Soh has requested for essential product manufacturers to operate at full capacity, while non-essential manufacturers to operate at half capacity

by S BIRRUNTHA/ pic by BLOOMBERG

THE Federation of Malaysian Manufacturers (FMM) is urging the government to allow product manufacturers to operate during the Movement Control Order (MCO) period, as well as in the possible extension of the order.

Its president Tan Sri Soh Thian Lai had requested for essential product manufacturers to operate at full capacity, while non-essential manufacturers to operate at half capacity.

“Allowing the industry to operate is critical to prevent it from collapsing following the month-long closure of most businesses.

“Factories cannot afford to remain closed while they continue to have financial obligations to meet including salaries and fixed capital expenditure,” he said.

Previously, the International Trade and Industry Ministry (MITI) had granted approvals for the production of critical essential goods like food items and medical and personal protective equipment including face masks, sanitisers and medical equipment during the MCO.

Soh said the extended MCO effective April 1, however, has seen workers in these segments being denied permission to travel to their workplace, with several cases of workers being arrested.

“This is despite workers showing proof of the media statement released by MITI on March 25.

“It has also resulted in disallowing movement beyond the tightened MCO hours, thus affecting shift workers,” he said.

Soh added that the export and import activities being curtailed with the insistence of MITI approval have resulted in disruption to incoming raw materials.

There are cases, Soh said, where some manufacturers that are part of the essential products supply chain are not allowed to operate, in view that they do not fall under the category of essential product manufacturers.

“This, too, has hampered the operations of manufacturers who are allowed to operate,” he said.

Additionally, he said factories must operate under a very controlled environment where workers move from home to the workplace and back, limiting their exposure to an environment beyond their workplace and home.

“Employers have instituted very stringent health and safety measures at the workplace since the Covid-19 outbreak and continue to abide by the strict conditions,” Soh said.

Since March 21, FMM said it has been monitoring manufacturers’ feedback through its survey on the impact of the MCO and received 1,120 responses.

The association found that 56% of respondents estimated that they will face losses of RM500,000 and above.

Meanwhile, more than half (55.4%) estimated losses of between RM1 million and RM5 million. This is particularly true among medium-sized industries.

“Small-sized industries estimated losses of RM100,000 to less than RM300,000, followed by RM500,000 to less than a million.

“Large companies estimated their losses to be RM1 million to RM5 million, followed by above RM5 million,” FMM noted.

It added that estimated losses comprised mainly salaries, loss of sales, stock inventory and possible contractual penalties from suppliers, as well as customers.