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SMEs plead for certain non-essential sectors to operate

FMM In The News: THE MALAYSIAN RESERVE, Sunday, June 13, 2021 - Small and medium enterprises (SMEs) are calling for certain non-essential economic sectors to operate during the lockdown as the extension of the full movement control order (FMCO) have devastating impacts and could shutter industry players for good.

Federation of Malaysian Manufacturers (FMM) president Tan Seri Datuk Soh Thian Lai said the extension of the lockdown period until June 28, 2021 is “totally unfair” especially to the non-essential sectors including those export-based companies that are part of global supply chains.

“With almost 80% of all businesses falling into the non-essential sectors that are not allowed to operate and with only 60% capacity operations allowed for the essential sectors, the extended lockdown period will certainly cripple the entire manufacturing sector and their contribution to global supply chains.

“With companies in the United States and European Union starting to operate at full force, it is imperative that Malaysia, as a key manufacturing hub, has to support these markets as part of their global supply chains,” he said in a statement yesterday.

He highlighted that companies in the essential sectors are still facing great challenges to operate because they are unable to sustain their 60% capacity operations as parts of their supply chains are not able to operate despite repeated appeals supported by their customers from the essential sectors.

Companies that fall under the essential services are also “being tormented” with almost daily checks and raids by multiple enforcement teams with some accompanied by media teams which had disrupted production operations, said Soh.

FMM urged the government to review the daily infection cases and move into Phase 2 of the lockdown when the daily infection cases are contained to ensure less damage on businesses and the economy.

“At the same time, the industry proposes the following for the consideration of the Government to immediately address some of the critical challenges faced by the industry in Phase 1. The essential economic and services sectors approved to operate are to be extended to include an en-bloc approval of the entire supply chain as currently there are still those companies in the supply chain supporting the operations of the essential sectors that have their application either rejected or still pending approval.

“Allow manufacturing industries in the non-essential economic sectors that have smaller workforce and are able to ensure proper social distancing at the workplace and those with contractual export orders to operate at 50% capacity on a 24/7 basis, given the significant 85% contribution from manufactured exports to total exports, to ensure that there is a minimal impact to the projected economic growth for 2021 due to this FMCO,” he said.

He also urged the government to allow industries to undertake maintenance of plants including warm idle, IT servers support and others during the lockdown period with a maximum of 20% workforce capacity instead of the current 10%.

Other recommendations include allowing the movement of all containerised and sealed import and export cargo to and from ports and airports as well as manufacturing warehouses for all non-essential sectors.

The federation also called for the government to pump-prime the economy with a RM200 billion stimulus package with RM30 billion direct fiscal injection following the extension of the lockdown.

Small and Medium Enterprises Association (SAMENTA) Malaysia had also pleaded for the government to allow economic activities with stringent standard operating procedure (SOP) due to the uncertainty for the period of the lockdown.

SAMENTA Central chairman Datuk William Ng said many of the association’s members have expressed concerns towards their fully depleted savings as a result of the pandemic.

“For the record, SAMENTA has never called for a FMCO, and has always maintained that we should allow MCO 3.0 to run its course, with economic activities allowed at reduced capacity with stringent SOP in place.

“When the FMCO was announced, we also pleaded for assistance including an automatic moratorium with no additional penalty or interest and wage subsidy until the end of the year,” he said in a statement recently.

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