Pahang urged to ease fertilizer tender rules for local firms

The Pahang state government is being urged to reconsider its tender requirements for the supply and delivery of fertilizer, particularly for state-owned plantations. Industry sources argue that the current conditions, imposed by LKPP Corporation Sdn. Bhd., unfairly disadvantage local companies, especially those that have been operating for decades.

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The MITI manufacturer's license requirement should be an optional criterion or waived for local companies that are legally registered with the MOF according to the field code for fertilizers and pesticides.

The core issue lies in the new requirement for tender applicants to possess a manufacturer's approval or license from the Ministry of Investment, Trade and Industry (MITI). According to sources, this has disqualified over 15 licensed local fertilizer contractors in Pahang, some with over 30 years of operation and existing Ministry of Finance (MOF) approval. These companies now face estimated losses of RM100,000 to RM200,000.

Industry insiders claim this is a sudden shift, unprecedented since LKPP Corporation's establishment. Obtaining a MITI manufacturer's license typically requires a paid-up capital exceeding RM2.5 million or at least 60 full-time employees. The sources suggest that the MITI license criteria should be an optional criterion or waived for local companies legitimately registered with the MOF under relevant codes for fertilizers and pesticides.

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If the condition continues next year, it will only benefit large-scale suppliers or manufacturers from outside Pahang. Whereas this state has area farmer associations (PPK) and cooperatives capable of carrying out supply and delivery work.

Continuing with these stringent requirements next year, they warn, would primarily benefit large-scale suppliers and manufacturers from outside Pahang. This approach, they contend, not only contradicts efforts to empower local entrepreneurs but also risks diverting state government funds to external companies. The call is for a more open approach, setting a precedent for other state-linked government companies (GLCs) in sectors like construction, mining, and property, to ensure a healthier local business ecosystem and foster the growth of local talent and expertise in line with Pahang's economic development.

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This approach is important to ensure that the agenda of empowering local Pahang vendors and companies can be implemented comprehensively, while also preventing monopolies by external companies with large corporate licenses.