Friday 29 Mar 2024
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KUALA LUMPUR (June 9): Over 60% of Malaysian mid-sized companies are keen to expand beyond the country's borders and Asean is the most popular international destination of choice to them, according to a survey conducted by Standard Chartered Bank.

Some 76% of Malaysian firms surveyed are already doing business in the Asean region, a statement by Standard Chartered today showed.

Standard Chartered Bank Malaysia chief executive officer and managing director Mahendra Gursahani said there are many opportunities in markets beyond the domestic borders, but also many challenges. 

"These challenges include unfamiliar regulatory environments and sourcing credit facilities for working capital needs," Mahendra said.

While a substantial number is keen to look abroad, the majority or 84% of mid-sized Malaysian firms surveyed still consider domestic expansion their top objective, followed by diversification of products and/or services (82%), and upping sales in existing international markets they're in (70%).

Additionally, the survey found that rising costs is a main challenge for 94% of these companies, followed by increasing competition (86%) and lack of skilled workforce domestically (74%).

Still, challenges notwithstanding, about 80% of Malaysian mid-sized companies are confident in their growth potential over the next five years.

Among the factors that are fuelling such expansionary confidence, said the bank, are the increasing demand for products and services. 

"Much of this is driven by a growing middle class, as well as the relatively young population that is entering the workforce," the bank said.
This points to a positive sign of growth for the SME segment, said Standard Chartered global head of commercial clients Andrew Bainbridge. 

The SME sector in Malaysia makes up 97% of the total business establishments in the country. It is also the largest provider of employment, providing about 60% of job opportunities, which contributes to 32% of Malaysia's GDP and 19% of exports.

"Mid-sized companies are crucial engines of economic growth and job creation across ASEAN, and are increasingly active in global trade. Our study shows that slowing growth in the region has not dented the confidence of company CEOs," said the bank.

The survey interviewed chief executive officers and chief financial officers (or their equivalents) of 50 businesses with annual turnover of between US$30 million and US$100 million in Malaysia, between Aug 28 and October 10, 2014.

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