Published on: Thursday, August 28, 2014
Kota Kinabalu: Contracts and investment opportunities worth billions of ringgit are readily available to Malaysian firms but there are only a few takers, according to the Malaysian External Trade Development Corporation (Matrade).
A US$1.978 billion highway expansion work in Chile, fish and poultry investment opportunity worth Egyptian Lira 40 million in Egypt, toll road construction in Jawa in Indonesia worth US$2.14 billion and many more investment opportunities are available to Malaysian players.
But not many are aware that a unit under Matrade called Cross-Border Division has secured such opportunities for local players.
With over 40 network offices in leading trade centres worldwide, the small division does the market research, sniffs for new contracts, holds seminars, arranges meetings and conducts government to government policy checks and collaboration, to allow Malaysian businesses to venture out of the country.
They also pick up the business culture of the targeted nation, to enhance the probability of success in any form of ventures, so to speak.
Its Director, Amran Yem, said Cross Border works the exact opposite of the Malaysian Investment Development Authority (Mida), in that, instead of luring foreign investments into Malaysia, they work outward - making local businesses invest in foreign countries.
"We want Malaysian companies to open up their businesses to exports and grab opportunities outside of Malaysia," said Amran, maintaining that the unit deals directly with the principal companies and government agencies to avoid lobbyists and brokers.
He said this during a Customised Briefing on Cross Border Investment, here, titled "Expanding Your Market Abroad by Matrade."
But to ensure their mission succeeds, Amran said they need serious support from companies and, of course, registered under Matrade.
"It's for free and they could do it online. There had been several disappointing instances in the past as we had clinched very, very viable projects and offered them to locals, but none came forward," he said.
Previously, operating under the Mida, the Cross-Border Unit was transferred under Matrade in 2012 and charged a fee for their services.
Based on his experience, he said it is not a good idea for Malaysian firms to establish their presence in developed nations, but they could do very well in developing or Third World countries.
"Yes, of course, many foreigners would know some Malaysian brands, like Proton, but they still don't know what they do.
"They are literally nobody. Most of the jobs out there come from developing nations, not from advanced countries. We need to look into the niche market, instead of going against multi-nationals in modern nations," he said.
According to Amran, although there are Malaysian companies venturing out of Malaysia by themselves, having Matrade to partake in such effort would offer a value-added quality to trade missions.
And having them onboard will boost the viability and confidence in local companies by their foreign clients, he said.
"Furthermore, we also could arrange their appointments and if they are trying to convince their foreign clients, we could also assist in extending their invitations to them," he said.
He said their objectives is to ensure that the country's goal to attain a 70 per cent contribution to the National Gross Domestic Product by 2020, pointing out that it presently hovers around 20 to 50 per cent.
"Without the local business communities, we cannot do anything, as a government agency involved in business, that is why we hope for solid support from them," he said.
Based on their published logbook, multi-billion ringgit worth of projects and investment opportunities ranging from services to supplies covering seven nations, namely Chile, Egypt, Indonesia, Kazakhstan, Korea, Philippines and Yemen.
But the value could be more, Amran said, adding that it is just a matter of local companies being willing to take the risks.
He said under the Eleventh Malaysia Plan, the Government is also trying to gather inputs from local companies to address their present hindrances.
For example, the Cabotage Policy, a study is now being done to ensure that that no policy would hinder the development of exports and imports from Malaysia.
In the case of financial support, Amran said for Sabah businesses they could tap into the Singapore Third Country Business Development Fund (SBDF), where Malaysian businesses can team up with Singaporean entities to go abroad.
"We have a state fund for Singapore and Malaysia, a government to government arrangement," he said.
Another fund is the Fund of Feasibility Study (FFS), which was recently established, and Malaysian firms which may want to bid for contract jobs in other nations, can request funds to cover a portion of the cost.
Amran said only RM18 million has been allocated under FFS, saying Matrade is not promoting it on the national level for fear of involvement of lobbyists.
"So we only promote the fund to Sabahan companies which want to go to Indonesia to propose for the toll road project per se, what they can do is tap into the fund to look for a potential partner there. They can do it," he said.
According to him, the reimbursement would be around 50 per cent of the cost, with a maximum reimbursement of RM3 million per company.
Amran said the fund is limited and will end in 2018, or much earlier, if all of them are used up.
Furthermore, investments into countries like Chile, Australia, Brunei, Canada, Japan, Mexico, New Zealand, Peru, Singapore and the United States would be much better in the future, if the Trans Pacific Partnership pact is sealed, making it much easier for Malaysian companies to tap into opportunities from these countries, he added.
Still, the work doesn't stop there, as the companies, which had successfully ventured abroad and facing a few glitches, can also contact Matrade to address their issues.
"We want this input, we know there would be a lot of problems, but maybe companies are too shy or maybe because of bad experience, but we are serious in doing our work and want to help Malaysian businesses succeed in their foreign ventures," he said.