FMM calls to move to Phase Two of FMCO

by NUR HANANI AZMAN / pic by TMR FILE

THE Federation of Malaysian Manufacturers (FMM) is urging for the Full Movement Control Order (FMCO) to be moved to Phase Two immediately after Phase One ends on June 28.

This is because both essential and non-essential companies are in a very precarious and fragile position in terms of revenue and cash flow.

The current extended period of Phase 1 is impacting business viability and survival including employment especially among the non-essential sectors that have not been operating for the past four weeks. 

FMM president Tan Sri Soh Thian Lai (picture) suggested for the government to allow approved essential sectors that are operating to include an en-bloc approval of the entire supply chain and increase the workforce capacity to 80%.

“Allow manufacturing industries in the non-essential economic sectors that have smaller workforce and can ensure proper social distancing and those with contractual export orders to operate at 50% capacity on a 24/7 basis.

“Allow critical manufacturing sectors like iron, steel and cement to operate at 50% capacity,” he added.

Soh said under the current FMCO phase, even the essential sectors are struggling given their reduced capacity and other operational difficulties including their supply chains not approved by the International Trade and Industry Ministry (MITI) to operate and the constant disruptive enforcement raids.

“Overall, essential and non-essential businesses are in a very precarious and fragile position with revenue and cash flow severely affected from not being able to meet contractual global supply chain and export commitments with order deliveries delayed or cancelled, causing mounting legal action from customers.

“Operational costs are also on the rise as wages, rent, utilities and financing costs have to continue to be paid despite the non and reduced operational period. Business recovery for many has also been reversed,” he added.

Soh said the FMCO has gravely impacted investments, especially foreign direct investments, as many of the foreign establishments with manufacturing hubs in Malaysia have not been able to support their global supply chains during this crucial period of business recovery globally.

“It is also very disheartening that the industry has been continuously singled out on workplace clusters when it is evident from the Health Ministry’s data that 69% of Covid-19 cases recorded this year until June 19 were sporadic cases.

“What is more frustrating is that the source of infections is often not traced back to the community but to the workplace where more workers are tested as a result of one confirmed infection.

“This in turn is classified as a workplace cluster by the authorities giving rise to the misconception that the workplace is the primary source of infection,” he said.

The industry also appealed for enforcement agencies to be more coordinated with their spot checks and raids on factories so as not to cause undue disruption to company operations.

Factories have to face multiple raids by different enforcement agencies who also interpret the standard operating procedures and MITI approvals differently.

Greater emphasis and focus should be placed by the authorities on containing sporadic cases, Soh said.

FMM also reiterated its call for the government to further pump the economy with a RM200 billion Stimulus Package with RM30 billion direct fiscal injection to ensure that businesses can sustain jobs and operations.