KUALA LUMPUR, June 9 (Bernama) -- Small and medium enterprises (SMEs) are encouraged to leverage on the logistics industry to venture overseas.

"Before SMEs can venture overseas, they must understand and get to know the logistics side of business and where the logistics industry can help them turn raw material into finished goods in a more efficient manner," Konsortium Logistik Bhd Chief Executive Officer, Datuk Che Azizuddin Che Ismail told Bernama today.

He said being SMEs, their businesses cannot attain economies of scale by having their own logistics departments, as it involves a substantial cost to invest in IT systems and equipment.

"SMEs remain challenged to venture overseas due to the high logistics cost, a fragmented industry and the lack of any single point of contact in the overseas destinations," he said when presenting his paper at the China-ASEAN SME Conference here.

Meanwhile, with a 1.3 billion population, Che Azizuddin said China is an opportunity not to be missed, and logistics a key important factor in getting things right in the entire supply chain.

However, on the local front, he said the logistics business needs more improvement to remain competitive and stay ahead of competitors.

"By integrating logistics service operators and selecting the best logistics solution, we can combine our skillsets to produce an efficient system thus generating savings by sharing logistics costs," he added.

-- BERNAMA