PETALING JAYA, Selangor, Malaysia, Oct 23 (Bernama) -- The Malaysian Plastics Manufacturers Association (MPMA) echoes the concerns raised by the Federation of Malaysian Manufacturers (FMM) regarding the government’s sudden decision to implement the mandatory Employees Provident Fund (EPF) contributions for foreign workers. MPMA is deeply disappointed by the lack of industry engagement or consultation on this critical policy change, which has far-reaching implications for the plastics industry and the wider manufacturing sector.
The plastics industry employs approximately 170,000 individuals, of which 30% are foreign workers. This new policy will have a direct and significant impact on labour costs, as foreign workers make up a substantial portion of the workforce. Labour costs already constitute 15-20% of total production costs for plastics manufacturers. In addition, the increase in the minimum wage from RM1,500 to RM1,700 by February 2025 will undoubtedly place significant strain on businesses. These cost pressures threaten to squeeze manufacturers’ margins, jeopardizing the viability of many businesses in the plastics industry.
Furthermore, the repercussions of this policy extend beyond plastics manufacturers. The increased production costs will likely lead to higher prices for plastics products, which are critical components across numerous industries, including packaging, automotive, and construction. The sudden implementation of this mandate could also diminish our export potential, as higher production costs could make Malaysian plastics less competitive in international markets.
MPMA strongly urges the government to defer this mandate indefinitely and engage in constructive dialogue with industry stakeholders. We believe it is crucial to explore alternative solutions that balance the need for fair worker benefits with the sustainability of our industry. Collaborative efforts between the government and the plastics sector can pave the way for policies that support both the workforce and the economic health of our industry.
We are committed to working alongside the government to find a solution that ensures the welfare of our workforce while safeguarding the interests of the plastics industry and the economy as a whole.
CC CHEAH
President, Malaysian Plastics Manufacturers Association
About MPMA
The Malaysian Plastics Manufacturers Association (MPMA), established in 1967, is a progressive trade association providing leadership and quality service to its members and the plastics industry. MPMA is the official voice of the Malaysian plastics industry, representing its members and the industry in Government interaction, spearheading the plastics industry’s growth and providing the platform to assist members in being globally competitive. MPMA currently has about 750 members comprising Ordinary members, which represent about 60 per cent of plastics manufacturers in the country and account for 80 per cent of the country’s total production of plastic products, as well as Associate members who are mainly raw material and machinery suppliers.
Industry Background
There are currently about 1,400 plastics manufacturing companies in Malaysia, employing about 160,000 workers. About 90% of the companies are SMEs, based on the 2014 SME Definition. The plastics industry registered a total sales turnover of RM61.2 billion in 2023, of which 27% or RM17 billion production was exported.
SOURCE: Malaysian Plastics Manufacturers Association (MPMA)
FOR MORE INFORMATION, PLEASE CONTACT:
Name: SC Chan (Mr)
Manager, MPMA Secretariat
Tel: 017-2988 110
--BERNAMA
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