The Great potential of rubber in Malaysia

By Biz Times

MALAYSIA exported RM5.88 billion worth of rubber gloves in 2007, the fifth consecutive year of rising exports, despite challenges of profit erosion from the weakening US dollar and costlier shipping.

Malaysia maintained its position as the world’s biggest rubber glove exporter, churning out some 40 billion pieces last year.

“Last year’s rubber glove exports added another RM430 million to RM5.88 billion,” said Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui.

“This is a very good achievement considering our rubber glovemakers had to contend with the devaluing of the US dollar and costlier freight rates,” he told Business Times.

The rubber industry has been the pillar of Malaysia’s economy since colonial times and continues to contribute to export earnings, employment and income generation.

Spurred by the government’s industrialisation drive in the 1980s, Malaysia became the world ’s No.1 exporter of rubber gloves, catheters and latex thread.

In a separate interview, Malaysian Rubber Glove Manufacturers Association (Margma) president Oon Kim Hung expressed confidence of a reasonably good growth this year despite the impending price hike in natural gas.

Rubber gloves manufacturing is among the heavy users of natural gas.

An increase in natural gas pricing will hit manufacturers twice — once through natural gas and secondly via electricity tariffs — as the power sector is expected to pass through the added costs to industrial consumer s.

Asked how rubber glovemakers will cope with the prospective burden, Oon replied: “We ’ve submitted our appeal to the government to consider that any increase in gas prices be implemented on a staggered basis. ” “Rubber glove prices will go up as raw material and fuel costs escalate. Depending on whether all 48 Margma members are selling forward or via spot contracts, consumers are informed of costlier natural rubber and transportation and freight costs,” he said.

Another challenge lies in the possibility of the slowdown in the US economy having a negative impact on Malaysian exports.

Oon said American hospitals will continue to buy from Malaysia because medical gloves are a necessity.

“Even hospitals in developing countries like China, India and Vietnam are starting to buy our rubber gloves,” Oon said.

*I always believe there is great potential for rubber industry in M'sia with our tropical weather! hehe.. Go Durex! lolx..