Some Penang-based multinational corporations with supply chains tied to Thailand have begun cutting back on production.
George Town: While the full effects of the massive floods in Thailand on Malaysian-based companies cannot be quantified yet, there appears to be mixed signals from industrialists in Penang.
While those who are not highly dependent on Thai firms for the supply of parts and components for their products - notably in the electronics and automotive sectors - seem unaffected, others with a deeply entrenched supply chain in Thailand are already feeling the heat.
Speaking to the Business Times on condition of anonymity, some Penang-based multinational corporations (MNCs) with supply chains tied to Thailand have begun cutting back on production. Others are scrambling to source alternative supplies of materials locally and elsewhere.
"The visibility of the supply chain for companies here is not known to many people and the long-term effects of the Thai floods to Penang is still not known," an industrialist said.
Malaysian American Electro-nics Industry chairman Datuk Wong Siew Hai said some members - like those in the hard disk drive industry - with high inventory levels of components and parts, may initially have a buffer and have time to work with other suppliers to meet continued demand, or grow their capacity locally.
"Given Thailand's position as a global supplier for hard disk drives, I would expect the lead-time to the end-product manufacturer to be extended," he said in an interview.
It is learnt that at least one Penang-based global electro-nics manufacturing services (EMS) provider has shut down one production line owing to a shortage of parts caused by the Thai floods.
Another EMS firm with ope-ration scattered in Penang and other Malaysian states said that it was not affected because its supply chain is concentrated in Malaysia and China.
"The situation in Thailand has minimal impact on our company as we have next to zero suppliers in Thailand," a company spokesman said.
Wong anticipates some hiring by Penang firms to occur as member companies with manufacturing presence in Thailand turn to Malaysia to grow their capacity.
"The multiplier effect on Penang is likely to spill down to small and medium industries such as machine suppliers," he noted.
Meanwhile, Penang Freight Forwarders Association president Krishnan Chelliah said: "Since the airport, seaport and access roads in Bangkok are now closed indefinitely, we are unable to assess the impact on our over 110 members yet.
"The transportation chain has definitely been crippled because of the floods and the issue will be discussed this coming week when council members of the Federation of Malaysian Freight Forwarders meet and we will have better visibility on the situation."
George Town: While the full effects of the massive floods in Thailand on Malaysian-based companies cannot be quantified yet, there appears to be mixed signals from industrialists in Penang.
While those who are not highly dependent on Thai firms for the supply of parts and components for their products - notably in the electronics and automotive sectors - seem unaffected, others with a deeply entrenched supply chain in Thailand are already feeling the heat.
Speaking to the Business Times on condition of anonymity, some Penang-based multinational corporations (MNCs) with supply chains tied to Thailand have begun cutting back on production. Others are scrambling to source alternative supplies of materials locally and elsewhere.
"The visibility of the supply chain for companies here is not known to many people and the long-term effects of the Thai floods to Penang is still not known," an industrialist said.
Malaysian American Electro-nics Industry chairman Datuk Wong Siew Hai said some members - like those in the hard disk drive industry - with high inventory levels of components and parts, may initially have a buffer and have time to work with other suppliers to meet continued demand, or grow their capacity locally.
"Given Thailand's position as a global supplier for hard disk drives, I would expect the lead-time to the end-product manufacturer to be extended," he said in an interview.
It is learnt that at least one Penang-based global electro-nics manufacturing services (EMS) provider has shut down one production line owing to a shortage of parts caused by the Thai floods.
Another EMS firm with ope-ration scattered in Penang and other Malaysian states said that it was not affected because its supply chain is concentrated in Malaysia and China.
"The situation in Thailand has minimal impact on our company as we have next to zero suppliers in Thailand," a company spokesman said.
Wong anticipates some hiring by Penang firms to occur as member companies with manufacturing presence in Thailand turn to Malaysia to grow their capacity.
"The multiplier effect on Penang is likely to spill down to small and medium industries such as machine suppliers," he noted.
Meanwhile, Penang Freight Forwarders Association president Krishnan Chelliah said: "Since the airport, seaport and access roads in Bangkok are now closed indefinitely, we are unable to assess the impact on our over 110 members yet.
"The transportation chain has definitely been crippled because of the floods and the issue will be discussed this coming week when council members of the Federation of Malaysian Freight Forwarders meet and we will have better visibility on the situation."
