Firms need resilient supply chains, seizing China's restructuring opportunities

DPM Heng noted that the pandemic has made companies more aware of potential disruptions and driven them to make contingency plans, a process that is occurring amid tensions between China and the United States.

“Instead of relying purely on one location, which is big enough that you can manufacture the entire supply chain, people are now concerned about over-dependence, and about action that will be taken on the trade front that is not strictly trade-related,” said DPM Heng, who was speaking at the UOB Global Markets Economic Forum.

He cited a local company that started by building its manufacturing operations in Malaysia due to lower land and labour costs there.

During the pandemic, the firm was unable to meet a surge in online orders as its goods could not be delivered here due to Malaysia’s movement control order.

It then set up a small factory in Singapore that was almost fully automated. It also carried out research, development and design.

This helped it to ensure it could continue to serve customers here in case of future disruptions, which then gave it confidence to grow its investments in Malaysia.

Prisca Ang

The Straits Times

Asia News Network