MUAR: Muar, recognised as the country’s furniture hub, contributed nearly 60% of Malaysia’s furniture exports valued at RM10 bil last year, but Covid-19 is having a huge negative impact on the industry.
Hence, Muar Furniture Association (MFA) president Ong Yeou Huan has proposed six steps for the government to consider to help furniture companies in the Malaysian furniture town, 80% of which are SMEs.
He said the recently unveiled Prihatin Rakyat Economic Stimulus Package was a welcome relief to the SME furniture industry in Muar, but this assistance needed to be strengthened by adding another six special measures to help revitalise the industry.
“The recovery of the Muar furniture industry takes at least three to five years or longer to return to its original form. So, we hope the government can implement the six steps that we are proposing to restore the industry,” he added.
1 For the Malaysian Timber Industry Board (MTIB) to accept applications from furniture factories that failed to get approval to operate under the Movement Control Order (MCO), as well as factories that have not been able to apply before.
2 Extend the operating period automatically for furniture operators who have obtained approval from the MTIB until the end of the MCO period.
3 Reinstate the Goods and Services Tax (GST) at 2% as it is seen as a catalyst for the industry’s redevelopment.
4 For the furniture industry to receive exemptions from quit rent, assessment and road tax for their commercial vehicles for two years from this year.
5 For water and electricity bills to be reduced to 70%.
6 Banks should provide loans at a low interest rate and longer repayment period to medium-scale entrepreneurs and larger ventures.
Ong said these moves are important for the 674 MFA member companies which are facing various obstacles to continue their business, including lower sales and cash liquidity, as well as in paying their employees.
“An MFA survey found that 44.3% of manufacturers say their cash liquidity could only cover up to last month, while 34.2% expect losses of between RM1 mil and RM5 mil in the next six months,” he said.
What is more worrying is the fate of workers as 44.3% of employers want to persuade workers to accept a voluntary pay reduction package, while 41.8% say they have to terminate their services, he added. – April 16, 2020, Bernama
