A 12 man delegation from the International Committee of the Danish Federation of Small and Medium sized Enterprises (DFSME… or Håndværksrådet in Danish) gained many useful experiences and insights in the Malaysian business environment during a study tour covering Bangladesh and Malaysia recently. DFSME is an umbrella organisation for 33 Danish trade organisations and 65 cross-trade organisations representing more than 23,500 member companies.
The purpose of the delegation’s tour was to get an understanding of circumstances and opportunities in the two very different countries, both part of a region playing a more and more significant role in the world trade.
In Bangladesh during strikes
The delegation first visited Bangladesh to take a look at different aid and development projects. Members of DFSME are already involved in approx. 20 partnership projects around the country through the Danish Business-to-Business programme via DANIDA and the delegation was hoping to gain inspiration and ideas for the future. Their trip was however, made somewhat difficult by a general strike and minor riots. Most roads were blocked and often the delegation members saw only rickshaws on the roads… and themselves due to their VIP escort. Plans had to be changed on several occasions but in spite of this the Chairman of the delegation Mr. Ole Nørgaard Andersen still concluded it was a worthwhile trip.
Reception in KL
The Malaysian part of the tour went off more structured and well-organised, starting off with a briefing on the Royal Danish Embassy and a visit to the Small & Medium Industries Development Corporation (SMIDEC). Here the delegation was given an overview of incentives and taxation for SMI’s and a briefing on industrial manpower and labour standards and cost.
The first evening ended with a reception hosted by the Danish Ambassador HE Børge Pedersen at his residence. In his speech the Ambassador encouraged the guests including representatives from Malaysian business organisations, local representatives of Danish companies and Danish business people residing in Malaysia to use the evening as a networking opportunity.
Unlike the norm in Malaysia, where local business people typically leave immediately after the food, the evening went on till late and many contacts were established between delegation members, local businessmen and resident Danes.
Easy for a Dane on business
In an interview on Sunday morning which was planned as leisure time for the delegation, the Chairman of the International Department of DFSME revealed that most delegation members had been surprised that Malaysia is such a well structured and organized society.
“Many delegation members have commented positively on the streamlined society here in Malaysia and are indeed surprised that the country doesn’t seem to promote itself more strongly both as a tourist destination and as a country for business”, Chairman Mr. Ole Nørgaard Andersen said.
“We found that the population is easy to communicate with, they seem to understand what we’re saying and people are extremely open and friendly. I believe it to be fairly easy for a Dane on business to adapt to society here compared to some other countries in the region”, he added.
Outsourcing possibilities
In general, conclusions by both Chairman Mr. Nørgaard Andersen and the Director of the International Department of DFSME, Mr. John Aagaard, were positive about the Malaysian leg of the study tour.
“One of our conclusions is that outsourcing to Malaysia is a good alternative to China which many people tend to focus on these days. Costs may be slightly higher in Malaysia but the ease of communication makes a big difference. Some of the work force may come from Bangladesh or Indonesia but is still relatively cheap while the local Malaysians may be more expensive but also better educated”, says Mr. Aagaard.
“Furthermore, orders can be smaller and the whole ordering and manufacturing process seem more flexible… and energy supply is stable minimizing downtimes, and logistics seem to be very efficient comparably. It should be possible to bring in parts or materials for production and then export the final product with relative ease”, Nørgaard Andersen adds.
Future SMIDEC corporation
One of the promising results of the tour was a firm understanding between DFSME and SMIDEC to produce a Letter of Intent for future corporation on matchmaking between Danish and Malaysian businesses. This opening for a longterm relationship between the two business organisations was a direct result of meetings on the delegation’s visit on their first day. It is hoped that in future a system of matching Danish technology and businesses with local partners can be developed to ensure easier and faster matching of potential partners.
“The fine art of working together about matchmaking is to always have the big picture in mind while at the same finding the right partners at the right time, ie. relatively fast”, states Department Director Mr. Aagard. “We hope to build such a relationship with SMIDEC where matchmaking is streamlined and easy for all parties”.
“I also had talks with the Chairman of the Federation of Malaysian Manufacturers (FMM) and he was surprised to hear that we as an organisation are involved in politics… though it is a bit more indirect through lobbyism than he initially expected when hearing the word politics. We’re hoping to exchange more ideas and experiences with them in future”, adds Chairman Mr. Nørgaard Andersen.
Business opportunities
Though the purpose of the visit wasn’t to find business partners a few delegation members used the opportunity to establish a business potential in Malaysia. One company made a presentation to a local company new to them while another Danish company had business discussions with an ex-customer and will be sending their quotation for a rather large quantity to an old customer who hasn’t bought from them for a number of years. It appears that even study tours can generate business opportunities else not discovered.
The general conclusion from the tour will be made available for the DFSME’s approx. 23,500 members when all aspects of the trip have been evaluated by the 12 delegation members and a report made. The report is amongst others expected to include conclusions on what types of products are likely to attract the Malaysian businesses and buyers, what products could be produced on license in Malaysia, the educational level of the work force, laws and tax and the business environment in general.
Read more about DFSME here: http://www.hvr.dk/
