This has posed a number of difficulties for the business circle.
Mohammed Izhaar Mohammed Sebirm, an apparel factory owner in Petaling Jaya, a satellite town in Kuala Lumpur, said he needs 125 foreign workers, but so far has only recruited 20.
With this small number of workers, his factory could not operate at full capacity and many machines were left idle, he said.
Many other factories are facing similar issues which threaten their business development.
Secretary-General of the Associated Chinese Chamber of Commerce and Industry of Malaysia (ACCCIM) Low Kian Chuan said the freeze in the recruitment of foreign workers caused stagnant production in fields such as home decoration manufacturing.
Many factories have been unable to receive new orders and are struggling to complete current orders, he said.
Roland Mueller, President of the Free Industrial Zone Penang Companies’ Association (Frepenca), which groups 70 domestic companies and multinationals from the US and Europe operating in semiconductor and electronics, said some members may cut investments in Malaysia to shift to other regional countries.
A survey conducted by the Federation of Malaysian Manufacturers (FMM) showed that up to 84% of manufacturers are facing manpower shortages and potential losses of revenue.
The survey also indicated that 49% of member businesses said they are unable to implement current orders, while 25% denied new ones, 21% had to close production lines, 24% were hit with penalties due to missing delivery deadlines and 60% operated under capacity.
The federation proposed the Government review the policy.
Minister in the Prime Minister’s Department Wee Ka Siong said he is collecting information from various businesses, and will report the manpower shortage to Deputy Prime Minister Ahmad Zahid who is also Minister of Home Affairs.