500,000 jobs in fashion at stake

FMFTA says fashion companies may not be able to continue absorbing the huge daily losses of RM163m on lockdowns


FASHION and food and beverage (F&B) businesses are counting millions of losses daily, pending the government’s decision to allow fewer restrictions for vaccinated persons.

About 30% of the fashion, textile and apparel businesses are on the verge of ending their businesses with 150,000 employees will be retrenched due to lack of cashflow and uncertainties.

The supply chain of the fashion, textile and apparel industry in Malaysia employs about 500,000 employees nationwide. A prolonged shutdown will put all the 500,000 employees at stake and aggravate the unemployment rate in Malaysia.

Federation of Malaysian Fashion, Textile and Apparel (FMFTA) chairman Datuk Seri Tan Thian Poh said fashion companies may not be able to continue absorbing the huge daily losses of RM163 million on lockdowns.

“Four renowned foreign-owned multinational textile and apparel factories have shut down their business operations in Malaysia and retrenched about 6,000 employees in 2020.

“Since then, the chain effect continues, many local small and medium enterprise manufacturing companies in the industry have shut down or downsized their business operations resulting in about 15,000 job losses from the industry,” said Tan.

“Instead of total closure, the government must allow the industries to open, but with strict standard operating procedures (SOPs),” he told reporters at a virtual press conference last Friday.

FMFTA also urges the government to review the threshold set by the National Security Council to move the country to Phase 2 of the National Recovery Plan (NRP).

Malaysian Knitting Manufacturers Association president Datuk Tang Chong Chin said fashion, textile and apparel export volume has been down 30%-40%.

“We cannot commit to our orders because our situation is not improving. Most of us are tense and do not dare to accept order. Even the buyers are worried to do business with Malaysia.

“We are not only losing our current order, in the long run, we are losing our future business to other countries,” he added.

The fashion, textile and apparel industry in Malaysia has been one of the major contributors to the country’s export of manufactured goods particularly to the US, Europe, Turkey and other parts of the world since 1970s.

In 2020, the industry recorded a declined export value of RM21 billion compared to RM27 billion in 2019 due to the pandemic.

Meanwhile, the Restaurant and Bistro Owners Association (PPRB) said while 30% of local F&B players have shut down completely due to the loss of income, the remaining ones are pleading for the government to discuss ways to allow safe dine-ins before more eateries collapse.

PPRB VP Jeremy Lim suggested that the government engage trade groups by sector in order to find the right and sustainable solution for businesses to reopen.

“We welcome Prime Minister Tan Sri Muhyiddin Yassin’s remarks about reopening for dine-in, but we should be discussing how that will look like.

“Let industry leaders and policymakers be guided by data and science when making any SOPs that will affect millions of lives and livelihoods,” he told The Malaysian Reserve (TMR).

Muhyiddin said over the weekend that the government is looking into easing some curbs for vaccinated individuals.

The government also is reportedly considering allowing limited dine-ins. Dine-ins, based on the NRP, would be allowed in Phase 3.

Jeremy said on the ground, the overall sentiments are low, no one has the confidence the industry will get out of this in the short term.

“We believe another 30%-60% businesses are currently ‘hibernating’ and waiting for the government to announce their next steps.

“This means there is no real reflection of the unemployment rates because technically, everyone is still employed. The government should look at the amount of statutory contributions pre-lockdown compared to current month, that should show them the real picture of how strapped the rakyat’s wallets are at the moment.”

He said the continued restriction means F&B industry players are still reliant on deliveries but in reality, this too is killing the industry.

“The delivery platforms take a commission charge on the value of the order, on top of the delivery charges that are imposed directly to a consumer,” he said.

“Some of PPRB members are losing money for every order they fulfill on these two platforms, but they continue running the business in hopes that they can keep their employees busy and if consumers may order from them directly,” he added.

Jeremy also suggests the government to do away with the label of essential and non essential because every business, every industry is related to one another.

Cornery FNB Sdn Bhd MD Datuk Joe Tan said the sales of his businesses have declined by 50% due to the lockdown.

“Most of our outlets are still operating except for airports and Genting Highlands (temporarily closed).

“Our sales have dropped more than 50% compared to sales in the first quarter this year. Delivery is not enough to keep us afloat,” he told TMR.

Currently, there are three F&B brands under Cornery FNB’s portfolio — Street Churros, Indobowl Resto and Cornery-The Popcorn Gallery.