Associations join hands with ministry to boost Sabah SME growth
KOTA KINABALU: The SME Association of Malaysia (SME Malaysia) and SME Association of Sabah (SME Sabah) are prepared to work closely with the Sabah Government to increase the contribution of SMEs to the export of Sabah.
Currently, the local market was too small in order to achieve economy of scale. The SME Malaysia has proposed to MATRADE on conducting SMEs go-export nationwide roadshows, which aimed to recruit 10,000 SMEs to take part in the programme.
SME Malaysia and SME Sabah disclosed this when they paid a courtesy visit to Deputy Chief Minister cum Minister of Ministry of Trade and Industry, Datuk Seri Panglima Wilfred Madius Tangau, on November 19.
The delegation, comprised of ten members, was led by Datuk Michael Kang Hua Keong (National President of SME Malaysia) and Foo Ngee Kee (CoFounder and President of SME Sabah).
Among the delegates present were Terence Kuah (National Vice President of SME Malaysia), Foo Yen Lay (National Vice President of SME Malaysia cum President of SME Klang), Datuk Grace Chia (National Council Member of SME Malaysia), Lawrence Wong (Secretary of SME Sabah), Wilfred Lim (Vice President SME Sabah), Aik Lai Choo (Vice President of SME Klang), See Leng Moi (Treasurer of SME Klang) and Lai Ngan Yin (SME Training Director of SME Malaysia).
Kang suggested that the Sabah Government consider providing further export incentives to SMEs, and to work hand-in-hand with SME Malaysia and SME Sabah in recruiting SMEs to join the SMEs go-export programme.
Tangau said that his main focus would be on upscaling the manufacturing base in Sabah, especially in helping the manufacturers to adopt advanced technology in production, with the ultimate goals of increasing export and job creation.
At the moment, the state government assisted ten SMEs to take part in the SIRIM-Fraunhofer Programme, which would provide technology audit and assistance to the participating SMEs moving toward Industry 4.0.
He welcomed the efforts of the association to assist the Sabah Government in promoting awareness of the SMEs, as associations might leverage on their close rapport with the SMEs.
Kang also suggested that more measures should be introduced to attract foreign investments to the Free Trade Zone (FTZ) in Sabah.
Malaysia enjoyed advantages in export to the US, Europe and some Muslim countries vis-a-vis other ASEAN countries. Hence, this has become an attraction to the Chinese manufacturers when they searched for overseas production base.
Foo suggested that the state government could focus on the BIMP-EAGA scale in promoting FTZ of Sabah. The region was rich in agricultural produce, so effort should be carried out to organise the collection and management of the produce for export.
He elaborated that many of the SMEs’ products lacked of proper packaging and branding, and the costs of packaging was expensive in Sabah. This could be resolved through increasing the volume and getting the design and packaging services from China for the small local producers in Sabah.
Foo echoed the view of the Deputy Chief Minister that more value-added activities should be introduced to the natural resources industry in Sabah, in order for the state to maximise the economic benefits.
He also indicated that more stringent conditions should be imposed on the grant concession to the investors, in order to ensure that these investments were beneficial to the local SMEs.
The other challenge was the high costs of utilities in Sabah. The cost of generating electricity in the state was as high as 40 cents per unit, and there had been shortage of water supply in industrial parks.
Operators in Lahad Datu Industrial Park had been using lorries to carry water to their plants, as a result of lack of water supply. These issues contributed to high costs of doing business in Sabah.
Other issues such as upskilling of workers, promotion of tourism, promotion of oil and gas industry with the participation of SMEs in Sabah, certification of pineapples and other local produce by the Sabah state agencies were discussed as well.