The Malaysian Insight

PUTRAJAYA must reconsider the current standard operating procedure (SOP) put in place for factories as it is affecting the sector’s output, industry experts said.

They said current measures that dictate shutdown of factories when there is an outbreak is causing more backlog as factories are trying to catch up with old orders and keep up with new ones.

Current screening measures that mandate workers be tested every two weeks is also costing factories a lot of money as the government has not provided any subsidies.

Malaysia Semiconductor Industry Association president Wong Siew Hai urged the government to allow factories to claim the cost of testing from the Social Security Organisation (Socso).

“It is (testing) very expensive. That’s why we are asking for government support to claim from Socso,” he told The Malaysian Insight.

Wong said this will reduce the financial burden on manufacturers.

He is also urging the government to reconsider shutting factories when workers test positive.

Instead of closing entire factories, the workers who tested positive and their close contacts can be safely isolated while production runs as usual.

Otherwise, they will face a continuous backlog and lose their customers due to late deliveries.

“Don’t shut down the factory. (We have asked the government) but they have yet to replied.

“Covid-19 now is not as serious as before. After vaccinating, fewer people are in category 4 of the infection.”

He added that the semiconductor sector will need around three months to a year to meet orders that accumulated from the shutdown during the Covid-19 epidemic.

At the height of the outbreak last year, one of the world’s biggest suppliers of gloves, Top Glove, halted operations after its workers tested positive for Covid-19.

The group had shut down 28 factories in Klang from November 17 to December 14 when its foreign workers’ dormitories in Meru were placed under the enhanced movement-control order following a surge in Covid-19 cases among the workers.

This in turn led to a shortage of medical gloves worldwide. Malaysia supplies around 67% of total gloves consumed globally.

Data from the Health Ministry showed that from March 28 to August 17, of the 1,549 workplace infections detected, 50.35% involved factories.

Federation of Malaysian Manufacturers president Soh Thian Lai said now that Malaysia is entering endemicity, people have to learn to live with the virus.

The current SOP has already been adopted by factories to ensure they do not become a source of Covid-19 clusters.

“We will continue implementing preventive measures such as encouraging the vaccination of all employees and enforcing the mandatory bi-weekly testing of all employees as required by the National Security Council.

“At the same time, targeted testing is already in place for many companies as part of their business continuity plan based on their risk assessment and management, which is an effective approach to pick up positive cases and trigger the necessary Covid-19 protocols to curb the spread of the virus in factories,” he said.

To that effect, manufacturers have a designated workplace coordinator who is responsible in ensuring that SOP is in order and also to liaise with the necessary authorities when there is an outbreak.

Despite the stringent measures, Soh said there is a need to provide boosters shots for factory workers to further minimise the risk of transmission.

Given that the manufacturers have implemented all necessary measures, Soj is hoping that the government will provide them with incentives to save costs.

“It is hoped that the costs for these continuous preventive measures would be covered with some form of tax incentive such as double-tax deduction.”

While these measures do slow down operations to a certain extent, Soh said the manufacturing sector is also facing another problem in the form of worker shortage.

“From the survey, a total of 252 companies indicated an overall shortage of close to 22,000 workers, the highest faced among unskilled general workers followed by skilled general workers, technicians, machinists and engineers.

“In particular, employers continue facing difficulties in sourcing for locals to fill the shortage arising from the current freeze in the new recruitment of foreign workers.”

The top five manufacturing sub-sectors facing manpower shortages are the electrical and electronics, food and beverages, chemicals and chemical products, fabricated metal and rubber products, he said.

The worker shortage has hampered the sectors’ ability to clear their backlog.

Malaysia froze the hiring of foreign workers during the first lockdown in March last year and has extended it to December this year.

Other than that, the delay in the global supply chain is also putting more pressure on local manufacturers.

The delay means that manufacturers are looking at skyrocketing freight rates.

In order to circumvent the problem, local manufacturers are now sourcing for alternatives closer to home.

“Among the measures undertaken to cope with the new normal for global supply chains include multiple sourcing, more focus on regionalisation, establishing flexible supply chains, driving digitalisation with data-analytics and looking at alternative transportation modes to better position themselves during this difficult period.” – November 1, 2021.