Bumiputera furniture firms thank MOF for six-month extension, explain why they missed cert deadline

The building of Malaysia’s Finance Ministry is pictured in Putrajaya. The Malaysian Bumiputera Furniture Industry Association expressed appreciation towards the Finance Ministry for a six-month extension to obtain a certification. — Picture via Google Maps
The building of Malaysia’s Finance Ministry is pictured in Putrajaya. The Malaysian Bumiputera Furniture Industry Association expressed appreciation towards the Finance Ministry for a six-month extension to obtain a certification. — Picture via Google Maps

KUALA LUMPUR, Sept 12 ― An industry group representing Bumiputera furniture companies today expressed appreciation towards the Finance Ministry for a six-month extension to obtain a certification, as this will give them a chance to join in tenders to supply furniture to the government.

The Malaysian Bumiputera Furniture Industry Association (PETRA) however said that these Bumiputera furniture firms were not to blame for missing the previous one-year deadline, as the speed of the certification process was beyond their control.

PETRA deputy president Nik Asmawie Nik Abdullah said the extended deadline meant that companies previously dropped from the Finance Ministry's Centralised Panel Contract (KPB) list of companies will now be eligible again to bid for tenders to supply furniture to the government.

“First of all, PETRA wishes to record the highest appreciation towards YB Deputy Finance Minister Dato Wira Ir Amiruddin Hamzah on the press statement last night (September 11, 2019), that agreed to reinsert 28 of the 33 companies that were dropped from the list of KPB panel companies and enabling them to join in the major tender tomorrow (September 13, 2019) for the supply of wooden school and office furniture for schools under the Education Ministry,” he told Malay Mail when contacted.

Yesterday, the Malay Economic Action Council (MTEM) had complained of unfair treatment after 33 out of 87 Bumiputera furniture producers were dropped from the KPB list over their failure to obtain certification under the Forest Research Institute Malaysia's (FRIM) Product Certification Services (PCS) within a one-year period.

The Finance Ministry subsequently explained that non-certification by June 30, 2019 resulted in the companies being automatically dropped from the KPB list, noting that 54 of the 87 succeeded in obtaining the FRIM PCS certification by the deadline.

As for the remaining 33 companies that failed to obtain the certification within the deadline, the ministry’s latest list that was updated yesterday 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.

Today, PETRA's Asmawie explained that all 87 companies were Bumiputera-owned as the KPB programme was a special programme for Bumiputera factories producing furniture for the government, noting that this was a legacy of the “Payung” or umbrella concept-based programme under Guthrie in 1987.

PETRA said the Finance Ministry had in June 2018 made the FRIM PCS certification a mandatory requirement for KPB companies to be fulfilled by the end of June 2019, but said FRIM PCS only started processing applications mid-way and which left the companies with only six months to complete the process.

He said the first six months of the deadline period saw FRIM still being involved at the planning stage such as briefings on the PCS, roadshows to the factories, data collection involving companies, with the certification process only starting in the last six months.

Asmawie noted that the certification process involves many stages such as application, documentation, audit and factory visits, and product testing, with many companies said to have gotten stuck at the testing stage.

“The companies had already complied with the required conditions for the PCS testing, such as factory visits and sending of products within the period fixed, but the testing results are beyond the control of companies.

“For me, the testing lab infrastructure and insufficient officers from FRIM to carry out the certification process and to solve the companies' problems slowed down this process. Most of the products, especially owned by the companies that were dropped was due to the lateness in testing done by FRIM after June 28, 2019,” he said.

Asmawie said all furniture companies in the KPB list had since its initial form under the Guthrie Payung concept (1987) were required to have various certificates to ensure quality in their systems and factory process such as Sijil Amalan Peningkatan Kualiti APK 97 (SIRIM), Productivity dan Quality (MPC), 5S, and ISO, while their products are also sent for durability and stability tests.

“But only because of not getting FRIM PCS certification within the period fixed (outside the control of companies), without looking at other certificates, the companies were dropped. Not fair,” he said.

As for five of the 33 companies which did not apply for FRIM PCS certification, Asmawie said most of them were no longer active or did not have other qualifications to apply for FRIM PCS, adding that high costs for the certification also deterred companies from applying.

Asmawie said that the FRIM PCS cost typically includes RM500 for new applications, RM500 annual fee, auditor to audit factories (RM1,000), technical expert (RM1,000), additional product (RM100), testing costs per product (RM840-RM2,000 on average), transportation costs to send products for testing, while the time for the certification process to be completed varies and could take four to six months.

Asmawie noted the significance for the companies to be on the KPB list as panel companies that can supply furniture to the government and statutory bodies.

“All companies that were dropped could not join in any tender/ quotation for government procurement including tenders for MOE, Mindef, universities and others. The latest is the major tender from the Education Ministry tomorrow, Friday, September 13, 2019,” he said.

Asmawie said 10 of the companies had individually and through PETRA appealed to the Finance Ministry previously which were rejected on grounds of non-cooperation with FRIM, but noted that further efforts via meetings with Deputy Finance Minister Datuk Amiruddin Hamzah and his officials were made where he promised to assist and also finally a meeting with PETRA and MTEM that eventually led to the deadline extension.

“PETRA is very thankful to YB Dato' TMK (deputy finance minister) who was willing to listen and solve the problems of these 33 companies that were dropped,” he said.

Asmawie however also expressed hopes that improvements would be made to the FRIM PCS requirement, such as by lowering costs and smoothening the process for the furniture companies.

“PETRA also calls for this supply programme using the FRIM PCS system to be reviewed in order to not burden Bumiputera entrepreneurs but to also still prioritise quality and customer satisfaction,” he said.

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