GKN: Co-Operatives Lack Competitive Edge
By Hussin Hj

Bandar Seri Begawan - Gabungan Koperasi Nasional (GKN) held a briefing which took place at B1NA Headquarters recently. The briefing was attended by Pehin Haji Dani, the President of GKN, BINA officials, cooperative leaders and members:

Lack of total commitment, competitive edge and teamwork efforts among members of the director's board, short of management skills and product knowledge and members' oversight on potential co-operative business dealings are the stumbling blocks cited in the slow development and growth of cooperative sector in the country. These are some of the revelations in a study conducted by Gabungan Koperasi Nasional (GKN) through visits, interactions, feedbacks, observations and consultations with cooperative leaders and members throughout the sultanate.

"Co-operative shops are often labelled as old-fashioned, inferior and out of touch with the globalised business climate. The main source of its development relies heavily on investments and savings from members. This is not sufficient enough to finance its future activities.

Other tangible factors that constitute to this malaise lie on the unwillingness of co-operatives to merge or form alliances with other entities. Consequently, they are unable to achieve the benefit of economy of scales which has become the norms of today's operations," the study said. These are some of the details which emerged during the briefing.

As the umbrella body of a co-operative movement, GKN will continue to strive to realise the sultanate's vision to make the co-operative sector as the third engine of economic growth capable of contributing to the economic development of the country. Since last year, a series of road shows, briefings and meetings have been drawn up by the alliance with the cooperation of BINA to gain as much support as possible from various establishments. The response was encouraging and if any of the projects lifts off the ground, it will get its financial assistance from GKN members, individual business partners, government financial institutions and banks.

In this respect, GKN is planning to set up "One-stop Wholesale Provision Centre" as underlined in its short-term strategy. The warehouse has been identified and will be launched somewhere in the second quarter of this year upon agreement with multiple parties.

In this approach, the centre not only operates as a distribution point for budding entrepreneurs especially co-operative bodies to obtain their regular supply of commodities but equally essential, they will get a hold of dividends and bonuses from their accumulative investment (modal) start up.

Based on the data obtained by GKN, direct import of wholesale products from overseas suppliers could generate a profit of 40 per cent compared with 15 per cent profit margin if the commodities are, purchased from local suppliers.

To a particular question on competitiveness raised by an audience during the briefing, Pehin Haji Dam stressed that co-operatives have been encountering fierce competitions from supermarkets and retailing shops. He said with the number of them flourishing now, with a new one just coming up, having competitive edge will determine the survival of any entity and the same goes to co-operative body.

For a long-term strategy, GKN will acquire a piece of land to house the central' wholesale centre which would enable to accommodate a supermarket as well.

A consultant will be appointed and the centre will be managed by qualified professionals. Also in the pipeline, all co-.operative bodies will be merged with a unique corporate image representing cooperative identity and investment in other viable and profitable business ventures.

To disseminate further information on project proposals undertaken by GKN, another briefing will take place on April 4 at BINA headquarters in Gadong.-- Courtesy of Borneo Bulletin

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