RELEASE RM500 MIL SEAFOOD INDUSTRY RESCUE AID PACKAGE IMMEDIATELY, TREASURY TOLD

BUTTERWORTH (Malaysia), Dec 17 (Bernama) -- Some 60,000 people working in
seafood processing factories and frozen food chain industries may lose their job
if the Treasury does not promptly release the RM500 million approved under the
seafood industry rescue aid package.

The money is urgently needed to tide over with the seafood export ban to
European Union (EU) countries.

The delay in reviving the multi-billion industry has not only affected the
workers' livelihood but had also brought down the industry to the verge of
collapse as 70 per cent of the RM2.5 billion annual export value came from the
28 EU member countries.

Malaysian Frozen Foods Processors Association chairman Ch'ng Chin Hooi said
the Cabinet approved the RM500 million aid package to rescue the ailing industry
three months ago, with the association members be given priority, but until
today none of the factories had received the promised soft loans to finance
their operations costs.

He said one seafood factory in Perai ceased operations three months ago
while 25 others had ran out of financial resources to pay their workers' salary
and to continue operations.

He said 43 entrepreneurs were engaged in the seafood and frozen food
industries but only 26 were members of the association.

"If the whole industry is paralysed, it will lead to a chain reaction,
affecting workers in the industry network such as fishermen, seafood suppliers,
packagers, transporters and so on," he told a media conference at the northern
region office of the Federation of Malaysian Manufacturers.

Through the soft loans, Ch'ng said factory owners could buy more seafood to
be processed and exported to other countries such as to the United States,
Middle East countries and Australia to clear the seafood stock that has been
specially packed for EU countries but cannot be exported so far.

"Seafood exporters suffer RM1.5 billion losses so far in sales and
production as the supply to EU countries for Christmas and New Year are lying
idle in cold rooms as they cannot be sold," he said.

"This stock cannot be sold to other countries as they have been specially
packed as required by the EU marketing standards. To reprocess the packaging, we
fear it may affect the quality, incur extra cost and will not be competitive,"
he said.

Ch'ng also hoped the interest charged for the soft loans would not be more
than two per cent in order not to burden the entrepreneurs, more so with the 30
per cent hike in electricity tariff.

He said the seafood industry was still viable as it still received orders
from abroad except from EU member states.

He also urged the government to consider giving tax relief to affected
companies until the export ban to EU countries was lifted.

"The impact of the economic uncertainties to the industry is not as serious
as what is being faced by the electronics and automobile industries. This is
because irrespective of the state of the economy, human beings must eat and
hence, this business can survive and is sustainable," he said.

In June, the government banned seafood and frozen food exports to EU
countries after the EU Health Authorities found that Malaysian seafood did not
comply with the stipulted export guidelines by the grouping.

Ch'ng claimed many of the weaknesses in Malaysian seafood and frozen food
exports were with the three government departments entrusted with monitoring.

They are the Health Department, Fisheries Department and the Fisheries
Development Authority of Malaysia, he said.

Among issues raised by the EU Health Authorities are the condition of the
ship carrying the seafood and frozen food consignments, landing ports and
aquaculture farms while processing at the factories was not much of a problem as
the factories were periodically audited by the EU authorities.

Following the shortcomings, Ch'ng said Malaysia was given two options on
whether the EU imposed the export ban or face the risk of a total ban to be
gazetted under EU laws.

"That is why the government chose to ban exports and after various
improvements made by the related departments, the government has invited EU
officials to conduct a re-examination in early March with a view to lift the
ban," he added. (US$1=RM3.45)
-- BERNAMA