MCO 2.0: What will happen to businesses in Malaysia?

Many businesses are at stake right now when the PM announced the MCO yesterday at 5:00 pm, 11 January 2021.

Our economy might come to a steep decline due to the Movement Control Order (MCO) has been restarted again in 2021 regarding the rise in infected cases of Covid-19.

A lot of factors came into account when the 2nd round of MCO 2.0 that burdens the brewers, consumers, real estate investments, airlines and banks.

Since there are few sectors in the business world that can operate for the region that they mentioned which are Penang, Selangor, Federal Territories (Kuala Lumpur, Putrajaya, Labuan), Melaka, Johor and Sabah.

What is affected by MCO 2.0?

We know that it will come to this but when?

Little that we know, it’s sooner than expected. Since the number of cases has been increasing from 100 cases to 1000+ cases in a day, it has been going out of control.

Just like MCO started back in March 2020, when Covid-19 cases started to reach 200 cases and above, businesses got quite the hit.

Not all businesses are going well, some businesses had to close down due to the halt of operations of any kinds.

During this MCO 2.0, there are only a few sectors that can still run the business.

Below are the sectors that can still run their business. (Essential sectors)

These are the categories under the industries that are essential to the economic sectors according to the International Trade and Industry Ministry (MITI).

MITI: List of Essential Services 2021

1. Factories and Manufacturing Sector

List of factories and manufacturing sector

1. Aerospace including MRO
2. Food, beverages and their supply chains
3. Manufacturing and After Sales Automotive Services
4. Household products, personal care items (Soap, Hand sanitisers, personal cleansers, etc.) and detergents including its supply chains.
5. Health and medical care including dietary supplements.
6. Packaging and printing
7. Personal protective equipment (PPE) and fire safety equipment
8. Components for medical devices
9. Oil and Gas
10. Electrical and electronic
11. Petrochemicals and petrochemical products
12. Chemical products
13. Machines and equipment
14. Iron and steel
15. Ceramics (ceramics as a mould for making gloves)
16. Textiles (involving the production of PPE)
17. Furniture sector
18. Production, distillation, storage, supply and distribution of fuel and lubricants.

Though they are allowed to operate during MCO 2.0, manufacturing companies still need to register with MITI’s Covid-19 Intelligent Management System (CIMS) in order to operate during the MCO period.

2. Construction Sector

A really straightforward that regarding all the construction works that require labours.

Critical Maintenance and Repair Work:

1. The major public infrastructure construction works
2. Construction work on buildings that provides accommodation for workers complete at the construction site or workers housed in the Centralized Labour Quarters (CLQ).

Note that not all construction that is allowed, anything that is critical regarding repair work and construction that requires major work. Below is the list as follows that are allowed:

• road repairs
• side road and major road repairs
• buildings and offices repairs
• housing repairs
• traffic control repairs
• Life & elevators repairs that require mechanical and electrical expertise
• Repairs and upgrade critical building services
• Traffic light repairs
• Construction of Bailey Bridge for collapsed bridge
• Tunnel constructions
• Emergency Constructions
• Cleaning, Plumbing to avoid flood, and Deinfestation for buildings

3. Business and services sector

1. Financial Services and its chains:
   – Financial Institutions (Banking, Insurance, Takaful and other entities that licensed, approved or registered by Bank Negara Malaysia)
   – Capital market entities licensed, registered or regulated by Securities Commission Malaysia.
2. Municipal and local government services:
   – Mortgage/community credit (licensed moneylender company)
   – Solid waste/sewerage management
   – Public cleaning; and
   – Premises cleaning and sanitation.
3. Telecommunication and digital infrastructure including ICT services and global business services (GBS).
4. E-Commerce and its chains include e-marketplace services, payments digital and local e-commerce internet centres.
5. Hotels and accommodations
6. Agriculture, fisheries and livestock sector including veterinary services:
   – Farm management/ swiftlet nest / horse / animal processing plant / slaughterhouse / livestock / animal feed factory / supplier such as vaccines / livestock management / pet stores (transfer operations livestock is at night)
   – Disease control and regulated livestock production, livestock input and products related to the livestock industry (including exports and imports)
   – Health management, disease diagnosis and animal treatment
7. Utilities (water and energy)
8. Professional services (including accountants/lawyers/auditors/engineers / architects), scientific (including R&D) and technical (including maintenance)
9. Security Services
10. Security and Defense
11. Transport by land, water and air
12. Services and enterprises of ports, ports and airports, including cargo loading and unloading, shipping, storage or commodity production.

4. Supply and distribution sector

1. Warehousing and Logistics
2. Food/Beverage Service/ Sale/ Delivery
3. Retail/ Distribution/ Wholesale

5. Agriculture and commodities sector

1. Agriculture, fisheries and livestock and its chains
2. Plantations and commodities and their chains

6. Others

Any services, work, industry and business as such determined by the Health Minister after consultation with the authorities who regulate said services, jobs industries and businesses.

Employers need to provide approval letters for employee movements

Employes of the company that are allowed to work according to their own specific times are required to bring along a copy of the notification provided by the employer together with the employee pass/ employer confirmation letter.

This way, it will facilitate the movement of commercial vehicles and the movement of workers between the residence and workplace.

PDRM has been informed regarding this process to reduce the movement during the roadblock operations in this MCO 2.0.

Only 30% of management allowed at the workplace

Only 30% of employees in the management group are allowed to be in the office.

The number of support staff and employees that are involved in the production line will be determined by their respective employers.

Work from home as the default.

For employees in the other sectors that are not listed in the essential service list, the work from home (WFH) will immediately be applied as the default.

It’s mandatory for employers to implement WFH practices for management team staff which includes tasks involving accounting, administration, finance, legislation, planning, ICT and anything related.

To all industry players, all information related to the MCO on manufacturing sectors can be accessed via https://t.co/pMVtMugppT#StaySafe #AdheretoSOPs #EconomicRecovery pic.twitter.com/IhmVNJNqkk

— MITI Malaysia (@MITIMalaysia) January 12, 2021

What does all this tell us?

There are most major businesses that can still run and most of them are essential to both economic and necessity sectors.

As we know, even though we can still run the business normally, the 30% management/ manpower will have a great impact on a company’s sales and revenue.

And that’s not all, the purchasing power of those in the other sectors or consumers in general, are significantly lower.

I wouldn’t say that they won’t bite:)

They just wouldn’t spend their money elsewhere even if their buying power.

What can we do during MCO 2.0?

As businesses started to go downhill as well as Malaysia’s economy, even though we felt hopeless.

But trust me, there’s always a way during this crunch time.

First, take a step back and review what we’ve done during our first MCO in 2020.

Learn from our mistakes and try to get solutions for it faster than our previous experience.

Secondly, make everything in your business online. Migrating to online might take some time.

Since most businesses will operate at home and work from home (WFH) has been enforced, we have no other choice to choose the online world.

Utilise the time we have set up whatever social media, websites and other networks that can be used to make your business in this modern era.

Lastly, if you are doing sales or need to meet someone to gain connections as the fuel to the business, use online meeting tools such as Zoom Meeting and Google Meet.

Although these may be a big change, we wouldn’t know these practices will go on until another wave hits.

Stay safe. Good luck.