KRC to speed up as regional high-value rubber hub

Stakeholders mull possibility of establishing a sub-regional business collaboration in rubber product manufacturing sector to promote balanced growth of industry


KEDAH Rubber City (KRC) aims to accelerate the development of the Malaysian rubber industry to be the regional high-value rubber industrial hub for Asean by 2036.

Under the Indonesia, Malaysia, Thailand-Growth Triangle (IMT-GT), KRC will be capitalising on the abundance of natural rubber supply in this region and focus on downstream rubber related activities.

Northern Corridor Investment Authority (NCIA) CEO Datuk Seri Jebasingam Issace John said stakeholders are exploring the possibility of establishing a sub-regional business collaboration in the rubber product manufacturing sector to promote balanced growth of the rubber industry.

“To this end, KRC will complement the development of a comprehensive rubber ecosystem in the IMT-GT region,” he said during IMT-GT Workshop’s webinar yesterday, organised by the Centre for IMT-GT Subregional Cooperation (CIMT) and co-hosted with NCIA.

KRC, a national strategic project and the first dedicated Rubber Industrial Park in Malaysia spanning 1,240 acres, is ready to receive private investors to set up factories, offices and warehouses to create employment opportunities and improve skills of the local workforce to meet the demands of the industry activities.

As announced recently by Prime Minister Tan Sri Muhyiddin Yassin at the Northern Corridor Economic Region (NCER) Investment Commitment Event 2021, two pioneer investors have committed to inject RM1.55 billion in KRC.

Infrastructure development for KRC is progressing ahead of schedule and construction of investor’s operations are slated to begin in the fourth quarter of this year.

KRC will develop a complete ecosystem including research and development (R&D) for the rubber industry in the NCER and stimulate socio-economic development as a new growth node in the border region, driven by the business sector with facilitation by the government.

Linking the region’s major rubber producers in the IMT-GT, KRC and other rubber cities will need to strengthen the value chain across the upstream, midstream and downstream segments to enable local small and medium enterprises (SMEs) to be more competitive and sustainable.

Economic Planning Unit regional development division director Datuk Ahmad Zamri Khairuddin said this can be achieved through the right policies and strategic direction and collaboration between governments and businesses within the IMT-GT to ease market access to products and services from the rubber region for investors such as ease of border trade, tax incentives and logistics.

“It is with this objective that the Project Implementation Team (PIT) has initiated the desired collaboration at sub-regional level. This converging collaboration will allow IMT-GT rubber cities to optimise our resources to address issues that are cross-cutting in nature,” he added.

KRC and the establishment of the Indonesia Rubber Corridor in Sei Mangke and Tanjung Api-Api, and Thai Rubber City development concept would complement each other and support the economy, as well as infrastructure development within IMT-GT and Asean member countries.

The proposed initiative is envisioned to support the increase in domestic consumption of rubber in IMT-GT, which will benefit rubber smallholders who play a major role in supplying the raw materials, and ultimately contribute to the stabilisation of the rubber price and improve the overall economy of the sub-region.

The world natural rubber production is marked at 903,000 tonnes, while world demand was recorded at 1.13 million tonnes in April 2021 on a year-to-year basis.