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PETALING JAYA: The Federation of Malaysian Manufacturers (FMM) is appealing to the government to allow all non-essential manufacturers to reopen at 50% capacity, regardless of the National Recovery Plan (NRP) phases, to avert the possibility of permanent closure.

Five states and three federal territories are currently under NRP Phase 1, which allows 12 essential sectors to operate at 60% workforce capacity, while the other states have transitioned into Phase 2.

The federation outlined that many non-essential SMEs and industries with export commitments and links to the global supply chain have remained closed for two months since May 25.

“Factory closure is killing these industries as they are running out of reserves to keep them going despite the financial assistance from the government in the form of wage subsidies and the automatic loan moratorium,” FMM president Tan Sri Soh Thian Lai said in a statement today.

A survey conducted by FMM found that of the industries in non-essential sectors and their supply chains which responded, 93% reported a reduction in total sales (domestic and foreign); 82% said their exports have declined, mainly by up to 30%; 93% experienced a reduction in cash flow; and 32% said their overall operation costs have increased.

The survey found that non-essential sector sales are severely impacted and their cash flows constrained as pending and future orders are interrupted with no certainty on resumption of operations.

Moreover, it pointed out, payments for suppliers, wage, utilities and rental are expected as usual, while logistics cost has increased due to penalties and delays at the ports.

“This has put most businesses in the non-essential sectors in an extremely precarious situation with the risk of collapse, resulting in high unemployment, if restrictions on business operations continue indefinitely.”

With regard to vaccination efforts, the federation noted that 10,522 companies involving 903,244 employees have signed up for the industrial immunisation programme with the hope that they could resume operations.

“With this strong move by industries, we believe that the government should be confident in allowing all industries to resume operations given that all efforts are already underway by industries to have their workers vaccinated including state/private arrangements for vaccination where companies will bear the full cost of vaccination,” Soh said.

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