The lockdown peril: Not all businesses will reopen


NOT all businesses will manage to reopen in Phase 2 of the National Recovery Plan (NRP), while some multinational corporations (MNCs) are looking to relocate outside of Malaysia due to the lockdown extension.

Federation of Malaysian Manufacturers president Tan Sri Soh Thian Lai said there is fear of the damage this prolonged lockdown has on Malaysia’s competitiveness as a key regional manufacturing hub for many industries that are part of global supply chains.

“In addition to the non-essential sectors totally not allowed to operate, the essential sectors are also facing production challenges with their reduced operating capacity at 60% of their workforce, as well as some being unable to run as their supply chains are not given the approval to operate.

“Consequently, many customers of the affected industries cancelled their orders and diverted the contracts to other regions,” he said.

Soh said the feedback he gathered from MNCs indicated that they might be moving out of Malaysia, due to the fact that the global economy is picking up but their Malaysian operations are unable to support the increasing demand as part of their supply chain.

“It is therefore crucial that the government re-evaluate the sectors that are allowed to operate with due consideration given to the export-based sectors that have been sustaining our economy through their revenue earnings to the nation, source of employment to the locals, as well as substantial source of direct investments,” he added.

For barbershop operators — whose businesses will only be operational in the Phase 2 — 30% of them may not be able to reopen when the time comes.

Instead of an announcement on loosened restrictions, the business owners are devastated to learn that they still cannot operate and will have to wait until the government renews the current standard operating procedures (SOPs).

Malaysian Bumiputera Barbers Association (MBBA) president TN Winda Mohd Tahir said when the SOPs were eased during the relaxation of the previous Movement Control Orders (MCOs), the average revenue for barbershops still dropped by 60% to 70% as the operators were only allowed to provide basic haircut service with a limited hour for each customer.

“More barbershops have closed during the first and second rounds of MCO, and with this MCO extension, 30% of the surviving operations could be closing their doors in the next several months.

“Before, we were still making money as we were allowed to do basic hair cut service, mainly for the people from the public sector who are required to maintain their appearance professional.

“With this extension, I do not think the barbershop owners could survive and if they do, they have to do a lot of downsizing such as employee retrenchment and branches consolidation,” he told The Malaysian Reserve.

He said currently, there are about 20,000 MBBA members who are barely surviving during this lockdown and require financial aid.

A check on social media showed that an increasing number of barbershop owners have put their shops up for sale since the start of MCO 3.0 as the last resort for survival.

For owners that lease property, TN Winda said they are having a hard time keeping up with rentals as there is no space for negotiation with the lessors.

In a semi-urban area, the average rental for a lot in shopping malls ranges between RM500 and RM10,000, while shopping malls in an urban area would cost between RM800 and RM25,000.

TN Winda said many MBBA members have also deserted the barber business and seek income through other means.

“Just like people in other affected industries, barbershop owners are turning to alternative small businesses such as opening up food stalls, or the young ones, they have been doing delivery services to support themselves.

“However, there are devoted owners who still believe in keeping their business, thus the MCO extension takes a toll on them.

“That is why we are a bit indignant when certain sectors are allowed to open although they caused spikes in positive cases compared to the hairdressing sector, which has been following SOPs and has yet to cause a spike in clusters.

“We urge the government to allow our shops to be in operation during the extended period of this MCO. Enhanced SOPs could be arranged such as limiting operating hours to appointments only,” he said further.

“The reality is, we need barber service at this time. We have been receiving calls almost every day, especially from civil workers asking if some arrangements could be made.”