“While the government continues to encourage small and medium scale players, there may also be a need to consider steps to consolidate among the many vendors in the automotive industry, in order to gain scale, financial strength and managerial talent to expand internationally.”

2. FINANCE
• Global financial crisis have caused
financial institutions to be more
cautious and credit processing has
become so complex, that very
often SMEs find it difficult to both
understand the procedures and
decisions when it comes to loan
processing.
HUMAN CAPITAL
• Severity of the brain
drain, especially among
professionals and skilled
workers.
MARKET
• Increase in competition.
• Rising cost of goods.
• The increase in uncertainty in the
market. Businesses have to reduce
costs and improve productivity in the
midst of adapting to changing market
conditions.
TECHNOLOGY
• Challenge to acquire or develop new
technology.
• Many of the leading research and
technological developments are coming
out from Europe and North America.
Finding partners and vendors who are
willing to transfer these technologies to
Malaysia is tough enough let alone
transferring these technologies to SMEs.

3. “Our traditional and biggest obstacle has always been in financing our
projects. Despite our management skills, variety of profitable projects
and great plans – none of it will work without money”
Robert Michael of vacuum and compression solutions provider, Airo-fluid
Sdn Bhd.
“As we continue to grow, we require additional capital and financing
power for expansions which are not easy to come by as an SME”
Cheng Nyek Paw of Bennova Mechanical Engineering Sdn Bhd.
Rick Cheng, CEO of property developer Encomas Sdn Bhd couldn’t agree
more when he said, “it’s financing, financing, financing. It is getting
harder to secure financing from banks and they always set very high
requirements for us to achieve in order to get financing.

4. “Our business is all about the talents that we have. Whilst the
largest investment may be in the technology and equipment,
without our people, we will not be anywhere near where we are
today,” said Lim Boon Siong, CEO of Vista Vision Specialist.
Alan Hoo of image consultants Chapter One Asia agreed, saying,
“finding the right candidate at the right time and the right price is
like striking a lottery. Most capable young adults would prefer to
work in MNCs as it looks more promising, not to mention more
glamorous; making smaller organizations like us difficult in
finding suitable candidates”.

5. Ken Kang, Managing Director of Wah Ha Children Products Sdn Bhd said,
“In 2010, we faced stiff business challenge due to significant drop of
purchasing power of domestic consumers. Our challenge in 2011 will
be to build up the confidence of consumers and regaining their
purchasing power”.
World Prominence Sdn Bhd’s Ahmad Fauzi Kari said that his company’s
biggest challenge would be to manage the cost of doing business. “For us,
high and cyclical raw and packaging materials cost, increase in other
operational cost such as labour cost, utility cost and distribution cost
are putting tremendous pressure on us. Passing the increased cost
to the customers is not an easy task either,” he said.

6. Competition from lower cost producing
countries of China, Vietnam etc.
Lack of expertise in export marketing
Lack of viability to export small quantities
to overseas
Source : Mr. Chua Tiam Wee
National President
Small and Medium Industry Association of Malaysia

7. Financial Constraints to Acquire ICT & New
Technology
Lack of Expertise on ICT complexities
Lack of ICT Technical Staff
Time and Effort to Learn to migrate to New Technology
High Software Licensing fees
Difficulties in Choosing the Right technology
Fear of Unreliability, Cyber Security, Data Loss.
Source : Mr. Chua Tiam Wee
National President
Small and Medium Industry Association of Malaysia