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BUSINESS • 27/03/2026 01:29 PM

FMM Seeks Govt Support Amidst West Asia Conflict

KUALA LUMPUR, March 27 (Bernama)-- The Federation of Malaysian Manufacturing (FMM) is seeking the government's intervention to mitigate the impact of the West Asia conflict on Malaysia's manufacturing sector.

In a statement today, its president, Jacob Lee Chor Kok said rising costs, supply delays and operational uncertainty are already affecting manufacturing output and export fulfilment.

To ease the impact, Lee said the federation has urged the government to exempt reimported export cargo from sales tax and import duty, subject to the goods not being sold or disposed of domestically upon return.

He highlighted that manufacturers are absorbing extraordinary and unplanned logistics costs due to the conflict, including war risk surcharges, excess freight charges on rerouted shipments, elevated marine cargo insurance premiums, as well as demurrage and port storage charges.

"FMM urges the government to provide a double tax deduction on these crisis-related logistics expenditures for the current and following year of assessment," he said. 

Lee said the federation also requests the government to extend diesel subsidy coverage to fuel-intensive industrial sectors with no viable alternative energy source. 

"Marine logistics operators serving Sabah and Sarawak should be treated as a priority, given the absence of fuel alternatives," he said.

To ensure a stable supply of critical raw materials, he said the government can direct national energy producers and major domestic refiners to prioritise domestic allocation of key feedstocks, as well as facilitate temporary duty and tax exemptions for imports from alternative sources.

Lee said the crisis impacts energy costs, logistics, raw material supply, tax treatment and port operations simultaneously, which demands a coordinated whole-of-government response, adding that FMM stands ready to work with the government as an active partner in its response.

“Thailand, India and South Korea have each established coordinated government-industry mechanisms to address the same disruption.

“Malaysia's manufacturing sector, which accounts for 23.4 per cent of gross domestic product, cannot afford to be left behind,” he added.

--BERNAMA

 

 

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