Local SMEs heading in the right direction

WAY FORWARD: Push them to the next level and boost their contribution to the economy

MALAYSIA is home to some of the most successful SMEs in the region. Most of these SMEs started out as local favourites and then expanded their footprint across the region. Some examples include Kawan Brand, Secret Recipe, Smart Reader and Padini Group.

Kawan Brand

The company originated in the 1970s, supplying traditional and homemade pastry products to local groceries and supermarkets. In the mid-1980s, while gaining popularity in the local market, it began exporting its products to the region.

In 2000, it established a new manufacturing facility, and continued to invest heavily in its employees and latest technology to support its growing operations.

To date, Kawan Brand can lay claim to be the world's first manufacturer of frozen parathas, which together with its other products, have opened the market to a new segment of consumer goods that are being enjoyed by worldwide consumers.

Secret Recipe

This is another Malaysian SME that has been successful in the region. Known for its extensive range of fine quality gourmet cakes, Secret Recipe was founded in 1997. It has since evolved to become one of the fastest growing lifestyle cakes and cafe chains in the region, boasting over 280 cafe outlets to date.

Targeting urban population, Secret Recipe cakes and cafes can be found in prime urban neighbourhoods and shopping malls in major cities regionally.

The cake specialist has businesses in Singapore, Jakarta, Bangkok, Manila, Brunei, Shanghai and Melbourne.

Smart Reader

This educational institution was founded in 1988. Backed by its success of the Smart Reader English Programme which it started off, the company launched the Smart Reader Kids concept in 1999. This was built as a vibrant 21st century model child development centre, which has emerged aggressively and commended by the Malaysia Book of Records as the largest chain of child enrichment centre in Malaysia.

Following this, the company introduced in 2000, the Smart Reader Kids Junior and Smart Reader English for adults and youths. With this, it had become the largest educational franchise group with the establishment of more than 300 franchise centres in Malaysia.

The company has since expanded with Smart Reader Worldwide internationally, establishing 150 franchise centres in Philippines, China, Thailand, Brunei and the Middle East.

Padini

Padini began its journey as a manufacturer, trader and supplier of garments to retailers and distributors. The company then ventured into distributing and retailing of their own brand of apparels, creating own brand based on consumer niche in Malaysia.

Today, Padini Group is a leader in the multi-billion textile and garment industry in Malaysia. The company has nine labels namely Padini, Padini Authentics, PDI, P&Co, Seed, Vincci, Vincci+, Vincci Accessories and Miki Kids, which retail at 330 freestanding stores, franchised outlets and consignment counters in Malaysia and worldwide.

Their labels include a Made-in-Malaysia stamp on it and are available in Bahrain, Brunei, Cambodia, Eygpt, Indonesia, Myanmar, Oman, Pakistan, the Philippines, Saudi Arabia, Syria, Thailand and the United Arab Emirates.

The company is listed on Bursa Malaysia.

These are some examples of Malaysian SMEs that started out small but have since transformed into companies that have taken over not only the region but the world. This shows the strength of the SMEs in Malaysia and how their footprints have contributed to the country's growth and its recognition regionally and globally as a brand.

Pushing the SMEs to the Next Level

With the inspiration from the examples discussed, Malaysia's next step is to push its current SMEs to the next level. However, going forward, the growth drivers are likely to shift.

SMEs are expected to play an important economic agent in achieving a high-income nation status. The role of SMEs will become increasingly critical not only as an enabler of growth by providing the support to large firms, but also as a driver of economic growth.

Malaysia's integration with global production network involves the upgrading of SMEs from second- and third-tier suppliers to first-tier suppliers who serve directly to the anchor companies in the value chain, namely large firms and multinational companies.

At the same time, SMEs will be at the forefront of Malaysia's focus on growing these entities to become large homegrown champions that can compete internationally.

The SME development is also important in achieving a more balanced and inclusive growth by addressing the micro enterprises.

The positive results in the last few years have highlighted that SME development in Malaysia has been heading in the right direction.

Moving forward, to achieve a high-income nation status, Malaysia, through its various support systems and aids, will continue to push the SMEs to the next level and raise their contribution to the overall economy.