FMFTA says fashion companies may not be able to continue to absorb huge daily losses of RM 163million on lockdowns

by NUR HANANI AZMAN / photo by TMR FILE

FASHION and food and beverage (F&B) companies are losing millions every day, pending the government’s decision to allow fewer restrictions on those vaccinated.

About 30% of the fashion, textile and clothing companies on the verge of going out of business with 150,000 employees will be made redundant due to lack of cash flow and uncertainties.

Malaysia’s fashion, textile and apparel industry supply chain employs approximately 500,000 people nationwide. A prolonged shutdown will put the 500,000 employees at risk and worsen the unemployment rate in Malaysia.

Malaysian Fashion, Textile and Apparel Federation (FMFTA) President Datuk Seri Tan Thian Poh said fashion companies may not be able to keep absorbing the huge daily losses of 163 million RM on blockades.

“Four renowned foreign-owned multinational textile and clothing factories closed their business operations in Malaysia and laid off around 6,000 employees in 2020.

“Since then, the chain effect continues, many small and medium-sized local manufacturing companies in the industry have closed or reduced their business activities, resulting in around 15,000 job losses in the industry,” Tan said.

“Instead of a total shutdown, the government must allow 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 (PNR).

Malaysian Knitting Manufacturers Association chairman Datuk Tang Chong Chin said the export volume of fashion, textiles and clothing fell by 30-40%.

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

Malaysia’s fashion, textile and clothing industry has been one of the major contributors to the country’s exports of manufactures, especially to the United States, Europe, Turkey and d other parts of the world since the 1970s.

In 2020, the industry saw a decline in the value of exports of Ringgit 21 billion compared to Ringgit 27 billion in 2019 due to the pandemic.

Meanwhile, the Restaurant and Bistro Owners Association (PPRB) said that while 30% of local F&B players have closed their doors completely due to lost income, the rest are pleading with the government to discuss ways to allow safe dinners before other restaurants. collapse.

PPRB Vice President Jeremy Lim suggested that the government engage business groups by sector to find the appropriate and sustainable solution for the reopening of businesses.

“We welcome Prime Minister Tan Sri Muhyiddin Yassin’s remarks on reopening for dinner, but we should discuss what it will look like.

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

Muhyiddin said over the weekend that the government was considering easing some restrictions on those vaccinated.

The government is also reportedly considering allowing limited dinners. Dinners, based on the PNR, would be allowed in phase 3.

Jeremy said on the ground, overall feelings are low, no one has confidence that the industry will do well in the short term.

“We believe 30 to 60% of other businesses are currently in hibernation and waiting for the government to announce their next steps.

“This means that there is no real reflection of unemployment rates because technically everyone is still employed. The government should look at the amount of statutory contributions before the lockdown relative to the current month, this should show them the real picture of how the rakyat wallets are currently depleted. “

He said the continued restriction means players in the F&B industry are still dependent on deliveries, but in reality it is killing the industry as well.

“Delivery platforms take a commission on the value of the order, in addition to the delivery costs that are imposed directly on the consumer,” he said.

“Some PPRB members lose money for every order they fill on these two platforms, but they continue to run the business in the hope that they can keep their employees busy and consumers can order directly from them. ‘them,’ he added.

Jeremy also suggests that the government remove the label of essential and non-essential because every business, every industry is linked to each other.

Cornery FNB Sdn Bhd MD Datuk Joe Tan said his companies’ sales fell 50% due to the foreclosure.

“Most of our outlets are still operating, with the exception of the airports and Genting Highlands (temporarily closed).

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

Currently, Cornery FNB’s portfolio includes three F&B brands: Street Churros, Indobowl Resto and Cornery-The Popcorn Gallery.