PETALING JAYA: At least eight companies ceased operations every day in the first three months of this year, the Insolvency Department (MDI) has revealed.

       The MDI Statistics report showed that 761 companies were either forced or voluntarily registered to cease operations between January and March. This brings the number of companies that have ceased operations since 2018 to 10,678.

       More than 60% of the companies that were forced to shut down were based in the Federal Territory (2,368) and Selangor (1,465).

       Almost half of them were trading, wholesale or retail companies.

       Others that had to cease operations were in construction, financial services, insurance, property and investment, transportation and communications.

       Consumer financial expert Prof Dr Mohamad Fazli Sabri said the average number of companies that ceased operations every day was worrying, adding that it would mean fewer job opportunities.

       “Those with financial difficulties, be it individuals or business owners, should enrol in Credit Counselling Debt Management (AKPK) programmes, where they can get help to restructure their loans and payments,” he added.

       Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) small and medium enterprises committee chairman Koong Lin Loong said it is not right to generalise and assume that all those that ceased operations did so due to bankruptcy.

       “Some might have wanted to cut down their operating costs so they reduced the number of outlets; or maybe they started small businesses during the movement control order, so now that they can continue with their previous jobs, they decided to close down (those) businesses.

       “Those who had to wind down due to loan non-repayment probably lack financial management as well, perhaps they are not aware of AKPK programmes,” he added.

       Koong said ACCCIM, in a previous survey, identified four main issues affecting businesses: the increase in raw material prices; high operating costs and cash flow problems; changes in consumer behaviour; and shortage of workers and supply chain disruptions.

       “My advice is, for a short-term solution, businesses should make use of government assistance such as the wage subsidy programme and reduce unnecessary expenses. In the medium term, businesses have to explore and utilise digital technology and automation; examine their products and services to eliminate those with low margins and low demand in order to increase their cash flow with their existing resources; and analyse the efficiency of their human resources and machinery.”