KKIP, SME Sabah to collaborate for mutual benefit
KOTA KINABALU: The SME Sabah Council, led by co-founder and president N.K. Foo met with KK Industrial Park (KKIP) chief executive officer Melvin G. Disimond and KKIP senior executives for a dialogue to explore the types of assistance that KKIP can offer to Sabah SMEs who are interested in the manufacturing of autoparts.
Melvin was also invited to be a VIP guest for the November 18 inaugural installation dinner for SME Association of Sabah (SME Sabah)
It was reported recently that Tan Chong Motor Holding Bhd (TCM) met with Chief Minister Datuk Seri Shafie Apdal to set up an assembly plant at KKIP.
According to Melvin, the proposal is now being revived and hopefully a firm proposal shall be tabled by this month.
Meanwhile, SME Sabah is hoping that the project will materialize soon and the Sabah government will protect and secure the interest of SMEs in Sabah as well.
In a courtesy call by SME Sabah on Deputy Chief Minister Datuk Seri Panglima Wilfred Tangau earlier this month, Foo highlighted in the meeting that conditions should be set for TCM to commit to obtain minimum 70% of the auto parts supplies from local manufacturers.
Foo was invited to attend the ‘Industrial Transformation AsiaPacific 2018' - an Industry 4.0 automated production machinery exhibition in Singapore from October 16-18. He was impressed with the robots and machinery which are so compact, cost effective and intelligent. Such technologies are also not very expensive and within the reach of SMEs.
Local SMEs are advised to embrace the IR 4.0 and prepare themselves for the opportunities that manufacturing offers to SMEs in Sabah not only from the manufacturing of auto parts but also parts for the aerospace and oil and gas industy.
Sabah has the competitive advantages of lower costs of land and labour, and ample supply of workforce.
However, the start-up capital cannott be too high for those small auto parts vendors.
In this aspect, Foo suggested that KKIP build an industrial complex (IC) to be rented to SMEs at a concession rental.
The benefits of an IC to KKIP are a steady recurrent stream of rental revenue and control over the use of the lots within the IC by KKIP.
With the modern compact machinery, large factory and warehouse spaces are not needed. This makes the IC concept workable.
Besides, KKIP should provide concession rental rates to SMEs, especially to start-ups. Rentals can be gradually increased over the years to nurture SMEs.
Currently, the smallest terrace type industrial factories at KKIP are selling about RM1.6 million, which is beyond the affordability of SMEs.
Over the years when the SMEs have grown successfully, they can then buy the terrace or even the semi-detached industrial factories from KKIP and operate independently.
In this way Sabah youths can either find jobs working for the assembly plant or for the Sabah SMEs who are starting a business of manufacturing auto parts, or aero space parts or parts for Petronas in the oil and gas industry. Some of the youths may instead take up the challenge and be their own boss.
Melvin cautioned that it was risky to depend solely on one big buyer -- the auto assembly plant. He also said some of the auto parts might have stringent requirements for high quality and reliability.
To this, Foo said with the conditions for TCM to buy from local manufacturers, this should secure the business for the local SME auto parts manufacturers; and the modern production machinery were fully automated. Thus the quality of the products manufactured will be as per the machine specifications, which can meet the high quality specifications for the auto or aerospace or oil and gas industry parts.
At the close of the dialogue, Melvin requested SME Sabah to solicit China investors for them.
SME Sabah agreed to use its vast connections locally and abroad to be on the lookout for prospective China and other investors, and introduce them to invest at KKIP.
SME Sabah also hoped that KKIP will continue to convey the messages from SME Sabah to the relevant state government bodies and alert them from time to time on SME Sabah's behalf.
Both KKIP and SME Sabah agreed to collaborate for a mutually beneficial relationship.
Also present from KKIP in the dialogue were Cecilia Amid, deputy CEO of KKIP Sdn Bhd; Frida Farah Bungga, general manager of KKIP Autocity Sdn Bhd; Samuel Wong, general manager of KKIP Property Sdn Bhd and Angela Tsen, sales and marketing manager of KKIP Sdn Bhd.
For SME Sabah, other than Foo, deputy president Michael Chin, vice president Tan Kai Tek, secretary Lawrence Wong, council members Callee Tan, Lau Jiin Woei and Lie Chun Vui were also present.