Industry players say sector faces domestic, global pressures
JOHOR BARU: The furniture sector is struggling under mounting global and domestic pressures, leading to some long-standing manufacturers shutting down after decades of operations, say industry players.
Muar Furniture Association (MFA) president Steve Ong said some businesses had ceased operations over the past two years, including several original equipment manufacturers, as they felt the future of the industry was not promising.
“The situation has become increasingly tough for local furniture makers who are already grappling with policies that burden businesses.
“Aside from having to deal with the expanded sales and service tax (SST), the US-imposed tariffs on Malaysian exports are also an added burden for those focused on the American market,” he said in an interview.
Ong, whose association represents more than 800 members, pointed out that the higher electricity tariffs and mandatory Employees Provident Fund (EPF) contributions for foreign workers are also adding to the pressure.
He said MFA has continued to call for a temporary suspension of the SST, electricity tariff hike and EPF contribution for foreigners.
Ong also urged the government to provide financial incentives or assistance to help companies transition better.
He said that while the government is encouraging automation, many industry players are hesitant to make the change.
“If local furniture makers are forced to shut down or relocate overseas, it will not only affect jobs but the entire supply chain will suffer,” he said, adding that the MFA held a dialogue session with industry players last week to listen to their concerns.
Many participants, including a furniture maker who has been in the business for over four decades, lamented about the “policies that are not business-friendly” which are hurting the economy.
Malaysian Furniture Council president Desmond Tan, who is also MFA executive adviser, said the council received over 180 petitions from industry players about the untimely policies.
He added that the council had submitted a petition to Plantation and Commodities Minister Datuk Seri Johari Ghani and met with his deputy Datuk Chan Foong Hin over the matter.
“We have expressed our concerns and requested their help to convey the message to the Prime Minister.
“During the meeting, the deputy minister told us that he would speak to the Finance Ministry about the SST, which we take as a positive step,” he added.
Johor, particularly Muar, produces the majority of Malaysia’s furniture.
The United States was the top destination for Malaysia’s furniture last year, followed by Singapore, Australia, Japan and the United Kingdom.
