KUALA LUMPUR, April 24 — Local businesses are already feeling the adverse effects of the global energy crisis caused by the Iran war

After surviving the Covid-19 pandemic six years ago, these small and medium enterprises (SMEs) are now forced to adapt to the “new normal” of rising fuel prices and supply chain disruptions.

While the government’s newly announced RM10 billion financial cushion and extended e-invoicing transition offer some long-term hope, several local SMEs are in a race for survival, struggling to cope with rising operational and supply costs.

Durian dilemma

Durian online store Dking has been around for 17 years, specialising in exporting and supplying various durian products — from the king of fruit itself to other durian-related confectioneries and products — to over 10 countries such as China, Turkiye and even Canada.

The company which started as a humble fried durian stall in 2009 has grown significantly over the years with six outlets around the country including in the Klang Valley, Melaka, Penang and Pahang.

However, Leron Yee, 42, who is one of the founders said they are currently quite affected by the energy crisis, especially as their business relies heavily on transporting their products from their headquarters in SS2, Petaling Jaya to all of their outlets.

And with diesel prices now at RM5.97 per litre, Yee and his partners have to come up with another formula to keep their operations running.

“Yes, hiking up the price is very easy, everyone can do that but for us, we are trying to tackle it differently.

“We will try to absorb as much as we can and try to save as much internally first because external wise, we can’t do anything anymore — we can’t fly to the US and say ‘Hey, stop it’.

“But internally, we can still try to reduce whatever costs that we are able to,” Yee told Malay Mail.

Amongst the steps being taken by Dking is a more strategic approach to workforce planning and recruitment while also optimising their internal budget by taking one-per cent off across their departments.

They also have to reschedule their company engagement activities such as annual trips and employee gatherings to ensure better allocation of resources for the time being.

“Importantly, any savings or efficiencies gained are being reinvested into employee development, including training and upskilling programs to strengthen our team for long-term growth,” he said.

Aside from that, Dking is also preparing for a stronger durian season as durian orchards in Penang are fruiting earlier than expected this year due to the hot and dry weather and a forecast of a possible surplus in the upcoming season.

“Dking is proactively preparing for increased supply nationwide, which we believe will lead to more competitive pricing.

“This presents an opportunity for us to deliver greater value to customers while keeping the market dynamic and accessible,” Yee said.

Off the menu... for now

Local restaurant and bar Gringo’s which specialises in Texas-Mexican (Tex-Mex) cuisine opened their first brick and mortar shop in Taman Tun Dr Ismail back in 2022 after years of operating out of a food truck.

The restaurant also acts as one of the home bases for Arsenal Malaysia, a local fan base for the English Premier League giant, where they regularly host “live” viewing of football matches involving Arsenal and also when it comes to matches involving local football club, KL City FC.

Gringo’s managing partner Azhan Benny Foo or Ben, 43, has begun removing beef tenderloin items from their menu for the time being in response to the global energy crisis.

Popular beef-based dishes like Fajitas, Burritos, and Quesadillas are being phased out due to a 53 per cent spike in imported beef prices, which rose from RM25 to nearly RM40 per kilogramme recently.

With almost 80 per cent of their ingredients being imported, Ben said that they are also experiencing price hikes on other ingredients as well, including for cheese.

“When prices started spiking up, we had no choice but to talk to other suppliers who could provide us with cheese brands that have similar taste and cheaper prices.

“But we are not fully substituting our previous brands with the cheaper ones — we would still get the original but now we have to combine it with the other brand in order to keep that same taste.

“We had to kind of reverse engineer the cheese so that the quality and taste can still be maintained,” Ben said.

Despite Gringo’s reputation for hosting lively football screenings, weekday footfall remains a challenge.

To combat this, the business has diversified its revenue streams by expanding into catering and deploying its food truck more frequently.

While a busier food truck typically means higher fuel expenses, Gringo’s secured a vital lifeline after realising that they are eligible for the government’s Subsidised Diesel Control Scheme (SKDS), which allows them to fuel up at the subsidised rate of RM2.15 per litre.

“Previously when SKDS was announced, we didn’t bother to find out about it until recently when diesel prices kept spiking up to over RM6 at one point.

“So, we decided to go to the Ministry of Domestic Trade and Cost of Living website and applied and it was approved but we are only able to use it in May — this one is on us because we were oblivious to the SKDS when it first rolled out a couple years ago.

“Hopefully by next month we will be able to enjoy the RM2.15 subsidised price, this will help a lot,” Ben said, adding that they too are currently opting not to raise their prices for the time being.

Ramping up production

Meanwhile, local boutique Caftanist known for their wide array of Baju Raya designs is also feeling the ripple effect of the Middle East conflict despite not experiencing any direct price hikes on their materials.

According to their CEO, Fawwaz H, 34, they are experiencing shipping delays on some of their materials which they outsource from abroad.

“For items such as our packaging boxes — previously it usually took around two to three weeks for them to arrive.

“But now, some of them would take up to a month to arrive while some didn’t even arrive after two months and I foresee that it will get worse in the coming months,” Fawwaz said, adding that the shipping frequency of these items is also getting worse these days.

Although they had a relatively good Hari Raya season this year with sales going up by 50 per cent, the prolonged energy crisis coupled with the growing fierce competition in the local market this year has left them opting to expand their output by producing more premium items.

“Usually we are quite conservative especially during off season or post-Raya season where we would only release several designs for our casual outfits just to fill in the gap.

“But with the current situation now, we are going to have to be more aggressive in terms of our product expansion by producing more high-end and premium quality products,” he said.

Caftanist started as a niche online store in 2015, founded by Fawwaz and his wife Adlina Arrif and they have been steadily growing over the years with them now having two physical stores, one in Kelana Jaya and another in Johor Bahru.

The local modest wear brand which features contemporary and traditional inspired clothing has also achieved a new milestone after being given their own section at Japanese department store Isetan in KLCC in December 2024.

Even though they have not experienced any price hikes for now, Fawwaz is still expecting some of their material prices to go up in the near future due to transportation costs.

Same price despite less profit

Adi Ibra Ruzali, 49, who is now handling the operations of his late brother’s Murtabak Acuan Azam stall in Negeri Sembilan, is adamant on keeping the price of their fluffy Murtabak and Roti John between RM6 to RM8 despite facing higher cost of operations.

“Yes, we are experiencing price hikes on several of our ingredients and materials at the moment but some are still the same price.

“The most obvious for me was the price of plastic and packaging where previously I would only spend around RM25 but now it is close to RM30 already.

“For now, we can still manage to absorb the extra costs because we understand that times are tough and people need the money to spend on other essential items, so we try to help with what we could,” Adi said.

Now in its 28th year, Murtabak Acuan Azam operates a weekend stall at Rembau’s Pasar Tani and a weekday kiosk in Tampin.

Unlike other vendors who serve Murtabak and Roti John in the evenings, Adi has uniquely specialised in offering these dishes as a breakfast staple for many years now.

“We initially started our business in KL but after the 1997 Asia Economy Crisis, we decided to move back to our hometown and operate from there.

“Previously we would also open our stall at Seksyen 13 Shah Alam once a week, and even then we were already selling Murtabak and Roti John for breakfast,” he said, adding that they have since stopped operating in Shah Alam after acquiring their kiosk a few years back.

Adi who previously went viral on social media in 2024 for his fluffy and perfectly symmetrical murtabak also pointed out that another reason for him not hiking up his prices was because he does not wish to disrupt his flow of customers.

“This is a challenge we have to face, but my hope is that when fuel prices eventually stabilise or drop, those who hiked their prices will have the integrity to lower them again.

“We often see vendors quickly raising prices when fuel goes up, but those prices rarely come back down when the market cools.

“Personally, I’m willing to absorb the losses for now — as long as people can still afford to enjoy my Murtabak and Roti John, that’s what matters most to me,” he said.