EVEN as the Government has allowed the furniture industry to resume operations after a 2.5-month lockdown, the industry is grappling with challenges that range from lack of raw materials to high freight cost and lack of manpower, among others.
Chief of the challenges would be luring back overseas customers who have flocked to regional competitors, according to the Malaysian Furniture Council’s (MFC) secretary-general Matthew Law.
“Many of our overseas clients have decided to source their products from Vietnam and Indonesia, thus creating massive loss for our local players where up to 80%-85% of them are small medium enterprises (SMEs) which do not have much savings compared to larger companies,” he pointed out.
Additionally, the lack of raw materials is another challenge as the closure of borders and the inability for upstream sector to operate has created difficulty for factories to obtain raw materials from local players while those from overseas are stuck at entry points.
With regard to the manpower issue, Law said MFC’s members have reported of their workers were being poached by ‘head hunters’ and agents to work in sectors that were able to operate during the 2.5-month lockdown period.
“As such, the industry is facing a lack of manpower as furniture manufacturing still requires manual labour as certain process such as packaging and boxing are unable to be mechanised.”
Law’s concern was echoed by MFC president Khoo Yeow Chong stating that while the industry has done the necessary requirements like getting its workers fully vaccinated and obeying the SOPs (standard operating procedures) prior to reopening, all is not smooth sailing yet.
For the past few months, the cost of freight charges has increased in US dollar term with freight service providers charging a higher rate compared to the official exchange rate.
“Adding to the complexity of the situation is the dearth of shipping containers where the industry now has to compete with major economies like China, the US and even Europe who have the ability to outbid us several times over for these shipping containers,” noted Khoo.
However, both business leaders remain optimistic in the long run as the industry has managed to remain resilient in times of crisis.
This is while the local furniture industry plunged to a mere RM 327.1 mil in April 2020, export value jumped to RM1.23 bil, which is a 275.42% recovery within five months when the country entered into the recovery movement control order (RMCO) from June 10-Aug 31, 2020.
With data from the Malaysia External Trade Development Corporation (MATRADE) showing that export of Malaysian furniture stood at RM674.4 mil in June 2021, the industry remains optimistic of a rapid recovery in the near future. – Aug 21, 2021
