Meet the man behind the change
Dato’ Noharuddin Nordin,
Chief Executive Officer of Matrade
Much has been said about the declining state of Malaysia’s export competitiveness in the global market triggered by the emergence of low-end production states in neighboring countries and the recent global economic downturn.The editorial team at the LEADERS magazine recently met with the man tasked with promoting export growth in the nation and boosting Malaysia’s export competitiveness, Dato Noharuddin Nordin, the CEO of Matrade.
TLM Would you elaborate on the role of Matrade, in particular on its actions in promoting economic growth in Malaysia?
As far as Matrade is concerned, its role is simple- to assist Malaysian companies in marketing their products and services on the international market. What IS complicated is how to achieve this simple role. Why Matrade is so important is also simple: Malaysia exports in excess of 100% of our GDP. It is made abundantly clear that our country is currently extremely dependant on its export revenue and growth. However, the volatility of the external market has a strong impact on export growth, and this is where Matrade assumes an important role; to enhance the promotion of Malaysian exports. As the national trade promotion agency, Matrade is a marketing extension of Malaysian companies and with our network and expertise; we help them to get connected with business opportunities in the global market. Through our 40 trade offices overseas, we assist Malaysian companies find markets for their products.
But the emphasis here is not only on products but also the services Malaysian companies can provide. People often forget that services are also exportable, and Matrade exports a lot of services. And as Matrade moves forward, the contribution of services become more important; the contribution of services to the country’s GDP is significant, accounting for more than 55%. We are not saying that we will overtake manufacturing in terms of export revenue. But we can certainly see with some certainty that its contribution will be bigger in the future. And when we consider that the New Economic Model places a strong emphasis on the service sector, I feel that it is wise to concentrate on it.
TLM Is Matrade concentrating more on exporting services, especially in light of the new directives under the NEM?
With the growing importance of the services sector to the national economy, Matrade is expected to play a pivotal role. In fact, over 50% of the promotional programmes listed for 2010 gives emphasis on promoting services. Moreover, we provide market intelligence to Malaysian companies in order to improve their export competitiveness. This information includes the market opportunities available or that have good demand or competitor’s activity. Although we are not involved in industry development, we have the respective Ministries and agencies to help industries grow and promote foreign investments. Matrade only comes in when companies are ready to export. So in a certain sense, we are at the tail end of the value chain. We work in collaboration with the industries in responding to their export needs.
TLM How does Matrade add value when, in your own words, you’ve said that you are at the ‘tail end of the value chain’?
Obviously the value we provide to the companies is in terms of exposure, especially in international markets. And that is what we [Matrade] was created to do. In venturing abroad, companies require two things; One, they require information, for example what products are available in the market they wish to penetrate. Secondly, they need a system in place to promote its products and services. These two requirements, that is the value that we provide.
TLM Is it safe to say that Matrade is a one stop solution centre for all information providers?
Well, we are only one of the agencies providing support for the Malaysian business community. There are other supporting agencies; they just operate in a different context. When we talk about promoting services and products overseas, we are not only talking about Matrade. There are other agencies, even within the private sector, who are also involved in promoting Malaysian products and services. It is a major undertaking. But as far as Matrade concerned, we are the agency to which the responsibility to assist Malaysian companies in exporting product and services falls upon. And in terms of value, our value is the international orientation that we have acquired, and using that international orientation, in being able to provide Malaysian companies with information on markets that they wish to penetrate. An example of the information we provide is what opportunities are available in various markets, what are the challenges companies coming into these markets are likely to face, what are the rules & regulations they have to meet in order to penetrate these markets, who are the competitors, who are the potential partners, and most importantly, match make those companies with potential customers or clients. We are able to do this as we have officers in over 40 different locations around the world. The only governmental agency that has more people in more places is the Ministry of Foreign Affairs.
TLM What are the incentives or in what form does Matrade assist the Malaysian business community?
Matrade assists export-ready companies by harnessing our trade promotion vehicles as a platform to create visibility for Malaysian products and services in the overseas market. We organize special trade exhibitions, tradeshows and awareness missions overseas. These are only a small part of what we do to add value to Malaysian companies. We also organize specialized marketing missions. These are smaller missions where we focus on specific sectors, or smaller divisions, something low protocol. We also organize business ventures and incoming buying missions, whereby we bring clients to Malaysia. This is a cost-effective way of bringing clients to meet up with representatives of Malaysian companies. This is something local companies are very keen on, as they [local companies] do not need to incur additional costs. Basically, the objective is to encourage local SME’s to seek opportunities in overseas.
TLM The government has been extremely supportive of the business community. However, are the local businesses doing enough to help themselves? What is your opinion on this issue?
We need Malaysian companies to be more aggressive.
They need to explore the green field markets and find niche opportunities in traditional markets which are often saturated with homogenous offerings. The competition is no longer on prices and quality but on information gathering as a competitive tool. I also see that not many SME’s utilizing the tariff concessions accorded under the various FTA’s Malaysia has signed. Also, many Malaysian SME’s are adopting what we call a wait-and-see attitude. Interestingly, what I see is these SME’s would come straight to Matrade and they want us to introduce them to overseas buyers. These SME’s believe that we can do magic! But in order to be successful, a lot of research and preparations are needed. When I compare local companies and traders with their counterpart from some countries from within the Asia Pac region, for example Singapore or Hong Kong, our local SME’s are coming across as less sophisticated, less well informed. For example, Matrade has a business library with a wide range of research materials for companies to market or develop their products, information that can help Malaysian companies to develop a very effective marketing structure. However, it is not being fully utilized. Malaysian companies have to learn that we [Matrade] will do all we can to help them, but they must also learn to help themselves, as well. In some countries in Asia Pac, Singapore or Japan for example, their information centers and the business libraries are full of business people who are seeking and looking for information. However, we do not have that culture of doing market research. We need to inculcate that idea of leveraging knowledge in order to boost local SME’s competitiveness. Another thing we wish to see is for the private sectors to intensify their own initiatives, either through various chambers and trade councils; these initiatives should help to lighten the load on Matrade, and will certainly be of great help to local companies. In other words, they need to be more proactive in their role. There are certain limitations to what Matrade and the government sector can do, but with their own networks around the world they [the private sector] could assist their members in exporting their products and services overseas.
TLM What are some of the challenges facing Matrade?
As far as Matrade concerned, the challenge is for us to keep abreast with the newest developments in the market as well as being up to date as to what is available here [in terms of products] in Malaysia. As I have said, we [Matrade] are now dedicated to promoting both products and services. In the past, whenever we talk about exports, people know that we are talking about palm oil, rubber, commodities products, which was what Malaysian companies used to export. But now, the Malaysian export market is so diverse! And it becomes ever more complicated when we start promoting services as well. The challenge right now is to educate ourselves. Matrade officers, both in Malaysia and overseas, have to educate themselves on what are the services and products that we [Malaysia] has, in order to be better placed to promote these goods and services.
For example; in one seminar we held in Kuala Lumpur, a company representative stood up to say they need some help from Matrade in order to do a survey of shore lights. And when we [Matrade] did some research, we found out that globally, there are only 10 companies doing the same thing. And one of the players is a Malaysian company. This information is interesting for Matrade, but at the same time it is also a challenge, before we can help to market something we need to understand what it, what are its advantages compared to its competitors etc. But I think you understand the point I am trying to make; over time, Malaysian companies’ trade products, be they services or goods, are getting more and more diverse, and Matrade has to deal with all of them. On the one hand, we have this makcik who makes kerepek, and who has suddenly realized that there is an overseas market for her product. And on the other extreme, we have companies selling oil rigs and vessels, for the oil & gas industries and in the services sectors. And in the middle, we have to promote the services of local ICT players who wish to export their services on the global marketplace. That is the challenge to Matrade, which is to ensure their sustainability for the export market. And us, Matrade officers, we have to know every detail about all of these local industry players, from the makcik selling kerepek to the company selling oil rigs. In the past, my job was easier, as the products Malaysian companies were exporting were simpler. But now the products and services we [Malaysia] is exporting can be so obscure that Matrade requires a lot of manpower just to research our local goods and services.
Of course we do not have to be experts, but we still need to know something about the products we are promoting. The other challenge is to get Malaysian companies to respond to all enquiries they receive. This is a very serious issue. I came back from a trade mission to Europe, and on the way back stopped at our Matrade office at Budapest. Apparently, the office was flooded with the same complaints, according to our officers. Malaysian companies have been slow to respond to trade partners in Budapest; companies that we [Matrade] introduced them [local companies] to.These Malaysian companies have various reasons for not responding, or for late responses, but for Matrade, it is important for us to know what these reasons are. They could just send a few lines in an e-mail, saying that they are not available at the moment, or that their manufacturing capacity is at full quota, or something like that. Silence is not good business etiquette. A simple answer is good, it is sufficient. But unanswered calls or slow responses are bad for us [Matrade] and for our country’s image overseas as well. We at Matrade have been traveling around the world to promote the idea of Malaysia as a reliable, qualified, efficient trading partner, with a very broad customer base and world class manufacturing facilities and a highly skilled service sector. These our selling points. But if the companies do not reply, then it reflects greatly on what we are claiming to provide.
TLM How would Matrade assist these companies if they have problems related to their goods or services?
We [Matrade] will identify where the company in question’s gaps and weaknesses are. We [Matrade] will then assist them by introducing them to different agencies that provides support in those areas. This assistance ranges from tailor made services to help desks and capacity-building programs.
In some areas, we will coordinate with the relevant agencies that can help resolve the problems faced by leveraging on their expertise and knowledge. For example; in the food industry, there are certain formulations that are needed to enter certain markets; specific percentages of certain vitamins etc. Matrade will ask assistance from MARDI or SIRIM in order for these companies who are struggling to penetrate these food markets. These are the kinds of services we do.
TLM Matrade covers a wide range of support services?
We try to leverage with our sister agencies in the government to assist us [Matrade] in areas where Matrade is not in the position to assist.
TLM What are your aspirations and hopes for the NEM, especially as the head of Matrade?
Well, I have two aspirations. Firstly- for in line with PM’s aspirations, we want our products and services to penetrate a higher market segment, where they will, by extension, enjoy higher premiums. To be honest, our companies cannot compete with China when it comes to pricing. But we want to see in the future is, our reference point for our products and services, is not china but with Korea, Japan Taiwan or even European countries or America. And so, my second hope is, in other words, to improve the image and positioning of our Malaysian products. With that we hope some of our Malaysian brand will achieve global recognition. At the moment we have some regional brands & international brands. But we do not have truly global brands.
TLM Can you give some examples of the brands that you mention?
Bonia is good example of a regional brand. And it is fast becoming an international brand as well, as we can find Bonia in China, in ASEAN countries.PETRONAS is also a very well known international brand, but unfortunately, it is only widely known among individuals in the oil and gas industry. Proton also enjoys brand recognition, as we can find Proton cars in some Middle Eastern countries and Europe. So, in a sense, we [Matrade] have succeeded in our mandate. But we wish for more Malaysian companies venturing abroad, more Malaysian companies having the courage to take that leap into the overseas marketplace. We also wish for a Malaysian company to become a truly global brand, as I said earlier. For example, something like a Malaysian version of Google or Shell.
TLM In your personal opinion, what are your views on the Prime Minister’s first year in office?
Speaking for myself, and not as the head of Matrade, I have been greatly inspired by the Prime Minister. To see all that he has accomplished in so short a time is very inspirational to me personally. Coming into the post, Dato’ Sri set a challenge for himself, as well as for the government. And through the KPI’s and KRA’s that he introduced, he has clearly defined the targets we in the government are supposed to achieve. He has been very frank with us, by saying that this is a risk he is taking, when he announced the KPI’s and KRI’s. And if we [the various Government Agencies] do not achieve them, we have failed to discharge our mandate. But at the same time we in the Government agreed to it. It is the right thing to do. And Dato’ Sri was proven right, by giving us the impetus to really challenge our limits; we showed him that we can really rise to the occasion. Something else I am looking forward to is this new economic model. We have done quite well, very well in fact, over the last few decades, but we need to move forward. We need to move up the value chain. So I like the idea of a new economic model to help us steer Malaysia into the future. These ideas by the Prime Minister are all forward looking, all optimistic. And I find myself very encouraged by these new ideas and ideals that have been put forth.