INTERNATIONAL: Malaysia

May 1 2008 Perry Gourley, Business Insider

Malaysia's diversity and history make it an open, relaxed trading partner finds

WHEN Craig Clark's office phone rings late at night he's usually got a good idea who is calling.

"It has sometimes been nearly midnight when my Malaysian customer has rung and I've only been in the office by chance because of working very late," says the managing director of satellite technology firm Clyde Space.

The time difference is undoubtedly an issue for those in the UK looking to trade with Malaysia.

"They are totally out of sync with us - when it is night-time here their working day is starting. We also deal with Japan where the time difference is similar but it is less of a problem as the Japanese seem to work all hours," adds Clark, whose Glasgow firm is supplying solar panels and batteries systems to a Malaysian company as part of a contract secured last year.

Those planning a business trip to Malaysia would also do well to check a calendar closely first.

The melting pot of cultures which make up its 21 million-strong population means the country is reputed to have more public holidays and festivals than anywhere else in the world.

"There are as many as 30 during the year and it is something worth bearing in mind if you want to do business here," explains Vicky Jones, Director of the Malaysian British Chamber of Commerce.

However it is also that very diversity and British colonial history that makes Malaysia more open than many Asian economies to trading with the west.

"They have had a mix of cultures for hundreds of years and that makes them naturally multi-lingual.

The people we deal with there speak very good English," points out Mike Antliff, chief executive of DA Group whose Yomego spinoff company is currently helping develop a social networking website in Malaysia.

For those looking to gain a foothold in a developing market in Asia, Malaysia is one of the more attractive places to start for Scottish companies.

As well as language being less of an issue than in other countries in the region, the legal system is broadly based on that of the UK. Its economy is also now one of the most stable in the developing world after emerging from a difficult period.

A decade ago the Asian financial crisis had wreaked havoc on its economy, wiping three quarters off the value of its stock market in a matter of weeks.

It was a serious blow to a country which had been seen as one of the most exciting of the Asian tiger economies.

The slump in the IT industries in 2001-02 also hit Malaysia hard but since then it has recovered strongly with growth running at over 5 per cent in the last three years.

While it may have failed to recapture the dramatic expansion witnessed in the early nineties, many commentators argue that the experience has left the economy on a far more sustainable growth path.

As Malaysia has recovered, the level of UK exports there has also grown strongly and it is now the second largest export market in South East Asia after Singapore.

In 2006 Malaysia also entered the top 20 league table of Scottish export destinations with a market valued at £350m.

Its potential over the coming years has seen it earmarked as one of the top 20 high growth markets in the world for UK companies.

Education and training is one of the key sectors identified which offers significant opportunities for Scottish companies and educational organisations.

The Malaysian government has pledged huge investment over the next decade as part of its push to reach 'developed' status by 2020 and a number of Scottish universities already have strong links with Malaysia.

Earlier this year the University of St Andrews received an £8m donation from a charitable foundation linked to Malaysian technology and financial services giant Petra Group to help fund a new School of Medicine and the Sciences. The funding will see scholarships offered to enable some of Asia's brightest students to study at St Andrews for up to four years.

Significant opportunities also exist in areas such as oil and gas with heavy investment planned over the next decade to explore Malaysia's deeper waters.

Aberdeen-based LA Recruitment recently choose Kuala Lumpur as the location for its second overseas office to supply engineers to the oil and gas industry.

"We were asked to set it up after our clients lost their Malaysian agent. We felt it was important for us to have a presence there so we could continue to provide a high level of personal service," says commercial director Mhairi Preston.

Although the office is currently working for one major client the company is hoepful that its physical presence in Malaysia will lead to further contract wins.

While English is widely spoken in business dealings and the legal systems are similar, there are aspects of doing business in Malaysia where Scottish companies are advised to seek on-the-ground assistance.

"We get a lot of queries from companies over issues such as visas and immigration which can sometimes be problematic for foreign firms," points out Jones.

"I would advise anyone looking to start trading with or in Malaysia to first get in touch with the British High Commission which has a dedicated team to help businesses," says Jones.

According to Kristen Bennie - who has been dealing directly with Yomego's Malaysian customer Green Packet - Scottish companies may be surprised at the welcome they receive if they do look to trade there.

"The Malaysians are the most hospitable people I have every worked with and go to great lengths to make you feel that you are part of their team rather than just an individual supplier," says Bennie, who is working on a three year license agreement struck by Yomego with the mobile broadband networking company, "The only constraint is that sometimes we only have a few hours in the morning to communicate with them but you work around these things and it hasn't impacted on the project in any way."

While some parts of Asia have a reputation for obsession with detail and deadlines, Clark has found the Malaysians have a more relaxed approach.

"I have found them quite laid back to do business with which has taken some getting used to.

Everything is quite relaxed until they suddenly realise they need what they have ordered very quickly!"

Chris Joslin, operations director of Perth-based Air Service Training, also cautions that patience is needed to succeed.

"We have found that dealing with the Malaysians can be a very slow process," says Joslin, whose company is currently involved in developing training programmes for employees of a Malaysian freight airline.

"It can take them a long time to reach decisions - particularly if you are dealing with a government agency - but persistence pays off and overall they are very good people to deal with."

Perry Gourley is a freelance business journalist.