MATRDS and TRMAM have been communicating with its members, advising them to adhere to the MCO for early resumption of operations.
MATRDS and TRMAM Help Members to Weather Economic Downturn
The whole world has been severely impacted by the Covid-19 pandemic, including Malaysia. To stem the spread of the virus, the Malaysian government has continued its nationwide Movement Control Order (MCO) with boarder closures and shutdowns for non-essential businesses.
The MCO was first enforced on 18th March, but was extended before its expiration on 14th April to 28th April.
During the current third phase of the MCO, the government has allowed selected industries to resume in stages alongside strict hygiene guideline and movement restrictions. This includes selected construction projects, the machinery and equipment industry, as well as selected activities of auto players. Then, based on a frequently-asked-question (FAQ) sheet released by the Ministry of International Trade and Industry (MITI) on 13th April, vehicle workshops and car parts centres in the country were given the green light to operate during the MCO. However, companies not allowed to operate would incur more losses due to the prolonged MCO.
According to an official announcement made by the Selangor and Federal Territory Tyre Dealers and Retreaders Association (STDRA) to their members on 26th March, auto workshops under the jurisdiction of municipal councils in Selangor are allowed to operate between 9am to 4pm with staff of not more than 10 or less during the MCO. However, their counterparts in Kuala Lumpur are to remain closed during the period.
In the midst of the virus threat, spare parts shortage, low demand and government measures, the tyre servicing and retreading industry has to think of way to survive and take decisive actions. This is where Malaysian Tyre Retreaders & Dealers Association (MATRDS) and Tyre Retreading Manufacturers’ Association of Malaysia (TRMAM) come to play, who have brought together a committed group of professionals that have deep industry roots and expertise, as well as resources. They would be the collective voice on important industry issues, a source of possible influence on legislation, and a force for the improvement of conditions within the industry.
MATRDS: Adhere to MCO for Early Resumption of Operations
MATRDS President Goh Soo Chay has been active in the tyre industry since 1972. Since beginning to work for someone else, and from starting his own business to today, 48 years have passed.
“I have gone through so many ups and downs, including economic downturns, recessions, financial crises, but I have never experienced anything like this before. The outbreak of Covid-19 has turned into a global pandemic that has greatly impacted the global economy, and the impact is bigger than any other impact. To curb the spread of the virus, the Malaysian government has implemented the MCO. Various industries have had to stop their operations during the MCO with only selected industries being allowed to work. The tyre retailing industry has also been affected by the MCO. In certain regions tyre servicing centres can operate with shorter business hours and a limited number of staff, while others are not allowed to open. This has led our members receiving either zero income or only obtaining 20 per cent of the total daily income they received before the MCO. Lack of working capital is the biggest problem faced by many of our members, which has jeopardised the ability to finance day-to-day operations. Some have even been forced to wind down their business.”
MATRDS, he said, has tried its very best to seek assistance from government through various channels. “Apart from the main appeal to government to allow tyre serving centres to operate with shorter business hours nationwide, we have also pleaded for subsidies and more tax relief. Furthermore, MATRDS has joined forces with other associations, raising their concerns through the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCIM) on staying afloat during the MCO. The good news is that government has agreed to channel RM1,200 to employers for every employee whose monthly income is RM4,000 or below for 3 months under the Wage Subsidy Programme for small and medium enterprises (SMEs).”
Alongside this, he encouraged members to talk to their tyre suppliers about extending payment days to weather the hard times. Also available is the micro scheme for micro businesses extended to Tekun Nasional with a maximum loan limit of RM10,000 per company at no interest and also the Special Relief Facility (SRF) to provide assistance to SMEs who are affected by Covid-19. The maximum financing rate is now lowered from 3.75 per cent per year to 3.50 per cent, where members could apply to ease their financial burdens.
“We have applied to government to resume operations during the MCO, but the terms and conditions given by government are too demanding, and we found them difficult to comply with.”
After the MCO is lifted, Goh said, members will have to adjust their mindset. Business closure and staying at home during the MCO has been a torture, leading a small number of tyre dealers to becoming depressed and even breakdown. MATRDS, he stressed, would strive to support the members, enhance their confidence to face new challenges.
“We would help them to resume their operation and change their management method to cope with the future market changes. We believe that after the MCO period has ended, the market will recover in small scale. It will take at least 6 to 9 months to fully recover. Insufficient capital would reduce the purchasing power, businesses would be even harder, as well as payment corrections. The challenges for MATRDS would be how to help our members solve their financial problems, staff issues, management method and many more, to enable our members to get back to their normal operations.”
Currently, MATRDS has about 2,500 members. Goh revealed that there is a plan to add two more divisions to enhance the operation of MATRDS, namely the government affairs division and business affairs division.
“The setup of the government affairs division in the Association would enable us to directly communicate with related government ministries such as the Transport Ministry and the Domestic Trade and Consumer Affairs Ministry so that we could have a better understanding on the government regulations or policies that relate to the tyre industry, and possibly influence legislation that affects the industry. Of course, this department would help us to express our concerns and the problems faced by members to the government. Whereas, the business affairs division would be responsible for participating in activities organised by various related Business Associations and Chambers of Commerce, interacting with them to have a better understanding of the problems and concerns of other related industries. Last but not least is to continue to provide training for the members’ employees, upgrading their skills and knowledge, enhancing their service standards,” he concluded.
TRMAM: Prospect Remains Despite Pain in the Neck
TRMAM President Kew Kuik Tin said, since the outbreak of Covid-19 at the end of 2019, the pandemic has now come to its peak. “Businesses in various industries began to feel the strain as the MCO entered into its third phase. It has affected the tyre retreading industry significantly, as well as the transport and logistics industry that is closely related to us.”
During this difficult time, he pointed out, TRMAM’s has been communicating with its members, advising them to adhere to the MCO. He stressed the importance of cooperation with the government to fight against the spread of coronavirus, with the hope of controlling the epidemic in one to two months’ time, in order to restore market stability.
“We urge the members to look after each other and avoid destructive competition. There will be clear skies after every downpour, and we believe there are still prospects in the tyre retreading industry.”
Did TRMAM carry out a dialogue with the government to express members’ concerns and needs regarding the MCO? Kew said, TRMAM is a ‘micro’ organisation, but they have already raised their concerns and are making their appeal through The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCIM), Malaysian Rubber Products Manufacturers Association (MRPMA) and MATRDS.
“During the duration of the MCO, the government has introduced the Wage Subsidy Programme to employees being fired and losing their income. To do so, the government will provide a subsidy between RM800-RM1200, depending on the number of employees in the company, for the next three months. This is an increase of the subsidy announced previously, which is RM600 per employee. In addition, the allocation of the Special Relief Facility (SRF) for small and medium enterprises (SMEs) will be increased to RM5 billion from RM2 billion. The maximum financing rate is now lowered to 3.5 per cent. The enhanced SRF is available until the end of the year. All these would benefit our members.”
In fact, he said, every retreader has experienced a drop in production volumes, and the outbreak of Covid-19 has worsened the situation. The challenges that they faced include severe competition from cheap new tyres, high application fees for foreign labour, difficulties in getting local labour, and the wage subsidy from the government during the MCO is not sufficient. It’s a pain in the neck.
The third phase of the MCO is scheduled till 28th April. He pointed out that the progress is slow, and might be prolonged until the middle of May. Adjustment would be needed after the MCO ends, he said, as the market will probably remain unstable in the short term.
“The market will need a long time to recover after the Covid-19 crisis. Many industries including tyre retreading will face collection problems, the operation for retreaders who do not have financial reserves to turn over would be affected. Retreaders have to adjust their footsteps, as the government would tighten their requirements in various industries. We have to enhance our quality, advance with the times, creating a brilliant future.”
TRMAM currently has 32 qualified retreading companies as members. Moving forward, he said, the Association would continue to work with related organisations such as SIRIM Berhad and the Malaysian Rubber Board to increase the quality of retreading products.
“We would also continue to join hands with Road Transport Department Malaysia (JPJ) and its subsidiary departments to organise road safety awareness campaigns, to eliminate the public’s misunderstanding about retreaded tyres that they are inferior in quality. Retreaded tyres are safe with a high economic value, and they are widely use in Europe and the United States, as well as other advanced countries. Currently, the majority of Malaysian retreading plants use state-of-art retreading tyre technology and adhere to Malaysian product quality standards and certification. Thus, the quality and performance of retreaded tyres that are produced by the certified retreaders are equivalent to new tyres,” he added.
与此同时，他也鼓励会员个别与供应商要求延长賬期，共同渡过难关。此外，还有国家创业集团商业基金（Tekun Nasional） 下的微型公司贷款也同样豁免利息，贷款顶限为每家公司1万令吉。为了协助受新冠肺炎疫情影响的中小型企业，政府还推出了特别援助金（SRF），利息从每年的3.75% 调低至3.50% ，减轻业者的财务负担。
“在行管期间，政府推出了工资补贴计划，为每名员工提供800 至1，200令吉的薪金津贴，为期3个月，按公司的员工人数而定。这比先前所公布的每名员工补贴600令吉提高了一些。此外，还有中小型企业的特别援助金（SRF）拨款也从原本的20亿令吉提高至50亿令吉，最高融资年利率减低至3.5% ，申请期到今年年底。这些都对我们的会员有所助益。”