PETALING JAYA: The Malaysian electrical and electronic (E&E) industry lauds the government’s decision to allow selected economic sectors that have been operating at half capacity to operate at full capacity beginning today.
The move is good news for E&E players, who have order backlogs to fulfil and demands to meet. But for full effectiveness, other businesses within the E&E ecosystem should be allowed to operate alongside the manufacturers.
American Malaysian Chamber of Commerce (Amcham) – Malaysian American Electronics Industry committee chairman Datuk Seri Wong Siew Hai said the government should also allow the operations of those involved in the service segment of the E&E industry and construction projects of E&E manufacturing facilities to commence.
“The service segment of the E&E industry entails the moving and setting up of equipment, calibrating and testing equipment, as well as managing IT networks – all of which are necessary, ” he said.
“Without these supplementary operations, which are under the purview of the Domestic Trade and Consumer Affairs Ministry, E&E players will not be able to achieve the complete benefits of operating at full capacity.”
Apart from that, construction projects of E&E factories that are currently stalled should resume promptly, to ensure a faster recovery for the industry.
These construction projects are under the purview of Construction Industry Development Board.
“In particular, factories that are 50% to 70% completed should be allowed to resume construction works. By doing so, new investments can be made and projects put on hold can be reviewed, especially prior plans to shift operations out of Malaysia.
“Above all, the E&E industry must continue complying to Covid-19 protocols like wearing face masks and practising social distancing, ” said Wong.
While the decision to allow full capacity operations is well received, semiconductor test equipment companies find travel restrictions within the country and overseas a hindrance.
Pentamaster Corp Bhd chairman C.B. Chuah(pic below) said about 80% of the group’s business required its engineers to go overseas to install semiconductor test-equipment.
“If we cannot install for customers, we will not be able to complete the sales transactions.
“However, the removal of restrictions allows us to clear the backlog orders faster, ” he said, adding that the move should mitigate the negative impact on Pentamaster’s performance for the year.
MMS Ventures Bhd managing director T.K. Sia said the federal government’s announcement does not make it clear whether test equipment companies could send engineers to travel to another state to do installation work.
“Currently, our engineers can’t even go to Seberang Prai to do installation work. The bulk of our business requires the installation of test-equipment for customers.
“The sales will not be completed if the installations are not carried out, and we will not be able to generate revenue, ” he said.
For Globetronics Technology Bhd, the removal of operating restrictions will improve the group’s second quarter performance.
However, its chief executive officer Datuk Heng Huck Lee(pic below) maintains a cautious stand.
“This does not mean that the group will rush to make new investments. We hope the federal government will consider giving approvals to the supporting industries to operate without restrictions, ” he said.
Plastic packaging materials producer SLP Resources Bhd managing director Kelvin Khaw said the move would mitigate the group’s production cost.
“However, our sales may not necessarily improve, although we are now able to swing into full production.
“This is because our big markets like Australia have asked us to defer delivery, as the whole country is locking down for six months. We are still expecting a 15% decline in sales for the first half, ” he said.
Spritzer Bhd group financial controller Sow Yeng Chong said whether Spritzer would move into full production depended very much on the demand from its distributors and the retail outlets.
“The distributors and retailers are still operating under restrictions. Presently, we are able to fulfill our orders without any problems, ” said Sow.
Yesterday, International Trade and Industry Minister Datuk Seri Azmin Ali announced that economic sectors allowed to operate at half capacity during phases one to three of the movement control order are allowed to carry on business at full capacity beginning today.
He also said these companies must, however, comply with the established standard operating procedure in their respective sectors.