Challenging year ahead for MATRADE

Reading Time: 4 minutes
MATRADE CEO Dr Wong Lai Sum (left), with Inside Investor's Asia Director Ndeye Diawara

Malaysia’s national promotion trade agency is not only planning to maintain its trade performance this year, but it will expand its various progressing industries for possible market share growth, its CEO Dr Wong Lai Sum told Inside Investor in an exclusive interview.

The Malaysia External Trade Development Corporation (MATRADE), established in 1993, plays an important role as a stimulus to the economy in Malaysia, especially to the trading sector.

The national promotion trade agency is promoting and assisting Malaysian companies in the international arena. It is also an institution which is recognised globally and has received a number of international awards. These included being the first institution among the Organisation of Islamic Cooperation members to win the prestigious Islamic Solidarity Prize – a prize which has been awarded under the trade promotion category to recognise MATRADE’s efforts in promoting trade among the members in 2008.

Overviewing a total trade value of RM1.269 trillion in 2011, MATRADE is focusing on sectors such as oil and gas, machinery, medical products, and the information and communication technology industry to sustain their performance for this year, despite the recession in Europe and the US.

Dr Wong Lai Sum, who took up office in August 2011, said that maintaining export growth of between seven to eight per cent was her target, and everything above that would be a bonus.

“But maintaining market share is difficult,” she said.

“It’s tough because we achieved 8.7 per cent growth in exports in 2011 and, as we are going on, we are looking at five to six per cent for the whole year 2012 which is a tough act to follow. I would even be satisfied with only five per cent,” she added.

Towards export-led industries

MATRADE is also looking at the advancement of the machinery sector in the country. With 30 years of experience in the electrical and electronic industry, MATRADE believes that the country is now also able to move further up the value chain.

“We’re no longer doing assembly work. We are good at things like production of semiconductors, and designing and utilizing them in various industries. Development of machines for the industries – that’s where we’re going,” said Dr Wong.

She also added that Malaysia’s exports of machinery, appliances, and parts experienced growth of 11.1 per cent in 2011. Devices such as diagnostic machines used in the medical industry, and optical vision products that detect errors in computer chips were examples of goods which generate higher revenue.

MATRADE is also planning to promote medical products for hospitals, such as medical devices, and other related medical goods, due to the increased interest of investors in that sector.

“We are looking at that as an area that spins off into other industries and generates high value in exports. Our orientation is actually towards export-led industries. We are looking at investments into these areas,” said Dr Wong.

“We hope to drive investments into a direction of value. For example, we talked about the electrical and electronics industry, and, as we are good in that, we want to look at investments in areas around the electronics production facilities that already have been developed in the country,” she added.

Besides the machinery sector, MATRADE is also expecting growth in the oil and gas services sector as well as in information and communication technology.

Products made for the oil and gas industry such as high pressure vessels, oil rigs, rendering services, and, for example, production and export of tugboats to the Middle East, are industry-related products of great interest for export promotion activities.

“Oil and gas is for us something that we are very much into. We are no longer looking at an industry very broadly, but rather at the verticals within this industry,” explained Dr Wong.

Worldwide offices

MATRADE is operating worldwide offices across the continents, including in the United Arab Emirates and Saudi Arabia. However, it has the plan to focus on the Asian market over the next five years.

But MATRADE is looking at ways to improve the accessibility to the GCC for local companies and investors. On the other hand, it supports foreign buyers from the region to tap the Malaysian market.

According to Dr Wong, Malaysia is a country with a lot of expertise, and capabilities are not limited. Instead, they were easily compatible to other countries, she said.

She said, “A US group from Boston benchmarked the expertise of our engineers here. They found that they are second to none and they were on par – which means the capabilities are here. Perhaps, is just the critical mass we need – the numbers.”

Why Malaysia?

One of the factors which make foreign investors continue to invest in Malaysia is the transparency within the government.

According to Dr Wong, the Malaysian government and state-run MATRADE are readily reachable by the public.

“I think we reach out now to engage with people,” Dr Wong said.

She also said that foreign investors and visitors are here because Malaysia is a safe country.

“The nicest thing I hear nowadays from investors and people who are visiting the country is that Malaysia is a safe country to be. I think that for the longest time I’ve never heard that about us and it sounds great. I hope that the government continues to go that direction and making Malaysia a preferred destination.”

She also said that easy communication is a factor which encourages foreigners to engage in businesses in Malaysia.

Outlook for 2012

According to Dr Wong, 2012 will be a challenging year for the export sector. She said she believed that it was time for Malaysians to move forward in an aggressive manner to overcome the challenges ahead.

“In short, it’s going to be challenging, but having said that I think that this is where the rubber hits the road. If your business partner is in some form of difficulty, you have to be ready to renegotiate terms and discuss things. We need to look at things in a long-term perspective as export is – like any other businesses – about relationships and sustaining these relationships,” said Dr Wong.

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Reading Time: 4 minutes

MATRADE CEO Dr Wong Lai Sum (left), with Inside Investor's Asia Director Ndeye Diawara

Malaysia’s national promotion trade agency is not only planning to maintain its trade performance this year, but it will expand its various progressing industries for possible market share growth, its CEO Dr Wong Lai Sum told Inside Investor in an exclusive interview.

Reading Time: 4 minutes

MATRADE CEO Dr Wong Lai Sum (left), with Inside Investor's Asia Director Ndeye Diawara

Malaysia’s national promotion trade agency is not only planning to maintain its trade performance this year, but it will expand its various progressing industries for possible market share growth, its CEO Dr Wong Lai Sum told Inside Investor in an exclusive interview.

The Malaysia External Trade Development Corporation (MATRADE), established in 1993, plays an important role as a stimulus to the economy in Malaysia, especially to the trading sector.

The national promotion trade agency is promoting and assisting Malaysian companies in the international arena. It is also an institution which is recognised globally and has received a number of international awards. These included being the first institution among the Organisation of Islamic Cooperation members to win the prestigious Islamic Solidarity Prize – a prize which has been awarded under the trade promotion category to recognise MATRADE’s efforts in promoting trade among the members in 2008.

Overviewing a total trade value of RM1.269 trillion in 2011, MATRADE is focusing on sectors such as oil and gas, machinery, medical products, and the information and communication technology industry to sustain their performance for this year, despite the recession in Europe and the US.

Dr Wong Lai Sum, who took up office in August 2011, said that maintaining export growth of between seven to eight per cent was her target, and everything above that would be a bonus.

“But maintaining market share is difficult,” she said.

“It’s tough because we achieved 8.7 per cent growth in exports in 2011 and, as we are going on, we are looking at five to six per cent for the whole year 2012 which is a tough act to follow. I would even be satisfied with only five per cent,” she added.

Towards export-led industries

MATRADE is also looking at the advancement of the machinery sector in the country. With 30 years of experience in the electrical and electronic industry, MATRADE believes that the country is now also able to move further up the value chain.

“We’re no longer doing assembly work. We are good at things like production of semiconductors, and designing and utilizing them in various industries. Development of machines for the industries – that’s where we’re going,” said Dr Wong.

She also added that Malaysia’s exports of machinery, appliances, and parts experienced growth of 11.1 per cent in 2011. Devices such as diagnostic machines used in the medical industry, and optical vision products that detect errors in computer chips were examples of goods which generate higher revenue.

MATRADE is also planning to promote medical products for hospitals, such as medical devices, and other related medical goods, due to the increased interest of investors in that sector.

“We are looking at that as an area that spins off into other industries and generates high value in exports. Our orientation is actually towards export-led industries. We are looking at investments into these areas,” said Dr Wong.

“We hope to drive investments into a direction of value. For example, we talked about the electrical and electronics industry, and, as we are good in that, we want to look at investments in areas around the electronics production facilities that already have been developed in the country,” she added.

Besides the machinery sector, MATRADE is also expecting growth in the oil and gas services sector as well as in information and communication technology.

Products made for the oil and gas industry such as high pressure vessels, oil rigs, rendering services, and, for example, production and export of tugboats to the Middle East, are industry-related products of great interest for export promotion activities.

“Oil and gas is for us something that we are very much into. We are no longer looking at an industry very broadly, but rather at the verticals within this industry,” explained Dr Wong.

Worldwide offices

MATRADE is operating worldwide offices across the continents, including in the United Arab Emirates and Saudi Arabia. However, it has the plan to focus on the Asian market over the next five years.

But MATRADE is looking at ways to improve the accessibility to the GCC for local companies and investors. On the other hand, it supports foreign buyers from the region to tap the Malaysian market.

According to Dr Wong, Malaysia is a country with a lot of expertise, and capabilities are not limited. Instead, they were easily compatible to other countries, she said.

She said, “A US group from Boston benchmarked the expertise of our engineers here. They found that they are second to none and they were on par – which means the capabilities are here. Perhaps, is just the critical mass we need – the numbers.”

Why Malaysia?

One of the factors which make foreign investors continue to invest in Malaysia is the transparency within the government.

According to Dr Wong, the Malaysian government and state-run MATRADE are readily reachable by the public.

“I think we reach out now to engage with people,” Dr Wong said.

She also said that foreign investors and visitors are here because Malaysia is a safe country.

“The nicest thing I hear nowadays from investors and people who are visiting the country is that Malaysia is a safe country to be. I think that for the longest time I’ve never heard that about us and it sounds great. I hope that the government continues to go that direction and making Malaysia a preferred destination.”

She also said that easy communication is a factor which encourages foreigners to engage in businesses in Malaysia.

Outlook for 2012

According to Dr Wong, 2012 will be a challenging year for the export sector. She said she believed that it was time for Malaysians to move forward in an aggressive manner to overcome the challenges ahead.

“In short, it’s going to be challenging, but having said that I think that this is where the rubber hits the road. If your business partner is in some form of difficulty, you have to be ready to renegotiate terms and discuss things. We need to look at things in a long-term perspective as export is – like any other businesses – about relationships and sustaining these relationships,” said Dr Wong.

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