In the coming months more Sarawakians would have to brace for the worst as the global economic slowdown would lead to hundreds if not thousands workers to be laid off as companies struggle to stay in business.
This despite, Chief Minister Tan Sri Taib Mahmud recent assurance that the state economy would not be badly affected and even insisted that project such as the aluminium smelter in Simalajau under the Score initiatives to proceed as scheduled.
But things could have changed following the sudden closure of Western Digital plant in Kuching as widely reported by local media on Saturday.
Western Digital was one of Samajaya Free Industrial Zone bigggest investors. The company yesterday reported to have laid off 1500 workers. At least 500 of them were professionals such as engineers and highly-skilled technicians while the rest were those who have been drawing salaries of more than RM1000 monthly.
State assistant minister for Industrial Development Datuk Daud Abdul Rahman were reported to have been fuming mad at the company for its decision to shut the plant in Kuching while maintaining plants in other locations such as Penang and Petaling Jaya.
“It is sad that the state government was not informed of the abrupt decision in advance (until my ministry decided to call Western Digital officials for a meeting today) because we are sympathetic to the plight of the workers, who were only being given a last minute notice through a video conferencing with the chief executive officer last week,” Daud said, quoted Bernama Saturday.
While the state government struggling to assist the thousands being laid off by Western Digital to find another jobs amid rapidly shrinking opportunities another news of potentially massive lay-off reported on Sunday.
Borneo Post said several timber companies in the state already stopping or suspending their business operations. Those still in operations were said to be cutting down on production rate as high as 50 percent to stay afloat.
“Out of every five logging camps or sawmills, four will have to suspend operation,” reported Borneo Post on Sunday. Already timber biggest producing towns like Bintulu and Sibu seeing several sawmill operators forced to cease operation, while others rushing to clear their stocks.
Since November timber companies have told workers to go on unpaid leave sometimes for months long or forced many to take a pay cut in order to stay in employment.
“What can we do? As much as we hate it (cutting salaries) we simply have no choice but to take drastic step to keep the business going,” Borneo Post quoted a sawmill operator as saying on Sunday.
The timber industry, one of Sarawak biggest employers is bracing itself amid slowing demand from overseas market notably the Japanese market.
Japan which imports about 70 percent of Sarawak’s timber and timber based products annually reported to have slashed or canceled orders in the coming months as demand were slowing down in their home market.
“Next year will be worse economically as Japan is facing economic slowdown as the rest of the world,” Borneo Post quoting a Japanese timber importer as saying.
Apart from Japan, Sarawak’s timber traditional market such as South Korea, Thailand, Taiwan, China, Vietnam and South Africa were also said to have reduced or canceled their orders.
The industry players also fuming at the recently introduced flat levy (royalties) rate of RM65 per cubic meter for any timber species effective Jan 1, which they said to be of no help to the already ailing industry.
In defending the state decision of switching to the flat levy rate Awang Tengah said at last month state assembly sitting, the new flat rate would lead to an increase in the state’s revenue. However the industry sees it as adding more burden them.
Smaller companies with lower volumes would be struggling if not wind up altogether under the new rate they said. Some of them have petitioned for the state government to give special discounts in order to stay afloat.