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Manufacturers urge Putrajaya to allow production during shutdown

FMM In The News: THE MALAYSIAN INSIGHT, Thursday, April 9, 2020 - THE Federation of Malaysian Manufacturers (FMM) has called on the government to allow essential product manufacturers to operate at full capacity and non-essential manufacturers, at half capacity during the movement control order period.

“Allowing the industry to operate is critical to prevent the industry from collapsing following an almost month-long closure of most businesses,” said FMM president Soh Thian Lai.

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

The MCO, besides banning production, also restricts both import and export. Loss from the export ban is estimated at RM4.7 billion.

While work to produce of essential goods is allowed, workers have been denied permission to travel to their workplace even though they have authorisation letters from their companies, FMM said.

The prohibition on movement of people after certain hours particularly affected shift workers, it said.

Export and import have also been curtailed despite the Transport Ministry’s approval for exports to continue with proof of contract.

“The business community has been very supportive of the lockdown the past few weeks and would continue to support the MCO but now needs some relaxation to allow factories to resume operations,” said Soh.

“The focus must shift to ensuring the survival of the industries, failing which there would be a detrimental impact on the overall economy.”

Soh said factories had tight controls in place to ensure that the workers only moved from home to the workplace and back again, thereby limiting the workers’ exposure to other environments.

“In addition, employers have taken the most stringent health and safety measures at the workplace since the Covid-19 outbreak and they continue to abide by the strict conditions to ensure their employees’ health and wellbeing.”

FMM has recommended that companies take the temperature of each employee every day at the entrance of the factory/premises and that they mmediately contact the nearest Health Department if an employee’s body temperature is above normal.

RM130 billion in estimated losses

FMM’s survey of 1,120 members found that 56% of them anticipated losses of RM500,000 and more from the shutdown.

The remainder expected to lose RM1 million to RM5 million each.

The losses were mainly from salaries, loss of sales, stock inventory and contractual penalties from suppliers as well as customers.

The survey also revealed that regardless of company size, the majority of the manufacturing sector – or 71% of respondents – could at most endure four weeks of shutdown.

With 60,000 manufacturers in the country, it is estimated that the one-month operational shutdown could cost the GDP about RM130 billion.

”Before the situation is further aggravated with compounding losses of businesses, FMM urges the government to respond swiftly to the above requests and proposals to ensure business viability and continuity and for the survival of the economy,” said Soh. – April 9, 2020.

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