Malaysia's RM2.5b seafood export industry near collapse

The Sun Daily 17 Dec 08;

SEBERANG PERAI (Dec 17, 2008) : Malaysia's RM2.5 billion seafood export industry is on the verge of collapse with no concrete help thus far from the government following a ban on Malaysian seafood by the European Union (EU) in June.

The Malaysian Frozen Foods Processors Association (MFFPA) has raised an alarm that the industry has a lifeline of only three months left, as millions of ringgit in stocks languish in cold rooms, unable to be exported.

The situation is worsened because the product cannot be sold to other countries due to different packing and logistical requirements.

"The seafood exporters have reported an estimated loss in sales and production of more than RM1.5 billion to date," said MFFPA president Ch'ng Chin Hooi.

"The players can no longer withstand the losses and pressure from commercial banks," he told a press conference at the Federation of Malaysian Manufacturers (FMM) headquarters here today.

Ch'ng stressed that some 10,000 workers from the MFFPA's 25 member operators stand to lose their jobs, alongside another 30,000 indirect workers in related services.

"Many factories have started to retrench workers, if they are not already reducing working days since the ban came into force."

"To add insult to injury, the government has increased the electricity rate by 30%," he added.

Ch'ng said the cabinet had three months ago approved a RM500 million rescue package through soft loans to help industry players, with priority given to MFFPA members. However, the money has yet to be given out.

The Malaysian seafood industry is the country's second largest food export earner, with Europe its main market.

But the EU has found environmental and hygiene standards in the Malaysian industry to be wanting.

Ch'ng said the Malaysian government had been given the Guidelines for Export to the EU in 2005, but these were not properly implemented when EU inspectors came here in April and May 2008.

He noted that the inspection team's main concerns were fishing vessels, landing ports and agriculture farms.

"The processing factories were not the main concern as most of the processing plants were audited by the EU Health Authority on an ad hoc basis," he said.

Ch'ng said a Malaysian team comprising representatives from the Health Ministry, the Fisheries Department and the MFFPA had met EU Health Authority after the ban, but failed to gain a reprieve.

"The seafood export industry is still viable as there are still orders from foreign customers. What the industry needs is a financial helpline to hold the stocks and soften killing interest rates," he said.

"The point is that this industry can be saved if the government acts fast. We will be back on our feet if we can catch the 2009 summer holiday sales."