Traders support abolishment of Cabotage Policy

12th January, 2009
PENAMPANG: The Cycle and Motor Parts Traders Association Kota Kinabalu has supported the call by Federation of Sabah Manufacturers (FSM) to abolish the Cabotage Policy which was designed to protect the local shipping industry.

Supporting this was its President Yong Chen Lip (pictured right) when approached at its 2009 Chinese New Year dinner held at a Chinese restaurant here, for comment on the recent call made by FSM, calling for the abolishment of the controversial policy.

“We believe that the abolishment of the Cabotage Policy will make a lot of difference as it is contributing to a high freight charges in the state.

“Hence, it was inevitable for businesses in the state to ultimately pass on the high cost of doing business to the consumers, in order to stay afloat,” he explained.

He lamented that that presently many manufacturers or distributors of consumer goods including vehicles parts refused to deliver their goods directly to Sabah, mainly due to high freight charges.

“The freight charge from Japan to Port Klang is even much cheaper than from Port Klang to Kota Kinabalu.

“Hence, most of the manufacturers or distributors in the region rather opt for transshipment either in Port Klang or Singapore,” he cited.

However, interestingly when asked on the price difference for cycle and motor parts between Sabah and Peninsular Malaysia, he disclosed that in fact the wholesale prices of some of the parts for Sabah are much cheaper as compared to Peninsular Malaysia.

He explained that this was due to stiff competition among the cycle and motor parts distributors who are mainly Peninsular-based who normally dispatch their salespersons over to Sabah to canvass for business, on monthly basis.

Asked on the impact of the current global economic crisis on their business, while noting that it was undeniable that their business were affected especially due to the difference in the exchange rates between Malaysia and the various leading manufacturing countries like Japan, Korea and China, he nonetheless was optimistic that the industry should be able to sail through the rough time.

While noting that the prices of cycle and motor parts had gone up by 15 per cent last year, he however expected the prices to come down in the next six months, also mainly due to a poor demand.

To another question, he said he did not expect its members to retrench their workers.

The Association currently has 88 members.

Earlier, Yong also joined his committee to distribute ang pau to the elderly folks as well as those who are still single, who were present in the occasion.

Also present at the occasion were, the Assistant Local Government and Housing Minister Datuk Edward Yong and his wife, Datin Mary Yong, President of FSM Datuk Wong Khen Thau, Datuk TC Goh, Secretary-general of Federation of Hokkiens Associations Sabah and, Datuk Jimmy Tham, Deputy President of United Sabah and F.T. Labuan Hakka Association’s (USLHA).