This article first appeared in The Edge Financial Daily on November 7, 2017 - November 13, 2017

KUALA LUMPUR: While most Penang-based listed companies are little affected by the state’s worst-ever floods, a significant number of small and medium enterprises (SMEs) appear to have been badly hit, with an industry group estimating losses at about RM200 million.

Federation of Malaysian Manufacturers (FMM) Penang branch chairman Datuk Dr Ooi Eng Hock said there are about 10,000 SMEs in Penang, of which an estimated 1,000 are affected by the flooding. Ooi estimated the damages suffered by these firms — mostly based in Seberang Perai — to be around RM200 million.

As for FMM member firms, he said more than a quarter of the roughly 400 members in the state are thought to have been impacted.

“Easily, more than RM50 million damages excluding machinery,” he told The Edge Financial Daily when asked to estimate their losses.

FMM chief executive officer Dr Yeoh Oon Tean said many factories, especially in Perai and surrounding areas, were badly affected and that the water level had not fully receded yesterday after the unprecedented floods over the weekend.

He said the floods had a negative impact on existing foreign direct investments as well as on investors planning to invest in Penang in future.

“The government at both federal and state levels should quickly come out with disaster management and impact standard-operating-procedures to be prepared for any future disaster,” Yeoh said, stressing the need for the government to immediately invest in flood-prevention measures as a long-term solution.

Most of the listed companies contacted by The Edge Financial Daily said the floods had a minimal impact on them. Many attributed this to their location in Bayan Lepas, which was not affected by the floods.

“Since the flooding was on Sunday, a non-working day, not much has been affected today (yesterday) as the water has receded,” said Pentamaster Corp Bhd executive chairman Chuah Choon Bin when contacted over the phone.

“Our workforce [count] is good, except for a few employees who took a day’s leave to clear their houses,” he added.

Logistics company Tasco Bhd also saw minimal short-term impact and no long-term impact as its warehouses are sited on higher ground. None of the group’s premises or cargo were affected, said its deputy managing director Tan Kim Yong.

“We were also lucky that the flooding happened on a weekend as we normally complete all our shipping and transportation arrangements by Friday,” said Tan in an email response, adding that the only impact so far was the absence of a small number of employees at the workplace yesterday.

He said operations should be back to normal within a week, provided there are “no further surprises”.

Also reporting minimal impact were ViTrox Corp Bhd and RGB International Bhd.

MMC Corp Bhd’s Penang Port Sdn Bhd said business was “as usual” for the company with the productivity of its container terminal operations remaining at a constant rate. There were no damages to the cargo and container working areas, the group said in a statement yesterday.

Brian Tan Guan Hooi, the Malaysian International Chamber of Commerce and Industry’s branch chairman for Penang and The North, said that while it is business as usual for most of the factories, the water has not receded in many residential areas.

Tan, who is also president and chief executive officer (CEO) of Texchem Resources Bhd, said a lot of houses are still under water and roads are not easily accessible. “It will easily take about three days for things to return to normal provided that there is no more rain,” he said.

Tourism Malaysia chairman Datuk Dr Siew Ka Wei said the disaster will definitely affect tourist arrivals, adding that the extent of the impact can only be measured at a later stage.

“Undoubtedly, the tourists already there and those who plan to be there in the short term will not be happy, especially with warnings from the Malaysian Meteorological Department,” said Siew.

“It is lucky that Malaysia has many alternative tourism experiences which can be offered to minimise the negative impact. I urge the state government and tour associations to look at this immediately,” he said.

Areca Capital Sdn Bhd CEO Danny Wong, when asked about the market’s reaction to the Penang floods, said: “For now, it’s too early to judge, but it’s still okay.”

”Generally, I think that the industry players may have some contingency plans for [natural disasters]. I personally don’t see that there’s a big hoo-ha. But if this continues on for one or two weeks, it might affect companies’ productions,” Wong added.