Oleh/By		:	DATO' SERI DR. 
			MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	DEWAN CEMERLANG 2, THE MINES, 
			KUALA LUMPUR 
Tarikh/Date 	: 	18/10/99 
Tajuk/Title  	: 	THE OPENING CEREMONY OF THE 
			"SMIDEC ANNUAL SMI SHOWCASE '99" 


      
  
  
  First  of  all,  I would like to thank the  Ministry  of
  International Trade and Industry (MITI) for inviting  me
  to  officiate the opening of 'SMIDEC Annual SMI Showcase
  `99'.
  
  2.    It  is indeed heartening to note that the  country
  has  come  out of the woods after undergoing an economic
  turmoil  to  an  unprecedented  degree.  Malaysia's  so-
  called   unconventional  measures  and   strategies   in
  addressing  our economic crises were severely criticised
  by  the  international  financial  institutions  and  so
  called  experts. But these measures have  proven  to  be
  appropriate and effective, for overcoming our  financial
  problems and economic fundamentals.
  
  3.    I am equally happy to note that whilst the economy
   was  put  to  the  `test', confidence from  the  private
  sector  including  foreign  direct  investors,  remained
  high.  This  is  evidenced by the  continued  inflow  of
  foreign  direct  investments (FDI)  into  the  country's
  manufacturing sector, even at the time when the  country
  was  registering  negative growth. These  are  the  real
  investors  who know the actual situation of the  country
  and  who  have  taken a long-term view of the  country's
  fundamentals   and   potentials.   Therefore,   existing
  foreign  investors remain committed to their investments
  and  have  in  fact  continued to expand  and  diversify
  their  operations into higher technology and more  value
  added including R&D activities.
  
  4.    These are the type of FDIs which we are interested
  in  attracting  into the main economic  sectors  of  the
  country  and  these are the investors whom  we  like  to
  work  with,  in  advancing further our industrialisation
  programme.  This  is  because  developments   in   these
   sectors  will  determine the long term  economic  growth
  and  sustainability of the country, as  they  contribute
  greatly   to  the  Gross  Domestic  Product  (GDP),   to
  exports,    employment,   technological    and    skills
  development, development of small and medium  industries
  (SMIs),   which  are  all  critical  components   of   a
  country's industrial development.
  
  5.    The  SMI  sector  assumes  an  important  role  in
  deepening  and broadening the country's industrial  base
  through  the  supply of essential parts and  components,
  and  related services to the large companies  and  MNCs.
  SMIs  having  strong linkages with domestic economy  are
  also  training ground for the development and  nurturing
  of  entrepreneurial skills. This sector  has  also  been
  recognised  as  a vehicle for developing Malaysian-owned
  companies  and Malaysian owned brand names  and  designs
  (OBM and ODM).
  
  6.    The theme chosen for this Showcase, 'Forging Ahead
  in  Challenging  Times' is both apt and  timely  as  the
   country  recovers from the economic crisis, and  is  set
  to  forge  ahead toward the next millennium. SMI  sector
  being  the backbone to the economy need to bolster their
  performance and profile in order to meet the  challenges
  of the new economy.
  
  7.    Rapid  globalisation of the world economy presents
  unprecedented  challenges as well as  opportunities  for
  Malaysian companies, in particular the SMIs. To  survive
  and  thrive in such a volatile global market place, SMIs
  must be prepared to change -- change in the mindset  and
  change  in  the  way of doing business as  well  as  the
  manner  with which business is conducted. If the success
  of  doing  any  business today is  determined  by  one's
  flexibility,  adaptability, responsiveness  to  changing
  market  requirements, doing business in the next century
  is  about  making changes in `real time'  made  possible
  with  the  application of information and  communication
  technology (ICT).
  
  8.    The economic downturn has been a bitter lesson  to
   many  of  our domestic companies, especially  the  SMIs.
  The  resilient  and  the competitive  came  out  of  the
  'test'  leaner and in better shape to face  competition.
  However,  SMI companies need to realise that  in  future
  there   are   different  sets  of   challenges   to   be
  encountered  and  companies  must  quickly  acquire  the
  innovative  and  entrepreneurial  skills  to   transform
  these challenges into opportunities.
  
  9.    Our economy in keeping with the trend is gradually
  transforming  itself  into  a  knowledge  based  economy
  (K-economy) in which brain power rather than brawn  will
  be  the  determining  competitive  advantage.  In  a  K-
  economy, where the main activities are focussed  on  the
  high value added and knowledge-based activities such  as
  product    and    process   designing,   product/process
  development  and improvement, innovation and  other  R&D
  activities,  size and scale of operation do  not  matter
  as  much as before. Both large and small companies stand
   almost  equal  chance of achieving success.  Indeed,  it
  has   been   proven   by   many   success   stories   of
  breakthroughs  in  technology,  software   designs   and
  development  made  by  companies  or  entrepreneurs  who
  started very humbly and very small.
  
  10.   Therefore domestic SMIs should consider going into
  more  and  more  of  this type of skill  and  knowledge-
  intensive  business activities where the  start-up  cost
  is also low.
  
  11.   With the extensive application of  ICT by our  own
  companies,  the outreach of Malaysian-made products  and
  services  can  be  extended to the global  market,  even
  though   they  are  intended  initially  to  serve   the
  domestic market.  Through E-commerce, products  of  SMIs
  can  not  only reach the markets abroad faster but  also
  at  lower  costs.  At the same time, it is the power  of
  ICT  that has given the challenges of globalisation  the
  true meaning of doing business in a borderless world.
  
  12.  Against this backdrop, our local SMIs must rise  up
   to  face  the  challenges and changes  that  are  taking
  place  even while we are in this hall. Products produced
  today  must  not  only  meet  the  needs  and  taste  of
  domestic  market but should also adapt to  consumers  in
  differing  markets. What this implies is that SMIs  need
  to  shift their focus from being production oriented  to
  market oriented.
  
  13.   Fundamental  to  achieving market  acceptance  and
  penetration  is  of course quality and  competitiveness.
  At  the  very outset products and services must be  able
  to  meet  the  rapid changes in international  standards
  and  requirements  in terms of price, quality,  delivery
  and  costs.   To be able to do this, SMIs should  strive
  to  acquire new technologies and upgrade skills in  core
  competencies   critical   to   achieving   manufacturing
  excellence.  SMIs also need to acquire new  capabilities
  and  new skills in order to be able to produce essential
  parts  and  components to compete with the best  in  the
   market.
  
  14.   Over  time,  Malaysian  SMIs  must  graduate  from
  producing  lower-end components and parts,  to  becoming
  global  suppliers  of  higher  value-added  intermediate
  products.  For  Malaysian  SMIs,  this  graduation  from
  domestic   to  becoming  global  suppliers   should   be
  achieved  as  a  matter  of  logical  progression.   The
  global  networking  of  Malaysia-based  MNCs  should  be
  fully  capitalised to gain access into the international
  procurement market.
  
  15.   I  am  happy to note that with the  assistance  of
  MATRADE  the  Showcase this year has  attracted  several
  foreign    buying    missions,   representatives    from
  international procurement offices (IPOs) from  Singapore
  and  Hong  Kong as well as other foreign trade visitors.
  These foreign trade visitors will also take part in  the
  Business  Matching sessions with companies participating
  in the Showcase.
  
  16.   To further strengthen this year's event, an 'ASEAN
   Match-making  Workshop' to foster  linkages  and  joint-
  ventures between large companies and SMIs is held  back-
  to-back  with  the  Showcase. The Workshop  provides  an
  avenue  for  those involved to meet, discuss  and  share
  experiences  in  developing  SMIs  through  establishing
  smart  business  partnerships and joint  ventures.   The
  networking  and  linkages  established  will  contribute
  towards   strengthening  ASEAN  economic   architecture,
  turning  the region once again into the most competitive
  growth area in this region.
  
  17.   Finally, I would like to take this opportunity  to
  wish  every  success to all participants of this  year's
  'SMIDEC   Annual  SMI  Showcase'  and  hope  that   your
  participation  in  these  events  will  bring   in   new
  business opportunities and networks for all of you.
  
  18.   I   now have the pleasure in declaring the 'SMIDEC
  Annual SMI Showcase `99' open.