SOME Singapore firms with businesses in Malaysia are adopting a wait-and-see attitude ahead of the elections there, although they remain optimistic about prospects in the country.
Jonathan Phoon, executive director of Freshening Industries, said sales had dropped about 10% in the past few months as customers seemed to shy away from committing to new contracts before the poll outcome is known.
However, he reckons this is a temporary blip and that business will return to normal after the elections.
Freshening has a 50-50 joint venture in Malaysia and a factory in Petaling Jaya that produces disposable wet paper towels.
“We’re pretty confident about the economy there, and we don’t think the election is an issue, so we’re not worried,” he added.
Elyna Tan, chief executive of Paradise Group Malaysia, said consumers have been spending less over the past few months, but this has not had a major effect on business.
The group has four restaurants and one food centre in Malaysia.
“The elections are not expected to affect business at all; it’s still looking very positive,” she said, adding that Paradise Group is “not holding back on its expansion plans in Malaysia”.
It is also business as usual for listed BBR Holdings. The construction group announced yesterday that it had secured two new contracts worth RM286mil to build two bridges, in Terengganu and Sarawak.
OCBC chief executive Samuel Tsien said Singapore banks are somewhat “shielded” from political events, as they deal with customers and not with the government directly.
OCBC may be affected if a customer’s contract with the government has to be redrawn, while it would be business as usual with other customers.
Singapore companies with a presence in the Iskandar region said they are in wait-and-see mode.
Racer Technology founder Willy Koh said: “In the past we faced ups and downs in Malaysia, but we feel that in the last two to three years there has been constant improvement. The business environment has become more stable and infrastructure and security have improved.”
Koh said crime had become less of a problem in Senai, where his factory is located, in the past few years and that a lot of red tape had been removed for business processes. Racer makes healthcare products.
Hai’s general manager Darren Lim added: “We’ll just have to wait and see. It would be quite worrying if (a new government) changes the trade regulations or other corporate rules, but no matter what we’ll still stay here and adapt.” Hai’s has a factory in Johor making sauces and pastes.
Alex Lau, chief executive of technology firm Anacle Systems, which specialises in managing the energy needs of buildings, set up an office in Kuala Lumpur earlier this year.
“The Malaysian market is a major prospect – it’s reasonably well governed and resource-rich... we are definitely confident of the prospects regardless of the elections outcome,” he said.
OCBC Bank economist Gundy Cahyadi said that while there might be concerns over policy continuity and the country’s economic strategy after the elections, “fundamentally speaking, the underlying commitment of both parties towards growth is the same”.
“Whoever wins the election, the attitude towards foreign investors and growth will be the same – both parties are committed to upgrading the infrastructure... and they understand that Malaysia is moving into the next step of its development,” he said. — The Straits Times/Asia News Network