EDITORIAL:
Going global

2009/11/12

IN Istanbul on Tuesday, the deputy prime minister spoke of the offer of more land in Sierra Leone to cultivate oil palm to Felda, which has been managing plantations in the west African country since 2006. On the same day in Lahore, it was reported that Pakistan is seeking the country's expertise in developing its halal meat industry. On Tuesday, too, Syarikat Takaful Malaysia, which has branches in Indonesia, said in Kuala Lumpur it expects to close a deal with a local financial institution in Qatar as part of its plan to penetrate the Middle East market, while in Johor Baru, MSC Cyberport reported interest from China and Indonesia in the electronic system it was developing for local authorities. All this goes to show that, even in these turbulent times, and with a contraction in the demand for our exports, the wealth of specialised know-how, technical expertise and management acumen that Malaysian corporations and companies possess, is still very much sought after.

Leading the way is the national petroleum company, whose vast knowledge and experience in domestic oil exploration, extraction, refining and distribution have provided a solid platform for expanding its operations in Africa, Central Asia and Vietnam. Backed by good track records at home, Malaysian contractors have secured jobs to build bridges and roads, buildings and houses, ports and airports in Asia and Africa, despite tough competition. The scope of Malaysia's foreign ventures has extended beyond oil and gas and oil palm, and participation has broadened beyond government-linked companies to include private corporations such as YTL and Genting, which have become the largest cross-border investors after Petronas, as revealed in Parliament on Monday. This diversification and expansion of Malaysian companies overseas has yielded positive results in the form of rising profits and dividends from RM0.4 billion in 1999 to RM14.4 billion in 2008. Overall, direct investment abroad by Malaysians has increased from 1 per cent of gross domestic product in 1980 to a remarkable 32 per cent of GDP last year.

Of course, venturing overseas is always a risky proposition, as the CIMB group chief executive officer would no doubt attest. After all, he expressed a "main disappointment" in the form of higher loan losses in its international (ex-Asean) portfolio in releasing the bank's best-ever nine-month and single-quarter results on Tuesday. Certainly, it will not be all smooth sailing. There are formidable challenges, and there will be winners and losers. But there are also significant opportunities for those with the will and vision to take risks and globalise their business.

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