Friday 22 November 2013

Hurdles in doing business in Malaysia

Singapore firms cite transport and border issues as the biggest obstacles
By Rachael Boon, The Straits Times, 21 Nov 2013

SINGAPORE businesses have flagged transport and border issues as the biggest obstacles to setting up shop in Malaysia.

Many Singapore firms are eager to tap into the abundant opportunities across the Causeway, with Iskandar, in particular, a major investment hot spot.

But small and medium enterprises (SMEs) yesterday raised various concerns at the Malaysia Business Forum 2013. The annual event, organised by the Malaysian Investment Development Authority (Mida), was held at Raffles City Convention Centre. Ministers of both countries were also at the forum.

Transport woes and border crossing congestion were raised by a number of Singapore firms.

Mr Y.K. Law, business development manager of logistics firm Choon Heng Logistics, said: "For Singapore firms wanting to export to Malaysia, they have to use Malaysian trucks or truckers. Sometimes, they are not on time and the service level is not there."

He hopes the Malaysian government will consider allowing approved logistics firms to use Singapore trucks instead.

Questions from Singapore SMEs were answered by Malaysian officials, including the Minister in the Prime Minister's Department, Dato' Sri Abdul Wahid Omar; the Minister of International Trade and Industry, Dato' Sri Mustapa Mohamed; and Malaysian High Commissioner to Singapore Dato' Husni Zai Yaacob.

Some participants called for making the Customs, Immigration and Quarantine Complex more efficient, or making the proposed high-speed rail a seamless experience between Singapore and Malaysia.

Mr Wahid said: "The aspiration is there, we have to work together to make it work. In Europe, you have one processing point and when we implement the high-speed rail, we also hope to have something similar.

"These are subject to discussion and there are some security issues being raised, so allow us some time to discuss with our Singapore counterparts."

There were also calls for more support from the Malaysian government for Singapore SMEs.

For example, Mr Henry Tan, president of the Association of Medical Device Industry (Singapore), is seeking greater collaboration in technology development and innovation.

After the forum, Mr Tan told The Straits Times: "Mida has approached me and is interested to see how they can help, and it is a positive step to build collaboration rather than see this as competition."

The call for more support reflects the growing appetite for doing business in Iskandar.

Trade and Industry Minister Lim Hng Kiang said at the forum: "Singapore emerged as the top foreign investor in Iskandar. As of June 2013, Singapore's investments in Iskandar accounted for 16 per cent of its total foreign investment."

The region is moving towards attracting more quality investment from high-value-added industries such as aerospace. This could be an issue for lower-cost or labour-intensive firms here.

Mr Victor Tay, chief operating officer of the Singapore Business Federation, said: "It's no longer a foolproof business paradigm to keep all the high-cost operations here and relocate the low-cost operations there, especially with Johor land prices escalating... sooner or later Iskandar industrial park and manpower costs will also spiral upwards...

"For SMEs that belong to a certain point on the value chain, it is no longer about competing by cost, but about moving up or rejuvenating your own business model."


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