As governments prepare to reopen borders, businesses are looking at opportunities to recover from the economic downturn by exporting their goods and services.
Malaysia External Trade Development Corp (Matrade) general manager of SME Export Development (x-SEED) Shah Nizam Ahmad says the trade promotion agency is ready to assist companies in their export growth.
In a recent pocket talk organised by the International Strategic Institute, he names two main initiatives to support SMEs, namely, the Market Development Grant (MDG) and Services Export Fund (SEF).
The MDG is a reimbursable grant to assist SMEs in their export promotion activities while the SEF assists Malaysian service providers to undertake activities to expand and venture into international markets.
The ceiling for the MDG is RM300,000 per company. The company must be in operation for more than a year and registered with Matrade. The MDG covers participation in international trade fairs or exhibitions, trade investment missions, international conferences overseas and listing fees for Malaysia-made products in supermarkets or hypermarkets.
Also, the MDG services were temporarily expanded this year to help companies defray 30% of logistics costs of up to RM15,000 per shipment to send goods overseas. It will also cover reimbursements due to cancellations or postponements of trade promotion events for non-refundable items such as participation fees, accommodation and airfares.
These temporary initiatives are valid till Dec 31 or until the Covid-19 pandemic is officially declared ended by the government.
The SEF offers assistance of up to RM5mil per company for the duration of 2015-2020. The company must be at least 60% Malaysian owned, be in operation for more than a year and registered with Matrade.
All services sectors are eligible for the SEF except tourism and financial.
The SEF grant is 50% reimbursable for activities such as participation in competitions, rendering of services overseas or presentations to potential clients, setting up of offices abroad and logistics costs, among other things.
The assistance for SMEs to export is crucial.
In 2019, SME exports rose to RM176.3bil or 17.9% of Malaysia’s total exports, compared to RM171.8bil or 17.3% of total exports in 2018.
But based on Matrade’s survey in April, 85% of respondents have lost export orders since the movement control order. Of these, 83.5% lost up to RM5mil, and 14.3% lost between RM5mil and RM50mil.
The survey covered 1,430 respondents, of which 77.1% were SMEs. The majority of the respondents came from the manufacturing sector.
Matrade adds that 91% of SMEs expect their exports to decline this year while 84% of SMEs have lost their export orders. Additionally, 62% indicated that the buyers will not continue to import from SMEs and 11% of SMEs think they can only revive their exports after two years.
Source: https://www.thestar.com.my/business/business-news/2020/12/19/pushing-exports-to-recover-sales