which we thought was quite small considering that 70,000 ships passed through the Strait each year.Recognizing the potential demand, we set ourselves up with a Spanish oil company (Cepsa) and have been bunkering ever since.Today, we bunkering about 3.5 million tons of oil.

In relations to that, we then decided to start our own petroleum company, Peninsula Petroleum, in 1997.Peninsula Petroleum, with its association with the Spanish oil company Cepsa Gibraltar, has allowed us to develop Peninsula in many other places, so we have been helping each other.Peninsula Petroleum was not only involved with selling bunkering in Gibraltar but also worldwide.As an extension of these services, we also began being physical suppliers to other places around the world such as Panama and the Canary Islands.Although we have office all over the world, our head office is, and always will remain in Gibraltar.



Could you tell us a little bit about the property development side of Gibunco’s business in further detail?

This side of our business came about in the late 80s with the opening of the frontier when two things happened; one was that there was no longer an economic blockade, which meant that there were no more subsidies coming from the British government with regards to building and the housing program.As much as 87% of all properties in Gibraltar at that time was in the hands of the Gibraltar government or the Ministry of Defense.As a result of the fact that all of the financing from the British government for housing in Gibraltar (for social accommodation) and because of this housing was renting very cheaply for political reasons, the private property market was not viable.The second thing that happened when the frontier finally opened in the 80s was that Spanish contractors we able to come in and we were able to do things a little differently.

I then had an initiative of reclaiming a small piece of land for development in partnership with Atkins International of the United Kingdom (UK).I then had various partners that were eager to pursue this business of reclaiming land and building homes and apartment complexes.We then set up Gibraltar Homes, which today is a party of the Montagu Group, and we began to work directly with the government to develop other pieces of reclaimed land.

With the arrival of the Bassano government came an even eager proponent of land development and reclamation, not only for personal accommodations and housing but also for commercial and office space.The new government wanted to do things differently, so we had to negotiate and set up a joint venture company between the government, a Dutch company and ourselves.With this company we were given the rights to a piece of reclaimed land on which we built several large apartment complexes with 650 and 717 units.Currently, on that same piece of land we are now building Euro Plaza.In order to make these properties attractive and affordable to local buyers we came to an agreement with the government where by we capped the prices.The government also bought half of the units and offered the other half interest free for 8 or 9 years, which help first-time, home buyers considerably at that time.



Could you give us your thoughts on where the real estate market is today and where you see it going into the future?

Things have been moving at a very fast pace on the property development side.We are building apartments in Euro Plaza, which are being resold at over 100% of the initial costs.We also have other plans for two other property projects with other shareholders.We are involved with the Mid-Town development, which is basically outside the city walls and it is a bit controversial because we want to build the first high rise, but I think it is a good project because it saves the most precious asset in the market, which is land.

Right now, the Gibraltar real estate market is on a high, and obviously when the market is so good you tend to get a lot of new developments coming, which is the case now.There is chance that we will over-develop and things will level off, but for now there is room of a good number of these projects that are being developed.



How would you describe you management style?

I have never really been concerned with having partners in my business.What is Gibunco is 100% me, but I think the success has been in diversifying and whenever I have needed a partner or when there has been a partner willing to business with me, I have done business with a partner.I have always been comfortable with having business partners in certain ventures, and that has always worked out great for me.

In my company, we have had employees who have literally died in their late 70s because they didn’t want to leave the company or they just wanted to keep working.I think there has always been a very close-knit relationship between management and the employees.



Where do you see the company in three to five years from now?

What gives me a lot of peace of mind is that we have a very solid base with respect to the fact that we are not in debt; we tend to make sure the income streams are there and that they are safe.We do not necessarily grow faster than we should and expose ourselves to unneeded risk and we always have a lot of leeway when business slows down, so we are not highly geared.We like to do things in which we can handle safely.Of course we incorporate all the latest technique and strategies in management, equipment and systems to make sure we have access to details, so that we can properly manage the business.



Do you envision Gibunco further diversifying into any other areas?

I have been tempted on the ship holding side because that has been a very large growing market, but I really limit that to what contributes the most to our business, such as bunker barges, which can move our own products.Generally speaking we are always very open to new initiatives as long as they are not going to be a distraction to what we know how to do.

Do you think there are any areas of the port in which the government could improve in order to entice more ships to call here?

I form part of one of the advisory committees for port matters, so obviously I make my views known in those meetings and I must say that most of the time they take into consideration my thoughts and concerns.



What are some of the most current issues that the Gibraltar Port Authority is concerned with?

At this moment in time, we are trying to open up a little more regional dialogue. With the Chief Minister’s new initiative, there are a number of things in which we must be seen to be attempting to support the other side [the Spanish side] of the Bay in terms of emergencies and all sorts of things. Therefore, there are going to be a number of things that we will propose, in which surrounding ports will be able to support each other in a variety of ways. That will obviously be something that will take place naturally, however at this moment in time there is a political component involved.

There is some concern about the Strait’s ports like Ceuta and Algeciras, which is a massive container port of trans-shipment, as well as the new port in Morocco. However, having said that, in the very long-term I think it will level out and eventually help the entire area. For example, the Spanish enclave in Ceuta, which recently does not seem to be so attractive on the bunkering side, and which again politically has had its difficulties with Morocco, also showed concern with the new port in Morocco. I think it is important to remember that when you have a container terminal, you naturally develop an industrial area around it, which I think will also happen in Morocco. Now, when you consider that Morocco has cheap labor, which not even southern Spain has anymore, a lot of the Spanish industry in southern Spain could use Morocco as a place to have some of their manufacturing done. Instead of importing low cost labor, why not manufacture there. Another possible advantage is that Morocco is not in the EU, so certain regulations that may apply to business or manufacturing in southern Spain, would not apply in Morocco. If you are going to have a lot of Spanish business people from southern Spain coming to that industrial zone in Ceuta, what better place to set up a company with the banks and lawyers, etc, than in Ceuta itself. So, my thought is that little Ceuta could end up being the Andorra of northern Spain in the south.



What would be your personal message to the US News readers?

I have been to the United States many, many times and I always enjoy going.I know that the United States is going through some very difficult times.You can see the different approach from Bush in his second term, but I think that despite the bad press that the States receives in different countries around the world, for what seems to be their “dominant” position, I do not think it is very dominant because we will all benefit, world-wide, from all of their different initiatives.