News - By administrator on Saturday, January 22, 2011 - 01:27

JOHOR BARU: The small and medium-scale enterprises (SMEs) based in Johor anticipate that an improvement in last year's business environment is expected to continue at least until the second half of 2011.

South Johor SME Association chairman Teh Kee Sim said that 2010 was a better year for most SMEs here compared with 2009, which they described as “a horrible year.”

“Last year, orders started coming back for our members and getting funding from commercial banks was no longer a nightmare for us,'' he told StarBiz in an interview.

Teh Kee Sim ... ‘Getting funding from commercial banks is no longer a nightmare for us.’

Teh said banks were now more business-friendly towards the SMEs unlike before but more could be done to facilitate loans disbursement and repayments for the SMEs which were affected by the 2008-2009 global economic recession.

He said despite all the good signs, the SMEs should not rest on their laurels and feel satisfied as the economies of European countries and the United States were still in doldrums.

Teh said they needed to expand their horizon and reduce their dependency on Europe and the United States, and start looking at countries especially in the Asia-Pacific as their potential export destinations.

He said among the countries that local SMEs should look at were China, India, Indonesia, Vietnam, Middle East, Brazil, Russia and South Africa.

“Our SMEs need to change their mindset and be more export-oriented but many are not willing to take the risk in their business undertakings,'' he added.

Teh said apart from funding, another main problem which continued to trouble the SMEs nationwide was the shortage of labour and the frequent changes in the Government policy for hiring foreigners.

Teh said Johoreans preferred to work in Singapore due to better salary schemes there and the only time they came back to work in the state was when Singapore slipped into recession in 2008 and 2009.

Ismail Ibrahim says Irda has never sidelined the SMEs under its development plan.

He said the Johor government and Iskandar Regional Development Authority (Irda) must be more aggressive and proactive to attract the multinational corporations (MNCs) in China to relocate their operations in Iskandar Malaysia.

“Feedback from our business associates in China showed that many of the MNCs especially those in the coastal cities are considering to leave China due to high operating costs there,'' said Teh.

He said another reason was the trade barrier imposed by the European Union and the United States on “Made-in-China” goods and many of the MNCs were looking at a third country to export their products.

Irda chief executive officer Ismail Ibrahim said Irda would continue to work closely with the SMEs in Johor including having business matching between them and the major local and foreign investors in Iskandar.

He said Irda had never sidelined the SMEs under its Comprehensive Development Plan (CDP) from 2006 until 2025, to transform Iskandar into an international metropolis.

“Many MNCs and SMEs from Europe, China, Japan, South Korea and Singapore have shown strong interest to invest in Iskandar, and with their presence here our SMEs will definitely benefit,'' he said.

There are more than 26,000 SMEs in Johor at the end of 2008 and 65% are located in Iskandar, and the figure from the International Trade and Industry Minister shows of 600,000 SMEs nationwide, 10% are from Johor.