sme 100
TRANSCRIPT
Intro
Malaysia’s Fast Moving Companies91
MAIN CHALLENGES FACING SMES
The SME 100 debunks several myths that many (including some of us in the team) had about SMEs. From the response that we received, we can conclude that Malaysian SME own-ers are not just well read, they are technologically savvy and well educated. Accounts are generally in good order, and in
many cases, of greater depth and details than are legally required. When we asked for management outlook, little did we expect that the conference room we have hijacked will be stacked up high to the ceilings with business plans that would shame any dotcom era rentseek-ers. The amount of e!ort put was astounding, and more importantly – the myth that SMEs cannot get "nancing due to poor documentation is nothing more than hullabaloo. It is clear that most of the 100 will have no problem putting together a loan proposal anytime they wish to. We also asked the CEOs their take on how the economic climate in 2010 a!eced them, and the response showed not just "nesse, but ex-perience comparable to those of multinationals. Malaysian SMEs have "nally come of age. The SME 100 con"rm that the key challenges facing SMEs in Malaysia are many and varied. Whilst all SMEs asked feel that the Government are doing its part to help SMEs in general, most feel that the Government could do more and in more speci"c areas.These challenges are grouped into four broad groupings:
1. Access to Finance 2. Access to Human Capital 3. Access to Technology 4. Access to Market
ACCESS TO FINANCING For many SMEs, while banks and the Government alike are making avail-able funds for business expansion, the reality is – it is getting tougher to secure "nancing. The global "nancial crisis have caused "nancial institu-ions to be more cautious and credit processing has become so complex, that very often SMEs "nd it di#cult to both understand the procedures and decisions when it comes to loan processing.
Robert Michael of vacuum and compression solutions provider, Airo-$uid Sdn Bhd agreed that "nancing is important for the company. “Our traditional and biggest obstacle has always been in "nancing our proj-ects. Despite our management skills, variety of pro"table projects and great plans – none of it will work without money. We hope to overcome this barrier through recommendation via BMI to "nancial institutions”, he said.
“As we continue to grow, we require additional capital and "nancing power for expansions which are not easy to come by as an SME”, Cheng Nyek Paw of Bennova Mechanical Engineering Sdn Bhd added.
Rick Cheng, CEO of property developer Encomas Sdn Bhd couldn’t agree more when he said, “it’s "nancing, "nancing, "nancing. It is getting harder to secure "nancing from banks and they always set very high requirements for us to achieve in order to get "nancing. That is the most polite way to reject your loan. I guess it is the same for most SMEs.”
Ong Chin Seong of data centre operators Powerware Systems Sdn Bhd feel the government could do more in providing incentives to data cen-tre operators if we are serious about growing our technology footprint. “There are currently no government incentives for our data centre site infrastructure. There is also a lack of government assistance or "nancial aid to help companies doing data centre related business to aggres-sively go abroad to get overseas business. We hope to see changes in the government policies, such as lowering of duties for data centre site infrastructure related equipment, now that data centre has been identi-"ed as one of the core areas of development under the Economic Trans-formation Programme. The credit ‘crunch’ appears to be even more severe among service pro-viders. Many SMEs in the services sector do not own land or equipment, and as a result, "nd it di#cult to provide any form of security or collateral to "nancial institutions – resulting in an otherwise pro"table business venture unable to obtain "nancing for business expansion. We call this is the curse of collateral. As long as "nancial institutions in this country rely on the current antiquated secured-lending prin-ciples, business simply won’t grow. In more advanced countries, un-secured lending is fast becoming the rule rather than exception – and there’s plenty our SME banking operations have to catch up on.
ACCESS TO HUMAN CAPITAL Whilst the government has realised the severity of the brain drain, es-pecially among professionals and skilled workers, little is being done to help SMEs attract and retain world class talents. Take the Talent Corporation, for example. Whilst we are con"dent the plans will work given proper and transparent implementation, the re-turning talents are unlikely to want to work for SMEs.
“Our business is all about the talents that we have. Whilst the largest invest-ment may be in the technology and equipment, without our people, we will not be anywhere near where we are today,” said Lim Boon Siong, CEO of Vista Vision Specialist. Many SMEs such as Vista Vision Specialist has put in placed numerous practices to attract and retain talents – including paying above market average salary, annual bonuses, continuous training and a conducive and supportive working environment. So it is not true that working for SMEs is not attractive. But the fact is, given a choice, candidates would prefer to work for larger companies. This is where the government could step in and o!er incentives to returning talents to work in SMEs and pro-vide more incentives to SMEs to provide greater sta! bene"ts.
Alan Hoo of image consultants Chapter One Asia agreed, saying, “"nding the right candidate at the right time and the right price is like striking a lot-tery. Most capable young adults would prefer to work in MNCs as it looks more promising, not to mention more glamorous; making smaller organi-zations like us di#cult in "nding suitable candidates”.
“The biggest business challenges for us in 2010 and 2011 remain the availability of talents joining our team to fuel expansion plan, and the supply of manpower for the production side. Having the entire team to
truly understand the essence of sustainable quality – both in terms of products and services is another constant challenge that we are com-mitted to take head on”, said Liow Ren Jan, CEO of halal food manufac-turer AVS Sdn Bhd.
Bennova’s Cheng agreed, “due to the complex nature of our business, the biggest challenge we are facing in 2010 is the technical knowledge of our sta!. Many young engineers lack industry experience either due to their youth or training. We have had to continuously train while mentoring and coaching them”.
“Being a technology based business, we need to keep abreast with the development of the fuel cell technology. In this we need more knowl-edge-based human resource to support our innovation and develop-ment of the technology. To us, human resource is critical to the success of our company and business. As such we are diligently developing and tapping on university students to help fuel our manpower require-ments”, said Yiap Tea Sin of fuel cell manufacturers G-Energy Technolo-gies Sdn Bhd.
Chong Tiean Leang, Deputy CEO of International Brass Manufacturers Sdn Bhd felt 2010 was a year marked by severe labour shortage, on top of commodities and currency volatility, which has a!ected the compa-ny’s business.
Mohamed Shajahan Iqbal of Three-OPP (M) Sdn Bhd "nds recruiting skilled managers to be a challenge. “As managers, they will need to handle not only the sta!, but also customers e!ectively”. And Foo Chi Ching of Astramina Sdn Bhd think that retaining talents in SMEs is as challenging as recruiting them.
ACCESS TO TECHNOLOGY At a time when the country is preparing to move into high technology industries agressively, not only as a consumer but also as developers of technology – many SMEs still "nd it a challenge to acquire or develop new technology. This become a critical point as the rapidly evolving market demands cutting edge technology in almost every aspect of business, and the new mantra of the 2010s is ‘latest, best and most advanced’. While we want to move forward to become a global hub for biotechnol-ogy among others, we need to admit that many of the leading research and technological developments are coming out from Europe and North America. Finding partners and vendors who are willing to trans-fer these technologies to Malaysia is tough enough let alone transfering these technologies to SMEs. Again, this is an area that many SMEs hope the government will play a facilitating role.
“Business or product life cycle has become shorter due to market com-petition. The amount of development work required has increased and it demands the company to carry out more R&D seeding to secure fu-ture businesses”, said Char Tze Hiang of VAW Technology Sdn Bhd.
i-HR’s Supra Ramasamy agreed, saying, “The government have outlined a
plan to transition SMEs to K-SMEs, K as for knowledge. We have to realise that technology is moving fast and other SMEs in countries like South Korea and Brazil - another fast mover in the world economy - are leading the way. Our SMEs need to be more innovative to survive”.
ACCESS TO MARKET Although Malaysia’s entry into WTO and AFTA has promised to open up new markets for our SMEs, many of our SMEs are instead facing such intense challenge that many has even considered folding up. The year 2010 in particular has seen marked increase in competition. As the country recovers from the global "nancial crisis of 2008 / 9, many companies resort to cutting price to secure lost businesses and to get back on track. This has resulted in sti! competition in almost all indus-tries. The rising cost of goods did not help, as this has resulted in razor thin margins like never seen before.
Ken Kang, Managing Director of Wah Ha Children Products Sdn Bhd said, “In 2010, we faced sti! business challenge due to a signi"cant drop of purchas-ing power of domestic consumers. Our challenge in 2011 will be to build up the con"dence of consumers and regaining their purchasing power”.
Sunny Phang of Protect Print Sdn Bhd concurred. “The same challenges we faced in 2010 will also be faced in the 2011 with the uncertainty in the global economy. There has been a dramatic rise in regional / global counterfeiting which is threatening business livelihood and consumer safety, contributing to billion dollars of losses. There other main chal-lenges are rising production costs and a price war among players in the security printing industry”.
World Prominence Sdn Bhd’s Ahmad Fauzi Kari said that his company’s biggest challenge would be to manage the cost of doing business. “For us, high and cyclical raw and packaging materials cost, increase in other operational cost such as labour cost, utility cost and distribution cost are putting tremendous pressure on us. Passing the increased cost to the cus-tomers is not an easy task either,” he said.
Lim Kee Siang of My Gopeng Resort Sdn Bhd agree that the cost of ma-terial has gone up. “We now have to set-up a new department just to monitor product cost. Labour cost is also on the rise”, he said.
“In 2010, the major challenges were the labour shortage and deteriorat-ing currencies and limits export to abroad. We are expecting the protec-tionism of major economies will be the major challenge in 2011,” said Ratanam Visvanathan of Malaysian Aluminium & Alloys Sdn. Bhd.
More optimistic is seasoned entrepreneur Teoh Wun Seong of Kooka Marketing (M) Sdn Bhd, who said, “As I have always stressed to my team, in business, it is full of challenges. In fact, the business comes from the challenges that you could manage or overcome. We were not only sand-wiched in between our committed selling price and the ballooning op-eration cost but also undergoing tremendous pressure when the raw material cost starts rocketing since the beginning of the year. The pres-sure was really great! Anyway, we kept to our words and delivered our promises and commitments. In return, we saw more orders pouring in!”
Intro
Malaysia’s Fast Moving Companies93
The uncertainty of 2010 seems to be a recurring theme for many SMEs. Most of those interviewed agreed that it was a year of spiraling costs and decreasing margins.
Bernard Tang of Jayacom Information Sdn Bhd said that “the biggest chal-lenge is the increase in uncertainty in the market. Businesses have to reduce costs and improve productivity in the midst of adapting to changing mar-ket conditions. Customer expectations continue to change as well. From a strategic standpoint, we have to pay attention to basics like strong cus-tomer service. Our aim is to "nd ways to adapt, evolve and move forward despite uncertain conditions. This calls for creativity, $exibility and persever-ance. We have to focus on long-term visions even as we continue to wrestle with short-term challenges. We have to make our business models $exible so as to prepare for unexpected future trends”.
His view is shared by Toh Yew Liang of Everest Dental Supply Sdn Bhd. He said, “we compete in a competitive industry where success is dependent on its ability to increase market share and market presence. We are aware that our future performance will substantially depend on market accep-tance of the products and services we provide. A reduction in demand or an increase in competition in the industry in Everest’s existing or future products will have a material e!ect on our business, results and "nancial condition. Hence, Everest has set our motto as “we grow beyond technol-ogy” as a constant reminder”.
“For the most part of last year and 2011, the biggest business challenge will be that of the highly competitive industry with many players and suppliers that suppress average selling price (ASP) as well as competing for customers’ attention and support,” said Boey Tze Nin of EKO Metal Industries Sdn Bhd.
Some are even more optimistic. “We believe that the expertise we have developed in the Asian markets will enable us to continue to grow in the face of competition from other banking solution providers, some of whom may be more established and larger than us but may not have as much experience in these markets”, said Chris Phang of Cedar Plus Sdn Bhd, a provider of technological solutions to "nancial institutions.
FROM TOP TO BOTTOM, THEN LEFT TO RIGHT
Robert MichaelCheng Nyek Paw
Rick ChengOng Chin SeongLim Boon Siong
Alan HooLiow Ren Jan
Yiap Tea SinChong Tien Leang
Mohamed Shajahan bin Mohd.Char Tze Hiang
Supra RamasamyKen Kang
Sunny PhangAhmad Fauzi Kari
Lim Kee Siang, Ooi Beng YeawTeoh Wun Seong
Bernard TangToh Yew Liang
Boey Tze Nin Chris Phang
COMPLETE SME 100 LISTING
Advance Micro Product Sdn Bhd Robert Chua Industrial & Commercial Products
Advanced Air Traffic Systems (M) Sdn Bhd A Rahman bin Dardak Professional & Business Services
Airofluid Sdn Bhd Robert Michael Industrial & Commercial Products
Ascap Builders Sdn Bhd Hj. Azinal Abidin Construction, Property Development & Building Materials
Asia M & E Engineering Sdn Bhd Rathinam a/l Rengasamy Oil & Gas, Mining & Energy
Asia Pacific Flight Training Sdn Bhd Dato’ Faruk Othman Education & Training
Asian Resinated Felt Sdn Bhd Norsham binti Shamsuddin Chemical & Plastics
AYS Sdn Bhd Liow Ren Jan Food & Beverage
Ban Lee Hin Engineering & Construction Sdn Bhd Dato’ Tony Looi Chee Hong Construction, Property Development & Building Materials
Banway Marketing Sdn Bhd Tan Hoy Leong Trading & Wholesaling
Bennova Mechanical Engineering Sdn Bhd Cheng Nyek Paw Industrial & Commercial Products
Biofact Life Sdn Bhd Chua Wee Kok Healthcare, Pharmaceutical & Biotechnology
Bison Stores Sdn Bhd Dang Tai Luk Retail
Bizztax Alliance Sdn Bhd Sam Lim Financial Services
Breps Sdn Bhd Nelson Chiong Professional & Business Services
Brilliant Merchandising Sdn Bhd Liew Bin Trading & Wholesaling
Builtech Project Management Sdn Bhd Leong Kit Leong Construction, Property Development & Building Materials
Buzznet Sdn Bhd Sanjoy Bose Telecommunications & ICT
Cedar Plus Sdn Bhd Chris Phang Telecommunications & ICT
Chapter One Asia Sdn Bhd Wendy Lee Personal Services
City-Link Express (M) Sdn Bhd David Tan Transportation & Logistics
CMC Engineering Sdn Bhd Dato’ Abdul Rahman Yusof Telecommunications & ICT
Corporate Wardrobe Sdn Bhd Chia Kee Kim Trading & Wholesaling
Datamation (M) Sdn Bhd Alex Wee Telecommunications & ICT
Diayo Die-Casting (M) Sdn Bhd Lim Huat Chai Industrial & Commercial Products
ED-Online Technologies Sdn Bhd Lee Chuen Loong Telecommunications & ICT
EGOnutritions Sdn Bhd Lim Kim Tim Retail
EKO Metal Industries Sdn Bhd Boey Tze Nin Industrial & Commercial Products
Elabram Systems Sdn Bhd Yaw Lung Uei Telecommunications & ICT
Encomas Sdn Bhd Rick Cheng Construction, Property Development & Building Materials
EPS Computer Systems Sdn Bhd Kevin Liang Professional & Business Services
Era Herbal Products Sdn Bhd Jimmy Tan Healthcare, Pharmaceutical & Biotechnology
Everest Dental Supply Sdn Bhd Toh Yew Liang Trading & Wholesaling
Facade Treatment Engineering Sdn Bhd Yong Chuan Chin Construction, Property Development & Building Materials
Gastrodome Management Services Sdn Bhd Edward Hyde Hospitality, Food Service & Tourism
G-Energy Technologies Sdn Bhd Yiap Tea Sin Industrial & Commercial Products
GranuLab Sdn Bhd Romli Ishak Healthcare, Pharmaceutical & Biotechnology
i-HR Consulting Sdn Bhd Supramaniam Ramasamy Professional & Business Services
Icon Consulting Enginners Sdn Bhd Lim Wee Tin Construction, Property Development & Building Materials
Icon Trans Sdn Bhd Teoh Ai Lee Transportation & Logistics
Integrio Business Solutions Sdn Bhd Arnab Sarkar Professional & Business Services
Intellect Worldwide Sdn Bhd Solomon Lee Professional & Business Services
International Brass Industries Sdn Bhd Dato’ Muthukumar Ayarpadde Construction, Property Development & Building Materials
iProperty.com Malaysia Sdn Bhd Shaun Di Gregorio Trading & Wholesaling
Jayacom Information Sdn Bhd Bernard Tang Sip Hon Telecommunications & ICT
Job Hunt Sdn Bhd Dato’ Michael C H Wong Professional & Business Services
Kemuncak Facilities Management Sdn Bhd Nurol Amin Professional & Business Services
Kooka Marketing (M) Sdn Bhd Teoh Wun Seong Consumer Goods
KV Advertising Sdn Bhd Hui Kok Ping Professional & Business Services
Leaderonomics Sdn Bhd Roshan Thiran Education & Training
COMPANY NAME CEO/MD/GM INDUSTRY
Malaysia’s Fast Moving Companies95
COMPANY NAME CEO/MD/GM INDUSTRY
Leesa Formula Sdn Bhd Che Muna Din Healthcare, Pharmaceutical & Biotechnology
Linsun Engineering Sdn Bhd Ramlee bin Mohd Hashim Construction, Property Development & Building Materials
LMC Star Sdn Bhd Low Fung Hoon Trading & Wholesaling
Malaysian Aluminium & Alloys Sdn Bhd Dato’ Muthukumar Ayarpadde Industrial & Commercial Products
Mayfair Bodyline Sdn Bhd Karen Chong Personal Services
ME Technology Sdn Bhd Michael Wong Industrial & Commercial Products
Mediawork Resources Sdn Bhd Annuar Hamzah Professional & Business Services
Medical-Latex (Dua) Sdn Bhd Frank Foo Har Chai Consumer Goods
Multi Cargo Express Sdn Bhd Hoh Ding Wei Transportation & Logistics
My Gopeng Resort Sdn Bhd Lim Kee Siang Hospitality, Food Service & Tourism
MyKris Asia Sdn Bhd Chew Choo Soon Telecommunications & ICT
Natural Wellness Holdings (M) Sdn Bhd Shahnas binti Oli Mohamed Healthcare, Pharmaceutical & Biotechnology
NetEon (M) Sdn Bhd Richard Lim Wah Lee Trading & Wholesaling
Neuropower (M) Sdn Bhd Felin Lam Industrial & Commercial Products
OSA Technology Sdn Bhd Dr. Hyzan Yusof Industrial & Commercial Products
Pacific Engineering Sdn Bhd Chai Fook Chong Industrial & Commercial Products
Perusahaan Azan Sdn Bhd Mohd. Ghazali Food & Beverage
Plastech Industrial Systems Sdn Bhd Chin Yuan Tai Construction, Property Development & Building Materials
Platform2u.com Bhd Lim Tau Liang Professional & Business Services
Powerware Systems Sdn Bhd Ong Chin Seong Telecommunications & ICT
Power Woosh Sdn Bhd Tan Su Cheng Education & Training
Proguard Technologies (M) Sdn Bhd Cindy Choh Yem Mei Industrial & Commercial Products
Proreka (M) Sdn Bhd Yong Nam Yun Automotive
Protect Print Sdn Bhd Sunny Phang Professional & Business Services
Puncak Generasi (M) Sdn Bhd Fu Toi Ting Electrical & Electronics
Redring Solder (M) Sdn Bhd Wong Kum Fatt Electrical & Electronics
ROHM Semiconductor Malaysia Sdn Bhd Daisuke Nakamura Industrial & Commercial Products
SA Kargo Sdn Bhd Dato’ Samsudin Transportation & Logistics
Safetyware Sdn Bhd Wong Kee Wei Industrial & Commercial Products
Seasonings Specialities Sdn Bhd Foo Chi Ching Food & Beverage
Serba Dinamik Sdn Bhd Dr. Ir. Hj. Mohd. Abd Karim Abdullah Industrial & Commercial Products
Shins Corporation Sdn Bhd Teh Kong Yaa Retail
Smart Reader Worldwide Sdn Bhd Dr. Richard Ong Education & Training
SmartLink International Sdn Bhd Dr. Sharon Tong Professional & Business Services
Softegic Systems Management Sdn Bhd Lim Teik Han Professional & Business Services
SPV Nosa Sdn Bhd Mohd. bin Abd Azis Oil & Gas, Mining & Energy
Success Resources Sdn Bhd Richard Tan Education & Training
Ten Ten Telecommunications Sdn Bhd Tan Seng Giap Telecommunications & ICT
Three-Opp (M) Sdn Bhd Mohd. Shajahan bin Mohamed Iqbal Telecommunications & ICT
Timber Global Resources Sdn Bhd Malik Dhanani Furniture & Woodbased Manufacturing
Tomta Furniture Manufacturer Sdn Bhd Goh Sin Long Furniture & Woodbased Manufacturing
Translab Sdn Bhd Teo Cheng Hock Trading & Wholesaling
Ultra Racing (M) Sdn Bhd Elson Tong Kam Yew Automotive
VAW Technology Sdn Bhd Char Tze Hiang Industrial & Commercial Products
Vista Laser Eye Center Sdn Bhd Lim Boon Siong Healthcare, Pharmaceutical & Biotechnology
Wah Ha Children Products Sdn Bhd Ken Kang Trading & Wholesaling
Wellness Concept (M) Sdn Bhd Vivian Tan Healthcare, Pharmaceutical & Biotechnology
World Prominence Sdn Bhd Ahmad Fauzi Consumer Goods
X Trade Resources Metal Sdn Bhd Julian Leong Yu Loon Industrial & Commercial Products
Xpose Images Sdn Bhd Lee Kong How Professional & Business Services
