Finance Ministry explains why Bumiputera furniture firms delisted, extends deadline for certification

Deputy Finance Minister Datuk Amiruddin Hamzah speaks in Putrajaya July 26, 2018. — Picture by Ahmad Zamzahuri
Deputy Finance Minister Datuk Amiruddin Hamzah speaks in Putrajaya July 26, 2018. — Picture by Ahmad Zamzahuri

KUALA LUMPUR, Sept 11 — The Finance Ministry today explained it had dropped 33 out of 87 Bumiputera furniture producers from the list of suppliers to the government as they had missed a one-year deadline to obtain a specific certification.

The Finance Ministry however also said it will now be extending the deadline by six months, adding that this grace period will be for furniture firms that had shown an interest in being a certified supplier but had not managed to do so previously.

In a response to the Malay Economic Action Council (MTEM)’s allegation of unfair treatment towards the 33 Bumiputera firms, the Finance Ministry explained the entire matter relating to the Bumiputera furniture companies on the Centralised Panel Contract (KPB) or companies that were contracted to supply to government bodies.

Deputy Finance Minister Datuk Amiruddin Hamzah noted that the ministry had on June 22, 2018 listed 87 Bumiputera furniture companies on the panel of suppliers under the KPB for a three-year period from July 1, 2018 to June 30, 2021.

But the listing came with a strict condition to be certified under the Forest Research Institute Malaysia’s (FRIM) Product Certification Services (PCS).

“The companies involved are required to obtain FRIM PCS certification within one (1) year of the contract being in force until June 30, 2019 (the last date to obtain certification). Failure to fulfill that condition would cause the company to be automatically dropped from the KPB list,” Amiruddin said in a statement today.

Out of the 87 Bumiputera companies, 54 of them successfully obtained the FRIM PCS certification within the period fixed, which was before June 30, 2019.

As for the remaining 33 companies that failed to obtain the certification within the deadline, the ministry’s latest list that was updated today showed that only 13 of them obtained the certification, while 15 were still undergoing the testing process and five more did not submit applications to FRIM at all, he said.

Weighing in on those who had failed to obtain the FRIM PCS certification within the deadline, Amiruddin said the Finance Ministry had last held a discussion on August 8 with all involved associations, namely the Malaysian Bumiputera Furniture Industry Association (PETRA), the National Bumiputera Furniture Manufacturer Association (PUPUK), Association of Bumiputra Timber and Furniture Entrepreneurs (PEKA), Science Lab Furniture Association (PEMASA).

Amiruddin said it was agreed in the meeting that the government would be urged to relax the conditions for companies that had yet to complete the certification process, while companies that had shown no interest at all to have their products tested would be dropped from the KPB list for furniture suppliers.

“The Finance Ministry is very sensitive to the appeals from association members that have yet to complete the testing process for their products.

“In relation to that, the Finance Ministry has decided to extend the period to obtain the FRIM PCS certification for another six months, that is until December 31, 2019,” he said, noting that this extension does not cover the five companies who did not even submit their products to obtain FRIM PCS certification.

“However, if companies are still interested to join the KPB Furniture, these companies can submit appeals to the Finance Ministry to consider, subject to companies having obtained FRIM PCS certification within this extended period,” Amiruddin added.

The Finance Ministry today stressed that the FRIM PCS requirement was a government initiative under a programme to empower the Bumiputera furniture industry, noting that this was aimed at improving Bumiputera furniture firms’ capacity and furniture quality to penetrate into overseas markets, while also ensuring quality furniture is supplied to the government.

The ministry said FRIM was appointed as a regulator, as it was recognised internationally as a product certification body by the Furniture Industry Research Association (FIRA) and the Department of Standards Malaysia.

The ministry also explained its extensive efforts in assisting the furniture industry with the certification requirement.

“To ensure the industry is prepared with the enforcement of this certification, the Finance Ministry together with FRIM had carried out 17 series of engagement with manufacturers involved, such as PETRA members.

“In relation to that, the Finance Ministry greatly appreciates the cooperation shown by the majority of manufacturers that had successfully obtained the PCS certification within the period set. This proves that the Bumiputera manufacturers involved are ready to bring their products to a higher standard,” Amiruddin said.

According to the FRIM PCS website, the service was established in June 2013 with the primary goals of ensuring the manufacturing of quality products and quality wood-based furniture by the local industry and has been accredited by the Department of Standards Malaysia to be a product certification body.

Based on information available on FRIM’s PCS website, 67 companies have as of September 5 passed the required tests and successfully received certification for products such as tables and chairs for school students, racks, kitchen cabinets, file cabinets—including those made from wood, plastic, metal or fabric.

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