INTERNAL INCONSISTENCIES WITHIN THE INDUSTRY MAY HINDER FUTURE GROWTH,SAYS DATUK(DR)SOW
Malaysia's furniture industry is faced with certain internal inconsistencies that can prevent it from progressing,according to Group Managing Director of DPS Resources and veteran of the Malaysian furniture industry,Datuk(Dr)Sow Chin Chuan.He added that the industry is also facing a shortage of workers.The main reasons for such problems surfacing are the lack of strong support from banks and insurance companies,and unfavourable policies in the industry.
Datuk(Dr)Sow expressed concern that certain policies were hindering worker retention.Workers in the industry have been fleeing;even after levies have been paidand approval for their employment has been granted.Out of every 300 workers,approximately 200 will run away,according to Datuk(Dr)Sow.
AUTO-RENEWAL POLICY
He proposes that an auto-renewal policy for employment will prevent such a large turnover rate for workers in the industry.In addition,workers ought to be retrained and have their skills developed.Skilled workers are currently lacking in the industry and investing in such workers will also help retain them.
The renewal process for employees is very long at present,and as a result workers are leavingevery month.Datuk(Dr)Sow emphasises the need for dialogue sessions between the industry players and policy-makers to improve on the state of the industry.
INSUFFICIENT INSURANCE COVERAGE
Another problem faced by the industry is the insufficient insurance coverage for furniture manufacturers.Datuk(Dr)Sow cited the unwilling of insurers to provide adequate coverage for factories due to the high risks involved.He added that it might be time for Bank Negara to intervene in order to sustain the industry's continued growth.
"Currently,furniture exports account for 3.3 percent of total exports in Malaysia.It is only fair that we ask for insurance to cover around three to four percent of the industry's output,"said Datuk(Dr)Sow.
CURRENCY CONTROL
Datuk(Dr)Sow also highlighted the troubles arising from the appreciating currency.The strengthening Ringgit has cost the industry several long-term contracts;and because of this,it has become difficult for the industry to receive support from banks and insurance companies.
"Right now the industry is facing very tough times,with the Malaysian Ringgit fluctuating between three and 3.8 to the dollar in recent times,and this has not been monitored over the past three years,"saidDatuk(Dr)Sow."We need help from the authorities because currency control is beyond the manufacturers."
BRIDGING THE GAP
He adds that in order for the industry to progress,the governing associations must have leaders who understand the industry and appreciate the issues faced by manufacturers.Datuk(Dr)Sow concluded by saying that communication lines between policy makers and industry players must be strengthened,as information is not disseminated efficiently enough right now.
YBhgDatuk(Dr)Sow Chin Chuan is the Group Executive Chairman and Group Managing Director of DPS Resources.He was appointed to the Board on June 1,2004.He completed his Diploma in Civil Engineering from the Federal Institute of Technology(FIT)College,Kuala Lumpur in 1980,and obtained a Master of Business Administration degree from the US in 1999.Datuk(Dr)Sow was awarded a Doctor of Philosophy(HonorisCausa)in Business Emphasis Entrepreneurship by the same university in 2002.
