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Nearly 40% of manufacturers unsustainable for more than 12 months, says FMM


FMM president Soh Thian Lai (centre), Chairman of FMM Strategic Policies and Research Committee Saw Choo Boon and MIER assistant director Elayne Yee in a press conference at FMM’s headquarters today.

FMM In The News: FREE MALAYSIA TODAY, KUALA LUMPUR, Wednesday, August 19, 2020 - Nearly 40% of Malaysian manufacturers said their businesses would only be sustainable for less than a year, according to a survey by the Federation of Malaysian Manufacturers-Malaysian Institute of Economic Research (FMM-MIER).

According to the survey’s first half of 2020 results released today, 38.9% of businesses said they could not sustain themselves for the next 12 months after revenues plummeted due to Covid-19 and the movement control order (MCO) which saw all non-essential businesses brought to a halt.

FMM said 549 respondents nationwide participated in the July 2 to July 31 survey, held for the 17th year.

A total of 9.1% said they could sustain themselves for 10 to 12 months, 6.7% for seven to nine months, 18.4% for four to six months and 4.7% for one to three months.

“Most of the companies, unless they are cash-rich, on average will have six months of cash (reserves) to sustain them – and that is already considered good,“ FMM president Soh Thian Lai said in a press conference at FMM’s headquarters today.

“Some of them who say they can last for 12 months… it is because of the government stimulus packages, wage subsidies and bank moratoriums,” he added.

Around 24.6% of the businesses said Covid-19 and the MCO had not affected their business while 34.2% said their business would be sustainable for over 12 months.

While 2.2% of the respondents reported they were already closing their business, Soh said the 38.9% of businesses who said they would not be able sustain themselves might not be closing shop as “after these 12 months, they will look to bank loans, government assistance or mergers and acquisitions”.  

“Most of the companies, unless they are cash-rich, on average will have six months of cash (reserves) to sustain them – and that is already considered good,“ FMM president Soh Thian Lai said in a press conference at FMM’s headquarters today.

“Some of them who say they can last for 12 months… it is because of the government