MANUFACTURERS in areas ravaged by the recent floods have suffered almost RM180 million in damage, a survey conducted by the Federation of Malaysian Manufacturers (FMM) discovered.

These affected companies, however, anticipate this figure to increase, as they are still not out of the woods.

FMM conducted the survey from December 22-24 on the impact of the floods on members in affected states, with 92 companies participating.

“The 92 companies responded that they were badly affected by the floods, with estimated damage amounting to RM178,621,875,” FMM president Soh Thian Lai told The Malaysian Insight.

“We foresee those losses will be more as companies are only able to assess their exact damage after the floods have subsided,” he added.

Soh said manufacturers in Shah Alam and Klang were among the hardest hit, resulting in substantial damage to property, other assets and products as well as disruption to production and supply chain operations as a result of the flooding.

Additionally, many workers were not able to get to work as main highways had to be closed due to the traffic.

He said the industry was appealing to the government to extend the bank moratorium for another three months for industries that have been affected by the floods, given the extent of the damage to property and assets.

“In addition, we call on the government to provide some form of one-to-one grants or double tax deduction on expenditure for the repair or replacement of machinery damaged by the floods as well as repair to property,” he said.

The steel tycoon added that the heavy downpour had not only affected production but also severely affected warehouse and logistics operations’ ability to clear import and export containers, especially since the roads leading to and from Port Klang were flooded.

This also resulted in many logistics and terminal personnel not being able to travel for work.

“Delays are expected as companies will need to reschedule shipments to allow for movement of goods once the floods have receded and the roads are fit for travel,” he said.

He added that some manufacturers were also concerned as to whether they would be forced to incur storage and removal charges due to the inability to move their cargo from the ports and detention.

Likewise, they also feared demurrage charges imposed due to delays in returning the empty containers to the depot.

“We seek assistance for the ports to waive storage and removal charges and the government to intervene to request shipping lines to waive the demurrage and detention charges for the duration that the containers remain uncleared from the ports,” he said.

Putrajaya must give financial support

Meanwhile, Malaysian Employers Federation (MEF) president Syed Hussain Syed Husman said every sector,  including manufacturing, hypermarkets, retail trades, delivery and transport services, has been affected by the floods.

While it is too early to assess the losses suffered by businesses, Syed Hussain said it could be expected that the losses suffered by employers in the Klang Valley would have been huge.

“This is especially so when most… had just reopened their businesses after the shutdowns due to Covid-19,” he said.

Concurring with Soh, Syed Hussain said the floods had affected supply chains, including supplies of consumer goods.

“As an example, consumers found it hard to get bread. It is hoped that businesses could recover quickly from the floods and resume their operations and put recovery efforts back on track,” he added.

He described the impact of the flood as devastating and requiring a lot of effort to restore damage.

“Machineries and equipment need to be repaired and all the business areas need to be cleaned up and restored and this can take quite some time.

“Water supply and electricity supply were cut off during the floods and the utilities companies may require time to reconnect supply,” he said.

On that note, he said employers would require full support and assistance from the authorities and financial institutions to restore their businesses during this challenging period.

“We are thankful that most of the financial institutions are quick to offer assistance in the form of loan moratoriums for companies that have outstanding loans,” he said.

He also suggested that local authorities consider the waiver of assessment tax for 2022 to assist businesses and property owners that were affected by the floods.

He warned that without financial support many small- and medium-sized enterprises may close shop, which could lead to job losses.

“MEF hopes that the government will come up with more financial aid to add on to the incentives that were implemented during the Covid-19 lockdowns and the Budget 2022 allocations,” he said. – December 26, 2021.