Challenges, Solutions For Sabah’s Cottage Industry

When I was a teenager several decades ago, school holidays were an opportunity for me to explore my creativity. I spent many afternoons painting in watercolour and crafting items from natural materials like bamboo, sago, coconut and seashells. A few of those artworks and handicrafts have stood the test of time; they still occupy space in my living room today.

Back then, visitors to our home, mostly my father’s friends, often expressed surprise and admiration for the work of a teenager. Some even offered to buy the pieces. But my father declined on my behalf, as most of them were one-of-a-kind and held sentimental value.

On reflection now, I sometimes wonder what might have happened had I taken those early creative pursuits more seriously. Could I have turned a hobby into a small business? Perhaps opened a local gift shop featuring handmade products, offering tourists genuine souvenirs made in Sabah, rather than imported mass-produced items? While I stopped pursuing that path, I believe the idea remains relevant today within the context of the cottage industry, particularly in Sabah.

Sabah is renowned for its natural beauty, cultural diversity, and rich traditions. In the backdrop of its lush rainforests and vibrant communities, the cottage industry thrives as an essential component of the local economy, especially among rural and indigenous populations. The cottage industry, typically comprising small-scale, home-based businesses that rely on local resources and traditional skills, provides livelihoods to thousands across Sabah. However, while it contributes to cultural preservation and income generation, it faces various challenges that hamper its growth and profitability. Understanding the various forms of the cottage industry in Sabah, the problems it encounters, and identifying practical solutions can help unlock its full economic potential.

The cottage industry in Sabah is as diverse as its people, reflecting the unique cultures and resources of the state. One of the most visible sectors of the cottage industry in Sabah involves handicrafts and souvenirs.

Indigenous communities such as the Kadazan, Dusun, Murut, Rungus and Bajau produce handcrafted items, including beadwork, woven baskets (wakid), batik fabrics, wood carvings and traditional musical instruments like the sompoton. For instance, in Matunggong, Kudat, the Rungus women are known for their intricate beadwork and weaving, which are sold under the Sabah Handicraft Centre brand and featured in local cultural festivals. These crafts are not only decorative but also hold cultural significance and are in demand among tourists and collectors. Matunggong is also famous for crafting traditional musical gongs.

Many Sabahan households also engage in small-scale food processing, producing traditional delicacies such as kuih cincin, pinjaram, salted fish, hill rice wine (tapai or lihing), banana chips and smoked meat. In Kampung Ratau, Inanam, local women’s cooperatives produce tapai using traditional fermentation techniques, supplying local restaurants and cultural events. Likewise, in Papar, a growing number of families package and sell banana chips and kuih cincin under small local brands that are now stocked in supermarkets like Servay and Bataras.

Traditional textile and weaving practices are also a notable part of the cottage industry. Among the Rungus and Bajau Laut communities, weaving colourful garments and accessories is an art form passed down through generations. In Semporna, Bajau Laut women weave traditional kain bunga samada, which are used in weddings and rituals and increasingly sold as decorative items. In Kudat, local cooperatives help artisans sell handwoven fabrics at the Rungus Longhouse and during the annual Tamu Besar Kota Belud.

Sabah’s rich biodiversity further supports the production of natural and herbal products. Many rural entrepreneurs have turned to producing lemongrass oils, coconut-based beauty products, herbal teas and traditional medicines. For example, the company “Nusabah Enterprise” in Tuaran produces coconut oil-based soaps and skin balms using traditional techniques, now marketed at Sabah Fest and selected eco-lodges. The agro-based cottage industry, such as small-scale processing of cocoa, coffee, vanilla and honey, is also common. In Ranau and Tambunan, farmers have formed cooperatives to process and market highland honey and Arabica coffee beans under the brand “Tagal Coffee,” sold to both domestic and Singaporean markets.

Despite its importance, the cottage industry in Sabah faces numerous obstacles that limit its ability to grow and become economically viable on a larger scale. Many small-scale entrepreneurs lack qualification or access to financial institutions for loans owing to the informal nature of their businesses. Without adequate capital, upgrading equipment, purchasing raw materials, or scaling production becomes difficult. For instance, in rural Pitas, many honey gatherers rely on traditional tools and are unable to afford modern extraction or packaging equipment, reducing their efficiency and output.

Most cottage industry operators rely on traditional knowledge and lack formal training in business management, accounting, packaging, or marketing. The lack of formal training limits their ability to increase efficiency, reach wider markets, or maintain consistent quality. In Kampung Penampang Proper, despite having high-quality lihing, many producers are unable to scale owing to inconsistent bottling practices and a lack of branding.

Poor road connectivity, unreliable electricity supply, and limited access to internet in some rural areas hinder production and transportation. For example, in villages along the Crocker Range, weavers and food processors often face delays and spoilage owing to the difficulty of transporting goods to urban centres like Kota Kinabalu. Entrepreneurs often find it challenging to bring their products to wider markets, let alone export them.

While the demand for unique and artisanal products is growing, many producers lack connection to larger markets. They often depend on word-of-mouth, local fairs, or intermediaries who take a large share of profits. Without proper quality control and product certification, it is difficult for many products to penetrate supermarkets or international markets. For instance, a tapai producer in Tenom struggled to obtain a food safety certification required for distribution in larger grocery chains.

Locally handmade products face stiff competition from cheaper, mass-produced imports. Consumers may choose lower-priced items over traditional ones, even if the latter are culturally rich or of higher quality.

Additionally, many younger Sabahans migrate to urban areas or seek employment in the formal sector, leaving behind the traditional skills that fuel the cottage industry. This generational gap poses a long-term risk to the survival of certain crafts and practices, such as sompoton making in Tambunan or traditional bamboo carving in Keningau.

To make the cottage industry in Sabah more economically viable, a multi-pronged approach involving the government, private sector, NGOs and community stakeholders is essential. Financial institutions and government agencies such as TEKUN Nasional, Amanah Ikhtiar Malaysia (AIM), and SME Corp should simplify procedures and design financial products tailored to the cottage industry. In Keningau, a group of women entrepreneurs were able to expand their production of natural herbal balms after receiving micro-loans through AIM’s outreach programme.

Organising workshops and training programmes on financial literacy, branding, digital marketing, packaging, and basic bookkeeping can empower cottage industry operators. In Kota Marudu, the PACOS Trust has worked with rural women to teach soap-making and essential oil distillation while also training them in pricing, budgeting, and social media marketing.

Upgrading rural infrastructure such as roads, power and internet is crucial for the cottage industry to thrive.

Investment in rural connectivity not only facilitates logistics but also allows entrepreneurs to engage in e-commerce and digital platforms. In Ranau, fibre-optic upgrades in selected kampungs enabled several cottage entrepreneurs to begin selling their products online via Facebook and Shopee, increasing their income significantly.

The integration of cottage industry products into digital marketplaces can greatly expand market reach.

Government initiatives like the “eUsahawan” and “Go eCommerce” programmes help micro-entrepreneurs in Sabah set up digital stores. For example, a herbal soap maker in Tuaran successfully reached customers in Kuala Lumpur after joining the “Desamall@KPLB” programme.

Government and state agencies can assist in helping producers attain necessary certifications and implement standardisation processes. Establishing a “Made in Sabah” or “Bornean Heritage” branding initiative would help differentiate Sabahan products in domestic and global markets. A good example is the Sabah Craft Council, which helps artists obtain national-level recognition and market access via craft expos.

The cottage industry can be integrated with Sabah’s thriving tourism sector. Establishing cultural villages, craft centres, and eco-tourism homestays allows visitors to witness the making of products and purchase them directly. Mari Mari Cultural Village and Monsopiad Cultural Village in Penampang are notable examples where traditional craft making is part of the tourist experience. Encouraging cottage industry operators to form cooperatives or business clusters enables pooling of resources, collective marketing, and access to government support. In Beaufort, a tapioca cracker cooperative has allowed members to buy cassava in bulk, use shared processing machines, and standardise packaging.

Schools and community centres should incorporate traditional arts and crafts in their curriculum or extracurricular activities. At the same time, using modern tools to make traditional crafts more appealing to younger generations can bridge the gap between heritage and innovation. For example, younger artisans in Tawau are experimenting with digital art to complement traditional batik techniques.

Collaboration with established businesses can offer mentorship, capital and market access. Companies such as Yayasan PETRONAS have adopted rural entrepreneurs as part of their corporate social responsibility (CSR) programmes, providing both training and marketing channels. The state government can play a greater role by enacting policies that protect and promote the cottage industry, offering tax incentives, and recognising excellence through awards or certifications. Additionally, facilitating access to international trade fairs and expos would help place Sabahan products on the world map.

The cottage industry in Sabah is more than an economic activity; it is an embodiment of cultural identity, community resilience, and self-sufficiency. Despite its potential, it remains underutilised owing to a range of structural and economic challenges. However, with strategic support from all stakeholders such as the government, civil society, private sector, and the communities themselves, the sector can evolve into a dynamic contributor to Sabah’s economy. Empowering the men and women behind these small enterprises with tools, training, technology and trust will not only enhance their livelihoods but also preserve the vibrant traditions of Sabah for generations to come.

Footnote
Dr Richard A. Gontusan is a Human Resource Skill Training and Investment Consultant. His views expressed in this article are not necessarily the views of The Borneo Post.

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