The Malaysian Insight

WITHOUT foreign labour, the local furniture industry has fallen on dire times, facing losses close to RM400 million in exports as of August this year, said industry players.

They have blamed the government’s labour policies for their plight, adding that shortage of foreign workers in the sector has caused many of them to stop taking new orders.

They have not been getting foreign labour since the change of government in May despite paying all of the application fees, they said.

According to numbers from the Malaysian Furniture Council (MFC), this sector usually showed a 6.4% annual growth but now it showed a decline of 5.8% as of August this year. The losses amount to RM387.3 million.

MFC president Chua Chun Chai said the new government does not have a clear foreign labour policy and there has been no progress from the Primary Industries, Human Resources and Home Ministries.

Chua said his company had applied for 200 labourers and had paid all necessary fees but the import of foreign workers was suspended after the change of government, leading to manpower shortage.

“I’ve found workers and made payments to the government. Now I’m just waiting for clearance because now that I’ve applied for the 200 workers, I cannot apply for more.

“I’ve asked many times, and they are aware of my situation. They told me if I cannot wait any longer, then they can refund me the money, but what I want is workers, not refunds.

“Even if you refund me, I do not have enough workers, and I don’t dare accept many orders,” he said.

Chua told The Malaysian Insight that he had met with the Primary Industries ministry officials but the problem remains unsolved. He said all applications that were already made and all new applications were suspended.

It appears as if there is a mechanism in place to address the issue, he added.

“The US-China trade war was supposed to be beneficial to the Malaysian furniture sector. There was an increase in orders from both countries, but industry players don’t take them up because of the lack of manpower. We are happy to hire locals but locals do not want such jobs,” he said.

Even though the government is encouraging businesses to hire locals or to invest in automation, Chua said furniture manufacturing cannot be automated.

“Every furniture brand’s manufacturing process is different, we cannot automate them like cars, we can do it with mattresses but not for sofas. We need to train workers to do the cutting. The backrests, armrests and cushions must be handmade, there’s no way to automate it,” he said.

He said many other industries are facing the same issues as the government wants foreign labourers who have been in Malaysia for 10 years to go back to their home countries.

“I have 100 labourers who are heading back, while the 200 I’ve applied for are not ready to work yet, what should I do?” Chua said.

Malaysian SME Association president Michael Kang meanwhile said applying for foreign labourers usually takes about a week to get a response if all papers are in order. But in “extraordinary situations”, he said, it can take up to a year.

Kang said companies have always borne such risks when hiring foreign workers and the new government’s elimination of middlemen was a good move.

He pointed out that companies however still have to go through middlemen in other countries to hire foreign labourers and suggested that the government consult with all labour-intensive industries to gather their feedback, and to establish an independent committee to handle foreign worker applications.

“I hope when we switch to online applications for foreign labourers, we can be as efficient as Singapore, where all applications are processed within a week,” Kang said.

The government has always assisted SMEs and other industries to achieve automation, including in the recently unveiled Budget 2019, where RM210 million was allocated for 2019 to 2021 for automation and Industry 4.0, and to assist about 500 SMEs transition to Industry 4.0.

However there are certain industries that simple cannot be automated.

Malaysian Vegetable Farmers’ Association president Tan So Tiok said the farming industry requires about 20,000 foreign workers, and farmers are finding it difficult to accommodate the increasingly harsh conditions imposed when applying for foreign labourers.

“The government wants farmers to provide appropriate accommodations to the labourers but we need them to stay near the farms to guard the vegetables.

“We are willing to hire locals, we don’t have to pay costs to hire locals, but where are we going to find them? The government wants us to hire locals, I hope the government will help us find locals who want to work for us,” Tan said.

He said complete automation is not possible for the industry as there are many produces that need to be tended to by hand.

“Produces such as chilli and long beans need to be handpicked, how do you automate that? I hope the government can watch the labour market closely and help us find workers. Although many of us farmers are family businesses, but we do not have the manpower and need more labourers,” he said.

According to industry players, the application process for foreign workers is still following the previous government’s system, but due to the new government’s unclear labour policies, previously approved foreign labourers now cannot enter Malaysia to work. – November 10, 2018.