KUALA LUMPUR: Indonesia is the top pick for Malaysian small- and medium-sized enterprises (SMEs) seeking to expand their businesses in South-East Asia, according to a survey by United Overseas Bank Bhd.
One in two respondents chose Indonesia over other South-East Asian countries, citing its strong domestic consumption, high economic growth rate and lower labour costs.
CEO of UOB Malaysia, Wong Kim Choong, said Malaysian SMEs were keen to tap into the business opportunities that Indonesia offered and to invest in the country’s growth potential.
According to UOB Malaysia, the number of its SME customers with a presence in Indonesia increased by 40% in 2013 compared with 2012.
“Our SME customers with established operations in Indonesia are mostly from the chemical and fertiliser, printing and packaging, and steel auto parts production sectors,” he said.
“However, we have also been receiving more enquiries from customers in the food processing sector. This is because Indonesia’s large domestic consumption base and increased spending on food by its rising middle class are proving attractive to businesses looking to secure new customers.”
UOB said the survey results were in line with the increase in foreign direct investment (FDI) into South-East Asia in the past few years, which grew 136% from US$47bil in 2009 to US$111bill in 2012.
The bank said its extensive South-East Asian network would allow it to provide local SMEs with the connections they needed to expand in the region.
“We have a dedicated team which can help facilitate cross-border deals and overseas expansion by providing advisory and financing services. Our regional capability has enabled us to support an increasing number of businesses with cross-border ambitions,” Wong stressed.
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