‘Second half won’t be any better’

PETALING JAYA: Federation of Malaysian Manufacturers (FMM) CEO Yeoh Oon Tean said the outlook for the second half of the year will remain “as bad as the first half” due to the challenging economic conditions.
“They’ve (FMM members) indicated that there will be a slowdown in expansion and will hire fewer people,” he told reporters on the sidelines after a panel session on “The Synergy of Malaysia and Thai Auto Part Makers to Drive Beyond Asean Border” here yesterday.
Yeoh said FMM has submitted a wish list for the upcoming Budget 2016, expressing hope that the government will undertake measures to contain the cost of doing business, including granting investment allowance, holding off utility tariff hikes and reviewing foreign labour policy.
He added that FMM has always engaged with the government on issues that manufacturers have to face.
Meanwhile, Delloyd Ventures Bhd executive director Datuk Noor Azmi Jaafar is encouraging local automotive part makers to expand into new segments to compete with their regional peers.
He said areas that could be looked into include machinery, engine and precision part manufacturing.
“They cannot be stagnant, they have to go into new areas. If they are in the same industry, they must go into automation, high productivity facilities, so that their costs can be brought down,” he added.
Azmi said the Malaysian auto parts industry is far behind that of its counterparts in the Thai market.
“Thailand is better than us because of the government’s push on its eco car policy, (whereby) engine manufacturing must be produced in Thailand if you want to produce eco cars. So automatically, technology is brought into Thailand.”
Azmi said Delloyd, which was delisted from Bursa Malaysia on March 31, is less affected by the weakening ringgit given that 80% of its materials are sourced from the Asean region, with the remainder from countries like South Korea and Japan. The company aims to achieve a 10% revenue growth a year.
Azmi said the government’s aim to transform Malaysia into an energy efficient vehicle hub under the National Automotive Policy has opened up new business opportunities for local auto part makers.