Hanoi (VNA) – Surging coronavirus casesin Southeast Asia, in such countries as Malaysia and Indonesia, have startedaffecting the supply chains of Japanese companies, with the possibility ofregional production disruption becoming more real, the Kyodo news agencyreported.

In Malaysia, where lockdown has been in placesince June 1, plants belonging to Toyota Motor Corp. and Honda Motor Co. remainclosed.

The lockdown has already been extended twice,with more stringent restrictions imposed since July 5 on Malaysia's capitalregion, where Japanese companies operating in the country are concentrated.

Mitsui Mining & Smelting Co., which makessmartphone materials in Malaysia, announced a production halt on July 5. Eventhough the government has since allowed the electronics industry to resumework, a press representative of the company says production will not return toearlier levels until sometime between late July and early August.

Kyodo noted Japanese companies have also beenhit hard in Indonesia, where daily new infections surpassed 40,000 on July 12.A survey conducted by the Japan External Trade Organisation (JETRO) showed manymanufacturers decrying the increase in infections and the impact on theiroperations. One company reported having 18 percent of its workforce infected.

Also finding it difficult to operate at fullcapacity due to restrictions imposed on people's movements, many Japanesecompanies operating in Indonesia are considering sending their Japaneseexpatriates back home.

An official of a Japanese automaker in SoutheastAsia said in the region, where vaccine rollouts remain slow, it is difficult tomake a one-year forecast. The difference between the coronavirus pandemic andnatural disasters lies in the former having a long-term impact on supply chainsand hitting multiple areas simultaneously.

Thailand, considered a linchpin of Japanesecompanies' production networks in the region, has had a curfew imposed on theBangkok region since July 12. But that has yet to be accompanied by strongrestrictions on corporate operations.

Kyodo cited Kitami, a researcher at JETROBangkok, as saying that while Japanese companies are doing their best amid the pandemic,"there is a possibility that if infections continue to spread in othercountries, regulations as strong as Malaysia's could be adopted there."

That could sap the appetite for investment, hesaid./.