FIC warns young entrepreneurs ‘too many micro-companies’

Leong Heng Teng (left) and Davina Chu

The Cultural Industries Fund (FIC) has warned of the dangers of the creation of an excessive number of micro-size companies operating in the same business sector, chairman of Fund Leong Heng Teng said yesterday during a meeting with the press.
“Maybe there are too many small companies operating in the same [business] field,” Leong said, adding that grouping them into a larger size corporation could be more sustainable.
Leong said that yesterday was fulfilling as his last day of working in the duties of the chairman of the fund, and also said that the topic of the high number of micro-size companies seeking financing for business in niche markets “has been a concern [for] the fund,” noting that “the fund supports the companies but we are not entitled to take [managerial] decisions [for] those companies.”
In the chairman’s opinion, digital media companies are the type to seek support from the fund more often, as many young people are interested in the field. “There aren’t great earnings in this sector,” he warned.
Leong was following on from the words of committee member Davina Chu, who had said earlier, when questioned by the media on the high percentage of companies (74%) whose projects have not yet reached a break- even point, that the “animation and film and television are sectors that we know have a very high [initial] investment, and that it is difficult for them to fulfill the same timelines as other sectors. We are taking this into account.”
Chu added that one of the tasks the FIC has been working on is precisely to provide a better platform for companies to be able to do their business, namely establishing some business matching opportunities among companies so they can “cooperate, for example on renting some equipment to lower the production costs.”
On the topic, Chu also noted that besides the FIC, companies, especially those that are developing larger-scale businesses “need to seek financing from other sources.”
When speaking more specifically about the problems observed by the FIC that might be based on the lack of financial balance, and how to sustainably develop companies, Chu said that there is some rush in growing companies through the recruitment of more staff.
“In the reports, [of] the companies presented [to the fund] we could observe that a high number of companies [make the same mistake]. When they start to have more productivity, they immediately start recruiting more people and then they can’t find a balance [between the number of staff members and the workload],” Chu said.
Like Leong, Chu indicates the path to stability for these micro-companies is by participating in cooperative projects and sharing their resources.
Although the issues were cited while doing a general evaluation of the work of the fund over the past six years, the members noted that the FIC has financed a total of 256 projects that accounted for some 502 million patacas in financing since 2014 until last month. About 286 million patacas were related to non-refundable grants, while some 216 million patacas were granted as interest-free loans.
Including their own investment from the companies and other means of funding, the 256 projects involved a total investment of about 2.1 billion patacas and generated 1,687 jobs in total.

Davina Chu to chair FIC until 2021

The Cultural Industries Fund (FIC) committee member Davina Chu will assume leadership of the FIC from today until 2021, both Chu and Leong Heng Teng confirmed yesterday during a meeting with the press.
Not wanting to address the topic of who will succeed him in his other positions, such as spokesperson of the government Executive Council, Leong said that Chu will assume leadership of the fund in the interim from today, leaving the fate of his other roles to be announced by the Macau SAR government as soon as today.
Nevertheless, at 72 years old, Leong confirmed that yesterday was his last day serving the SAR government and that he plans to retire from all his government duties.
Chu remarked that her position was, for the time being, as acting chairperson and that further developments would depend on an official appointment from the government, though she noted that her mandate in the FIC had recently been extended for another two years. RM