China set to overtake Malaysia as the world's largest rubber glove producer?

Malaysia has traditionally held the spot as the world's largest rubber glove producer ever since the 1980s.

Companies such as Top Glove, Supermax, Hartalega, Kossan and other smaller firms dominate the world market producing over 200 billion pieces a year.

But China however is fast emerging as a serious contender to topple Malaysia off the top spot.

Should the estimated 70 rubber glove producers in the country be worried over China's rising dominance?

According to the latest statistics, the Malaysian Rubber Gloves Manufacturers Association (Margma) said that Malaysia now commands a global market share of 60 percent from 67 percent a few years ago.

China's global market share meanwhile has risen to above 20 percent from total obscurity before.

The development may not be worrying now but the "threat" can be detrimental to the country's rubber glove producers in the future.

Merging to become leaner

Should the rubber glove firms merge to become a bigger force to be reckoned with?

The answer is yes. Amalgamations may result in a leaner and more efficient organisation as well as achieve economies of scale.

In an interview with BFM radio, Margma president Dr Supramaniam Shamugan said with over 70 rubber glove players in the country, mergers and acquisitions cannot be discounted.

"A bigger company might want to buy the smaller company which has niche markets to complement the bigger company's overall operations," said Supramaniam.

A steady supply of latex

Latex which is derived from natural rubber is always a constant issue.

Supply is erratic due to the wintering season causing rubber prices to be volatile.

Bloomberg reported the on-going wintering season and heavy rains will crimp latex supply in top producers such as Thailand, Vietnam and Indonesia.

Thus, there is always a need to source for rubber, buy at an affordable price and ensure adequate supply.

Malaysia's rubber glove firms should seriously amalgamate and perhaps establish a "rubber city" or sustainable rubber plantations to ensure a steady supply of latex.

Bolstering innovation

A united front of rubber glove firms can obviously enable them to share their resources in research and development to roll out innovative gloves.

Already in the market are anti-microbial or anti-viral gloves which can obviously enhance safety aspects.

Demand a more competitive gas price

Natural gas is also major component in the rubber glove industry.

Without gas, the rubber glove firms cannot heat up their furnaces to mould the rubber gloves into shape.

Supramaniam had said more often than not, rubber glove companies had to buy the gas in "packages" meaning not all gas which are bought are fully utilised leading to wastage.

Thus, it would be a better idea if the gas suppliers could sell their rubber producers based on what they use.

Addressing labour woes

Perhaps, a merged entity will finally address the various labour woes plaguing the industry.

This includes allegedly poor living conditions and various other alleged infringements.

By merging, the sector can further conform with investors’ concerns, the International Labour Organisation and authorities from its export destinations such as the US Customs and Border Protection agency.

Supramaniam said players could also put on their thinking caps and figure out how to address the workers shortage of some 12,000 at present.

Pandemic still lurking

Rubber glove companies should start to prepare from now for rainy days ahead.

Even though COVID-19 has somewhat dissipated, the world is still vulnerable.

New pandemics can be unleashed at any time and by then, the country's rubber glove producers should have banded together to compete with their competitors.

Once upon a time, Malaysia was once the world's largest producer of tin, rubber and palm oil until it was overtaken by China, Thailand and Indonesia respectively.

Perhaps the rubber glove producers cannot fight the might of China.

But as a united front, the sector can still face off with the superpower by dishing out innovative and value-added products to revolutionize the market. – DagangNews.com