Local lighting manufacturers have been trying in vain to break the monopoly of four politically well-connected companies in the supply of lighting for government agencies.

For the past two years, manufacturers, through memorandums and meetings with government leaders, have argued that the monopoly does not bode well for the industry.

The bottom line, according to them, is that the monopoly is hampering the development of the local lighting industry.

The manufacturers, both bumiputera and non-bumiputera, have voiced their protest through numerous trade associations.

These include the Malay Contractors Association of Malaysia (PKMM), Malay Electrical and Mechanical Association of Malaysia (Perkem), Electrical and Electronics Association of Malaysia (TEEAM) and Coalition of Malay Economic Bodies (Gabem).

The frustrated manufacturers have also brought their complaints to the attention of International Trade and Industry Minister Rafidah Aziz, Second Finance Minister Nor Mohamed Yackop and Deputy Finance Minister Awang Adek Hussin.

However, all these efforts have been futile.

In their memorandums, the trade associations inserted findings and arguments to challenge the rationality of the monopoly, which came into effect in 2005 following a circular from the Treasury.

Imported products

According to the Treasury, many manufacturers do not use locally-made products and material for their work. It reasoned that this practice could be stopped with the appointment of the four companies.

However, the other manufacturers claimed that imported products are still being procured.

They accused the four companies of 'giving the licence' to importers to sell imported products for government projects via the former's respective marketing companies.

These are products manufactured and available locally, added the contractors.

"The justification of the monopoly was to ensure that suppliers use local products but it turns out to be encouraging them to import foreign products," stressed one vexed manufacturer, who declined to be named.

Manufacturers who spoke to Malaysiakini argued that if the government opened up the market, products made by local manufacturers would not only be able to meet government requirements, but also promote healthy competition in the industry.

Worried about the possibility of being blacklisted by the Treasury, all the manufacturers interviewed requested anonymity.

"We still hope to do business with the government, what is important is our reasons and the principles behind them," said one of the manufacturer.

Another justification for the monopoly is that it could increase the participation of bumiputera entrepreneurs in local trade and industry.

But this does not appear to be the case.

A memorandum from the manufacturers claimed that three of the four appointed companies - Amat Sinar Sdn Bhd, Permintex Electronic Sdn Bhd and Muarlite Industries Sdn Bhd - have also monopolised the supply of lighting to Tenaga Nasional Berhad (TNB).

Under the government's Bumiputera Manufacturing Vendor Scheme, TNB, the nation's largest lighting purchaser, was required to allocate 30 percent of the business to bumiputera manufacturers for a period of five years.

However, the memorandum claimed that TNB did not comply with the above criteria and instead allowed the three companies to monopolise its lighting procurement until now.

Amat Sinar, Permintex Electronic and Muarlite Industries were appointed as TNB's vendors in 1995, 1996 and 2000 respectively.

Sirim certification

"These companies have enjoyed government assistance for nearly 10 years or more and until now they have not graduated (from the vendor scheme)," said a manufacturer.

"If this is the case, how can other bumiputera companies get business opportunities?" he asked.

The manufacturer also wondered if there was a glitch in the assistance provided by the government to bumiputera companies.

"If the policy is effective, the three companies should have graduated from the vendor scheme by now and pave the way for other companies to enjoy the privilege," he added.

A check with Permintex Holdings' website revealed that the company, which was established in 1986, had received plenty of business opportunities from government agencies and government-linked companies.

Permintex Holdings is the parent company of Permintex Electronic.

Meanwhile, the Treasury, in a second circular issued in May 2006, required all panel suppliers to obtain Sirim certification for their products.

According to the manufacturers' memorandum, Muarlite Industries and Permintex Electronic have not fulfilled the above condition.

A check by Malaysiakini revealed that among the four companies, only Amat Sinar acquired the Sirim certification.

The monopoly had severely disabled the local lighting industry as manufactures do not want to expand their business or invest in research and development. Some manufacturers have even decided to relocate their business overseas.

Part 1: Lighting monopoly casts a dark shadow
Part 3 will be published tomorrow