PETALING JAYA: Latex prices’ downtrend will continue in the next few months due to improved supply and relatively stable demand, according to Top Glove Corp Bhd chairman Tan Sri Lim Wee Chai.
“My opinion is latex concentrate will fall to between RM5 and RM6 per kg in the next few months, from the price range of RM6 to RM6.30 per kg presently. Demand is stable. China’s economy is not as aggressive as the past few years,” he told reporters at the inaugural media roundtable event about the rubber glove industry.
The event was organised by the Malaysian Rubber Glove Manufacturers Association (Margma).
Also present were Hartalega Holdings Bhd managing director Kuan Kam Hon, Margma president Lim Kwee Shyan, Supermax Corp Bhd director of corporate affairs Denis Low and Kossan Rubber Industries Bhdmanaging director and chief executive officer Datuk Lim Kuang Sia.
Wee Chai said he was also expecting the global demand for rubber gloves to grow by up to 15% this year.
“Depending on the global economic situation, the market grows about 5% to 15% each year,” he said.
Meanwhile, Kwee Shyan said the rubber glove manufacturing industry was ready to meet the challenges of the minimum wage policy, which would come into effect on Jan 1, 2013, as well as an expected removal of subsidies from natural gas prices.
“We are ready to pay the market price for natural gas. But the changes in price should not happen overnight. It should be gradual,” said Kwee Shyan.
Kuang Sia said the Government should provide the industry with the time frame. “Three to five months is fine.”
However, Wee Chai urged the Government to consider any price changes carefully as “we do not want to cost ourselves out of the market.”
“The gas price and supply is important to the industry. We should compare the price with that in the countries that produce and export natural gas, not the prices of the net importing countries,” he said.
Kuan also pointed out that should such a cost increase occur, the rubber glove manufacturers could pass on the costs to the end-users.
Regarding the minimum wage policy, Kuan said the industry would continue to increase the use of automation in production.
“Hopefully, the glove industry will one day be a very automated industry,” he said.
Kuang Sia noted that in the late 1980s, the industry needed 20 workers to produce one million pieces of gloves per month. “Now, we need only four to five workers.”
However, Kuan said the challenge was to hire the human resources needed to operate and manage the increasingly sophisticated machines in the manufacturing plants.
Meanwhile, Kwee Shyan said the industry would be investing significantly within the next few years to increase production capacity.
“Based on our survey last year, the top 10 companies in Malaysia will reinvest a cumulative RM7.3bil from 2010 until end-2020.”
He noted that Malaysia commanded more than 60% of the world market for rubber gloves, and produces 96 billion pieces of rubber gloves per year (out of the global market volume of 150 billion pieces of gloves).
Kwee Shyan said last year, export earnings of the Malaysian rubber glove industry was RM9.8bil (from RM8.9bil in 2010).
“Under the forecast by the National Key Economic Area and Margma, export earnings are targeted to grow to RM30bil annually by end-2020.”
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