RUBBER glove makers in Malaysia continue to hope for a reconsideration to extend the the 15-year period reinvestment allowance (RA) to a further 15 years, despite the Government rejecting the proposal earlier.
The Malaysian Rubber Glove Manufacturers Association (Margma) affirmed that the RA extension and similar incentives will help the glove sector in hitting its RM30 billion export earnings target by 2020 from RM9.89 billion in 2011 under the National Key Economic Area (NKEA).
The RA extension proposal was thumbed down by the Ministry of International Trade and Industry in October last year The sector avers that the 15-year extension period for the RA is not sufficient as some manufacturers are already seeing their RA incentive expiring anytime soon.
Margma President Lim Kwee Shyan said that the manufacturers need longer time in order to reach full automation of their processes.
Global demand for rubber has been brisked and especially in the last two years, data from Margma showed that demand for rubber gloves reached 150 billion pieces per year. This year, the amount is projected to grow 10% to 165 billion pieces, and Malaysia is forecast to account for 62% to 63% of the total.
The sector’s total capital expenditure is pegged at RM1.6 billion per year, encompassing allocations for new investments and automation; Of the amount, an estimated RM300 million and RM500 million per year is allotted to automation in the next three and five years, said Lim, adding that the sector is expecytef tp continue its earnings trend achieved last year, driven by strong global demand for gloves particularly in the healthcare, food and electronic sectors.