Energy cost hike in Malaysia to up glove prices, say manufacturers

electricityTHE MALAYSIAN Rubber Glove Manufacturers Association (Margma) say that there is a likely price increase in gloves to offset production costs due to electricity tariff hike.

MARGMA President Lim Kwee Shyan said the production cost for 1,000 gloves will increase between US$0.20 and US$0.60 (RM0.64 to RM1.93) due to the 15% surge in electricity tariff, depending on the type of equipment used as well as other costs.

For local glove makers, cost of electricity is part of the energy costs, which eats up 10% of their production costs.

The group recommends to authorities that electricity tariff hike, while should be within at market rate, must be gradual to allow manufacturers to adjust.

“The increase definitely has to come but the government should give us more time to adjust to the new cost structure and to liaise accordingly with our customers,” said Lim.

Energy, Green Technology and Water Minister Datuk Seri Maximus Ongkili, recently announced an electricity tariff hike of 15% (4.99 sen/kWh) in Peninsular Malaysia and 16.9% (5 sen/kWh) in Sabah. The higher rate will take effect on Jan 1, 2014.