90% of Malaysian manufacturers expect supply chain disruptions within two weeks

KUALA LUMPUR, Malaysia (MNTV) – Nine in ten Malaysian manufacturers expect supply chain disruptions within the next two weeks as a result of the U.S.-Israeli war on Iran, according to a Federation of Malaysian Manufacturers survey of more than 200 respondents.

FMM president Jacob Lee Chor Kok said the war has affected the sector in three key areas: logistical disruptions, higher energy and fuel costs, and material shortages. Companies are being forced to reroute shipments at significantly higher freight costs, while also paying premium insurance and higher port storage charges.

Rising energy costs are affecting every consumer, and material shortages are hitting petrochemical derivative products such as polyvinyl chloride, polypropylene, polyethylene and other plastic resins particularly hard.

“As most Malaysian industries are involved in conventional manufacturing, they are highly sensitive to cost increases due to their thin margins,” Lee said, appealing to the government to consider extending the diesel subsidy to the manufacturing sector.

“We hope that the government could come up with measures or interventions to help cushion cost increases so that companies will not need to pass on too much of the increase to consumers, which could in turn drive inflation.”

Malaysia’s manufacturing sector accounts for 23% of GDP and employs 2.3 million people, with 86% of the country’s exports comprising manufactured goods.

The sector’s purchasing managers index rose to 50.2 in January before falling to 49.3 in February, indicating a return to contraction territory.