Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	PETALING JAYA HILTON, SELANGOR 
Tarikh/Date	: 	18/07/84 
Tajuk/Title  	: 	THE LAUNCHING OF MALAYSIAN 
			VENTURES BERHAD 




Yang Berbahagia Dato' Azman Hashim, Pengerusi Malaysian Ventures
Berhad; Dif-Dif Kehormat; 

Tuan-tuan dan puan-puan.

Saya mengucapkan terima kasih kepada Lembaga Pengarah Malaysian Ventures
Berhad kerana memberi peluang kepada saya berucap malam ini. Syarikat ini
merupakan syarikat modal penerokaan yang pertama ditubuhkan di
Malaysia. Saya pernah menyuarakan perlunya syarikat seperti ini ditubuhkan
sebagai satu langkah tambahan bagi meningkatkan bilangan perusahaan dalam
sektor teknologi baru dan sebagainya. Saya berharap syarikat ini akan
menempa kejayaan dan akan menimbulkan keyakinan sektor kewangan negara ini
bagi menampung penubuhan beberapa buah syarikat modal penerokaan yang
lain.

Ladies and gentlemen, 

2. I have, on many previous occasions, spoken about the importance and
role of venture capital in the Malaysian context. I am pleased to learn
that certain banks and business groups have started to look into the
possibility of forming their own venture capital companies. I must,
therefore, congratulate the Arab-Malaysian Merchant Bank, and its partners
for taking the initiative to establish Malaysian Ventures Berhad, the
first venture capital company in Malaysia.

3. It is heartening to note that Malaysian Ventures Berhad is also a
partner in a larger regional venture capital grouping called the South
East Asia Venture Investment Company or SEAVIC. I understand SEAVIC
comprises some forty US and European institutions, banks, business
enterprises and the International Finance Corporation, the private sector
arm of the World Bank group. This organisation which will explore the
opportunities in the Asean region, is commendable especially since it will
provide useful market links for Asean manufactured products and a wider
technology source and exchange of information on problems, solutions and
experiences.

4. The Malaysian economy is an open economy, and international trade makes
up more than half of our GNP. However, a substantial proportion of our
exports are still primary commodities which are subject to wide price
fluctuations. Hence, we have sought to diversify our exports. Towards this
end, we have encouraged the growth of our manufacturing industries
particularly the resource-based industries. Manufactured goods too can
suffer from economic depressions, but they are less affected by external
forces than primary commodities. With an abundance of natural resources, I
do not see why we cannot diversify and develop a strong manufacturing base
and be a significant exporter of manufactured goods.

5. In line with this, the government has taken measures to encourage
industrial activities that can contribute to the nation's development. In
the past, the government has been a major initiator of projects and
facilities to promote economic growth. The government, however, cannot and
should not continue to invest in what is the domain of the private
sector. The extent of Government's involvement is already large and it
should limit its role to an appropriate level so that the private sector
can play its part. The government has already established the
institutional framework and created the necessary environment for the
private sector to show its creativity and to take the lead in industrial
investments.

6. Privatisation, Malaysia Incorporated, and the formation of HICOM and
small business development centres and many more socio-economic and
commercial corporations are but some of the ways to achieve this end. What
is left is for the private sector to respond positively and to play its
role. You have, within your resources, the ability to be creative and
innovative, and to take the opportunity to work with the Government and at
the same time achieve high profitability. You can be assured that the
Government will provide the necessary support to the genuine entreprenuers
who are committed to the country's industrialisation programme. We want
businesses to prosper so that we all can share that prosperity.

7. There is no shortage of "entrepreneurs" in this country. However, it is
the disciplined entrepreneurs with innovative ideas that we are short
of. Often entrepreneurs start small and fail, not because they do not try
enough or work hard, but because they do not receive the support they
need. Many have excellent ideas but they too fail because they do not have
the financial resources. As they are starting anew, they do not have the
track record to enable them to raise the funds they require. The
traditional bankers would want to see their past performances, their
balance sheet and profit and loss accounts and market studies. But if you
are a pioneer, then there is, and rightly too, no track record to talk
about. If all the bankers were to take this attitude, there would not be
any Silicon Valley! This is not to imply that bankers should not be
prudent, as indeed they must be as custodian of depositors funds. But they
should not be afraid to allocate a small portion of their resources to
invest in new businesses.

8. It is the venture capitalists, who are willing to take calculated risks
and who can help to encourage new products and services and develop them
into growth industries that have enabled new technologies to develop. I am
particularly pleased that today we see the birth of such an institution in
this country. I understand Malaysian Ventures Berhad will not only provide
equity financing but also technological and marketing support.

9. One word of warning. An idea or knowhow on the making of something do
not ensure business success. To succeed the knowhow must be combined with
management and marketing expertise. The person with the knowhow may not
have the other two attributes. It is important that he be prepared to work
with those who have. That way he will not only improve the chances of
success but should there be failure, he will not bear the whole burden. In
Malaysian society it is natural for everyone to keep his knowledge to
himself. He will not share it with anyone else for fear of losing his
advantage. Yet in Western societies knowledge is freely shared through
publication and other means. The innovator will get royalty or some kind
of fee. But because the knowledge is widely used, the small royalty
becomes very large indeed.

10. It is time that Malaysians change their attitude and in sharing their
knowhow, distribute and lessen their risks. Of course, some safeguards
must be built in order to ensure that the knowhow is not completely lost.

11. The venture capital industry here is only in the embryonic stage and
we should not expect an immediate take-off as has happened in the United
States today. It has taken the US industry nearly 20 years to reach its
current position, aided by the advent of new technology in computers and
bio-technology. Venture capital was successfully applied in the US even
before the silicon boom. It is the emphasis on entrepreneurship and the
application of existing technology rather than technological breakthrough
that would make venture capital attractive here. Technology can be
imported, adapted, improved upon and applied to create high value-added
industries. Today we do not have to reinvent the wheel. The Japanese after
the war, started off by mostly using technology developed by others but
now even their former teachers are looking to them for inspiration.

12. I am not implying that we should not, or could not, develop our own
technology. Our Rubber Research Institute, for example, is second to
none. Given the proper support we can develop into other fields such as
genetic engineering to improve our oilpalms and other food crops.

13. No doubt venture capital involves a certain degree of risks. Not many
people would want to venture into the unknown. But as practical
businessmen, you must know that the success of a business extends beyond
balance sheet figures and the immediate ability to repay. For those who
can minimise these risks, the rewards could be substantial. I was told
that in the past, many venture capital companies in the US failed because
they were greedy, impatient, lacked the necessary commitment or did not
possess the entreprenuerial spirit to carry out projects successfully. In
setting up your venture capital company, let us learn from others so that
we can minimise these risks in the future.

14. As a developing country, we need to identify and systematically
examine opportunities to introduce new concepts and new activities. I am
pleased to note that the merchant banking industry has been well enough
established over the last 15 years for it to be the vital vehicle to
assist other companies to restructure and comply with the New Economic
Policy. I am also pleased to note that the merchant banks in Malaysia
themselves have complied with the NEP and in fact have a substantial
bumiputera participation both in terms of ownership and management. Of the
12 merchant banks, Bumiputera equity participation, inclusive of
Government controlled corporations, amounted to 68.2% and 43.5% of senior
management staff are Bumiputeras.

15. I am especially pleased that today, a Malaysian merchant bank has
taken the lead to establish the first venture capital company in
Malaysia. The launching of a venture capital industry will intensify the
search for more innovative ideas and activities, and will help to
establish and foster more companies with innovative ideas and activities
in Malaysia. In launching the Malaysian Ventures Berhad tonight, I wish to
offer its shareholders and its chairman, Dato' Azman Hashim my heartiest
congratulations.

Tuan-tuan dan puan-puan, 

16. Sekarang dengan sukacitanya saya melancarkan Syarikat Malaysian
Ventures Berhad ini dengan rasminya.

Terima kasih.