SUCH is the billion-ringgit question posed by veteran journalist and blogger Datuk A. Kadir Jasin to the Madani government.
Yesterday (April 28), Continental Tyre Malaysia revealed that it shall cease production at its Alor Setar plant by end-2025 – ending 46 years of operations – in an exercise that will affect 950 employees currently working there.
The move will see the German automotive supplier which serves replacement customers and original equipment customers alike left with one manufacturing facility in Petaling Jaya.
The manufacturing facility in Alor Setar which covers an area of about 133,000 sq metres commenced operations on Dec 20, 1979 and has been a wholly-owned subsidiary of Continental since May 2012.
At the same time, Channel News Asia (CNA) reported that a protracted rift between national oil corporation PETRONAS and the Sarawak state government “appears to be causing investor disquiet” following a surprise withdrawal by US oil firm ConocoPhillips from an oil project off the Borneo coast.
In a little-publicised surprise move this month, the US oil giant has decided to withdraw from operating the Salam-Patawali deepwater oil and gas (O&G) field that it discovered in 2018 with PETRONAS in a 50-50 joint-venture that was expected to cost RM13.7 bil (US$3.13 bil).
Two industry sources close to ConocoPhillips separately confirmed the pullout with CNA. The Singaporean news portal added that the move was part of a “country strategy review” which the O&G exploration and production (E&P) outfit did not elaborate on.
Between Continental and ConocoPhillips, it seems that Continental caught the eyes of majority netizens with one equated the 950 jobs lost to “about 5,000 family members are affected”.
“Continental may choose to relocate in Thailand. What can the Madani government do?” he lamented.
Another foresaw a major economic impact on Kedah in addition to the image of Malaysia “being scarred”.
“Previously (2023) the Goodyear Tyre factory in Shah Alam was closed down,” he reminded.
Apart from the normal PMX-bashing comments which are expected from opposition-slant netizens, one boldly suggested that both the Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani and Human Resources Minister Steven Sim Chee Keong “lure the 950 affected workers to work in oil-palm plantation where competitive salaries and amenities are offered”.
As for Sarawak, the netizen reck0ned that the time gas come for the East Malaysian state “to take charge of their O&G sector” rather than “forever play second fiddle to the big brothers in the Semenanjung (Peninsular Malaysia).”
Bigger picture
Whatever the case is, there is a need to at the broad situation. Beyond Malaysia, Continential has manufacturing facilities in Hefei (China), Rayong (Thailand), Modipuram (India) and Kalutara (Sri Lanka).
Continental’s decision to close the Alor Setar tyre plant follows a full business review as the group bids to stay competitive in the Asia-Pacific region. The move is part of efforts to adjust to changing customer demand and improve its product range and factory locations.
In response to shifting consumer demands, particularly towards electric vehicles, Continental had in mid-February 2024 announced plans to reduce its global workforce by 7,150 jobs by 2025.
As for ConocoPhillips, the move to exit Sarawak was in part driven by the uncertain regulatory environment arising from the spat between PETRONAS and the state government headed by Premier Tan Sri Abang Johari Openg.
As it is, the Sarawak government which owns O&G firm Petroleum Sarawak or PETROS is demanding greater control over its resources.
The bottom line is industry executives now expect ConocoPhillips to begin focusing on its activities in neighbouring Sabah where it already has operations. – April 29, 2025
