Subsidy no solution for SME dev't

SMALL and Medium Enterprises (SMEs) looking towards exporting their products must not rely on subsidies and instead look towards Brunei Halal as a platform to stay competitive in the international market, said a Ministry official.

Dato Paduka Dr Hj Mohd Amin Liew Abdullah, the permanent secretary at the Ministry of Industry and Primary Resources (MIPR), yesterday said that the establishment of the Brunei Halal Brand is an important strategy implemented by the government to ensure SMEs can successfully penetrate the international market as opposed to looking at other avenues such as subsidy on exported goods.

This was said in response to a question raised by Stuart V Kemp, chairman of the Britain Brunei Business Forum (BBBF) on the Ministry's initiatives to boost Brunei SMEs' export potential, as high export costs of still remain one of the limitations faced by businesses in the Sultanate to enter the global mart.

"This is an ongoing challenge in Brunei," said the permanent secretary who cited that there were also entrepreneurs who ask for subsidies, instead of genuine assistance in order to increase their export potential.

"My answer to the local SMEs is that subsidy is not a long-term solution. If we continue to look at subsidy as a solution to stay competitive, more likely we will be in an endless cycle," he added.

"So let's say today we may be able to subsidise the company 10 cents per item, so their products can compete with other products outside Brunei, but the overseas producers will also try to improve their efficiency and lower down their costs when they see competition coming (from us)," he said.

He added that close to 2 billion of the world's population are Muslims, so there is a huge market of Halal consumers that producers can tap into, and products branded with the Brunei Halal can easily penetrate these markets.

He added that since it was launched a year ago, the Brunei Halal Brand project has highlighted the potential of many Halal product manufacturers, including three foreign companies, with more than 30 quality products under the brand already distributed internationally.

"At the moment we have contract manufacturings with producers from China, Malaysia and Spain, and these are high quality food producers. Over time we will see a gradual increase in the number of products distributed under the brand. As of today we have about 33 products already and we're looking at over 100 products by the end of this year," he said.

"We have already established our brand penetration into the Singapore market, and the United Kingdom (UK) is likely the next potential market we are looking at after Singapore," he added.

"Although we are dealing mostly with overseas producers at the moment, we are also helping producers in Brunei to ride on this brand by (raising) their products' standards that comply internationally, through our National Standards Centre," he said.

He said the centre offers SMEs a variety of services including identifying the appropriate standards used for various industries in Brunei, such as ISO, good manufacturing practices and so on.

"Once their standards are up, then they will be able to ride the branding and their products take off in the future, which by then the brand will become even more established," he said.

"Our goal is for the Brunei Halal Brand to one day become more renowned, when the world will recognise the Brand as a high quality product that consumers would be willing to pay a premium for them," he added.

The High Tea Talk was held between the BBBF and the MIPR at Laksamana College of Business, where more than 50 invited guests comprising senior government officials, members of the BBBF and business figures listened to a presentation by the Ministry on its various initiatives in the area of local SME Development.

The Talk was organised by the BBBF with the aim to provide the business community with an opportunity to give feedback on the Ministry's initiatives and thereby contribute to the development of government policies.

Also present was the British High Commissioner to Brunei Robert Fenn.

The Brunei Times