SMEs shy away from govt grants

Malaysia’s small and medium enterprises (SMEs) are not keen on taking up grants by the government, especially for biomass projects, because of the tedious application process.

EU-Malaysia Biomass Sustainable Production Initiative technical adviser Datuk Leong Kin Mun said the application forms are “more than 40 pages” and ask a lot of open ended questions.”You can go on for 100 pages if you’re answering an open ended question. No one knows where to stop!” Leong said, when met at the pre-launch of the EU-Asia Biomass Best Practices and Business Partering Conference 2012 here yesterday.

He said SMEs keen to undertake such projects did not have the time to prepare for the proposals, although his team was willing to assist.

“They’d rather invest their own money or take a bank loan with minimal interests. Only the ones that need the grant desperately are willing to spend the time to apply,” he said.

Leong, however, said banks too were a hard nut to crack as many had low appetites for financing such projects.

“They just don’t want to take the risk and have told us to take the top down approach to solve this problem. Meaning going to the Prime Minister or Bank Negara if we want to see more banks lending money to biomass projects. This is something that we are doing now,” he said.

Leong said many companies prefer to take bank loans because they are always in control and do not have to sell their companies and lose their controlling stake, which is often the case when a foreign investor gets in.

“These companies prefer a bank loan but at present, there are more European investors who are keen to invest in biomass companies in Malaysia than banks,” he said.

Leong said next year’s EU-Asia Biomas Best Practices and Business Patnering Conference 2012 from May 7 to 10 aims to do just that.

“More than 50 European companies are expected to attend the event and will invest a total of RM300 million in cumulative investments,” he said.

Leong said the event plans to match deserving Malaysian companies with European investors in projects such as bio-fertiliser, bio-composite, bio-plastic, biomas-power plant and bio-gas project.

“At present we are already matching two companies with two investors, one from Ireland and the other from China. One of these companies already got a project to supply renewable energy to Tenaga Nasional Bhd. Both these companies need RM100 million each,” he said.

Also present was EU ambassador to Malaysia Vincent Piket.

“Buyers are interested in bio-composite products made of rice-husks, palm biomass pellets, wood pellets, palm kernel shells and biomas briquettes. Investors are interested in wood pellets production plant, biomass power plant and methane capture biogass projects,” Piket said.

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