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SMEs must transform: Shafie
Published on: Sunday, June 24, 2018

Kota Kinabalu: Chief Minister Datuk Seri Mohd Shafie Apdal said small and medium enterprises (SMEs) in the State need to consider re-modelling their business and find new markets and avenues of growth in the face of evolving challenges in the economic environment.

"The age of Digital Economy has brought unprecedented opportunities and challenges to Malaysia economy, especially to the SMEs sector which forms nearly 99 per cent of the businesses in the country.

SMEs are strategically placed to take the most advantage of digital disruption, as they are more agile and flexible in meeting the needs of the new economy.

"Unfortunately, only a small number of SMEs have seriously embarked on the path of transformation.

Many of the SMEs are facing tremendous constraints on the journey of transformation.

They lack entrepreneurial skills, low capability in adopting high-end technology, limited funding, lack of knowledge and skills in management and marketing under the new economy," he said.

He said this in his speech, which was read out by Deputy Chief Minister Datuk Seri Wilfred Madius Tangau, at the Platinum Business Awards (PBA) 2018 Sabah Roadshow at a hotel, here, Saturday.

Shafie said he, however, believed that these challenges can be overcome when the Government and SMEs community come together and work hand-in-hand to transform SMEs into competent, innovative and technological driven enterprises.

"In order to achieve this goal, there is no short-cut but to develop the culture of learning, to strengthen capacity building of SMEs in order to embrace disruptive change and catalyse success."

He said the country is at the beginning of a new chapter.

"We have a new Federal Government and a new Sabah Government whose leadership is committed to inclusive approach to growth. We are committed to ensuring the prosperity of the people of Sabah by enhancing the State's economic growth. And for this, the SMEs sector is going to play the key role in our efforts to boost industrialisation and entrepreneurship in Sabah.

Shafie said he was made to understand that the organising committee of the Platinum Business Awards is taking bold steps to increase the global presence of the Awards by engaging Asean SMEs and established foreign enterprises in Malaysia to take part in the Awards.

"Indeed, this is a timely move amidst the fast changing business dynamics at both regional and global levels.

As Malaysia's domestic demand is shrinking, SMEs should now look outward for growth.

We should explore new platforms to promote our products and services, as well as the opportunities to be integrated in the regional or global value chains."

He said the PBA 2018 theme, "Local Innovation Global Recognition", was a timely message for SMEs as there was a need for SMEs to adopt cutting edge technologies to continue to innovate in pursuit of excellence.

Meanwhile, when met, Tangau said the total GDP for Sabah is RM80 billion and currently the contribution of the manufacturing sector to this GDP is 7.5 per cent.

"In order for Sabah to be a developed economy, contribution by the manufacturing sector must reach 35 per cent.

"So the challenge is to push from 7.5 per cent to 35 per cent is great. We need investors to come to the State, especially to key destinations in the State such as POIC Lahad Datu and Sogip Sipitang.

"We would like to see the east coast of Sabah as an industrial belt because a large chunk of the State's natural resources are in the east coast. Sabah has 1.5 million hectares of oil palm plantation and the oil and gas reserves are the biggest in the country.

"So we need investment but at the same time it is important to grow home-grown Sabahan industrialist in the State and thus we want the SMEs to be more dynamic."

He noted that the Government would like to work with (SME associations) as it wanted to see the State's natural resources be a blessing for the State.

"In the past, it was characterised by an extractive economy where timber was felled and exported and crude palm oil was exported, for example. "Now the State Government has decided to ban the export of timber and one of the reasons was for the timber to be processed downstream but we want to also see a win-win situation for all."

He said he had instructed his officers to look into and facilitate the matter to ensure the growth of the (wood) industry in the State.

Madius also reiterated that SMEs in the State have to seriously look at adapting or using technology to increase their efficiency and productivity, saying technology can also assist them to do certification.

During the event, Tangau also announced that the State Government was donating RM50,000 to the Sabah SME Association.

Also present was Consul General of the People's Republic of China in Kota Kinabalu, Liang Caide, SME Association Sabah President Foo Ngee Kee, SME Association of Malaysia Vice President cum PBA2018 Organising Chairman Chey Onn Wah and SME Association of Malaysia National Deputy President Ong Chee Tat. - Neil Chan

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