Smidec to play bigger role in sector

THE Small and Medium Industries Development Corp (SMIDEC) will be the central coordinating agency to develop the SME sector in Malaysia, International Trade and Industry Minister Tan Sri Muhyiddin Mohd Yassin said.

The new responsibility recognises the agency's efforts throughout the years to implement small- and medium-sized enterprise (SME) programmes and initiatives.
SMIDEC will change its name to SME Corp and will begin operation on January 2 2009, after amendments to the current SMIDEC Act is completed.

"I am confident that SME Corp will be able to continue and assume this new role and responsibility more effectively," Muhyiddin said in his speech at the SMIDEC Night 2008 in Kuala Lumpur.

Also present were SMIDEC chairman Datuk Mohamed Al Amin Abdul Majid, International Trade and Industry Ministry secretary-general Datuk Abdul Rahman Mamat and SMIDEC CEO Datuk Hafsah Hashim.

Muhyiddin said with the new expanded functions, SME Corp will act as a single point of reference in the formulation of policies and strategies for the SME sector.

"It will also be responsible in coordinating SME development programmes, not only across all economic sectors but also across 18 ministries and 60 agencies," he said.

SME Corp will also set up branch offices in all states.

"To undertake this expanded roles and functions, it is anticipated that SMIDEC will require an additional 300 staff to complement its current strength," he added.

Muhyiddin said in view of the new development, it is important that SMIDEC officers are continuously well-informed and knowledgeable, particularly to provide support and services to SMEs.

He said under the Malaysia-Japan Economic Partnership Agreement initiative, SMIDEC and the Japan International Cooperation Agency (JICA) have collaborated to train 50 SMIDEC officers as SME Business Counselors.

So far, a total of 32 officers have undergone the training programme. The training modules include basic SME counselling, financial and management planning as well as production management.

They would equip officers with the necessary skills and knowledge to provide advisory services to SMEs.

- Business Times

Sirim's efforts help boost image of Malaysian goods

One of the agencies that has been working hard to see strong growth of Malaysian SMEs is SIRIM Berhad. I had the liberty to talk to its chairman not too long ago and this posting is to share with everyone what he had said at the interview. Here it goes...

HAVING been around for more than 30 years, Sirim Bhd has successfully positioned itself as a leader in technology, quality and conformity assessment services.

It has chalked up numerous achievements in providing technological, innovative and quality solutions in supporting Malaysian industries, including small-and medium-sized enterprises (SME), to compete in the global market.

"Sirim's efforts throughout the years have boosted the image of Made-in-Malaysia products for their quality, safety and reliability thus facilitating their entry into overseas markets," Sirim chairman Datuk Zulkifly Rafique told Business Times in Shah Alam.

He added that Sirim's expertise in industrial technology is comparable with those offered by developed nations. This is evidenced through sealed memorandums of agreement and memorandums of understanding with various international agencies such as MIT in the US, Arter Technologies Ltd from Russia and AIST, Japan.

"Sirim is also collaborating with several renowned internationalResearch & Technology Organisations including the Global Research Alliance (GRA)," he said.

GRA is an elite grouping of nine research organisations incepted with the main purpose of sharing knowledge and resources towards creating research that would benefit the societies and world communities.

Apart from Sirim, other members include renowned research organisations from Australia, Germany, South Africa, Finland, the US, India, Denmark and the Netherlands.

Similar to its involvement with GRA, Zulkifly said, an important note to mention is Sirim's role as the secretariat to the World Association of Industrial and Technological Research Organisation (WAITRO).

Through WAITRO's platform, Sirim is able to promote home-grown technologies and services with projects such as "Enhancing Capability of Hydro-Generator and Extending Power Supply to Larger Areas to Support Post Harvest Processing Activities of Local Herbs" in Tambunan, Sabah.

More on international recognition, Sirim QAS International Sdn Bhd, a subsidiary of Sirim Bhd, has been accepted as partner in the highly-esteemed Switzerland-based International Certification Network, IQNet.

With the acceptance, it provides Sirim QAS global recognition and worldwide market access, and furthermore, certificates issued by Sirim QAS International are accepted across the world through IQNet mutual recognition.

"This is indeed a great opportunity for Malaysian products to penetrate the market," he said.

At the national front, under the Ninth Malaysia Plan and the Third Industrial Master Plan, Sirim has been given the mandate to continue its role in science, technology and innovations to realise the nation's aspiration of becoming a fully developed nation by the year 2020.

Sirim as a national development agency, is tasked with several responsibilities such as developing and transferring new and advanced technologies to Malaysian industries.

As for this year, Zulkifly said, Sirim has identified new areas to be focused on, including nanotechnology, green materials and renewable energy.

In supporting the role, Sirim has several flagship national projects which are the Advanced Materials Research Centre (AMREC) in Kulim, National Metrology Laboratory (NML) in Sepang, Advanced Manufacturing Technology Centre (AMTC) in Bukit Jalil, the National Centre for Machinery and Tooling Technology (NCMTT) in Rasa and the Environmental and Bioprocess Technology Centre (EBTC) in Shah Alam.

"The five centres have become referral points both domestically and internationally," he added.

Zulkifly said blending quality with technology innovations would ensure a better future for Malaysian companies as they forge forward to drive the nation to obtain developed-nation status.

- Business Times

Additional Info on BNM announcement

Participating Financial Institutions of the Pembiayaan Mikro Scheme

Commercial and Islamic Banks
1. Alliance Bank Malaysia Berhad
2. AmBank (M) Berhad
3. CIMB Bank Berhad
4. EONCAP Islamic Bank Berhad
5. Public Bank Berhad
6. United Overseas Bank (Malaysia) Berhad

Development Financial Institutions
7. Bank Kerjasama Rakyat Malaysia Berhad
8. Bank Pertanian Malaysia Berhad (Agrobank)
9. Bank Simpanan Nasional

Definition of Micro Enterprises

The National SME Development Council defines micro enterprises as follows:

Manufacturing and Manufacturing Related Services sectors
- Businesses with less than:
* RM250,000 annual sales turnover; or
* Five full-time employees.

Primary Agriculture and Services sectors
- Businesses with less than:
* RM200,000 annual sales turnover; or
* Five full-time employees.

The definitions can also be found at the following link located in the SMEinfo Portal: http://www.smeinfo.com.my/

Establishment of a RM200 million Micro Enterprise Fund

Bank Negara Malaysia on 4 Nov 2008 announced the launch of a RM200 million Micro Enterprise Fund to increase access to micro financing for micro enterprises with viable businesses, in this current more challenging business environment.

Given that a significant percentage of SMEs in Malaysia are micro enterprises, adequate access to financing for this segment of businesses is vital so as to enable them to contribute to the economic development of the nation.

Bank Negara Malaysia will channel the funds to micro enterprises through the existing Pembiayaan Mikro scheme. Currently, nine financial institutions participate in this micro financing scheme.

The Pembiayaan Mikro scheme has successfully benefited more than 40,000 micro enterprises since it was introduced in 2006. Under the Pembiayaan Mikro scheme, micro enterprises with viable businesses can obtain micro financing up to RM50,000 for working capital or for capital expenditure.

Micro financing under this scheme requires no collateral, minimal documentation and provides for quick approval and disbursement. Pembiayaan Mikro is offered at more than 2,600 branches and affiliates/agents of the participating financial institutions that display the National Microfinance Logo.

Participating financial institutions will determine the interest or profit rate to be charged and applications are subject to the normal credit approval process of the participating financial institutions.

For further details, micro enterprises can approach any of the branches and affiliates/agents of the participating financial institutions that display the National Microfinance Logo, or contact BNMTELELINK at 1-300-88-5465.

Bank Negara Malaysia

Squeezed by rising costs, falling orders

SMEs are facing a tough time amid rising costs and a drop in both domestic and export orders due to global economic uncertainty.

Some have resorted to raising the price of their goods to limit the squeeze on their profit margins.

"Although pockets of stronger performance do exist in the manufacturing world, it is a real concern that orders and output have fallen and areset to fall again," said AOB Engineering Sdn Bhd (water filter distributor) managing director Zainal Silong.

He said the company has had to put on hold plans to invest in machinery, as well as spending for research and development (R&D) and training.
Rising costs are a challenge to everyone in the value chain, from manufacturers to suppliers, distributors and end-users, Zainal added.

"There is no doubt this is a challenging time for many small- and medium-sized firms. Many are trying to stay on top of higher energy andraw material costs, and are finding it difficult to pass these on to customers through higher prices," he said.

A furniture industry player meanwhile, said the government needs to tackle head on the problems facing the economy.

"It must avoid adding any further costs to business and put in placepolicies which will provide the building blocks for an upturn," he said.

SMI Association of Malaysia president Chua Tiam Wee had said areas where SMEs faced challenges include human resource development, access to information technology and technology sharing, access to financing facilities and market access.

"The SMEs' ability to adapt in these areas quickly is crucial not only to them to remain competitive but also to the country's economic growth,"he said.

SMEs make up more than 95 per cent of the business establishments in Malaysia. He hopes that the government will continue to review the fuel price tohelp the overall market to recover.

"By lowering the fuel price, manufacturers can reduce operationalcosts, and this in turn could result in lower cost of products for consumers," he said.

He said although the government announced a slight reduction in fuel price, there is no mechanism put in place to ensure that prices for other goods would come down as well.

There were also suggestions that the government set up a SME college to provide proper guidance and training to industry players and appoint a minister to solely overlook the development and tackle problems faced bySMEs.

- Business Times