PETALING JAYA – Rubber glove makers are set to raise prices of their products, in view of costlier labour, fuel, packaging and a weakening US dollar.
“Fuel and labour costs have gone up considerably. The US dollar, too, has weakened further against the ringgit by around 10 per cent from a year ago. We try our best to absorb some of the costs but the quantum of increases is not within our control,” said Malaysian Rubber Glove Manufacturers Association (Margma) president Lim Kwee Shyan.
From June 2011, the government raised electricity rates by 7 per cent. There is also a 20 per cent average price hike for natural gas across all industries.
Rubber glove manufacturers using less than 2mmscfd of natural gas are now paying RM16.07 per mmBtu, 23.6 per cent more than the old RM13.00 per mmBtu rate.
“We’re told that the next scheduled price hikes on natural gas and electricity will be in January 2012,” he told Business Times in an interview.
Lim said Margma has appealed to the government not to curb the intake of legal foreign workers to facilitate the ongoing amnesty plan.
“This is because the illegal workers being offered amnesty might not be suitable for work in the factories. They could be used to working in the restaurants or are petty traders.
“If these foreign workers, legalised under the amnesty programme, are forced upon us, they’ll run away into the city again. When we recruit, we want workers who really want to work in the factories,” he said.
In view of the higher costs of doing business, Lim said Margma has had no choice but to advise members to adjust glove pricing accordingly.
As a result of higher operating cost, glove pricing and growing volume, Lim said Malaysia is set to post record rubber glove exports for the ninth straight year.
“This year, rubber glove exports should expand by 12 per cent to RM10 billion. Already, in the first half of the year, we’ve shipped out RM4.7 billion,” he said.
For the last 15 years, Malaysia is the world’s top supplier of rubber gloves. Last year, the country exported close to 100 billion pieces of rubber gloves to more than 180 countries.
This volume constitutes almost two thirds of the global market for rubber gloves. Healthcare products like medical gloves continue to see strong demand despite the current lacklustre global economic growth.
“While the US and Europe markets are seen as matured, they are not saturated. There’s still sustained demand. Rubber gloves, whether they are natural or synthetic, are a necessity in the healthcare and food-handling sectors,” Lim said.
In the last 12 months, big glove makers like Top Glove Corp Bhd, Hartalega Bhd and Latexx Partners Bhd continued to add capacity and sold more gloves.
Surprisingly, glove prices did not plunge. “It has not,” Lim said, “because Indonesian and Thai glove exporters have slowed their output. The very basic powdered gloves are still selling at between US$32 and US$35 per 1,000 pieces.”
He explained the additional gloves Margma members had put out in the market this year had filled up the portion of market share previously captured by manufacturers in Indonesia and Thailand.
Source: New Straits Times