Page 22 - FDMAsia May/Jun 2026

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Riekkinen 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,
said FMM.
It noted that Malaysia's manufacturing relies heavily on
global supply chains, with 83 percent of companies sourcing
broader push towards strengthening downstream activities in over 30 percent of raw materials from overseas.
the timber industry. Disruptions across energy, freight, fuel and materials are
Awang Tengah said the Park could expand Sarawak’s affecting domestic supply chains, with knock-on effects on
furniture industry which remains largely small-scale and retail availability and consumer prices even if the conflict

family-based despite abundant resources from both natural ended immediately, delays in restocking, insurance costs and
and planted forests. contract renegotiations would continue to strain operations
for months, according to the survey.
Manufacturers face supply and energy crisis The survey highlighted that 69.5 percent of manufacturers
The Malaysian manufacturing sector is facing a crisis due expect raw material shortages within a month, while eight
to the Middle East conflict with nearly 90% of companies percent have less than two weeks of critical stock. Plastics,
reporting a direct impact or expected disruption within four specialty chemicals, metals, food additives and rubber

weeks as of early April 2026. processing inputs are among the most affected, creating the
The crisis, characterised by shipping disruptions in the Strait potential for halted production in essential consumer goods
of Hormuz, rising energy costs and raw material shortages and industrial products.
has caused over 74 percent of manufacturing firms to report Energy and logistics costs have also surged, compounding
production cost increases of at least 10 percent, threatening operational stress. Nearly half of respondents reported industrial
the viability of small and medium enterprises operating on energy costs rising by 10 to 30 percent, while 22 percent
thin margins. said increases reached 30 to 50 percent and 12 percent
The regional press has picked up on a press release experienced hikes above 50 percent.
from the Federation of Malaysian Manufacturers (FMM) which Freight and logistics costs have also escalated sharply,

details the results of a recent survey which shows Malaysian with 53 percent of firms reporting 20 to 50 percent increases
manufacturers are grappling with severe supply chain and cost and 18 percent seeing costs jump more than 50 percent, often
disruptions stemming from the ongoing Middle East conflict outside contract terms. Diesel shortages for domestic haulage
and prolonged blockage of the Strait of Hormuz and Red further delay cargo movement and elevate transport costs.
Sea shipping lanes. The impact on output is already visible, 48 percent of
The survey found that nine in ten companies are either companies have reduced production or suspended lines, while
already affected or expect to be within four weeks, with raw 52 percent are facing export disruptions including delayed