Malaysian firms reap benefits of linkup

[ 13-05-2008 ]

Malaysian firms reap benefits of linkup

Small and medium enterprises under the Industrial Linkage Programme have turned in the highest sales ever recorded in a year since 1996

A TOTAL of 190 local small and medium enterprises (SMEs), which have been linked up to large companies and multinational corporations (MNCs) last year, have generated RM321.15 million sales.

This is the highest sales ever recorded in a year since the Industrial Linkage Programme (ILP) was introduced in 1996.

Small and Medium Industries Development Corp (Smidec) chief executive officer Datuk Hafsah Hashim said 722 SMEs have been linked to large companies and MNCs under the ILP between 1996 and 2007.

"Within the period, the companies generated RM772.93 million sales. But in 2007 alone, 190 companies recorded RM321.15 million sales," she said in an interview with Business Times in Kuala Lumpur on Tuesday.

Hafsah said the greater sales reflect the high-quality products and services supplied by these companies.

The ILP is aimed at developing domestic SMEs into competitive manufacturers and suppliers of parts and components and related services to MNCs and large companies.

She said local SMEs have also become more Internet-savvy as seen from higher online registrations and applications for SME grants.

Last year, there were 2,866 online registrations received by Smidec compared with 1,037 in 2006.

Online applications for grants also increased from 116 in 2006 to 532 applications last year.

Smidec, an agency entrusted by the government to support the development of SMEs, also saw nearly fourfold increase in applications for SME grants last year.

Hafsah attributed the increase to greater awareness among SMEs and Smidec's aggressive outreach programmes that penetrated capital cities and big towns in the country, as well as collaboration with industry associations.

"Smidec provides grants to the SMEs that walk through the company lifecycle from start-up to the export market," she said.

She also said that Smidec's advisory services, fiscal and financial assistance, market access and various support programmes are adequate to support the SMEs that participate in the growth corridors throughout the country.

"Naturally, SMEs will be integrated in these growth corridors. They will form the bulk of companies operating there such as logistics, research and development, retail and others," she said.

Among the relevant grants for SMEs to participate in the growth corridors include those for factory relocation and business start-ups.

"There is also Part Loan-Part Grant scheme for start-up companies that found that the start-up grant is inadequate for them. On top of the grant, these companies can apply for start-up loans from SME Bank or MIDF," she said.

Hafsah said Smidec's SME Competitive Rating for Enhancement (Score) programme, which determines a company's competitiveness, has been well-received locally and abroad.

Score, a diagnostic audit developed in-house by Smidec, evaluates SMEs based on seven parameters - financial strength, business performance, technology competency, automation, process development, product development and business efficiency.

Hafsah, who was among the pioneer staff in Smidec when the agency was established 12 years ago, said Smidec has grown significantly from 60 staff in 1996 to 196 staff today and has regional and state offices.

She said the challenge awaiting Smidec is greater when the government included services and agricultural sector under the scope of SMEs.

From 40,000 manufacturing companies in 1996, Smidec today has to oversee over 548,000 SME companies, which account for 99.2 per cent of total establishments in the country.

Out of 548,000 SMEs, 87 per cent are services, 6.0 per cent agriculture and 7.0 per cent manufacturing companies.

Smidec also has specific programmes designed for micro enterprises and women entrepreneurs.

Source: http://www.btimes.com.my/Current_News/BTIMES/Industries/SMEs/26SMID.xml/Article/