Drop in supply causing businesses to lose money

KUALA LUMPUR: For furniture retailer Steven Wong, his gallery here has seen a drop in the supply of finished goods as factories are not able to deliver orders in time amid the Covid-19 outbreak.

“We have been told that there will be delay, but we don’t know how long it will last.

“Business has gone down some 20% since February as customers cancelled orders following the long waiting time,” he said.

Wong, 45, who has been in the business for about two decades, cited an example of a chair booked by a customer that should take one-and-a-half months to arrive from China. But it has been two months now with no sign of its arrival.

Some manufacturers of raw materials in China were not fully back in production following the outbreak, he said.

“Many of them are still being vigilant by either halting or slowing down their production.

“With stricter surveillance on imports from China, there has been a shortage of raw material supplies that are mainly hardware, such as fabrics, bolts and nuts, glass, handles and paint thinner.

“When such raw materials are short, factories are unable to produce furniture to supply to trading houses, which in turn supply to retailers,” he said.

For now, he said he could still hold on by doing promotions on the items still in stock.

“But things will be worrying if the outbreak were to continue for another few months,” he added.

However, factory owner Datuk Lee Chee Hoh said many local manufacturers had wised up.

“I have diversified my raw material sources following tighter control on imported waste paper from China three years ago,” said Chee Hoh, whose factory in Ipoh makes paper products for prayers.

He said industry players should be vigilant and not rely on a single source country.

Businessman Ken Lee spoke of how Covid-19 had impacted him.

The 40-year-old has been involved in the food and beverage industry for some 17 years in Johor.

“There will always be ups and downs in any business but not as bad as since the Covid-19 started.

“My business went through the Severe Acute Respiratory Syndrome (SARS) in 2003. But Covid-19 has left a more negative impact than SARS on my business, which has already seen a drop of more than 20% due to lack of customers,” he said.

Ken pointed out that he had no other option but to cut down on operation cost and give more affordable prices to attract customers to his cafes.

As for the managing director of an event management company, he said that there had been a 30% decline in business due to cancellation and postponement of events.

“As this year is Visit Johor 2020, I received many bookings from clients seeking our services and to rent our equipment. But because of Covid-19, my customers had either cancelled or postponed their events and this caused me some issues,” said the managing director who only wanted to be known as Lee.

He also said he was facing problems getting his equipment from China and his orders had been delayed by weeks.

SME Association of Malaysia president Datuk Michael Kang said many SMEs had voiced concerns of their businesses slowing down, with some facing problems getting raw materials and components for production.

“In general, sales have gone down by 30%.

“Some fruit farmers reported exports dropped by 50% as fewer consumers are spending money.”