Insightful sharing for exporters


Pivotal role of transport: (from left) Kuan, Subramaniam, Arif, Ong and Muhd Shahrulmiza discussing the importance of transport to trade during the EEA 2022 KL roadshow panel discussion. – AZMAN GHANI/The Star

KUALA LUMPUR: Transport is a pivotal lifeline of trade that can help play a role in the strong recovery of the country’s economy, said experts in a recent panel discussion for the Export Excellence Awards (EEA) 2022 roadshow.

Titled “Transport as a Pivotal Lifeline of Trade”, it was organised in conjunction with the EEA 2022 launch, which was held at W Hotel KL and attended by Deputy Transport Minister Datuk Henry Sum Agong, Standard Chartered Malaysia managing director and chief executive officer (CEO) Abrar A. Anwar, as well as Star Media Group Bhd (SMG) group CEO Alex Yeow, among other guests.

Abrar said that it was an honour to partner with SMG for the third edition of the awards programme, while noting the importance of trade connectivity in rejuvenating economic growth.

“The awards are more than just winning trophies and citations.

“It is aimed at inspiring and encouraging businesses to grow beyond Malaysia and build a community of Malaysian exporters to lend support to one another and also share thought leadership and best practices.

“We believe trade connectivity is one of the crucial engines to refuel economic growth by sourcing new avenues, facilitating delivery of products to new market segments and entering new partnerships,” he added.

Transport to boost trade

Supporting such growth is the transportation and logistics industry, the topic of the EEA 2022 KL roadshow’s panel discussion, which featured Port Klang Authority general manager Capt K. Subramaniam, PKT Logistics Group chief marketing officer Kuan Eu Jin, Standard Chartered Malaysia transaction banking sales director Arif Afifuddin and Transcargo Worldwide (M) Sdn Bhd (Transcargo) director Ong Chin Keong.

The session was moderated by Malaysia External Trade Development Corp (Matrade) transformation and digital trade division customised programme section deputy director Muhd Shahrulmiza Zakaria.

Beyond the Covid-19 pandemic, companies are looking closely at environmental, social and governance (ESG) aspects for the logistics industry, such as renewable fuel and reducing carbon emissions and energy usage.

Kuan highlighted the vital role of transport as a lifeline for trade, pointing to the rapid momentum of the developments in Batu Kawan as an example and added that in order for everyone to rally around the sustainability cause, he said that there is a need to make sustainability more relatable.

He explained, “Sustainability is related to efficiency – from fast, accurate deliveries down to the way you ensure space efficiency when packing goods into containers. Hence, efficiency translates to lower costs to customers.

“Diversification is a core aspect that must be kept as part of the business strategy, with companies having to have agility and flexibility in tackling challenges and obstacles in their way.”

Meanwhile, Ong elaborated on the relation between efficiency, costs and trade, as he said, “Efficient transport services translate to lower transportation costs and shorter transit times, which in turn leads to increased trade.”

Elaborating on this, Subramaniam said that transport is more than the movement of goods, adding, “Transport is not only to move goods, but also people.

“During the pandemic, because we could not move people, a lot of industries were affected, so it shows that transport is one of the biggest enablers for the economy.

“We have to ensure that the industry is more resilient in the future so that the movement of goods and people flow seamlessly, as well as reinvent ourselves to stay relevant and environmentally friendly in adhering to international standards, as companies are looking at how green and clean their transport is.

“That’s the big question that the transport industry has to answer, moving forward,” said Subramaniam.

Sharing his opinion as a panellist, Standard Chartered’s Arif shared a different point of view as he singled out the necessity of risk mitigation, such as documentation risks, while exporting.

He said, “As a bank, we look at documentation risks. We want to make sure that all exporters have a sound, balanced commercial agreement and select the appropriate payment terms.”

This is where he said that partnering with an international bank like Standard Chartered can help exporters to find ways to mitigate those risks.

Promising outlook for growth

The role of transport in supporting trade is key, as Malaysia’s economy is expected to strengthen this year with the transition into the endemic phase, via the reopening of the international borders in April 2022.

The country’s robust trade performance of exports hit RM1.24 trillion in 2021, achieving 99% of the 12th Malaysia Plan export projection, four years ahead of target.

According to Matrade, trade performance continues to remain resilient in March 2022 with 27.3% growth to hit RM236.6bil, as compared to RM185.8bil in the preceding year, recording the highest monthly export and import values in history.

In an interview, Standard Chartered’s Abrar noted that Malaysia stands to benefit from anticipated growth in the electrical and electronic sector, as well as in the commodity sector driven by global demand and rising prices.

He said, “This is especially in palm oil, as well as oil and gas industries, which are expected to support expansion in exports in the coming months.

“The service sector is also expected to see stronger demand this year with aviation, hospitality and tourism-related industries emerging from their two-year doldrums to chart better performance as firms rebuild their balance sheets.”

Growth corridors of the future will not just be intraregional but global, he stressed, spanning Africa-East Asia; Asean-South Asia; East Asia-Europe; East Asia-Middle East; East Asia-Europe, as well as South Asia-United States.

According to Standard Chartered’s latest research, “Future of Trade 2030: Trends and markets to watch”, global exports will almost double from US$17.4tril to US$29.7tril over the next few decades.

The report also states Malaysia will be a key driver of this global trade growth, with its exports projected to grow at an average annual rate of more than 8% to cross US$498bil by 2030.

It also revealed that 43% of global corporates currently do or plan to source or manufacture in Malaysia within the next five to 10 years.

Mainland China and Singapore will continue to be the largest export corridors for Malaysia, accounting for 19% and 17% of total exports in 2030, respectively, while India is growing fast with 11.8% average annual growth from 2020 to 2030.

Middle East companies focusing on Asean are also positive about business growth in the region, with a significant 78% viewing Malaysia as their top Asean market for expansion, according to Standard Chartered’s “Borderless Business: Middle East-Asean Corridor” report.

Connecting the lines

To tap into this future growth by leamrning from the lessons of the pandemic, companies are thinking long and hard about their business fundamentals and what they must do to achieve long term growth.

Accelerating digitalisation strategies is a core focus to increase resilience and optimise business processes, said Abrar.

In line with the trend, Standard Chartered as a connector bank will continue digitising its services to offer its clients a superior banking experience, offering a differentiated proposition by using technology to connect our clients, markets and products to facilitate trade and investments at scale.

As the only international bank in all 10 Asean countries and its global presence in 59 markets, Standard Chartered can help companies navigate complexities, tap into emerging opportunities, innovate and digitise for growth.

“With our local presence and knowledge base across Asia, Africa and Middle East, our edge lies in helping companies understand and comply with local regulations in new and expanded markets, unlock trapped cash and explore the benefits of digitalisation.

“We connect emerging and high-growth markets with more established economies, allowing us to channel capital to where it’s needed the most,” said Abrar.

He further said that there is a need for industry players to come together and develop innovative and scalable solutions to support the efficient and convenient participation of small and medium enterprises in international trade.

Aside from digitalisation, sustainability and resilience will shape the business model of most companies.

Thus, the bank will continue to develop innovative and simple solutions such as its Sustainable Trade Finance proposition to help companies build sustainable and future-fit supply chains.

It employs sustainable trade finance solutions across Asia, Africa and the Middle East, Europe and the Americas, as well as encourages clients to improve their disclosure, reporting and definition of use, while meeting their environmental, social and governance goals.

It has also launched a shariah-compliant proposition termed as “Halal360” to support local businesses thrive within the global Islamic trade ecosystem, in addition to other such initiatives.

Changing with the times

Moreover, EEA 2022 will see the introduction of two new categories, namely Rising Star and Woman Exporter of the Year.

This is in addition to the existing special awards for Halal Products, Thriving in Adversity and Exporter of the Year; as well as the main award categories of machinery, electrical and electronics; agriculture, food and beverage; industrial products; and consumer products and services.

There will be two tiers of the award, namely for small and medium enterprises with annual sales turnover of up to RM50mil for products and up to RM20mil for services, as well as for medium and large companies with annual sales turnover above RM50mil for products and above RM20mil for services.

Companies will be able to submit their entries from today until Aug 19, 2022. Winners will be announced at the Export Excellence Awards Gala Night, tentatively to be held in November 2022.

EEA is organised by Star Media Group in partnership with Standard Chartered Malaysia, with PKT Logistics Group as co-sponsor and Matrade as patron. It is audited by BDO.

For more information on EEA, visit exportawards.com.my, email eea@thestar.com.my, or scan the QR code.

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