Procurement down 20.5% among Bumi vendors

by SHAHEERA AZNAM SHAH / Pic By ISMAIL CHE RUS

The Ministry of International Trade and Industry (MITI) registered RM4.88 billion in procurement value under the Bumiputera Vendor Development Programme (BVPD) in 2017, which is a 20.5% decrease from the amount reported in the previous year.

MITI Bumiputera entrepreneurship and SME director Khairulnizam Hashim (picture) said the reduction in the procurement value among Bumiputera vendors was mainly due to the country’s stiff economic environment that was experienced last year.

“The value of procurement is always aligned with the current economic situation. Although the decrease may signal some setback, the percentage of vendors registered under the programme rose as a testament to their capacity in serving government-linked companies (GLCs) and other anchor companies,” he said at the announcement of Telekom Malaysia Bhd’s (TM) BVDP national champions in Kuala Lumpur yesterday.

Launched in 2016, the BVDP now hosts 1,418 vendors from 21 anchor companies that are currently being assisted via consistent trainings on business operation and management.

Khairulnizam added that under the Bumiputera-centric programme, two more anchor companies are expected to participate and the move will spur more business activities among the Bumiputera supply chain.

“As noted in the 11th Malaysia Plan, there are certain targets that we need to achieve. For example, 10 vendors are needed to succeed nationally, while three will spearhead within the region and at least one is expected to penetrate the global market.

“Through the assessment, we are positive that we can meet the target in 2018 for BVPD, two years earlier from the actual timeline,” he said.

Apart from the assistance in financial support and business matching sessions, Khairulnizam said his division is trying to eliminate the “root problem” faced by Bumiputera vendors.

“It may seem insignificant, but addressing the common problems in Bumiputera’s business operation is the key for them to thrive.

“Some of them do not have the clarity in running a business, such as in terms of operation and financial management,” he said.

Meanwhile, TM chief procurement officer Mohamad Mohamad Zain said vendor-based programmes such a BVDP could ease the income gap between Bumiputera and non-Bumiputera vendors.

“Non-Bumiputera vendors are ahead in terms of their individual financial performances. As a GLC, we have been pushing for collaborations among the vendors in order to address the disparity.

“For example, some of the companies that secure our contracts have to meet the requirements of forming a partnership with Bumiputera companies,” he said.

Between 2014 and 2017, TM distributed an approximate RM7 billion worth of accumulative contracts to its 105 Bumiputera vendors.

The utility firm is now distributing an estimated RM4 billion of contracts annually, which involve services, engineering, and fibre optic manufacturing and supplying to Bumiputera vendors.