Malaysian Economics: Industrial Sector

 3. Opinion on Malaysian manufacturing sector survivability following Covid-19 pandemic.

    In my opinion, manufacturing sector was the most impacted from COVID-19 outbreak among another industrial sectors.  However, some of them have survived and their business get more engagement than before the pandemic.  Manufacturing industries focuses on transforming raw material to end products.  It includes the sector of wood processing, textiles and leather, paper and printing, food and beverages, electric and electronic and others.

During the implementation of Movement Control Order (MCO), all the economic activities has been halted by the government in order to curb COVID-19 transmission in Malaysia. This would cause manufacturing sector to limit their operation and disrupt supply-demand chain at the same time.  For example, in the optical industry, the main exporters of the eyewear products are Italy with USD 2.8 billion followed by China with over USD1.6 billion of total exports.  However, when the virus spread around the world, most countries declared series of lockdown.  This situation would affect the eyewear market globally since Italy and China contribute almost 40% and 22% in the market.  Things got worse when some companies were forced to shut down their businesses due to the zero revenue.

    Nonetheless, some of the business owners had made the great move to survive during the pandemic.  For instance, Small and Medium Enterprises (SMEs) business owners have taken the initiative to make money by selling their products in online shopping platforms, namely Shopee and Lazada.  Since the first lockdown has been declared in Malaysia, people confined to their homes and been limited to buy their groceries at physical market.  Seeing this problem as an opportunity, SMEs business owners especially in food and beverages sector use the social media to engage with potential customers virtually for the sake of increasing their sales.  Some of them also post the pictures and sell their products by making a good use of Facebook groups feature, as well as to communicate with their customers.  Most of the online shopping platform provide the special feature, like Shopee Live or Facebook Live, which let the viewers view the products live, and ask the details about the product.  Thus, they will get a better idea of what they are getting rather than just looking at the pictures and caption posted.  This effective method may attract new customers since both parties can communicate and gain trust.

    Next, another initiative taken is, some entrepreneurs are getting creative by adapting to the pandemic.  For instance, in textile and clothing industry, there was a scarves company, who design the scarf attached to the face mask.  Since the wearing of face mask mandatory especially in public areas, the innovation of the scarves seems useful and sensible.  Besides, the design also gave an inspiration to other companies to follow its step.  Later, with the existence of various colours and materials, the unique design of the scarves never fail to gain customers until now.  The innovation has not only benefitted that company but also the other companies during the pandemic outbreak.

    Lastly, the government also play an important role to help SME to survive in the market.  Bank Negara Malaysia (BNM) has improved the existing lending capabilities under its Fund for SMEs to assist SMEs in maintaining business operations and conserving jobs, as well as supporting growth in the current economic state.  Under Bank Simpanan Nasional (BSN), 2% of interest rate for the RM500 million Micro Credit Scheme has been abolished Besides, under Economic Stimulus Packages, the moratorium has been extended for three months for selected group.  A Special Grant of RM3,000 also been given by the government to the registered SME.

    To conclude, the pandemic has disrupted the supply side of the product and lead several changes to economic activities. Although manufacturing sector has had the worst impact from the COVID-19 outbreak, some of them are able to survive and thriving by finding a new way to operate and adapting to the culture of “new normal”.


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