SHAH ALAM (Sin Chew Daily) — Second finance minister Datuk Seri Ahmad Husni Hanadzlah said the implementation of the Asean Economic Community (AEC) next year means the market will be much larger and more opportunities for Malaysian SMEs to expand their markets, adding that he believed local companies would be well positioned to become "regional brands.:

He pointed out that some Malaysian SMEs are in the midst of upgrading their value chains as they forego the traditional price competition market. Instead, these companies focus on the unique values of their products.

Ahmad Husni said during the award presentation ceremony for 2014 Sin Chew Business Excellence Awards that there have been many outstanding SMEs in Malaysia which have tremendous business opportunities.

He estimated the contribution by SMEs to the country's GDP to increase from the current 33% to more than 40% by 2020.

He said although he had not gone into his own business before, he had friends who are SME operators from whom he had seen that it was not easy for a company to survive and thrive.

Only 30% last more than 10 years

"Even in the United States only 50% of emerging enterprises are able to sustain for five years and longer. And only 30% can last for more than ten years."

Ahmad Husni said the country's economy over the next ten years would be very different from what it is now, and he believed even today many SME operators have come to realize that human resources and good raw materials are no longer cheap.

"As we move towards a high income country, the market competition is going to be more and more intense. Looking forward, w want to see small and medium-sized enterprises to survive and flourish in a developed high-income country.

"Most importantly they must be professional. SMEs have been thriving in the UK, Japan, Italy, Germany, France and the US because they make up a very niche and highly professional portion of the relevant market.

"To achieve this level, the operators must invest in product innovation and R&D as well as human resources training and creativity."

Benchmark

Ahmad Husni praised Sin Chew Daily for its unrelenting effort in recognizing and encouraging SMEs in the country while setting a benchmark for them to enhance their overall standards.

He also thanked Sin Chew Media Corporation Berhad executive chairman Tan Sri Datuk Sir Tiong Hiew King for inviting him to attend the award presentation ceremony.

"When I received the invitation, I told myself by all means I would attend the ceremony because it gave me a unique opportunity to meet to top SME operators in the country. I treat each and every one of them as a part of my family."

He thanked SMEs for making significant contributions towards the country's economic growth.

"SMEs play a very important role as the country makes steady progress towards a high-income country."

He said as a former banker, he knew he had to take care of some SMEs, and that it is not easy for these companies to succeed.

"I want to congratulate all the winners this evening. You have joined the league of the nation's most outstanding entrepreneurs, creating a different level of excellence that belongs to you while taking the country to greater heights."

Talking on the country's GDP performance this year, Ahmad Husni said the country's GDP expanded by a robust 6.3% during the first half of this year, adding that the goal of high income could be achieved before 2020 if the economic growth could be sustained.

He reminded local businesses that 2020 would not be the finishing line as they would continue to move forward to compete with developed countries.