ASEAN SME NEWS

 
Latest ASEAN news

Brunei to host ASEAN roundtables, summit and business awards

Brunei businesses are invited to join the upcoming ASEAN Business Roundtables, ASEAN Business and Investment Summit (ABIS), and the ASEAN Business Awards (ABA) which are being hosted this year in the Sultanate as part of the country’s ASEAN chairmanship.

Brunei’s ASEAN Business Advisory Council (ASEAN-BAC) – the country’s private sector representative to ASEAN – will be organizing the three events. The ABIS and ABA will be held at the International Convention Centre (ICC) on October 25 and November 10 respectively.

The roundtables, which serves as a prelude to the the bigger ABIS and ABA, will take a deeper dive into fintech and digital skills in August and September. These events were officially unveiled by Brunei’s ASEAN-BAC yesterday at the ICC.

His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam along with other heads of state from ASEAN and its partners are anticipated to join ABIS, which is billed as ASEAN’s most important business event of the year, bridging both the private and public sector for strategic dialogue.

This year’s ABIS carries the theme ‘Building Our Sustainable Digital Future’ in light of the challenges posed by the ongoing COVID-19 pandemic, tying into the wider strategic thrusts under Brunei’s ASEAN chairmanship of recovery, digitalisation, and sustainability.

All the events will be done in a hybrid format – with local attendees at ICC and the majority of foreign participants joining virtually. Read the full story here.

Rise in agricultural exports improving farmers' welfare: President

Jakarta 15.79-percent year on year increase in agricultural exports in 2020 has contributed to farmers' welfare, as seen from the farmer's exchange rate (NTP), which has continued to improve, President Joko Widodo has said.

"In June 2020, the farmer's exchange rate was 99.60, and consistently increased to 103.25 in December 2020. Then, in June 2021, the figure reached 103.59. I think this is good news that can spur the enthusiasm of our farmers to stay productive during the pandemic," he remarked in a press statement issued by the Presidential Secretariat on Saturday.

The agricultural sector, the President said, is one sector that has been able to survive amid the COVID-19 pandemic. In 2020, agricultural exports reached Rp451.8 trillion, an increase of 15.79 percent compared to 2019, when they were recorded at Rp390.16 trillion.

"In the first semester of 2021, January to June, the export value reached Rp282.86 trillion, an increase of 14.05 percent compared to Rp202.05 trillion in the same period of 2020," he noted.

The President said he has asked regional heads to explore the export potential in their respective regions.

He further said he has asked local governments to connect farmers with supply chains, both at national and global levels. This is to ensure farmers and agricultural business actors can easily export their products, so that these businesses can develop into export-oriented agricultural production centers.

A number of other agricultural commodities that still have the potential to be exported are swiftlet nests, porang (a type of tuber plant), essential oils, jasmine flowers, ornamental plants, edamame, and other horticultural products, he pointed out.

"If we really pay attention. These products will be a good product for us to export, including processed livestock products, which have wider market opportunities," he said.

Besides increasing production, the President also emphasized the need for farmers to master technology to increase productivity.

Sourece: Antara News
Reporter: Indra Arief Pribadi, Katriana
Editor: Sri Haryati
Original published date: 14 August, 2021

President Jokowi asks Indonesian banks to support agriculture sector

Jakarta (ANTARA) - President Joko Widodo (Jokowi) has urged Indonesian banks to pay special attention to the potential of the agricultural sector, which has already expanded overseas exports apart from dominating domestic markets.

"Empower the farmers with access to capital, technology innovation, and guidance. I have already spoken with many bank executive directors to give farm (sector) special attention, because this is a chance," he said from the Presidential Palace in Bogor.

Many Indonesian agricultural commodities have the potential to become superior export products, he noted. Porang, for example, already has a large export market, but requires processing to create value-added products, he said.

This is in accordance with the government's program to promote the downstream mining policy, President Jokowi said.

“There is a big market we can penetrate, but also that the exports should not be raw, especially in tubers. At least (they should be) in chopped form, or possibly in the form of finished products, or finished porang rice. Our target is downstream mining policy," he elaborated.

The President also urged regional administrations to develop export-oriented agricultural centers.

On Saturday, President Jokowi also released agricultural commodities from 17 export gates located at airports and ports in Indonesia from the Presidential Palace in Bogor, West Java.

Read Full Article Here

Source : Antaranews
Reporter: Indra Arief P, Mecca Yumna
Editor: Rahmad Nasution

Original published date: 14 August, 2021

Indonesian President pushes for developing more export commodities

Indonesian President Joko Widodo (Jokowi) believes that several export commodities in various regions in the country can be developed for penetrating foreign markets.

Jokowi made the statement during his speech via video conference at the Release of Agricultural Exports, as witnessed on the Presidential Secretariat's YouTube channel on Saturday.

"Currently, out of the 514 districts and cities throughout Indonesia, only 293 have centers of leading agricultural commodities for exports," the president noted at the Bogor Presidential Palace, West Java, Saturday.

The export commodities in several areas comprised palm products, rubber, coffee, and various other commodities of interest to the global market. Several commodities can still be potentially developed, he affirmed.

According to the head of state, export commodities that can be developed comprised swallows' nests, porang plants, jasmine flowers, ornamental plants, edamame, essential oils for which customers have developed interest in recent years, and other horticultural products as well as processed livestock products whose markets are increasingly open.

The president also called for strengthening domestic and foreign markets.

Domestically, people must be encouraged to purchase the nation's agricultural products and to consume healthy food. Meanwhile, foreign markets must also be pursued intensively through an integrated system in place to penetrate non-traditional markets of foreign countries.

Source: Antaranews

Reporter: Rangga J, Resinta S

Editor: Rahmad Nasution

Original published date: 14 August, 2021

 Read full article here


Cambodia's SME bank roll out new scheme

The state-owned Small and Medium Enterprise Bank of Cambodia Plc (SME Bank) has officially launched the “Phase II Co-financing Project” to prop up the business activities of local small- and medium-sized enterprises (SME) and abate economic Covid-19 woes.

The second phase was introduced after the first iteration achieved positive results, with participating financial institutions providing lifelines for SMEs in need of financing to keep from going under, and promoting economic recovery, the SME Bank noted in a press release on August 16.

The project aims to provide low-interest loans to promote the development of SMEs in priority sectors such as industry, services and commerce.

The funds under this co-financing project amount to $100 million, which is an equal counterpart fund between the SME Bank and the participating financial institutions.

At present, there are 26 participating financial institutions: 21 commercial banks, one specialised bank and four microfinance institutions (MFI) – three of which are authorised to receive deposits.

“SMEs in need of funds can apply for a loan under this scheme at any participating financial institution, in accordance with the terms of this co-financing project and the lending conditions at each participating financial institution,” the SME Bank said.

 

Author: May Kunmakara

Source: The Phnom Penh Post

For full article, please read here.

Original publication date: 20 August 2021

How to Set Up a Limited Liability Company in Indonesia

Establishing a foreign investment company or PT PMA, is the preferred structure for companies looking to have a legal presence in the country. Foreign investors will need to have a minimum paid-up capital equivalent of 10 billion rupiah (US$696,000), up from the previous 2.5 billion rupiah (US$174,135), as the government aims to attract more high-value investments into the country.

Prior to setting up, applicants should study the new Positive Investment List (PIL) to see which business sectors are unavailable or restricted for foreign ownership. The general principle under the positive investment list is that a business sector is open to 100 percent foreign investment unless it is subjected to a specific type of limitation. The regulation presents one of the greatest liberalizations in foreign ownership limitations in Indonesia since the negative investment list was first introduced in the 1980s.

Important sectors that had previous foreign ownership restrictions, which have now been lifted include, among others:

o   Telecommunications;

o   Transportation;

o   Energy; and

o   Distribution.

 

The Positive investment list

The government has classified business fields into four categories.

1.     Priority sectors – 245 business lines open for foreign investment;

2.     Business fields that stipulate specific requirements or limitations — 46 business lines open;

3.     Businesses fields open to large enterprises, including foreign investors, but are subject to a compulsory partnership with cooperatives and micro, small, and medium-sized enterprises (MSMEs) — 51 business lines open; and

4.     Business fields reserved for cooperatives and MSMEs (not open to foreign investment) — 112 business lines.

 

Priority sectors

To classify as a priority sector, business enterprises must meet the following criteria:

o   Must be labor intensive;

o   Must be capital intensive;

o   Must be part of a national project/program;

o   Must be export-oriented;

o   Must involve a pioneer industry (renewables, oil refining, metals, etc.);

o   Must utilize advanced technologies; and

o   Must implement research and development activities.

There are 245 business fields under this category that can be found under Exhibit 1 of the positive investment list. Moreover, businesses in priority sectors are eligible for a range of fiscal and non-fiscal incentives.

Fiscal incentives include a 50 percent corporate income tax reduction for investments between 100 billion rupiah (US$6.9 million) and 500 billion rupiah (US$34.8 million) for a period of five years and 100 CIT reduction for investments over 500 billion rupiah (US$34.8 million) for a period between five and 20 years.

In addition, there are tax allowances available in the form of a reduction in the taxable income of 30 percent of the total investment for six years, a special withholding tax rate on dividends of 10 percent, and tax losses carried forward for up to 10 years.

Examples of non-fiscal incentives are the provision of supporting infrastructure, simplified business licensing procedures, and the guaranteed energy supply or raw materials.

 

What are the advantages of a PT PMA?

There are several advantages of PT PMAs, including: 

o   Special financial and non-financial incentives, particularly in pioneer industries;

o   Incentives for setting up in special economic zones (SEZs);

o   Foreign investors can own as little as one percent and as much as 100 percent of the company (depending on the industry);

o   Able to participate in government-sponsored business tenders in the country;

o   Ease of processing for business licenses;

o   Ease of processing for work permits;

o   Lower tax and import duties;

o   Simple organization structure (requiring only one director, one commissioner, and two shareholders); and

o   Ability to sponsor foreign executives.

There are no restrictions on where the PT PMA can be set up in the country, but the business can only focus on one specific sector or area.

 

Set up requirements for a foreign investment company

According to the Investment Coordinating Board Regulation No. 4 of 2021 (BKPM Reg 4/2021), investors looking to incorporate a PT PMA need to adhere to the following requirements:

o   A minimum paid-up capital of 10 billion rupiah (US$696,000);

o   Appointment of two shareholders (these can be foreign individuals or corporations – the percentage of local involvement will depend on the foreign ownership limitation based on the PIL);

o   There must be minimum equity of 10 million rupiah (US$601) per share;

o   The appointment of at least one commissioner and a director (these can be held by foreign individuals); and

o   The director will be responsible for running the day-to-day activities of the company.

 

Set up process for a PT PMA

1.     Reserve a company name with the Ministry of Law and Human Rights (which should not be similar to the name of other companies or contain vulgar language), Further the company name shall consist of 3 words and can be in English;

2.     Establish a legal entity with the company’s activities stated in the Deed of Establishment (this must be done with a local notary and the Deed of Establishment will have to be ratified by the Ministry of Law and Human Rights);

3.     Obtain a taxpayer identification number from the local tax office and domicile letter from the district government (businesses establishing in Jakarta do not require a domicile letter);

4.     Obtain a tax registration certificate through the tax office where the business is domiciled;

5.     Obtain a Single Business Number (NIB) by applying through the Online Single Submission (OSS) system. The NIB applies as the company’s import identification number, customs ID, and registration certificate. Further, the NIB will also automatically register your company under the government’s health and social security scheme; and

6.     Some companies may need to apply for additional business licenses (such as for mining and fintech). Business licenses will now be issued based on the assessment of ‘business risk level’ determined by the scale of hazards a business can potentially create.

 

Risk Based Business Licensing

To determine the risk level, the government will conduct a risk analysis of each application before deciding on issuing a business license. This will comprise of:

1.     Identifying the relevant business activity;

2.     Assessing the hazard level;

3.     Assessing the potential occurrence of hazards;

4.     Determining the risk level and business scale rating; and

5.     Determining the type of business license.

Based on the aforementioned risk analysis, the businesses activities undertaken by the applicant company will be classified into one of the following risk-level types:

o   Low-risk businesses;

o   Medium-low risk businesses;

o   Medium-high risk businesses; and

o   High-risk businesses.

Based on this risk-based approach, the lower the business risk, the simpler the business licensing requirements will be.

 

What sectors are impacted?

The government will undertake the risk-analysis for business activities in the following sectors:

1.     Maritime affairs and fisheries;

2.     Agriculture;

3.     The environment and forestry;

4.     Energy and mineral resources;

5.     Nuclear energy;

6.     Industry;

7.     Trading;

8.     Public works and housing;

9.     Transport;

10.  Health, medicine, and food;

11.  Education and culture;

12.  Tourism;

13.  Religious affairs;

14.  Post, telecommunications, broadcasting, and electronic system, and transactions;

15.  Defense.

 

What are the requirements to obtain a business license?

The requirements vary depending on the risk level of the business with those in the high-risk categories requiring more permits and licenses.

The first stage of the process is obtaining a business registration number (Nomor Induk Berusaha – NIB) through the OSS system. To register for a NIB, businesses will need to provide the following information:

o   Taxpayer number (Nomor Pokok Wajib Pajak– NPWP);

o   Business activity code according to the KBLI;

o   Business profile;

o   The capital structure of the business; and

o   The proposed location of the business.

Furthermore, the OSS system will be linked to all relevant ministries, such as the Ministry of Finance, the Ministry of Home Affairs, and the Ministry of Law and Human Rights.

 

Low-risk business activities

Low-risk business activities are only required to obtain an NIB to commence their operations. In addition to serving as the formal identity of the business, the NIB also serves as a company’s import identification number, as well as the number for registering with the national social insurance program.

 

Medium-low risk business activities

Business activities in this category must obtain a NIB and Certificate of Standards before beginning operations. A Certificate of Standards is a statement of the fulfillment of certain business or product standards, which must be filled in through the OSS system.

The NIB allows the business to conduct activities from ‘preparation to the ‘commercial stage’.

The preparation stage includes:

o   The procurement of tools or facilities;

o   Land acquisition;

o   Recruitment of manpower;

o   Feasibility studies;

o   Financing operations for the construction phase.

The commercial stage includes:

o   The production of goods/services;

o   Distribution of goods/services;

o   Marketing of goods/services; and

o   Other commercial activities.

 

Medium-high risk business activities

For medium-high risk business activities, companies will need to obtain a NIB and Certificate of Standards. However, the certificate will need to be verified by the central or regional government.

A company with a NIB and an ‘unverified’ Certificate of Standards are only permitted to conduct activities deemed in the preparation stage of operations.

Once the central or regional government is satisfied the business has fulfilled the specific business standards, they will issue the ‘verified’ certificate and the company can begin the commercial stage of operations.

 

High-risk business activities

High-risk business activities will require a NIB and a license to operate. The license will be issued once the business has fulfilled certain conditions and verifications set out by the central or regional government, which may include an environmental impact analysis.

The NIB, however, allows the business to conduct activities in the preparation stage of operations.

Depending on the products or services being provided, businesses may have to obtain other supporting licenses to conduct commercial activities regardless of what risk level their activities are classified as.

 

A note on the local limited liability company 

Foreign investors who want to operate a local limited liability company (PT PDMN) should understand that this can carry legal uncertainties as a PT PDMN can only be owned by Indonesian citizens.

According to Article 33 of the Investment Law of 2007, foreign investors are prohibited from making an agreement that states the share/ joint ownership in a company is on behalf of another party. Also known as a ‘nominee agreement’, foreign investors have used such arrangements to avoid regulations and requirements that apply to them.

This carries inherent risks as the local shareholders will have full control of the business and the foreign investors’ rights will not be recognized by the law.

Foreign investors who cannot afford to establish a PT PMA can engage in joint ventures or partnerships with domestic firms. This will also enable investors to enter industries that are restrictive for foreign ownership without having to face the legal ramifications.

Another option would be to buy an established PT PDMN, but this entity would need to be converted to a PT PMA. This would also mean having paid-up capital of 10 billion Rupiah (US$696,000).

 

 

Source: ASEAN Briefing

Author: Ayman Falak Medina

Original published date: 10 August, 2021

 

Read full article here

State enterprises, MSMEs should intensify collaboration: legislator

House of Representatives' Commission VI member Nevi Zuairina suggested the government to build collaboration between State-owned Enterprises (SOEs) and Micro, Small, and Medium Enterprises (MSMEs) to boost digitalization of MSMEs to drive Indonesia's economic growth.

"A link and match between MSMEs and SOEs must be developed immediately," Zuairina noted in a written statement obtained here on Saturday.

Zuairina suggested that the State Budget should not solely be allocated to SOEs but the government should also channel attention to the MSMEs ecosystem for allotment since the sector also helped to maintain the nation's economic growth and development.

The House member called on the government to strengthen the digitization of MSMEs and encourage them to prepare for the international market.

One of the signs of progress was greater acceptability of the products of commodities manufactured by domestic producers in the international market, she pointed out.

To this end, Zuairina pushed to strengthen the digitization of MSMEs based on centralized data.

She believes that information technology and supporting infrastructure, such as a competitive delivery service, will offer wider business opportunities without limitations on location and time.

"The current pandemic is not only altering the people's lifestyle but is also presenting a strong warning of a decline in the number of MSME players, which were earlier valued at Rp64.7 million in 2019, though fell drastically to 34 million business actors in 2020," Zuairina stated.

Earlier, Minister of State Enterprises Erick Thohir noted that MSMEs and SOEs were the backbones of the Indonesian economy.

Thohir remarked that transforming SOEs into global business players was one of his key tasks as minister of SOEs.

However, it is a shared task of all stakeholders to transform MSMEs, which are people-owned enterprises, to become stronger, more resilient, and more competitive.

SOEs will continue to make all-out efforts, so that all public services, infrastructure development, energy availability, telecommunication access, and business financing for Indonesians can be achieved optimally.

The initiative to involve MSMEs as partners in the industrial supply chain as well as the procurement of goods and services for SOEs is a tangible form of sustainable synergy, Thohir remarked.

 

 

Source: Antara News

Reporter: M Rahman, Resinta S

Editor: Sri Haryati

Original published date: 14 August, 2021

 

Read full article here

Gojek supports ministry in digitizing 30 million MSMEs

Ride hailing application company Gojek supports the Ministry of Cooperatives and Small and Medium Enterprises in digitizing 30 million MSMEs by 2024, Gojek Senior Vice President Public Policy and Government Anita Sukarman stated Thursday. "In May 2021, Gojek and the Ministry of Cooperatives and Small and Medium Enterprises signed a cooperation agreement on the use of Gojek application services in the development and empowerment of micro-enterprises to expand the scope of cooperation and the process of digitizing MSMEs," she said at an online press conference.

To support the ministry in achieving the target of digitizing 30 million MSMEs by 2024, Gojek would start training 5,000 micro-enterprises assisted by the ministry with the number of micro-enterprises undergoing training increasing, she said.

With the collaboration between Gojek and the ministry Eddy hoped that the target of digitizing the MSMEs could be achieved, and the program could reach MSME players in underdeveloped areas.

The synergy created between both sides is beneficial to accelerate MSMEs digitization, the ministry's assistant deputy for business protection Sutarmo added.


 

Source: Antara News

Reporter: Suci Nurhaliza, Raka Adji

Editor: Suharto

Original published date: 13 August, 2021

 

Read full article here

The Updated Indonesia-Singapore Tax Treaty Enters into Force

On July 23, 2021, the updated Indonesia-Singapore double taxation agreement (DTA) entered into force, strengthening efforts to prevent tax evasion, increase the tax base, and increase investments between the two countries. 

Updating the DTA can further enhance Singapore’s status as a hub for international investments into Indonesia. There were three significant changes to the tax treaty, namely, the introduction of an article that provides capital gains tax protection, the reduction of withholding tax (WHT) on royalties, and the reduction in branch profit tax (BPT).

In addition to updating their tax treaty, the Indonesia-Singapore Bilateral Investment Treaty (BIT) came into effect on March 9, 2021, and replaces the previous BIT. Under the treaty, investors from both countries will enjoy specific legal protection, such as access to international arbitration, thereby safeguarding bilateral investments and boosting investor confidence.

Indonesia and Singapore have substantial cooperation across a variety of sectors, and total merchandise trade between the two reached S$48.8 billion (US$36.1 billion) in 2020. Singapore has been Indonesia’s largest foreign investor since 2014, with total investments reaching S$13.2 billion (US$9.7 billion) in 2020. Further, there is approximately US$300 billion worth of Indonesian assets in Singapore.


What are the key changes in the updated DTA?

o   Introduction of the provision of capital gains article

o   Reduction in the branch profit tax rate (BPT)

o   Removal of limitation of relief to treaty benefits

o   New provisions on anti-tax avoidance

o   Exemption on interests for sovereign wealth funds and government-issued bonds

o   Reduced withholding tax rates for royalties


 

Source: ASEAN Briefing

Author: Ayman Falak Medina

Original published date: 06 August, 2021

 

Read full article here

Indonesia’s Batam Receives Two New Special Economic Zones

Indonesia is set to open two new special economic zones (SEZs) in the island city of Batam after President Joko Widodo recently approved the decision.

The new zones aim to develop a number of industries in Batam, with an emphasis on the digital economy, data centers, logistics, tourism, and aviation.

Batam has been a free trade zone since 2009, along with the neighboring Bintan and Karimun islands, and its first SEZs were set up in 2017. Together, the three islands are known as the BBK free trade zone.

In addition to the new SEZs, Batam has several other projects in the pipeline, including upgrades to the Batu Ampar Port and the development of the healthcare sector.

 

What are the advantages of a special economic zone in Indonesia?

SEZs in Indonesia benefit from several advantages, such as business tax and income tax cuts as well as special investment incentives. They also tend to have a higher-quality infrastructure and benefit from industry clustering. Free trade zones, in contrast, are not able to offer fiscal incentives.

Where are the new Indonesian special economic zones located?

Nongsa Digital Park currently focuses on digital technology and tourism and Batam Aero Technic specializes in the maintenance, repair, and overhaul of passenger aircraft; both will be upgraded to SEZ status.

 

Nongsa Digital Park: a hub for electronics and data centers

Nongsa Digital Park, located in the northeast of Batam, will see its status upgraded from a technological park to an SEZ. With the upgrade, the park will focus on research and development, education, and creative industries, along with its existing focus on technology and tourism.

The park originally opened in 2018 after bilateral discussions between Indonesia and Singapore to develop a “digital bridge” between the two countries. Travelers can reach Batam from Singapore with a one-hour ferry ride.

Currently, the park’s 155.43 hectares of land is home to over 100 technology companies, mostly from Singapore, employing 1,200 workers.

As an SEZ, the park aims to attract more international investors, beyond the largely Singapore-based contingent currently active in the area. Its goal is to receive 16 trillion rupiah (US$1.1 billion) in investments and to create 16,500 new jobs.

To reach this target, the park hopes to become a hub for data centers, an industry the market research firm Technavio projects will grow by US$10.57 billion between 2019 and 2023 in Southeast Asia.

 

Batam Aero Technic: A node in Indonesia’s booming aviation industry

Batam Aero Technic is currently a 30-hectare facility owned by Lion Air Group, the holding company that owns Indonesia’s largest private airline.

With the upgraded SEZ status, Batam Aero Technic plans to expand from maintenance, repair, and overhaul of passenger aircraft to logistics and distribution, production and processing, and technology development.

The closest airport to Batam Aero Technic is Hang Nadim Airport, which is the region’s only international airport. In March, Korea’s Incheon International Airport Corp. won a project worth KRW 600 billion (US$519 million) to develop and operate the airport for 25 years, including opening a second passenger terminal by 2024.

 

Why Batam is likely to attract more Singapore-based investors

Batam’s new SEZs, combined with its proximity to Singapore and location on the busy Malacca Strait shipping route, give the island strong potential to grow and attract more international investors, especially those based in Singapore.

Singaporean-based companies can also benefit from the Singapore-Indonesia expropriation protection and upgraded double taxation avoidance agreements that entered into force in 2021, and access Indonesia’s huge 270 million strong domestic market.

 

 

Source: ASEAN Briefing

Author: Alexander Chipman Koty

Original published date: 12 August, 2021

 

Read full article here

Cambodia and Malaysia launch fund transfer

Cambodia and Malaysia on August 11 officially launched cross-border payments through the National Bank of Cambodia’s (NBC) Bakong system with Maybank, enabling faster and more convenient real-time money transfer between the two countries.

Speaking at the launch, NBC technical director-general Chea Serey said the collaboration is a solid starting point between the two ASEAN nations in the development of financial technologies that make it easier for people to transfer money in a faster and more convenient manner.

“The collaboration is just a beginning and I am sure there will be more that we can do together – for instance, for now it is a one-way transfer, but we also work on both-way transfers where people from Malaysia can also send money from Bakong to their Maybank App to the local one in Malaysia.

Maybank Cambodia CEO Mohd Hanif Suadi said the collaboration will be in response to the current development of the cross-border payment ecosystem and will address the challenges of Cambodian people working in Malaysia, who require a more convenient, affordable and faster way to send money back home.

Malaysian ambassador to Cambodia Eldeen Husiani Mohd Hashim said the collaboration will facilitate and expedite the transfer of funds between citizens of Malaysia and Cambodia.

 

Author: May kunmakara

Source: The PhnomPenh Post

For full article, please read here.

Original publication date: 11 August 2021

The future of sustainable manufacturing is a hybrid approach

If you’re in the retail business, one of your worst nightmares is being stuck with boxes and boxes of unsold inventory taking up space in your warehouse. Wasted stock can be a huge cost to your bottom line and pose serious risks to your business. For eco-conscious brands, a lot of unsold inventory is also detrimental to the environment, especially if the products are textile-based. Of the more than 100 billion items of clothing produced each year, some 20% go unsold leftovers are usually buried, shredded, or incinerated (Forbes). Businesses that end up in an overstock situation generally use traditional bulk manufacturing which requires products to be made and then warehoused until they are shipped. While there is a risk of costly unsold inventory, bulk production can also be economically effective if a product is proven to be a best-seller.

On the opposite side of the spectrum sits on-demand manufacturing – a process by which goods are produced only when they are needed and, in the quantities, required, eliminating the cost and effort of storing and managing inventory. Although on-demand products are not produced at economies of scale, businesses can more easily and quickly test and go to market with new products and designs.

Previously, businesses would need to choose one method or the other but with recent advancements in technology in the past decade, retailers can get the best of both worlds through hybrid manufacturing. An economically and environmentally sustainable solution, a hybrid approach blends the cost-effectiveness of bulk production with the risk-free per-order fulfillment process of on-demand manufacturing.

How Hybrid Works
Before adding any new item to product lines, experts recommend testing them through on-demand manufacturing to ensure viability. An on-demand approach gives retailers the freedom to sell more SKUs and products that they might not think will take off en masse. Once retailers know a product has the potential to move into mass production, the switch can be made. Eventually, when interest wanes and the product becomes more evergreen but to a smaller audience, retailers can realize ongoing value by going back to an on-demand approach.

Why Utilise a Hybrid Approach

Adapt to trends quickly without risk. Culture is now manufactured on-demand and consumers are setting trends on social media. Because buyers are now changing the way we capitalize on culture, it is affecting how brands produce and manufacture products on-demand. With a hybrid approach, brands can quickly mockup a design and add the product to their online store without prepaying for costly order minimums by first using on-demand manufacturing.

Improve cash flow. When a business utilizes a blend of on-demand and bulk manufacturing for its products, it can more easily optimize its cash flow. For bulk products, they can get a higher per product profit margin due to economies of scale. For on-demand products, they don’t have to pay for costly inventory or order minimums, freeing up a business’s cash flow.

Shift toward sustainability. Being eco-conscious is no longer a consumer marketing trend, it is a real practice many businesses are implementing in their business model. Because on-demand manufacturing allows companies to produce only what consumers order, it eliminates unnecessary production and harmful waste—saving both the business’s bottom line and the environment.

Be better prepared for economic disruptions. When COVID-19 disrupted supply chains across all industries last year, many retailers were forced to shut down and were left with boxes of unsold inventory. When utilizing on-demand manufacturing in a hybrid approach, it is important to look for a provider that manages a distributed supply chain network. This type of fulfillment process allows on-demand manufacturing providers the ability to carry a large number of product SKUs in more than one facility, therefore orders of that product are able to be fulfilled in multiple locations.

Source: Global Trade Magazine

Read the full article here