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Industry Overview: Malaysia Rubber Industry

Malaysia today is the world's third largest producer and exporter of natural rubber (NR). In the products manufacturing sector, Malaysia is the leader in the production and supply of medical rubber gloves, catheters, latex threads and cords. The Malaysian rubber products industry is made up of more than 500 manufacturers producing latex products; tyres and tyre-related products; and industrial and general rubber products. The total rubber industry contribution to National Exports was nearly RM40.42 billion; nearly 5.82% in 2011. 

Further, it was extrapolate that the gross national income (GNI) of Malaysia contributed by the rubber sector in the 2020 would raise to RM52.9 billion, out of which 56.7 per cent (RM30 billion) would be contributed from the glove industry alone.Malaysia export earnings from rubber gloves in 2011 amounted to RM9.89 billion, an increase of 10.9 per cent, compared to RM8.92 billion in 2010. 
 
Malaysia's natural rubber production in 2011 amounted to 996,210 tonnes compared with 939,241 tonnes in 2010. The domestic consumption of natural rubber for 2011 was 401,923 tonnes. The natural rubber consuming industries for 2011 were latex products (80.3%), tyres (9.2%), general rubber products (7.2%), industrial rubber products (3.2%) and others (0.2%). The rapid growth of the industry has enabled Malaysia to become the world's largest consumer of natural rubber latex.
 
The latex products sub-sector is the largest sub-sector within the rubber products industry and comprises 125 manufacturers producing gloves, condom, catheters, latex thread and others. This sub-sector accounted for 81 per cent of the rubber total value of exports, largely contributed by gloves, catheters and latex threads. Malaysia continued to maintain its position as the world's leading producer and exporter of catheters, latex threads and natural rubber medical gloves.
 
There are currently 120 companies in the tyres and tyre-related products sub-sector comprising nine tyre producers while the remaining companies produce retreads, tyre treads for retreading, valves and other accessories. There are three major tyre producers producing passenger car tyres, commercial vehicle tyres and earthmover tyres, and another nine manufacturing other types of tyres. Exports value of rubber tyres, flaps and inner tubes in 2011 amounted to RM779.3 million.
 
The industrial and general rubber products sub-sector comprises 185 companies producing a wide range of rubber products such as mountings, beltings, hoses, tubings, seals, and sheetings for the automotive, electrical & electronics, machinery & equipment and construction industries, largely for the domestic market.
 
Malaysia's rubber sector is to get a boost with the setting up of several facilities by the government to improve production quality. Deputy Prime Minister Tan Sri Muhyiddin Yassin said the government through Malaysia Rubber Board had in its pipeline to set up these facilities. Muhyiddin said the approved investments in the rubber products amounted to RM629.5 million, of which 74.4 per cent was in the rubber glove sector in 2011. Domestic investment amounted to RM538.3 million (85.5 per cent), while foreign investments totalled RM91.2 million (15.5 per cent). 
 
The government continues to promote the development of Malaysia's resource-based industries to diversify the country's sources of growth. In addition to fiscal incentives which are currently available for promoted products and activities, the government has further fine-tuned the incentives to promote specific activities among which is the rubber products industry. To further encourage investments in resource-based industries, local companies in the rubber industry that reinvest to expand their projects are eligible for Pioneer Status or Investment Tax Allowance.
 
The use of rubber is widening. Therefore, the future of Malaysian rubber industry is fairly stupendous. The government has the policies to encourage the rubber industry. Measures have been taken to ensure stabilization of rubber industry so that Malaysia remains an important player in the global rubber industry.
 
(Source: Insight Alpha)
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Malaysia Rubber Industry