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News & Events

[ 17-12-2012 ]
Malaysian SMEs favour Indonesia, China for expansion

KUALA LUMPUR (Dec 13, 2012): Malaysian small- and medium-sized enterprises (SMEs) see Indonesia and China as top destinations for business expansion overseas, according to a survey by United Overseas Bank (Malaysia) Bhd (UOB Malaysia).

This was followed by Singapore, Thailand and India in the rankings of most favoured investment destination by Malaysian SMEs seeking to expand across the region.

The survey also found that two out of three Malaysian SMEs plan to grow their market base in the next three years, and more than half (55%) of these companies plan to expand domestically, while the remainder (45%) will go overseas.

UOB Malaysia CEO Wong Kim Choong said confidence in the medium-term economic outlook for Asia was driving many SMEs to expand their businesses.

"Indonesia and China have demonstrated resilience amid the economic uncertainty in the Eurozone and the US," he said in a statement yesterday.

"The strong consumer demand and continued economic growth in Indonesia and China have been key considerations for Malaysian SMEs seeking expansion opportunities. The language similarities with Malaysia also make it easier for our local companies to conduct business in these counties."

On its part, UOB Malaysia has in recent months received an increased number of enquiries from SME customers exploring financing options for business expansion in Indonesia and China, especially in the food and beverage industry, printing and packaging industry, as well as construction-related businesses.

Indonesia is forecast to deliver a gross domestic product (GDP) growth of 6.3% in 2013, underpinned by fixed asset investment, government spending and private consumption, while China is projected to maintain a GDP growth of 8.0%.

The UOB Malaysia SME Survey 2012 was conducted among 450 Malaysian SME owners in multiple sectors to seek their views on business and economic sentiment, and key business priorities for 2013.

UOB Malaysia defines SMEs as companies with an annual turnover of up to RM200 million, considerably higher than the not more than RM5 million in annual turnover or not more than 50 employees definition that Small and Medium Industries Development Corp subscribes to.

Wong also said in order to achieve overseas expansion ambitions, SMEs need easy access to financing as well as expertise in setting up their operations in a foreign country.