MTEM alleges unfair treatment after Putrajaya drops 33 uncertified Bumi firms as furniture suppliers

KUALA LUMPUR, Sept 11 — The Malay Economic Action Council (MTEM) called the Finance Ministry cruel today over its move to stop 33 Bumiputera companies from supplying furniture to the government over their lack of a specific certificate.

MTEM said it received a complaint from its member organisation Malaysian Bumiputera Furniture Industry Association (PETRA), after the latter’s members were omitted from the ministry’s revised list of companies on the Centralised Panel Contract for the supply of furniture to all government agencies in peninsula Malaysia.

“As many as 33 companies or 38 per cent of the 87 companies listed for the supply of furniture to government agencies have been dropped from the list effective 15 July 2019,” MTEM CEO Ahmad Yazid Othman said in a statement today, identifying the 33 companies as being Bumiputera companies.

Yazid said those were dropped due to their failure to obtain certification under the Forest Research Institute Malaysia’s (FRIM) Product Certification Services (PCS) before June 28, 2019.

He accused the ministry of taking the easy way out by removing the affected firms as suppliers without taking into account the certification process.

He said it was cruel to drop these companies as they purportedly complied with all processes and within the timeframe determined by FRIM, arguing that the period for tests and to obtain the PCS certificate was beyond the control of these companies.

“All these companies that had been dropped have furniture manufacturing factories that have operated for more than 20 years, with wide experience and achievements and recognition, but only because of failure to obtain PCS before the scheduled date, their rights and opportunity have been denied,” he claimed, adding that these companies have lost their main source of income.

“Isn’t the KPB policy intended to give priority to Bumiputera companies, especially the small and medium companies?” he said, further asking if only the PCS is to be used to determine such companies’ quality, competitiveness and merit even if they have other certificates.

In the statement, Yazid did not say if these 33 companies have other forms of certification.

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.

Noting that Malaysia is the 10th largest furniture producer globally, Yazid said Bumiputera entrepreneurs currently only make up less than one per cent of the local furniture industry and further questioned if the government was interested in helping Bumiputera furniture firms.

Yazid expressed hope that the government would provide quick feedback on the matter, as the tenders for such furniture supply are expected to be issued by the end of this week.

He also noted that the Finance Ministry’s notification of the dropping of these companies was only through normal post and that many companies had only received the notification several weeks after being dropped, adding that there was no direct notification through email, phone calls or registered post.

He said the process used by the ministry to drop such companies from the government panel should be given attention.

Following MTEM's complaint, the Finance Ministry explained tonight that 33 out of 87 Bumiputera furniture producers were automatically dropped from the list of suppliers to the government, as they had missed a one-year deadline to obtain the FRIM PCS certification.

The Finance Ministry however also said it will now be extending the deadline by six months to December 31, 2019, 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. 

The ministry said it appreciated the cooperation given by the majority or 54 of the 87 Bumiputera companies that had obtained the certification within the deadline, adding that this was proof of Bumiputera firms being ready to rise to higher standards.

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.

The ministry explained that the FRIM PCS certification was enforced to empower Bumiputera firms by uplifting their quality to compete internationally while also ensuring quality goods are supplied to the government, noting that it had already held 17 engagement sessions to assist furniture firms with the FRIM PCS certification.