SME Bank of Malaysia in collaboration with Malaysia External Trade Development Corporation (MATRADE), organised a trade delegation to the UAE in conjunction with the recently concluded oil and gas show (ADIPEC) in Abu Dhabi.
The mission was aimed at providing opportunities for Malaysian SMEs in the field of oil and gas to expand their presence in the market and establish business partnerships with the UAE and its neighbouring countries — the MENA region.
The mission was led by Datuk Dr Mohammad Hardee Ibrahim, group chief corporate strategy officer of SME Bank Malaysia. The event is quite significant since it leverages strategic collaborations between various ministries, agencies, foreign embassies and trade industry associations in implementing export-related programmes to create more opportunities for SMEs in Malaysia.
Discussing Malaysia’s national economic landscape post-Covid-19, Ibrahim said: "Malaysia recorded an impressive economic performance during the first half of 2022 by registering a GDP growth of 8.9 per cent compared to the same period in 2021, mainly resulting from pent-up demand, base effect factors, normalising economic activities, tight labour market, supportive policy measures, and resilient external demand."
"Economic expansion was also supported by strong manufacturing performance and a recovery in the construction industry, which outpaced contraction in the agricultural and mining industries," he added.
Ibrahim emphasised the contribution of the SME sector to Malaysia’s economic development. He said: "In 2021, the Malaysian SME sector's contribution to GDP was 37.4 per cent; recording a growth of 1.0 per cent compared to a negative 7.3 per cent in 2020. Employment in the SME sector is currently around 48%. In 2021, SME sector exports were recorded at RM 124.3 billion, an increase of 5.4 per cent over 2020. The SME Bank Business Export Program (BEP) 2020-2025 is one of the initiatives taken to achieve the stated goal above."
Further elaborating on BEP, Ibrahim referred to it as a structured intervention programme that develops participating companies’ potentials through six specific parameters including, production/technical; financial; human capital; export requirements; marketing; and standards and regulations. "The goal is to nurture and develop more SME exporters between 2020-2025. SME Bank is targeting 47 companies to enter new markets or expand their existing markets and record additional export sales."
A total of nine Malaysian O&G companies participated under SME Bank Export Acceleration Mission (EAM) to ADIPEC 2022.
Highlighting the key takeaways from this exhibition for Malaysian SMEs, Ibrahim called ADIPEC 2022 an excellent platform for Malaysian O&G companies to keep abreast with the latest developments in petroleum and gas technology, participate in global opportunities as well as create networks and identify global partners. "The companies were able to rekindle old ties with existing partners, strengthen existing business partnerships and form new models of cross-sector collaboration and maximise value across businesses among the global players of the industry," he said.
During ADIPEC 2022, the companies under SME Bank EAM successfully posted actual sales of $3.78 million and registered potential sales of $21.33 million over three years. During the visit two of the participating Malaysian O&G companies also signed MOUs with their global counterparts to venture into new markets.
Malaysian Government through the Ministry of Entrepreneur Development and Cooperative (KUSKOP) and PETRONAS, the national oil firm, have together developed and produced world-class Malaysian services and equipment companies that can compete in global markets with success stories of international footprint in over 30 countries, listed at Bursa Malaysia, awards and accreditation by international and local agencies and the invention of Malaysian made products.
The Malaysian O&G sector is especially known for its capacities and capabilities in areas such as offshore and onshore fabrications, conceptual engineering and detailed design, marine repair and conversion, engineering and construction as well as drilling fluids, drilling waste management and oilfield product distribution. These companies have always had a strong international orientation and the MENA region has been especially an important area of interest.
Besides assisting the companies to venture into the export market, SME Bank also offers financing to O&G companies, usually in the form of contract financing, that offer features that meet the needs of the contractors and the players.
To prosper abroad, Malaysian SMEs are encouraged to be agile, innovative, and accustomed to transformation. SME Bank has taken initiative in implementing export promotion and exporters' development programmes towards digital culture and sustainability initiatives for the benefit of the Malaysian business community.
In pursuit of business expansion, SME bank in collaboration with MATRADE continues to assist SMEs to become new exporters and to scale up the existing exporters through various facilitation initiatives, including capacity building programmes, exporters customised programmes and various trade promotion activities.