"Everyday we hear of retrenchments rising and the number of companies facing cash flow problems and bankruptcy increasing as if the global crisis has no end," Second Finance Minister Tan Sri Nor Mohamed Yakcop said.
Earlier, Human Resources Minister Datuk Dr S Subramaniam confirmed that 137 employers, mostly in the electronics sector, will retrench some 4,700 workers.
The manufacturing sector employs 1.1 million people or 10 per cent of the total Malaysian labour force of 11.1 million. There are 2.2 million foreign workers employed legally, including 700,000 in the electronics sector.
Among the options mulled by the ministry to ensure jobs for locals is a freeze on the hiring of foreign workers. "Over the next 12 months, we want to reduce the number of foreign workers to between to 1.6 million and 1.7 million from the current 2.2 million," he said.
Following this, Plantation Industries & Commodities Minister Datuk Peter was asked on the prospects of the palm oil sector.
23 Feb 2009 - Oil palm sector still hiring
MALAYSIA'S robust palm oil exports can help ensure job security for more than a million people, of which half are working in the estates.
“We’re exporting more palm oil and the sector continues to recruit. So far, I’ve not received any reports on retrenchment,” said Plantation Industries and Commodities Minister Datuk Peter Chin.
The minister said estates need more foreign workers as the oil palm industry embarks on new plantings and replantings. “I’ve written to the Human Resources Ministry and Home Ministry to put the oil palm industry in a unique category as we find it difficult to mechanise the planting and harvesting processes,” he said.
Chin was speaking to reporters in Kuala Lumpur yesterday after officiating at the Programme For Rebuilding and Improving Malaysia’s Exports, organised by the Malaysian Palm Oil Council (MPOC).
The minister said there are cases of foreigners employed as labourers in the oil palm estates absconding to the city to operate hawker stalls and eateries, some of them even manning the cash register. “The issue is more of abuses of foreign labour applications,” he said. If a foreigner is permitted to work in one sector, he cannot switch to another without prior approval from the Home Ministry.
As the nation braces for slower economic growth this year, Chin said, he is confident that palm oil exports will continue to be a saviour just like 10 years ago. At that time, exports of commodities like petroleum, palm oil and rubber helped the country ride out the 1997/98 Asian financial crisis.
Also present at the press conference was newly-appointed MPOC chairman Datuk Lee Yeow Chor, who said rising palm oil export volume since last year also called for job opportunities at commodity trading desks. Banks and insurance companies also benefit from strong palm oil exports.
The palm oil sector’s sprawling value chain extends to production of margarine and cooking oil, oleochemicals, transport and storage of palm oil at the ports, trading of palm oil futures at brokerages, design and build of refineries and biodiesel plants, animal feed, vitamin E extraction and even the development of nutrient-enriched moisturisers and toothpaste.
2 Feb 2009 — Palm oil to cushion slower economic growth
ROBUST palm oil exports are expected to help cushion slower economic growth ahead, just like 10 years ago. At that time, exports of commodities like petroleum, palm oil and rubber helped the country ride out the 1997/98 Asian financial crisis.
As the nation braces for slower economic growth this year, the Malaysian Palm Oil Council (MPOC) remains hopeful that palm oil will continue to be a saviour.
"You can't go wrong with food. As long as there are people to feed, the food sector will always remain the cornerstone of the economy," MPOC chief executive Tan Sri Yusof Basiron said.
Last year, the RM65 billion palm oil shipment made up 10 per cent of the country's overall exports. Compared to 20 years ago, it constituted less than 5 per cent of the country's foreign earnings.
"In the years ahead, palm oil will play a bigger role in Malaysia's economy. We will continue to invest in this golden crop," Yusof told Business Times in an interview in Petaling Jaya.
"One cannot go wrong with palm oil, be it a country or a company. The long-term returns are good, or should I say very good, as was seen in the first half of 2008."
Palm oil exports are dependant on palm oil prices. After it reached its peak of RM4,486 a tonne in March last year, it began to decline over the next seven months to a low of RM1,390 a tonne in October. In November and December, prices traded sideways within a range of RM1,500 to RM1,600 a tonne. At the begining of 2009, palm oil price began rising to RM1,900 a tonne. Of late, it has been trading at around RM1,800 a tonne.
While Yusof acknowledged volatile palm oil prices' negative impact on exports, he noted that palm oil companies had become adept at managing trading risks. "Our oil palm planters are increasingly investing in downstream products to add value to their exports. When palm oil prices come down, exports of downstream products go up," he said.
The MPOC is headquartered in Petaling Jaya. It also operates regional offices in China, Belgium, South Africa, Pakistan, the US, India, Eygpt and Bangladesh.
On the RM2-a-tonne crude palm oil cess payable by planters to fund MPOC activities, Yusof said the contribution was necessary for continued efforts to expand palm oil exports.
Asked if the MPOC planned to scale down overseas activities in view of slowing global economic growth, Yusof replied: "No, it is actually going to be a busy year ahead. We've lined up palm oil trade fairs and seminars in Bangladesh, Pakistan, India, the US, Russia and Turkey."
There will also be trade seminars in Japan and southern India. In addition, there are plans for a series of nutraceutical conferences in Malaysia, the US and Europe.
Yusof said the MPOC's overseas intelligence units help bring together vegetable oil sellers and buyers. "While many other businesses slow down, we're expected to work harder to find new markets or new ways to market the many uses of palm oil."