Malaysia Provides Soft Loans for Exporters to Recover from EU Ban


Linda Salim, for SeafoodSource from Surabaya, Indonesia

Published on
July 13, 2008

Malaysian Health Minister Datuk Liow Tiong Lai announced last week that the government will provide soft loans to companies affected by the European Union ban on the country's seafood exports. Last month, Malaysia decided to voluntarily cancel all shipments to the EU to avoid rejects. As many as 46 seafood processors and related companies have halted sales, some of which are close to bankruptcy.

The announcement was made after consultation with Datuk Mustapa Mohamed, minister of Agricultural and Agro-based Industries. Although the loan is designed to keep exporters in business until the EU market reopens, some companies don't think it is in the industry's long-term interests. Some exporters have given up the EU market and are instead looking to penetrate new markets.

Reminding that the loans are approved on a case-to-case basis, Datuk Liow reported that the cabinet has also requested Bank Negara, Malaysia's federal bank, and the Ministry of Finance to intercept and persuade banks not to terminate loans.

In a commitment to help seafood exporters re-enter the EU market, Malaysian cabinet ministers have approved 1,282 additional staff in related departments. Laboratories and testing facilities related to the seafood industry will also be upgraded and staff retrained.

Datuk Mohamed explained that a technical committee organized by the Ministries of Health and Agricultural and Agro-based Industries has been formed to ensure Malaysian seafood could reenter the EU market soon. Bank Negara also has instituted a similar financial committee.

The committees are nominating the first batch of companies to be prepared for EU inspection as soon as Aug. 1. Those that don't qualify for the first inspection will receive assistance to improve facilities to comply with EU requirements, which include purchasing refrigerated trucks and installing ice-block making facilities.

The Ministry of International Trade and Industry is working with Malaysian embassies worldwide to monitor new markets to make sure that the industry doesn't have to deal with over-supply that would cause prices to drop once the seafood industry bounces back.

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