Industry leaders are still concerned about what the US Federal Reserve’s policies would be in terms of rate hikes to rein in inflation, which would affect economic sentiment, along with how quickly China could bounce back from its “zero-Covid” policy.
Having said that, he viewed the ending of China’s “zero-Covid” initiative – which has been dampening demand for the past 18 months – as the proverbial light at the end of the tunnel. “Higher interest rates can also cause a further dislocation in property yields and values. Over and above that, the labour and talent shortage in not only Malaysia, but also in the region, is something all businesses will have to look to address,” Khoo said.
He said the strengthening of the Japanese yen could also pose a challenge to the company, although this is mitigated by Bermaz making a bulk of its purchases in the ringgit for its completely-knocked-down products under its main volume driver, Mazda. Lim projected little restocking from customers until at least the second quarter of the year, as average selling prices of gloves continue to face downward pressure, and it would be looking to reorganise all resources to match lower capacity utilisation.