Mustapa: MNCs attracted by Malaysia's strong SME base

KUALA LUMPUR: Foreign companies are attracted to Malaysia because of its strong base of small and medium enterprises (SMEs) which are technically competent, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.

He said that before coming to a country, multinationals (MNCs) look to see if there are enough SMEs able to supply them with components which meet global standards.

“This has been an added attraction in Malaysia. If we had a weak SME ecosystem, it would deter MNCs from investing in this country,” he said after delivering the keynote address at the MNCs and SMEs Supply Chain Development and Opportunities Conference here Thursday.

To date, more than 8,000 companies, including MNCs from over 40 countries, have made Malaysia their off-shore location for manufacturing and related services operations.

Some employ as many as 20,000 workers and a good number are 100% export-oriented.

Citing the example of the aerospace industry, Mustapa said several global companies wanting to produce aircraft components here are using the capabilities of local SMEs.

These SMEs, he said, must meet requirements to "produce products of the highest standards”.

Mustapa also said that SMEs should not be content to be local suppliers or vendors to foreign MNCs.

“My vision is to have more SMEs in Malaysia who are not only suppliers of components for MNCs but also to become part of the global supply chain,” he said.