Most Japanese companies in Malaysia record operating profit in 2021

PETALING JAYA: Almost 60 per cent of the Japanese companies in Malaysia recorded a surplus in their operating profits in 2021.

The Japan External Trade Organisation (Jetro) in their survey on Business Conditions of Japanese Companies Operating Overseas in Asia and Oceania noted that 58.7 per cent of Japanese companies operating in Malaysia have forecast their operating profit to be in surplus while the percentage for “loss” dropped from 30.1 per cent to 4.9 per cent.

The percentage however is lower than for most Asean countries and the low operating rate during lockdowns in 2021 was cited as the reason.

“For Malaysia, the percentage of companies in surplus has increased by nearly 10 per cent from 50 per cent last year to 59.7 per cent.

“A remarkable difference could be seen between large corporations (surplus at 67.7 per cent and SMEs (surplus at 41.1 per cent).

“All six Asean countries (Malaysia, Singapore, Thailand, Indonesia, Vietnam and Philippines) see a huge decline in “loss” for their operating profit forecast for 2022,” the survey found.

The study which was conducted from August 25 until September 24, 2021 targeted 14,175 Japanese companies operating in 20 countries.

The number of Japanese companies that plan to expand and diversify their business functions in Malaysia in the next few years has also increased with many citing “sales function” as the reason for expansion.

Employees’ salary increments continue to be the top management issue in all six countries including Malaysia.

“In Malaysia 51.8 per cent of the companies are particularly concerned about “Quality of employees.

“There are also more companies in Indonesia and Malaysia that selected “Emergence of competitors (cost-wise) compared to last year,” the report said.

A total of 70 per cent of Japanese companies in Malaysia recognise human rights in the supply chains as a management issue.