Top glovemakers are expecting annual growth to hit about 10% this year from last year’s total exports worth RM23.7b
By ALIFAH ZAINUDDIN / Pic By RAZAK GHAZALI
THE local rubber industry is expected to maintain its double-digit exports growth momentum this year despite challenges arising from the ongoing trade war between the US and China.
Major corporations in the rubber industry which comprise the world’s top four glovemakers — Hartalega Holdings Bhd, Top Glove Corp Bhd, Kossan Rubber Industries Bhd and Supermax Corp Bhd — expect annual growth to hit about 10% in 2019 from last year’s total exports worth RM23.7 billion.
“Our target is always double-digit growth (in exports) each year. Currently, the constraints are in the diversified rubber products sector where it is mostly dominated by small and medium enterprises (SMEs).
“They lack capital to invest in automation, so we try to build the capacity to increase exports further,” said Malaysian Rubber Export Promotion Council (MREPC) board of trustees chairman Chik Chan Chee at the launch of the MREPC fund for automation and green technology in Petaling Jaya yesterday.
Primary Industries Minister Teresa Kok (picture) said in her speech that export growth in the rubber industry has registered an average of 10% over the last decade, outperforming the national export growth rate in recent years.
“Going by this growth trajectory, I would expect the rubber industry to continue to achieve greater heights and in the near future, I hope, will be able to take its place among the top five best export performers,” Kok said.
Rubber products are among Malaysia’s top 10 exports, with local rubber products exported to 195 countries worldwide. Kok said there are over 300 rubber products manufacturers today compared to less than 50 in the 1970s.
Nevertheless, Kok said there are concerns over the continued weakness in global economic growth in the near term. She said policy uncertainties in the global trade front will also weigh on Malaysia’s external trade prospects.
Kok urged the industry to confront the challenges ahead by addressing labour shortages, enhancing productivity and innovation, as well as adopting sustainable manufacturing practices.
“The promotion of automation and green initiatives in the industry must be pursued strongly and aggressively to ensure that we are prepared to face the challenges of a rapidly changing landscape of intense competition, unpredictable global economic circumstances and the disquieting trend of inward-looking and protectionist policies,” Kok said.
The minister announced the government’s commitment to provide RM20 million to the new MREPC fund for automation and green technology.
The fund, dedicated to SMEs, will provide matching grants of up to 50% of the project cost for automation and green projects in the rubber industry. A total of 19 applications have been received to date, with five companies awarded the grant at the event. The sum, however, was not disclosed.