7 days ago
- Business
- New Straits Times
Tengku Zafrul urges companies to be indispensable, competitive globally to withstand tariffs
KUALA LUMPUR: Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz has called on Malaysian firms, including small and medium enterprises (SME), to become indispensable and competitive globally to withstand tariffs and other trade barriers.
Tengku Zafrul said businesses should persevere to become global champions and not depend solely on the domestic market.
He said that among the strategies to be indispensable is for companies to invest in manufacturing overseas and make their products essential to other players.
Furthermore, enterprises must adopt the latest technologies, be productive and efficient, as well as ensure their competitiveness is at par with global standards, Tengku Zafrul said during a fireside chat at the ASEAN Business Community Development (ABCD) Forum here today.
The minister was commenting on a question about how Malaysian companies can prepare mentally and be ready to face challenges arising from the tariffs.
"In light of what is happening in the United States and the protective stance by other countries, it is important for Malaysian companies as well as those in ASEAN to 'go back to basics'," he said, alluding to Washington having imposed tariffs on numerous countries, including a 19 per cent tariff on Malaysia.
He said that by being indispensable, "whatever tariff they put in, or sanctions in terms of non-tariff barriers, would not affect the company.
"If your product is a necessity and if they are competitive enough, they will still buy. So we need to strengthen the companies that we have," said Tengku Zafrul.
To this end, he said that company owners, shareholders, entrepreneurs, and the chief executive officers who run the companies should ensure they are fundamentally ready to compete.
He stressed the government's industrial master plan, the focus on green investments, and all the strategies that many agencies and ministries have announced are about "strengthening our companies".
He said we need to increase, for example, the productivity rate of our SMEs, (and) we need to make sure they can compete globally.
"The recent numbers show that we are improving, as our world competitiveness ranking has improved.
"But when you look at the (recent) numbers on SME productivity in Malaysia, (we might) have fallen behind countries such as Vietnam and Thailand," said Tengku Zafrul.
Tengku Zafrul opined that a lack of global competitiveness and sole dependence on the Malaysian market would not create global champions.
"The market is becoming more competitive, and with tariffs, countries are becoming more protective. If we are not competitive and just rely on Malaysia as a market, we are in trouble," he said.
Depending on Malaysia as the sole market "would not make us global champions," he said.
"We need to be ready, you need to invest in technology, in research and development, talent, and you must make sure that you continue to be relevant," he said.
On free trade agreements (FTAs), Tengku Zafrul said the ministry's role is to ensure that companies, especially SMEs, understand how to tap into these FTAs and have access to these markets.
"We need to push the SMEs and make sure they are ready. This is (why) we need to move on and not be too dependent on just one market, but expand and create new opportunities by looking at new markets," he added.
