FURNITURE companies are optimistic the industry will be able to operate at 80% capacity in the second half of the year as vaccination is ramped up nationwide.

With the implementation of the Public-Private Immunisation Programme, furniture manufacturers are confident inoculation for employees can be sped up.

Malaysian Furniture Council president Khoo Yeow Chong said this is especially important for furniture factories that cater to the export market.

He said in the first two weeks of the lockdown that started on June 1, the industry lost RM550 million. He estimated that as of July 12, the industry has suffered RM1.6 billion in losses.

“It is estimated that from June to August the industry will lose around RM2 billion even after operations resume in the eight states that have transitioned to phase two.

“While we are sympathetic towards the government’s efforts to control the Covid-19 pandemic, it is evident that past measures have not worked and the relevant department must discuss other measures so that the industry can resume work.

“Otherwise, it will be difficult for us to compete with the rest of the world,” Khoo told The Malaysian Insight.

Khoo said most furniture factories in Malaysia are located in Muar and Batu Pahat in Johor. In Muar, the industry vaccination drive will be rolled out from August 2.

At its peak, furniture exports reached RM12.1 billion. The United States accounted for 56% of the export volume, followed by Japan, Singapore and the United Kingdom.

Johor alone produces 70% of the furniture exported overseas.

A workforce of 80% is allowed under phase two of the national recovery plan. The criteria before a state can move into this phase are fewer than 4,000 daily Covid-19 cases, full vaccination of 10% of the population and moderate use of intensive care unit beds.

Currently, eight states have transitioned to phase two. They are Terengganu, Kelantan, Pahang, Perlis, Perak, Penang, Sabah and Sarawak.

Under phase two, only furniture factories producing for export purposes can operate under the list of manufacturing sectors allowed to open.

Consider 50% workforce for furniture factories first

Matthew Law, president of Kuala Lumpur and Selangor Furniture Association, said the industry in both areas hopes to resume work in August.

Unlike Johor, in Selangor the vaccination started this month and most employees have been vaccinated. If all goes according to plan, Law expects the industry to resume operations by the end of July or early August at the latest as more employees complete the second dose of the vaccine.

“The interval between the first and second dose takes time, but we are looking forward to reopening.”

Law urged the International Trade and Industry Ministry (Miti) to consider allowing furniture factories to operate with 50% of employees who have received one dose of the vaccine. This, he said, can help restore business and fulfil export orders.

He said foreign workers who have completed the first dose of the vaccine should be allowed to work as they are only confined to workers’ dormitories while local workers commute to and from work.

He hopes that after all the employees have completed both doses the government will allow the industry to operate at full capacity.

“As long as the employees have completed the first dose and the employers adhere to strict standard operating procedure (SOP), the risk of infection will be greatly reduced. This is a win-win for all as the government stands to make a profit from export taxes while we are able to pay salaries to our employees,” said Law.

Deputy Plantation Industries and Commodities Minister Wee Jeck Seng has called on Miti to allow furniture factories in the green zone to operate.

He said the government’s lockdown to curb high Covid-19 cases and restrictions had curtailed the operation of furniture factories to catch up with the foreign orders.

“If Malaysia loses these orders, foreign buyers may switch to other countries to buy furniture, and it will be even more difficult to get their orders again,” Wee said recently.

He also cautioned the furniture industry to make sure that their foreign workers are not treated as slaves. Companies must meet the Employees’ Minimum Standards of Accommodation and Amenities Act 1990 in building dormitories for migrant workers.

The export value of Malaysia’s wooden furniture in 2020 was RM10.6 billion.

The five major export markets are the US (RM6.61 billion) and Japan (RM470 million), Australia (RM430 million), the European Union (RM400 million) and Singapore (RM310 million). – July 24, 2021.