MALAYSIAN BUSINESSES LEAD IN MANAGING ENERGY COSTS

 

• raw material and energy costs increasing pressure on global business
• businesses to lose competitiveness if no action is taken to combat environmental issue

Kuala Lumpur 9 May 2007 – Companies in the emerging markets have done most to manage energy cost pressures, according to the latest findings from the Grant Thornton International Business Report (IBR). Out of a maximum score of 600, companies in the Philippines (410) lead the way, followed by Brazil (360), Mainland China (341), Malaysia (307), Germany (306) and Turkey (303).

“Malaysia standing at No 4 amongst the 32 countries surveyed is commendable and reflects the keen awareness of the issue amongst our Medium to Large Enterprises (MLEs),” said Dato’ N. K Jasani, Managing Partner of Shamsir Jasani Grant Thornton. As per the survey (refer to attached chart), the main action taken by companies to reduce energy cost pressures were: 60 per cent of businesses have put in place measures to ensure all computers and electrical equipment is turned off, top were Malaysian companies on 85 per cent. The least action taken was by businesses in Thailand (16 per cent) and Sweden (39 per cent) 58 per cent of businesses globally have undertaken an energy review to understand how they may be wasting energy, led by companies in the Philippines (83 per cent) and Malaysia was at 71 per cent which is in the top five. 59 per cent of businesses have reduced their energy consumption, again led by the Philippines (85 per cent) 44 per cent of businesses have spent most on energy saving equipment with Brazilian businesses (66 per cent) the most likely to invest 20 per cent of businesses have invested in alternative fuel/energy supplies. European businesses are more likely to have invested in these (24 per cent) 22 per cent of businesses have considered relocating to reduce transportation costs with companies in Mainland China (46 per cent) most likely to have contemplated this. Malaysian companies are also pro-active on this as indicated by our companies standing at 31 per cent and being amongst the top countries.

 

Dato’ Jasani elaborated:

"There is a simple clear message from our findings. Unless environmental factors such as energy and raw material costs become issues that significantly affect a company’s profitability there is no incentive for it to take action, and reduce its impact on the environment. There must be motivation to take action on raw material and energy costs or companies will continue to focus on other cost pressures such as salaries and wages.”

"In addition to higher energy cost, we are also now at a tipping point in looking at climate change and environmental management. It is time businesses recognised the fact that unless they take action to reduce their impact on the environment, it will harm their long-term competitiveness.”

"There is also a role for national Governments to look at the long-term competitiveness of their economies and factor energy and raw material costs into that equation. Unless they take action to actively encourage businesses to invest for the future and reduce their impact on the environment, they will ultimately damage their economies."

The International Business Report covered the opinions of 7,200 Medium to Large (MLEs) in 32 countries representing 81 per cent of the Global GDP. The Grant Thornton IBR research was conducted globally on a professional and confidential basis by Experian Business Strategic and Harris Interactive. .

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