Vol.

1, 2012

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INSIDE Using the WTO/TBT Enquiry Point SME-friendly standards for foodstuff Opportunities in Malaysias halal industry

Driving innovation through technology and quality

THE SME TOOLKIT

Everything an SME needs to become a globally competitive business

STANDARDS FOR BEGINNERS

Helping SMEs improve their product standards

THE SEAL DEAL

Meet Malaysias most innovative company

The innoVation iMPeratiVe

The 1-InnoCERT Certification Programme

WHATS IN A TRADE NAME?

How to leverage the power of trade marks

EDITORS NOTE

EMPOWERING SMEs
The worlds economic epicentre has shifted dramatically over the past decade. While rich nations still command significant influence over world economic affairs, the baton of world economic leadership has clearly passed on to the worlds emerging markets. Malaysia anticipated this shift in the global economy many years ago. The government has been working hard at transforming the economy so that it is less reliant on the rich world for its economic prosperity. The Economic Transformation Plan (ETP) and Government Transformation Plan (GTP) provide a useful framework for this effort, while the Rural Transformation Programme (RTP) will modernise rural Malaysia by increasing the infrastructure, income level and the rural population economy. Small and medium businesses will play a big role in this transformation and, as always, SIRIM is ready to do its part. The SME Master Plan (2012 2020), launched by Y.A.B. Dato Sri Mohd Najib Tun Haji Abdul Razak in November 2011, will create an ecosystem to accelerate the growth of SMEs towards achieving a high income economy. Malaysia needs to turn the best of its SMEs into world beaters. SIRIMs suite of services for developing SME span the entire business lifecycle, from research and product development to branding and commercialisation. We aim to arm homegrown entrepreneurs with the tools, support and advice that they need to compete internationally. With the support of other agencies such as SME Corp and MITI, we can all work together to transform our SMEs into global players.

Nor Rashid Ismail Vice President Corporate Division

ADVISOR Dr. Zainal Abidin Mohd Yusof CHAIRPERSON Tn. Hj. Nor Rashid Ismail MEMBERS Noraini Kassim Raja Yahya Raja Ariffin Abdul Aziz Long Dr. Abd Rahim Saad Pn. Futom Shikh Jaafar Dr. Neelam Shahab Dr. Kartini Noorsal Mohd Ghazali Mohd Yunos Azman Hassan Salmah Mohd Nordin Zanariyah Ali Inderjeet Singh a/l Sohan Singh

Abd Halim Yacob Ruhil Amani Zainal Abidin Nurazlina Ismail

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Published and printed by: SIRIM Berhad 1, Persiaran Dato Menteri Section 2, P.O. Box 7035 40700 Shah Alam, Selangor. Toll Free: 1300 88 7035 Tel: 603 5544 6000 Fax: 603 5510 8095 Writing, design and concept: Marcus Gomez & Partners Sdn Bhd No. 27, Jalan SS2/2, 47300 Petaling Jaya, Selangor, MALAYSIA. www.marcusgomez.com

SIRIMLink is an official publication of SIRIM Berhad. The bulletin is distributed free to our clients, associates, business and research establishments. Copyright SIRIM Berhad. Some images and artwork from iStockphoto, BigStockPhoto and other independent artists. For further information on the articles featured in this magazine, please contact: Corporate Communications Section Group Corporate Affairs Department SIRIM Berhad 1, Persiaran Dato Menteri Section 2, P.O. Box 7035 40700 Shah Alam, Selangor Tel: 603 5544 6770 Fax: 603 5544 6745 Or email to: publications@sirim.my

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the sMe toolKit: EVerything an SME needs to becoMe a globally coMPetitiVe bUsiness

ContEnts
Malaysias small and medium businesses have no shortage of support and resources available to them under the National SME Development Councils SME Masterplan, which is designed to create an ecosystem to breed stronger and more independent SMEs that can achieve success in the free market.

VOL. 1, 2012

THE SME MASTERPLAN

...04

A CHAT WITH...
Salmah Nordin talks about how small and medium businesses can make the most of SIRIMs WTO/TBT Enquiry Point to tap into global export markets.

...08

STANDARDS & QUALITY

...26

STANDARDS FOR BEGINNERS Malaysias rich and dynamic food industry reflects its cultural diversity, with traditional Malay, Chinese and Indian titbits consumed by everyone both young and old. Howver, traditional snacks which are still largely produced by small businesses unaware of the regulations that govern their industry, much less the safety and hygiene standards they have to meet. With SIRIMs help, that will soon change. HALAL FOR EVERYONE Halal certified companies contributed to 5.1-percent of Malaysias overall exports in 2011, according to the Halal Industry Development Corporation (HDC). As Malaysian entrepreneurs set out to capture the lucrative worldwide halal market, this share is almost certain to increase. As it happens, SIRIMs comprehensive range of services is a perfect fit for these future halal business leaders.

The World Trade Organizations (WTO) Agreement on Technical Barriers to Trade (TBT) makes it easier for businesses to sell their products in 155 WTO member countries around the world. See page 8

INTELLECTUAL PROPERTY
WHATS IN A TRADE NAME? A companys trade name is probably the most valuable asset it has. SIRIMLink speaks to registered trade mark practitioner Ong Chui Koon to find out how SMEs can register and start building their own trade marks.

...07

SME FOCUS

...20

THE SEAL DEAL In an industry dominated by huge but cumbersome OEM manufacturers, ProEight Offshore Engineering Sdn Bhd stands out as a pioneering beacon of innovation. For visionary Managing Director Ir. Azhar Zainal Abidin, winning the 1-InnoCERT Most Innovative Company award is just the beginning. WASTE NOT The World Wildlife Fund recently ranked Malaysia as the 46th biggest polluter in the world. 1-InnoCERT award winner Nasmech Technology reckons that its novel approach to waste disposal can help the country get back into Mother Natures good books.

THE SME MASTERPLAN

BLUEPRINT FOR FUTURE SMEs

Malaysias small and medium businesses have no shortage of support and resources available to them under the National SME Development Councils SME Masterplan.
hi L e l a r g e companies have often taken the spotlight during the growing years of Malaysias economy, it is the countrys small and medium enterprises (SMEs) that will become the backbone of the economy in the future. SMEs currently account for 99.2% of registered companies in Malaysia, contributing about 31-percent to the national GDP and providing jobs to about 56-percent of the countrys workforce. However, a recent study by the World Bank on 15 SME programmes in Malaysia found that the productivity level of local SMEs was only RM44,300 per worker less than one-third that of larger companies, where rates averaged about of RM143,000 per worker. The countrys small and medium enterprises thus have plenty of room to grow.
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Indeed, the government has identified SMEs as drivers of innovation, employment and growth, and has laid big plans ahead for them. At the 12th meeting of the National SME Development Council (NSDC) in November 2011, Prime Minister YAB Dato Sri Mohd Najib Tun Haji Abdul Razak announced the second phase of the SME Masterplan that will help to expand the role of SMEs in the economy. The SME Masterplan is designed to create an ecosystem to breed stronger and more independent SMEs that can achieve success in the free market. In line with the New Economic Model (NEM), Malaysias growth towards a high-income economy will also be inclusive of all walks of life, with attention to all sectors, regions (including East Malaysia and rural areas), and underprivileged groups in society.

A PLaN FOR PROSPERITY The SME Masterplan aims to help SMEs contribute at least 40-percent to national GDP by 2020. It also intends to raise the share of employment to 62-percent and the share of exports of SMEs from 19-percent to 25-percent. To achieve these goals, however, SMEs will have to improve their productivity gains by 75-percent. The SME Integrated Plan of Action 2011 encompasses a total of 219 programmes being implemented with a financial commitment of RM5.9 billion in 2011, compared to 226 programmes for a total of RM7.1 billion in 2010. To realise the goals of the SME Masterplan, the NSDC announced six high impact programmes (HIPs):

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THE SME MASTERPLAN

HIP 1: Integration of Registration and Licensing of Business Establishments HIP 2: Technology Commercialisation Platform (TCP) HIP 3: SME Investment Programme (SIP) HIP 4: Going Export (GoEx) Programme HIP 5: Catalyst Programme HIP 6: Inclusive Innovation services to help safeguard and commercialise their intellectual property (IP) through licensing, joint venture projects and spinoff technologies. Malaysias intellectual property environment has improved considerably over the past decade, prompting the US to remove Malaysia from a lower level watch-list of countries committing violations of intellectual property rights in May 2012. SMEs are thus assured of having a solid legal framework with which they can protect their ideas and can look forward to building their brands with greater confidence (see page7, Whats in a Trade Name?). GOING GLOBaL The true measure of any SMEs success is in whether or not it can survive global competition. Malaysian SMEs can only reach their highest potential by venturing into overseas markets as exporters of Malaysian goods and services. The HIP 4: Going Export (GoEx) Programme provides SMEs with a wide range of services to assist them in becoming export-ready. SIRIM is responsible for supplying the expertise and capabilities behind many of the initiatives under this HIP such as the Groom Big programme, branding and packaging consultation, the TBT/WTO Enquiry Point and compliance and conformity assessment all of which are designed to raise local products and services up to international levels. To find out more about these services, see page 8, The Export Challenge and page10, Standards for Beginners.
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A strategy for SME eXcellence

The strategic vision for creating globally competitive SMEs was defined through four strategic goals, as announced during the 11th meeting of the National SME Development Council. These four goals are: 1. Increase business formation to facilitate business dynamism through a constant stream of new entrants into the market; Intensify formalisation to incentivise innovation, growth and promote fair competition; 3. Raise productivity of SMEs to boost incomes and raise standards of living; and 4. Expand number of high growth and innovative firms as they generate a substantial share of employment and output in the country as well as having the scale to be globally competitive. Six focus areas were identified to support these four goals, covering innovation and technology adoption, human capital and entrepreneurship development, access to financing, market expansion, legal and regulatory support and regulatory infrastructure.

SIRIMs current SME development activities have been streamlined under the SME Development Centre, which will serve as a one-stop centre for SMEs. COMMERcIaLISING MaLaYSIaN INNOVaTIONS HIP 2: Technology Commercialisation Platform (TCP) will provide Malaysia with a national network of privatelymanaged platforms to promote technological innovation. Through the TCP, creative entrepreneurs will be able to get support for their innovative ideas, from proof of concept to commercialisation stage. The TCP will also provide infrastructure support, financing, technical assistance, market information and capacity building for innovators. SIRIMs SME Development Centre will feature hi-tech incubation for SMEs that have been assessed and are deemed suitable. SIRIM can support local innovators with consultation and

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THE SME MASTERPLAN

HIP 1: Integration of Registration & Licensing of Business Establishment HIP 6: Inclusive Innovation HIP 2: Technology Commercialisation Platform (TCP)

6 High Impact Programmes (HIPs)

HIP 5: Catalyst Programme HIP 4: Going Export (GoEx) Programme
CREaTING HOMEGROWN cHaMPIONS The SME sector contains many unpolished gems in need of focused attention in order to truly flourish. To create these homegrown champions, the HIP 5: Catalyst Programme targets selected companies for special support in the areas of financing, market access and human capital development. SIRIM supports HIP5 through quality and technology training programmes for SME employees, compliance and conformity assessment, branding consultation, skill upgrading and re-skilling for human capital, and many other activities. Business acceleration for these companies under HIP 5 will also include the Enrichment & Enhancement (E2) programme,
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HIP 3: SME Investment Programme (SIP)

branding assistance, Extension & Advisory services and other services. TRaNSFORMING cOMMUNITIES In addition to creating champions, the SME Masterplan also was created to ensure balanced growth. HIP 6: Inclusive Innovation will provide handholding and technical and management support for microenterprises in rural areas. This programme promotes socio-economic equality for the bottom 40-percent of income earners to promote transformation of these communities. Overall, the SME Masterplan is intended to be in line with the Rural Transformation Programme (RTP), which in turn aims to bring

the benefits of modernisation and infrastructure to rural areas, raising the incomes of rural communities and promoting the increased engagement of rural entrepreneurs with the national economy. Since 2009, the Ministry of Science, Technology and Innovation (MOSTI) has provided funding to Technology Applications Programmes (TAP) to bring the benefits of science and technology to the community level. SIRIM continues to implement and monitor various TAPMOSTI@ COMMUNITY projects, which now fall under HIP6. Similarly, SIRIMs Grassroot Innovation workshops and ideation and IP protection activities also fulfil the goal of Inclusive Innovation. The 1-InnoCert certification programme is also designed to encourage and reward innovation among SMEs (see page 14, The Innovation Imperative).

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MONETISING INTELLECTUAL PROPERTY

THe

TRADE NAME GAME

A companys trade name is probably the most valuable asset it has. What can SMEs do to enhance the value of their trade names?
That said, SMEs still have plenty of scope to think about branding. The basic rules when choosing a mark as a trade mark is that it has to be simple, easy to remember and not be risqu when translated into other languages. Marks which are considered as scandalous or which fall under the list of prohibited marks under the Trade Marks Act cannot be registered as a trade mark. Thus, the Sodo Mee mark, although registrable as a trade mark in Vietnam, might not be registerable in Malaysia because it will be considered scandalous. Where a company manufactures different types of goods or provides a host of services, the company will need to register the companys trade mark in different classes to reflect the different types of goods sold or the different types of services rendered. Thus, a fast food chain that registers its mark in the service industry cannot prevent another company from registering the same mark for paint products unless the fast food company has a well known or famous trade mark. In order to secure protection in other classes of goods or services, one has to register the same mark in different classes in order to secure maximum protection. That can become an expensive affair for a SME company.

RAde marKs, industrial designs, patents and copyright are the main types of intellectual property that encompass practically all aspects of a businesss operations. Sadly, most SMEs neglect to recognise the inherent value of their intellectual property assets, and thus fail to capitalise on the potential profits they may yield the organisation. Take a trade name, for example: in and of itself, a name does not mean much to anyone. However, once it becomes associated to a product, it transforms into a brand and carries with it the burden of the products perceived quality and value to consumers. What many SMEs dont realise is that when they choose a trade mark, the mark must not describe that particular product or service they are offering, says Ong Chui Koon, Senior General Manager at the Intellectual Property Centre at SIRIM. You cannot choose GOOD WHEAT as a trade mark for a product which is made from a good quality wheat flour because the mark will be considered as describing the goods which you are selling. The mark may not be registered as a trade mark under the Trade Marks Act, 1976.

Ong ChUi Koon: Many SMEs dont realise is that when they choose a trade mark, the mark must not describe that particular product or service they are offering.

Word marks are the most powerful form of trademarks but are also the hardest to register unless the mark is an invented word. One example of such a word is the KODAK trademark an invented word that is not found in any dictionary. Where a word used is not an invented word, a business can include a logo to make the mark distinctive and use the whole design to apply for registration, says Ong. Some examples of brand names that have done this are KFC and McDonalds. Registering a trade mark in Malaysia costs about RM2,500 per mark per class and takes about six months to twelve months provided the registration meets with no objections from the Trade Mark Office.
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MALAYSIAN EXPORTS

ESPISED as they are by businesses the world over, technical regulations are a necessary evil. They help keep products safe for consumers, they protect strategic industries from exploitation, and they provide competitors a level playing field. They also provide a framework for which countries may establish laws to punish indiscriminate businesses with no regard for the safety of their customers or the environment. Every country has its own unique regulations, some stricter than those of other countries. A product cannot be sold in that country unless it complies with these regulations. Governments have to continuously adapt and improve upon existing regulations and standards to respond to new technologies, research and business practices. This means that the regulations and standards in all countries are constantly evolving. Businesses have to stay ahead of these changes or risk being denied access to market, warns Salmah Mohd Nordin, Head of
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Overcoming regulatory barriers towards becoming a successful exporter is easier than ever before with the WTO/TBT Enquiry Point at SIRIM.
WTO/TBT Enquiry Point and Technical Advisory Services Section at SIRIM. A business that isnt aware of a regulatory change can be caught out and suddenly find itself unable to sell its goods in that country without making significant and often expensive modifications. The change might be a new physical requirement (e.g., a new ban on a food additive or chemical), or it might be a new labelling requirement (e.g. applying a second language to a nutrition label). Fortunately, the World Trade Organizations (WTO) Agreement on Technical Barriers to Trade (TBT) obliges countries to exchange information with each other about their proposed regulatory changes in advance of their implementation dates, thereby giving exporters time to make changes to their product formulations or documentation in time to meet the new requirements. All 155 members of the WTO are obliged to have national TBT Enquiry Points to facilitate this information exchange with other countries. Malaysias TBT Enquiry Point is managed by SIRIM. Here, Malaysian exporters can find out about the standards, regulations and conformity assessment requirements of any WTO member country in the world. They can then decide which countries to export their products to and take the necessary steps to ensure that they meet the regulatory requirements of those countries. BARRIERS TO EXPORTS But just because a product meets the countrys regulations today does not mean it will continue to do so in the future. As mentioned earlier, regulations everywhere are always being updated and modified to reflect new technologies and research findings, and the real challenge for exporters is being able to adapt to these changes. Luckily, WTO members must provide reasonable notice to all other countries of its intention to change before it does so, during which time those other countries may comment on the proposed change or suggest alternatives. The national Enquiry Point in each country will receive an alert of the proposal, and depending

EXPORT CHALLENGE

THe

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MALAYSIAN EXPORTS
on how much it might impact the businesses of that country, the country may formulate a response to oppose or recommend a modification to the proposed change, explains Salmah. Businesses that will be affected by the change are encouraged to participate in the comment process to protect their interests. There is no guarantee that the proposing country will change its proposal, of course, but they are obliged to take the comment in consideration. As long as the comment is justifiable and based on TBT requirements, the team has a case that can be pursued further and may also be raised at TBT Committee meetings. Some common concerns raised by WTO members include regulations that are not based on international standards, discriminatory treatment against foreign products and measures that are more trade restrictive than necessary. There are two kinds of regulations: those that affect a products intrinsic characteristics, and those that affect its extrinsic features. Regulations that govern a products intrinsic characteristics deal with what a product is made of and how it performs, such as the chemicals and ingredients it contains, its standard operating temperature and its safety features. Regulations that affect extrinsic features govern how a product is labelled, packaged and graded. We handle TBT notifications which covers all industrial and agriculture products, says Salmah. For agriculture and foods products, however, TBT only covers aspects related to labelling, packaging and grading requirements. The safety aspects are covered by the Sanitary and Phytosanitary Measures (SPS) Agreement which falls under the purview of other agencies such as the Ministry of Health and Ministry of Agriculture. Malaysia is one of only a handful of countries around the world whose WTO/TBT Enquiry Point offers exporters an automated system for receiving alerts about such proposed changes. The Export Alert! service (http:// www.sirim.my/web/srmc/exportalert) is provided free of charge and allows subscribers to receive alerts according to their selected country and product of interest. It also gives them access to foreign draft regulations as soon as they are announced. Say a country suddenly wants a health warning label on all foodstuff containing palm oil. Salmahs office at SIRIM receives the notification of the proposal today, which gives Malaysia 60 days to comment on it. Through its subscription to Export Alert!, the Malaysian Palm Oil Board (MPOB) will receive the information of the proposal and will able to request for text of the regulation from the WTO/ TBT Enquiry Point. If required, a meeting with relevant parties will be called to discuss how Malaysia should respond. The MPOB will submit scientific evidence that supports the safety and health benefits of palm oil in an effort to change the minds of regulators in that country, and Salmahs team will compile all the input and send it to the countrys WTO/TBT Enquiry Point. In the event that the country in question does change its mind about its proposed ban, then its back to business as usual for everyone. But if it stubbornly chooses to go ahead with the ban despite Malaysias objection, then at least Malaysian food exporters have a chance to change their recipes to meet the new regulation or to stop exporting its products to that country. The Export Alert! Service automatically emails subscribers with details about the proposed change and provides them with resources for more information, says Salmah. This is a huge improvement from the old manual system, whereby businesses only found out about impending changes much later after they were announced. Exporters really should take advantage of the service.

SalMah Nordin: What is even more important is that the business stays abreast of changes in regulatory requirements, because they are constantly under revision.

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Malaysias rich and dynamic food industry reflects its cultural diversity, with traditional Malay, Chinese and Indian titbits consumed by everyone both young and old. But traditional snacks are still largely produced by small businesses unaware of the regulations that govern their industry, much less the safety and hygiene standards they have to meet. With SIRIMs help, that will soon change.

STANDARDs for beginners

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STANDARDS FOR SMEs

ALAYSIANS love snack food. The countr y consumed over RM600 million worth of sweet and savoury snacks in 2010, over a third of which were traditional snacks such as kerepek and muruku. Indeed: visit any small convenience store in a rural town and you will find a slew of locally-produced snack foods available for sale hanging from hooks around the stores entrance. These assorted crackers, buns and nuts are the products of Malaysias micro-enterprises an increasingly important industry for the countrys rural population, but one that is woefully ill-equipped to meet the demands of modern society. SIRIM hopes to change that. Its role in developing Malaysian Standards is well-known, but most of these standards are not relevant to mom-and-pop businesses whose raison dtre is simply to make

better tasting banana crisps. For the micro-enterprises of rural Malaysia, a formal Malaysian Standard would simply be too much, too soon. In order to bridge this gap, SIRIM is using its expertise and experience to devise what it calls the SIRIM Quality Improvement Scheme Standard (Standard Skim Peningkatan Kualiti SIRIM or Standard SPKS): simplified, scaleddown standards specifically geared towards beginners. The aim of these standards is to create practical standards for traditional local snack foods such as crisps and crackers which local micro and small enterprises can really use and apply to their businesses, explains Saleha A Jalil, Head of the Scientific Standards Management and Consulting Services Section at SIRIM. Over 450 Malaysian Standards have been developed for foodstuff manufacturers in Malaysia to date, for everything from chili sauce to soya bean milk. However, these standards are generally for larger enterprises which make millions of units that are shipped all over the country and overseas. Such standards are overkill for micro and small enterprises still operating out of a shop lot in small towns, and in many cases, they would simply be unsuitable anyway. Hence, the need for the Standard SPK. Only five Standard SPKS have been developed thus far four for food products and one for beds but Saleha is optimistic that the list is set to grow. The standards for traditional food products and frozen food products are general enough to be applied to most micro and small enterprises in the

... we try to make these standards as general as possible so that they can be easily applied.
food business today, and SIRIM is actively engaged in identifying other popular Malaysian products that may require such standards to help them to produce quality products and hence remain competitive. These standards are in Bahasa Malaysia to make them more useful to rural entrepreneurs who are less familiar with English. The more friendly a standard is to an entrepreneur, the more likely it is to be effective, and so we try to make these standards as general as possible so that they can be easily applied, says Saleha. We are also careful not to meddle with the recipe of the product itself. ONE SMaLL STEP FOR MIcRO aND SMaLL ENTERPRISES A Standard SPKS describes how to produce a quality product using appropriate ingredients or materials. It also describes suitable processing guidelines using suitable equipment and on suitable premises as well as the packaging and labelling requirements. You can use any ingredient you want so long as it meets the quality requirements and relevant regulations, which means you are free to explore all the recipes you want. However, it is important to know where these ingredients come
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SalEHA JALIL: Indigenous standards are developed when there is no foreign equivalent standard that may be used as a reference.

STANDARDS FOR SMEs

from, how they are stored and processed and how the product is packaged. It is also useful to know how a product should be labelled to meet local regulatory requirements. When it comes to food, we also include halal elements so that micro and small enterprises are better prepared for the stricter halal requirements of the more formal MS 1500 Halal Food Standard later on, explains Saleha. A Standard SPKS describes what they can and cannot do to keep their product halal, from the beginning of production to final packaging. A standard describes rules in the production process, from where the raw material is sourced, used and processed to the way the premises are operated. Small food producers are often not aware of the national regulations which govern their business, and the standards references to the Food Act 1983, Food Regulations 1985, and Food Hygiene Regulations 2009 are helpful in ensuring they stay within the law. It can also be applied to automated systems, regardless of the machinery involved. Again, the standard is only interested in whether or not the machinery is clean and if it poses any risk of contamination to the product, not the recipe itself. Even if the whole factory is run manually, it can still meet a standards requirements for food hygiene and safety. With that said, however, it should be emphasised that a standard is more than just a rulebook. A savvy micro and small enterprises may also use a standard as the companys production manual. It becomes even more
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valuable later on as the basis for the businesss quality management system, and helps make the process of getting certified to standards very much easier. Most small food producers rely on the usual taste test to decide whether or not a batch of products is ready for packaging, says Saleha. A standard eliminates that vague element in the production process and allows them to recreate the same product a lot more consistently. If the business consistently meets the standards

that their grandmothers secret recipes remain intact provided they dont use any banned substances. Most home recipes are perfectly safe and are unlikely to contain dangerous substances like sodium borate or melamine, but mass producing family recipes on a large scale will nonetheless call for some sort of additive to enhance the shelf-life and appeal of the product. This is especially true if you want to sell your grandmothers cupcakes overseas. Besides helping entrepreneurs nail down their manufacturing recipe, standards also keep a product compliant with the import regulations of other countries. If you want to go global, then getting a standard for your product is the obvious first step. Since Malaysia is a member of the International Organization for Standardization (ISO) and the World Trade Organization (WTO), Malaysian Standards that are developed are in line with internationally accepted requirements and practices. The same practice is applicable in developing a Standard SPKS says Saleha. They can pave the way for the entrepreneur towards certification to more demanding and internationally-recognised standards. Luckily for micro and small enterprises today, the process of finding out what those foreign requirements are is easier than ever with the WTO/TBT Enquiry Point at SIRIM (see page 8, The Export Challenge). All these enterprises have to do is call SIRIM, tell them what their product is and which

Smart SMEs also use a standard as the companys production manual since it describes how the product is made in such detail.

requirements, then it will only be a matter of time before it is ready to pave the way for breaking into national and regional markets, says Saleha. GOING GLOBaL The Standard SPKS proposed by SIRIM are purely voluntary all they do is prescribe the minimum requirements for quality and safety for a particular product. There is thus plenty of scope for innovation, and entrepreneurs are able to ensure

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STANDARDS FOR SMEs

country they want to export their product to, and SIRIM will do the rest. Whenever a country in the WTO wants to issue a new regulatory standard, it is obliged to circulate the draft among all WTO members for comment before it is finalised and published. All countries can find out about the requirements of other countries through the WTO, and in the unlikely event that the target country has no applicable standard for the product, it will usually fall back upon the Malaysian Standard to decide whether or not the product is suitable for its market. In any case, Malaysian exporters are usually assisted by their import customers in determining whether or not their product will meet the target markets requirements, explains Saleha. Malaysian companies would do well to make sure they know and meet those requirements earlier rather than later.

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INNOVATION

THE

IMPERATIVE
Malaysian companies have everything to gain by embracing innovation. The Governments innovation campaign is aimed at encouraging small and medium enterprises (SMEs) to develop new products and new solutions, instead of falling back on the staid old ways of doing business. In support of this, SME Corporation Malaysia (SME Corp) in cooperation with SIRIM established 1-InnoCERT, a certification programme to seek out and recognise enterprises with genuine systems and processes that will nurture innovation.

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The 1-InnoCERT PrograMMe

f MaLaysia is to transform itself into a highincome nation by 2020, it needs to grow a healthy crop of innovators among its SMEs. That is the challenge laid down by Prime Minister Dato Sri Mohd Najib: to create a business ecosystem fueled by innovation. In 2009, SME Corp responded to this call by launching 1-Innovation Certification for Enterprise Rating & Transformation (1-InnoCERT): a programme that identifies innovative qualities in Malaysian businesses. SIRIMs role in this programme is to act as the vehicle for auditing, verifying and certifying companies that apply for 1-InnoCERT certification. Certified SMEs become eligible for participating in the annual SME Innovation Award, as well as benefits in financing, tax deduction and others. The 1-InnoCERT programme is not about a specific innovative product or service, says Abdul Aziz Long, Senior General Manager, Standards Research and Management Centre. It is about finding a model that inculcates product innovation, process innovation, marketing innovation and so on all the practices that indicate that an organisation strives to achieve a genuinely innovative strategy, rather than just carrying out business as usual. 1-InnoCERT is open to eight sectors: Manufacturing, Services, Biotechnology, Agriculture, Environment, Expert Design, Software and Construction. The programme isnt for novice companies, either. Applicants

must have been in operation for at least two years, with at least one complete twelve-month period of audited financial statements and one complete twelve-month period of management accounts. Once an organisation has employed an innovation model for a suitable period of time, 1-InnoCERT certification puts that model to the test. To better understand how to identify successful innovative processes, SME Corp looked at other countries that have nurtured vibrant technology sectors, particularly in the homeland of Samsung and Hyundai. South Koreas innovation model is the best one for a developing country, says Abdul Aziz. The Inno-Biz certification there is based on the internationally-recognised Oslo Manual developed by OECD countries, providing guidance on methods of innovation assessment. This is the template that 1-InnoCERT is based on, too. The web-based self-

assessment is made up of questions that measure the innovation ability, commercialisation ability, innovation management and innovation outcome of the organisation. Any applicant can go to the 1-InnoCERT website (www.1innocert.my) to register and fill in the online questionnaire, says Abdul Aziz. Once the questionnaire is complete, the company will receive a score ranging from 0 to 1,000. Any company that receives a score of 700 or higher will be automatically eligible for the next stage, which consists of an on-site assessment.

ABDUL AZIZ LONG: The 1-InnoCERT programme is not about a specific innovative product or service.

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The 1-InnoCERT PrograMMe

For centuries, inventors and designers have built upon innovations that came before them

Different ratings are given out based on the score that an applicant achieves. For example, any score of 900 or higher is AAA, while a score of 800 to 899 is considered to be AA. If any applicants fail to reach a score of 700, SIRIM also offers coaching to help them understand 1-InnoCERT requirements. When they have made the necessary changes, they can try the questionnaire again. But it is not an easy certification to attain. If innovation was easy, there wouldnt be anything special about it. ScOUTING FOR INNOVaTION POTENTIaL It is after a company has gotten a score from the online self-assessment that SIRIM enters the picture. This is when auditing begins, and it consists of a validation and verification audit at the applicants premises to confirm that the score is correct. The fee for the one-site audit is RM5,000 for new applications by SMEs, and RM10,000 for non-SMEs. Previously-certified companies seeking reassessment only need to pay RM3,000. There are three types of auditors who can be involved in auditing an applicant, says

Abdul Aziz. Innovation auditors are responsible for looking at the different components of the systems, while domain experts assess the technological innovation claims by the sector for a particular sector, such as oil and gas. Thirdly, there are also finance auditors however, since the auditing for finances is not a complex matter, we normally only send two persons, the innovation auditor and the domain expert, to perform an audit. The whole auditing process usually takes one day to complete. In the course of the on-site audit, it is up to the applicant company to provide all the documentation and evidence for the answers given in the online questionnaire. SIRIMs auditors must determine if the evidence provides valid justification for the answers that the company has given. Abdul Aziz lists the possible questions that auditors will have: 1-Innocert certification is about looking at the system that has been put in place in an organisation. Does the organisation have a R&D department, and what infrastructure is in place for it? Do the researchers network with academia and other organisations? Is there an information management system in place for research and development data? All these questions are important. Ultimately, the audit determines whether or not the organisation has an innovation management system that will encourage innovation activities. The presence of an innovation model is crucial, because, as Abdul Aziz, says, No innovation stands alone.

INNOVATION DEFINED
Before the Oslo Manual of 1992, innovation activities were only measured in terms of research and development (R&D). of But innovation can take many forms in terms product development, and in four efficiency. defined in process improvement as

organisational Innovation, types: 1-InnoCERT, comes

Product innovation is the introduction of a product or service that is new or significantly improved with respect to the intended use. Process innovation is the implantation of a new or significantly improved production or delivery method. Marketing innovation is the implementation of a new marketing method involving significant changes in product design, packaging, placement, promotion or pricing. Organisational innovation is the implementation of a new organisational method in business practice, workplace or external relations. 1-InnoCERT rating scale

Score
900 - 1,000 800 - 899

1-InnoCERT Rating
AAA AA A

700 - 799

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The 1-InnoCERT PrograMMe

This is true, both yesterday and today. For centuries, inventors and designers have built upon innovations that came before them. Johannes Gutenberg, for instance, is known as the inventor of the printing press, but in fact, his innovation improved upon existing movable type technology which was pioneered by Chinese and Korean printers long before he was born. Tim Berners Lee, who is credited with inventing the World Wide Web, was in fact building upon the communications network developed by DARPA for the US Department of Defence. Today, multinationals such as Nokia, Sony and Samsung all build upon the intellectual property of past innovators, paying for the rights to use many of the patented chip designs, touchscreens and other technologies that go into new products such as smartphones and tablets. SPURRING MaLaYSIaN INNOVaTORS Each year, the SME Innovation Award provides a high-profile venue for innovative SMEs, which must be certified under 1-InnoCERT in order to participate. The event offers cash prizes of RM1 million for the top winner and RM200,000 for the remaining winners in these categories: Manufacturing, Green Technology, Biotechnology & Agro Technology, Engineering & Industrial Design, ICT & Software Development, and Services. At 2011 last years SMIDEX Showcase, the Best Innovation Award in Technology (Manufacturing Sector) and overall top winner went to ProEight Offshore Engineering Sdn Bhd. The other category winners were Biofusion Sdn Bhd (Biotechnology & Agro Technology), N2N Global Solutions Sdn Bhd (ICT & Electrical & Electronics), Malaysia Microelectronics Sdn Bhd (Engineering & Industrial Design) and Success Nexus Sdn Bhd (Green Technology). 1-InnoCERT certified companies also benefit from the Green Lane Policy, introduced by the Government in 2011 and providing a financing facility with a 2-percent interest rebate from MOF-approved banks, stamp duty exemption, tax deduction and Government and Ministry of Finance Incorporated (MKD) procurement. Certified companies also have a chance to pitch to the banks or to venture capitalists, facilitated by Bank Negara and SME Corp. Sometimes, banks dont want to hear out the new ideas of innovators, explains Abdul Aziz.That is why it is important for this programme to bring them together to create new opportunities. But most importantly, innovative companies are simply more successful in business. This is because the prerequisites for 1-InnoCERT, such as technological capability and marketing ability, are contributing factors for business success. Innovative companies can be five or six times as profitable as ordinary companies, and they can also be two or three times as productive, says Abdul Aziz.

EXPloring a BlUe Ocean Strategy

In 2011, ProEight Offshore Engineering Sdn Bhd won RM1 million at the SME Innovation Award. For those who are familiar with this inventive engineering firm, this is no surprise. ProEight pursues a Blue Ocean Strategy in outmaneuvering its larger competitors in the mechanical seal industry (see page 24). Blue Ocean Strategy, the brainchild of W. Chan Kim and Rene Mauborgne, is about finding ways to make competitors irrelevant by exploring new or uncontested market space, or blue oceans. There are four steps that any organisation can take towards creating a Blue Ocean Strategy for its operations: 1. Eliminate factors that the industry takes for granted but adds no perceived value to customers. 2. Reduce factors well below the industrys standard to avoid the mistake of over delivering in order to beat the competition. 3. Raise factors well above the industrys standard so your customer wont have to make compromises. 4. Create new sources of value that the industry has never offered.

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Fees Payable

1-InnoCERT CertificAtiON PrOcess

External Parties

Online Registration & Online SelfAssessment (Technology Innovation System Evaluation Index: Minimum 700/1000)

Try Again

< 700 index

Site Audit Fee* Apply for 1-InnoCERT

Pre-Certification Coaching & External Consultancy

* Outstation logistic costs will be bourne by the applying company, payable as separate charges.

<= A Rating
On-Site Audit Report (Technology Innovation Rating Index: Minimum BBB/AAA

1-InnoCERT Approval Committee Meeting

Certified Innovation Auditors & Domain Experts

Award 1-InnoCERT Status

Add Company to 1-InnoCERT Database

Re-certification of 1-InnoCERT

FUTURE OPPORTUNITIES FOR 1-INNOCERT Abdul Aziz can see several areas for improvement. For example, the original online questionnaire was developed as a batch system, which is enough

for gathering applicants for the SME Innovation Award, but not enough for long-term continuous improvement. SIRIM is currently working on a new questionnaire that will better address the needs of 1-InnoCERT.

1-InnoCERT is still young, and the programme can go much farther in driving Malaysias innovation race. SME Corp has targeted further growth of 50to-100 more participants for the 1-InnoCERT programme this year.
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The halal indUstry

HALAL for EVERYONE

Halal certified companies contributed to 5.1-percent of Malaysias overall exports in 2011, according to the Halal Industry Development Corporation (HDC). As Malaysian entrepreneurs set out to capture the lucrative worldwide halal market, this share is almost certain to increase. As it happens, SIRIMs comprehensive range of services is a perfect fit for these future halal business leaders.
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he haLaL business is far more than just an industry by Muslims, for Muslims. While MATRADE estimates the worldwide market for halal products to be as large as USD2.3 trillion, these projections only consider the worldwide Muslim population. The fact is that halal products are good for everyone, not just Muslims. At SIRIM, a new strategy is in motion, one that is based on the idea that halal certification could become an important tool for marketing products to just about any market, and not just a way of reaching Muslim consumers in Malaysia. When we talk about the halal industry, we are talking not just about the domestic market, but also the global market, explains Dr Hj Abd Rahim Saad, Senior General Manager, Strategic Marketing at SIRIM. Malaysia is too small a market for our halal businesses. Whether we like it or not, we have to plan to expand to the rest of the world. SIRIM has all of the services to help create a new wave of halal entrepreneurs. The company has been dealing with halal for a long time, beginning with a relatively narrow focus on the training segment. But now, Dr Abd Rahim has devised a plan to position all of SIRIMs services to cover all things halal. A WORLD-REcOGNISED cERTIFIcaTION MaRK Once, there were many different halal certifications in Malaysia a variety of logos from different state Islamic departments, coming in a plethora of different colours such as red, black or green. Without a central benchmark certification to follow, consumers had good reason to wonder which logos could be trusted, much like the situation in many other countries today. Over the years, however, the Government has made the Department of Islamic Development ( JAKIM) the only national halal certification authority, with certain state certifications also being permitted. Furthermore, as of 1 January 2012, the Trade Descriptions Act 2011 requires that all Malaysian industries only make use of the halal logo issued by JAKIM.

Abd RahiM Saad: Malaysia is too small a market for our halal businesses. Whether we like it or not, we have to plan to expand to the rest of the world.

Our JAKIM halal certification should be accepted everywhere in the world, because the basis of our certification standard includes not just Malaysian standards, but international standards, says Dr Abd Rahim. When we talk about halal, we are talking about requiring three things: quality management (QM), Good Manufacturing Practices (GMP) and Syariah compliance. In Europe, food products already require QM and GMP. As such, adding additional value through halal certification is just one more step away. Dr Abd Rahim is optimistic about the ease of achieving halal certification for local entrepreneurs: When you implement an ISO 9001 Quality Management System, Good Manufacturing Practices or an ISO 14001 Environmental Management System, or in the case of food when you follow the Food Act, you are already there. There is Syariah compliance. Hes also confident that foreign markets not just Muslims, but also non-Muslims will come to see the value of the halal logo. Just as most people already know about the importance of Good Manufacturing Processes, halal certification (which has GMP and quality management as prerequisites) can be positioned in a similar way. JAKIM has a plan to educate nonSIRIMLink 01/2012
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The halal indUstry

Muslim markets on what Syariah compliance means for product quality, making halal certification a useful tool for marketing products to foreign markets. Meanwhile, the Halal Industry Development Corporation (HDC) has its own role to play in building Malaysias halal industries. The HDC offers planning and assistance to the industry, but its main role is to market halal products to various markets and industries, including overseas markets. THE RIcH NEW WORLD FOR HaLaL PRODUcTS Perhaps the clearest sign that SIRIM is on to a good thing with halal certification comes from the involvement of nonMuslim entrepreneurs and investors. Canny businessmen the world over will go where the money is and there are a lot of opportunities in halal certified products and services. Its not a problem for nonMuslims to get halal certification for their products, just as long as they accept Syariah requirements, says Dr Abd Rahim. At the previous Malaysia International Halal Showcase (MIHAS), many Malaysian companies came to exhibit their products, and these were not just Muslims but nonMuslims as well. The way they processed their food was GMP compliant as well as Syariah compliant. There is also growing investment in local halal businesses from China, Korea and Japan. Dr Abd Rahim doesnt consider it surprising. They see the big
22

market for these products, because they know that JAKIMs halal logo is widely recognised around the Islamic world, he says. This in turn comes from Malaysias reputation as a progressive and moderate Muslim country.

Its not a problem for non-Muslims to get halal certification for their products, just as long as they accept Syariah requirements.

SIRIM has always possessed major competencies in research and development (R&D), including product development as well as product testing and verification. Halal business hopefuls can benefit from SIRIMs R&D as well as SIRIMs well-equipped testing and verification facilities, with the assurance that their development process meets halal standards. Once their products pass the R&D and testing phases, halal entrepreneurs can ensure that their products are manufactured in a safe, efficient and wholesome manufacturing environment by making use of SIRIMs engineering design capabilities, which include machinery design, plant design, product design and engineering as well as GMP. To enhance the marketability and attractiveness of halal products, SIRIM has experts who can advise on packaging design. If you come here for training, says Dr Abd Rahim, we also have people who can help you understand about halal certification as well. In short, we have something for everyone involved in halal industries. PRODUcTS THaT DO NO HaRM Entrepreneurs looking for halal certification of advanced biotechnology products can also avail themselves of the expertise of SIRIMs Industrial Biotechnology centre. Whether the product is a cosmeceutical, a health supplement based on local herbal extracts or a biological compound for medical use,

FacILITaTING HaLaL PRODUcTS, STEP BY STEP As a standards organisation, SIRIM writes standards that have been approved by the Department of Standards Malaysia. However, we are more focused on the implementation and application of halal standards, elaborates Dr Abd Rahim. SIRIM has something to offer for halal businesses of every stripe. As Dr Abd Rahim reminds us, almost any product could be halal: Not just food, but also health supplements, pharmaceuticals, medical implants and even shoes! In addition, services such as medical services and banking services can also be certified as halal, as long as they are Syariah compliant and meet sufficient standards of quality.

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MS1500:2009 - EleMents of coMPliance for halal foods

Raw material supply Database of manufacturers, products, suppliers and logistics Training and consultation

Marketing and promotion

Developing a Halal/GMP/ HACCCP system

MS 1500
Packaging and branding Infrastructure, safety, health and production system

Testing of product and packaging Product development

Processing

THE HALAL MODEL: Products undergo a rigorous certification process in order to become recognised as a halal item, affecting everything from the raw materials supply chain to the final packaging and branding. They are therefore very safe for both Muslims and non-Muslims alike.

SIRIM can help to ensure that the products are chemically safe for human consumption as well as designing machinery and pilot plants that are environmentally friendly all of which are factors in getting halal certification. Anything that harms your body is no longer considered halal, Dr Abd Rahim reminds us. Therefore, our testing is important for ensuring that the product is not harmful. And if it is not harmful, it is on its way to being Syariah compliant as well. This is especially true of pharmaceutical products, which are already subject to extremely

stringent requirements. By certifying their pharmaceutical products as halal as well, companies could add greater value by taking that extra step, making their exports accepted in the Middle East and elsewhere in the Muslim world. Because all halal certification in the country has been standardised under JAKIM, it has become an international benchmark for good Islamic practices. In fact, Malaysias halal logo is the closest thing there is to a universally accepted certification mark. SIRIMs services apply even after the product has been manufactured. Halal exporters in particular can find out what

the permissible conditions are for storage and handling for their products. For example, both halal and non-halal products can be stored together without compromising their integrity, provided that they are placed in different containers. SIRIM offers companies an integrated vertical solution, covering all of the steps in the value chain, concludes Dr Abd Rahim. We bring our long experience with environmental management, quality management and standardisation and GMP to the table to show JAKIM that the entire process meets halal requirements.
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indUstrial innoVation

In an industry dominated by huge but cumbersome OEM manufacturers, ProEight Offshore Engineering Sdn Bhd stands out as a pioneering beacon of innovation. But for visionary Managing Director Ir. Azhar Zainal Abidin, winning the 1-InnoCERT Most Innovative Company award is just the beginning.

SEAL DEAL
other industrial mechanical component in oil-and-gas infrastructure. Unfortunately, the uneven wear and tear of other parts of the machinery involved often means that the standard issue mechanical seal does not always fit a tiny fissure here, a jagged surface there, and the new seal invariably starts to leak long before it should. In fact, the seal may have to be replaced several times over. Our mechanical seals are custom-built to precisely fit any pump fixture, explains Ir. Azhar Zainal Abidin, Managing Director of ProEight. We use threedimensional imaging to analyse the broken seal, identify the stress points, and then build a new seal that is an exact replica of the old one, minus the failures. The result is that ProEights mechanical seals fit existing oil pump infrastructure like a glove, and cost close to 30-percent less than regular, mass produced seals. The client saves money by not having to replace its mechanical seals so frequently and also by reducing downtime an OEM

THe

IKE MANY staple industries of the modern world, the oil business has become rather staid. Petrochemical giants subcontract entire swaths of their supply chains to third-party service providers, while OEM factories produce millions of wear-and-tear components for the oil-and-gas infrastructure. It is an industry dominated by global companies that play by the rules and are happy to keep things that way. Not so for ProEight Offshore Engineering, which won the Best Innovation Award in Technology (Manufacturing Sector) at the 1-InnoCERT competition in 2011 en route to being declared the overall winner of the contest. The companys just-in-time approach to tailor-making industrial mechanical seals is turning the whole concept of OEM-driven supply chains on its head. And what a spin it is. SIGNED, SEALED, DELIVERED Mechanical seals are typically mass produced by the millions and replaced as and when they start to fail, much like any

factory takes at least eight weeks to design and make a new seal, whereas ProEight can turnaround a new replacement seal within 24 hours. That is a compelling selling point in an industry where every second in lost pump time means money, so it is little wonder that Azhars company became the countrys first local mechanical seals supplier to oil and gas conglomerate Petronas. We are smaller than the big boys, and far nimbler, explains Azhar. When we get a new contract, we set up a small fabrication centre close to the clients facility. If a mechanical seal fails there, we can be at the clients site within a few hours.

AZHAR ZAINAL ABIDIN: Without innovation, we can never progress.

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INNOVATIVE SEAL: Conventional mechanical seals (right) are built with a series of eight or more small springs, each of which constitutes a potential failure point. ProEights new seal (left) contains much fewer potential points of failure, and is therefore likely to last much longer.

The three-dimensional imaging takes a few hours, after which we feed the data into a computer numerical controlled machine to make the new seal. The client gets the new seal by the next day. THE PIED PIPER Azhar first realised his business opportunity when he discovered that South East Asia totally lacked a mechanical seal manufacturer. All replacement seals were imported from one of the Big Four global OEM mechanical seal suppliers. The seals failed so frequently that oil-and-gas firms had to keep a stockpile of mechanical seals on hand to replace faulty ones, a less-than-ideal situation in which clients have to do the maintenance work. Azhars service-driven business model allows clients to leave the problem of mechanical seals in his hands. ProEight engineers visit the site, analyse the failure and then replace the faulty seal with a custom-made ProEight seal. During this time, the engineers will also be able to tell the client what the

root cause of the problem is an old pump might be vibrating too much and need to be replaced, for example, or the piping itself might be shuddering beyond normal levels of tolerance. Unlike OEMs, we dynamically test every seal we custom produce, says Azhar. We simulate the actual operating conditions of the facility to ensure that each individual seal will perform as required before we even install it. That is another first in the industry, where OEM manufacturers are used to testing their products at random rather than individually. In fact, ProEight is a whole barrel of firsts, which is perhaps unsurprising considering that the company invests between 30-to-40 percent of its profits into research and development. In fact, Azhar has set a goal that the company produce one patent every month. One such patent is for a new, single-spring seal design that significantly reduces the number of failure points in the component and extends its life-span considerably. I like the Korean culture of innovation, says Azhar. I push

my engineers to think beyond their limits as I believe that innovation is the only way forward for any company that is serious about longterm success. ProEight has on-site manufacturing and refurbishment centres in four oil-and-gas towns in Malaysia, each of which can turnaround a custom-built mechanical seal in a day or less. It is also in negotiations with an oiland-gas company in Oman which is interested in being provided similar services there. With 18 patents (and more pending) plus a slew of other certifications to its name, ProEights track record reflects its success in innovation. Nonetheless, Azhar is pleased that the companys achievements were formally recognised by the 1-InnoCERT competition, and believes the contest will encourage innovation among other entrepreneurs a discipline that Azhar thinks is crucial to the countrys development. Without innovation, we can never progress, says Azhar. Innovation is the cornerstone of any countrys success.
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indUstrial innoVation

WASTE Not
The World Wildlife Fund recently ranked Malaysia as the 46th biggest polluter in the world. Nasmech Technology reckons that its novel approach to waste disposal can help the country get back into Mother Natures good books.

he waste management industry has seen plenty of good intentions go awry over the years. Collective dump sites on new landfill areas are growing increasingly pass as the demand for more eco-efficient waste treatment grows, while solutions like open burning and incinerators are frowned upon. The increasingly strident calls for reducing the countrys carbon footprint cannot be ignored any longer.

Nasmech Technology Sdn. Bhd. has stepped up to this challenge. A leader in inventive, environmental and ecologically-friendly technology specialising in waste treatment equipment, the company has successfully commercialised its carbonisation technology which it has trademarked as

Carbonator. The technology makes waste disposal cheaper and safer for the environment by reducing the weight and mass of the waste by up to 90-percent. Whereas conventional industrial waste disposal methods cost between RM800 to RM2,700 per tonne, the Carbonator allows companies to dispose of their waste for

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indUstrial innoVation
much less after it is treated. The Carbonator can also turn biomass waste into charcoal-like feedstock for use as energy source. Such feedstock can be sold for up to RM3,500 per tonne on the retail market. Not unlike a gargantuan oven, the Carbonator uses indirect heat to roast industrial, municipal or agrowaste. The Carbonator may be found in chemical plants (chemical waste), medical waste treatment facilities (medical waste), oil palm plantations (empty fruit bunches) and even cafeterias (canteen waste). Incepted in 2000, the companys technology was way ahead of local waste management regulations at the time. Executive Director Patrick Ethe Raj is proud of the fact that Nasmech Technology is a fully home-grown entity, and believes that the secret of the companys success is in its capacity for innovation. Our Carbonator shows that anyone can innovate with the right direction and support, says Patrick. Brunei, Indonesia, Philippines and Thailand are also interested in greener methods in waste management. Brunei and Indonesia have already bought our products. The Nasmech Ecosystem Since obtaining the 1-InnoCert certification in 2010, the company continues to innovate and build upon its early success, investing over two million ringgit per year into research and development activities. Its efforts have paid off handsomely so far, earning it numerous awards and certifications such as the Green Project Certificate from Malaysian Green Technology Corporation and 1-InnoCert from SME Corp. And yet the company is also acutely aware that being a leader means having to stay ahead of the competition at all times. To do, Nasmech has already filed five patents (one has just been granted), with four being extended overseas to keep competitors at bay. The Carbonator is built to exceedingly high engineering standards, and our subcontractors must meet our stringent tolerance requirements, explains Patrick.We have 38 subcontractors that can meet our demanding standards to serve our customers to date. Nasmechs unique business model also allows the company to develop its own green industry ecosystem. Although it only has about 65 employees itself, but the firms technology and processes also help keep the other 38 subcontracting companies afloat. Patrick adds that the companys founders like the innovative spirit of the Japanese and Koreans, which they try to adapt into their company culture. They are the leaders in innovation and we try to emulate that passion for the unexplored, says Patrick. Innovation also results in evolution. The Carbonator has become steadily sleeker and more efficient with every iteration it has undergone. Already in its third generation, Patrick says the team is already making plans for what the fourth and fifth generation of the machine should be like. All technology evolves, says Patrick. Its just a matter of time.

PatricK Ethe Raj: Our Carbonator shows that anyone can innovate with the right direction and support.

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