Rubber glove makers are asking the Government to delay the revision of natural gas tariff by four months.
The Malaysian Rubber Glove Manufacturers Association (MARGMA), responding to Gas Malaysia Bhd’s Tuesday announcement of the tariff revision effective July 1, said the exercise would have “tremendous and adverse impact” on the manufacturing costs for rubber glove makers as well as the overall economy.
MARGMA president Denis Low said the timing of any increases must be simultaneous with the increase in prices of their products to the world.
“Malaysia is the world’s largest exporter of natural rubber and nitrile gloves, with an estimated export value of about RM11.7bil for year 2015. Therefore, the industry is of the opinion that any inevitable increase in cost should have been done on a consultation basis with industry players, and not done on an ad hoc basis,” he said.
“With the increase, it will mean that the industry will have to absorb this cost as orders to supply are usually done at two to three months ahead. If Gas Malaysia and the relevant agencies had heeded the many pleadings of the industry players to give them sufficient time to work ahead of the increase cost, such cost would have been easily passed on to the overseas buyers instead. This would also mean a better absorption of cost all-round, with the nation reaping better revenue and foreign exchange (forex) as well. MARGMA really hope that the increase can be push forward to another 120 days.”
It is estimated that the tariff increase will mean an additional cost of 45 to 75 US cents per 1,000 pieces of nitrile glove and about 35 to 55 US cents for latex glove.
“There will always be the element of a ripple effect as the supporting industries are also affected by this increase in cost. Basically, each manufacturer will have to adjust their pricing depending on the product type,” the association said.
MARGMA also noted that while Malaysia was still the world’s top supplier, competition from abroad was increasing and various regional governments were offering valuable incentive to encourage both foreign and local manufacturers to set up shop in these respective countries.
“It is always the aspiration of the rubber glove industry to make Malaysia the global capital of medical examination and surgical gloves, and these can be easily sustained with the cooperation and support from utilities players, the agencies and the Government,” Low said. – The Star