KUALA LUMPUR, April 7 (Xinhua) -- Malaysian manufacturers are grappling with severe supply chain and cost disruptions stemming from the ongoing Middle East conflict and prolonged blockage of the Strait of Hormuz and Red Sea shipping lanes, according to a survey released on Tuesday by the Federation of Malaysian Manufacturers.
The survey found that nine in ten companies are either already affected or expect to be within four weeks, with raw material shortages, skyrocketing logistics costs, and tightening diesel supplies threatening production continuity. Sectors producing food, household goods, packaging, chemicals, and consumer products are particularly exposed, raising the risk of product shortages and export disruptions.
Production lines are at risk of stoppage, export orders are being cancelled, and the financial capacity of manufacturers to sustain operations is under direct and accelerating pressure, it said.
It noted that Malaysia's manufacturing relies heavily on global supply chains, with 82.9 percent of companies sourcing over 30 percent of raw materials from overseas. Disruptions across energy, freight, fuel, and materials are affecting domestic supply chains, with knock-on effects on retail availability and consumer prices.
Even if the conflict ended immediately, delays in restocking, insurance costs, and contract renegotiations would continue to strain operations for months, said the survey.
The survey highlighted that 69.5 percent of manufacturers expect raw material shortages within a month, while 8.2 percent have less than two weeks of critical stock. Plastics, specialty chemicals, metals, food additives, and rubber processing inputs are among the most affected, creating the potential for halted production in essential consumer goods and industrial products.
Energy and logistics costs have also surged, compounding operational stress. Nearly half of respondents reported industrial energy costs rising by 10 percent to 30 percent, while 21.8 percent said increases reached 30 percent to 50 percent, and 11.8 percent experienced hikes above 50 percent.
Freight and logistics costs have also escalated sharply, with 52.7 percent of firms reporting 20 percent to 50 percent increases and 17.7 percent seeing costs jump more than 50 percent, often outside contract terms. Diesel shortages for domestic haulage further delay cargo movement and elevate transport costs.
The impact on output is already visible: 48.2 percent of companies have reduced production or suspended lines, while 51.8 percent are facing export disruptions including delayed shipments, order cancellations, and buyer-initiated renegotiations.
Working capital pressures affect 74.5 percent of companies, with nearly one in five reporting constraints that threaten operational sustainability.
The cumulative effect is reflected in the finding that 74.5 percent of companies have reported production cost increases of at least 10 percent against their pre-crisis base.
To mitigate the crisis, the association urged the government to act swiftly on multiple fronts. ■
