Adding value to the Malaysian rubber industry

The Covid-19 outbreak saw a surge in demand for medical gloves worldwide, but Raja Idris says Malaysian rubber products do not need to ride on a pandemic as the industry has grown exponentially over the past decades. – NORAFIFI EHSAN/The Star

RUBBER time is an old reference that Malaysian used for a laid-back attitude, but when it actually involves rubber, it is not a concept the industry can afford to enjoy.

To keep up with the rapid evolution of technology, rubber industry players must now be nimble and embrace change ¬– an ethos that the Malaysian Rubber Council (MRC) intends to inculcate.

“The world will not wait for us so the rubber players must ensure that we move in tandem with the ever-evolving world. There are things we must unlearn and relearn, and to accept new ideas and fresh ways of doing things, ” says MRC chairman Raja Datuk Idris Raja Kamarudin.

‘We need to innovate. If the rubber industry stays strong, the nation will continue to thrive, ’ says Raja Idris.‘We need to innovate. If the rubber industry stays strong, the nation will continue to thrive, ’ says Raja Idris.

“We need to be on the lookout for ideas that add value to the rubber industry and innovate to be a critical industry once again. This is in the national interest because if the rubber industry stays strong the nation will continue to thrive.”

To enhance the marketability of Malaysian rubber products, MRC plans to open the industry to technology transfer collaborations that go beyond the downstream sector and involve working with experts at the upstream and midstream levels to increase yield, productivity, quality and shelf life of products.

The industry is undergoing significant changes and the transition towards a high-value industry will not be easy.

For local rubber product manufacturers, they need to keep abreast with the latest technologies and developments or risk being left behind.

This is where MRC plays a prominent role to support industry players.

Over the years MRC’s support for rubber product manufacturers has boost their competitiveness and the industry through market promotion activities, capacity building and talent development initiatives.

MRC CEO Brandon Chan speaking at the launch of the Fund for Automation and Green Technology, introduced to assist SMEs improve their industry competitiveness through the use of automation and green technology.MRC CEO Brandon Chan speaking at the launch of the Fund for Automation and Green Technology, introduced to assist SMEs improve their industry competitiveness through the use of automation and green technology.

MRC has come a long way since its inception 20 years ago when export earnings for rubber products was just RM5.7bil, compared to RM23.3bil last year – making rubber and rubber products among Malaysia’s top 10 exports.

Back then, it was known as the Malaysian Rubber Export Promotion Council before being rebranded by the Plantation, Industries and Commodities Ministry as the Malaysian Rubber Council this year.

MRC’s rebranding exercise was not just a change of name – it also reflects the bigger role and responsibilities.

The council is looking at its role in the next 20 years to remain relevant for the industry. MRC will re-evaluate the entire rubber and rubber products supply chain to see how it can add and create further value.

MRC also wants to promote more proactive engagements with companies looking to set up rubber manufacturing factories in Malaysia, rather than only engaging with companies that are already operating here.

In 2017, the council launched the Industry Linkage Fund for collaborative research projects between the rubber products industry and various research institutions.

Last year, the Fund for Automation and Green Technology was introduced to accelerate the industry’s adoption of automation, solar, water and biomass technology.

Projections for the next decade indicate a challenging period ahead that is fraught with uncertainties.

A major challenge facing the industry is sustainable growth and MRC intends to address it through the integration of Sustainable Development Goals into its business models to pave the path for participation in programmes offered by international development organisations (IDOs).

To adapt to increasing demands from consumers and other stakeholders for more sustainable and environment-friendly products and processes, MRC’s Fund for Automation and Green Technology encourages the industry to adopt automation and green technology for more sustainable manufacturing methods.

Unique hand gloves and radiation atenuation gloves being displayed at Malaysian Rubber Council (MRC) Gallery at MRC office in Q Sentral, Kuala Lumpur.Unique hand gloves and radiation atenuation gloves being displayed at Malaysian Rubber Council (MRC) Gallery at MRC office in Q Sentral, Kuala Lumpur.

MRC sees the need for the industry to focus on design and development, diversification, automation and digital technology to establish a strong foothold in the global value chain.

Through partnerships with IDOs, companies can then reach out to larger untapped markets and emphatically show that Malaysian companies are competent and capable of contributing to the global wellbeing.

To further spur the growth of the rubber industry, MRC is also tasked with undertaking the investment promotion of tyres and pave the path for export, while attracting new manufacturing facilities in Malaysia.

The goal is to further expand the local tyre industry and strengthen its position in the global market, which is forecast to expand at 3.4% per annum and worth US$78bil by 2030.

Giving the tyre industry a boost is expected to bring benefits such as investments, expansion of local content, reducing imports and higher export revenue, while strengthening Malaysian tyre companies, improving job prospects as well creating more opportunities for local vendors.

There is also MRC’s Industry Linkage Fund for the industry to collaborate with universities and research institutions, enabling research projects that have potential to increase exports of rubber products and enhance the industry’s competitiveness in the global marketplace.

“I strongly believe in the importance of the ‘three I’s’ for the betterment of the industry: ideas, innovation and invention, where the creation of smart partnerships is vital.

“It is also crucial that we do not forget the element of investment, to commercialise these initiatives and bring them to fruition, ” says Raja Idris.

With social compliance becoming an increasingly important aspect of supply chain management, MRC has also been doing its part to help Malaysian rubber industry players contribute to this requirement.

Rubber glove manufacturers got an unexpected boost from the Covid-19 pandemic whereby a surge in demand for medical gloves worldwide resulted in an exponential increase in exports of Malaysian rubber gloves, by 40% in the first half of 2020.

The recent setting up of a RM36mil special fund under MRC that provides a wage subsidy encourages the downstream industry – particularly rubber glove producers – to hire more local workers, in line with the Government’s new policy of prioritising job opportunities for Malaysians.

The fund is intended to provide jobs for 10,000 Malaysians, taking over the jobs currently held by foreign workers, especially in the rubber glove industry.

MRC also provides an incentive for Social Compliance Standards for manufacturers, to encourage taking the necessary steps to meet stipulated requirements.

Raja Idris acknowledges that such situations usually only benefit a specific product-type and do not occur regularly.

“The rubber industry has grown exponentially over the past decades and the Malaysian rubber products industry does not need to ride on a pandemic or disaster to make its fortunes, ” he says.

But can the rubber product industry remain competitive in the face of rapid changes, disruptions and innovations?

MRC sees a growing demand for natural, organic, and environment-friendly products as consumers become aware of the adverse impact of plastic on the environment.

The council believes it is possible for the industry to regain its position as Malaysia’s key industry.

But it will require a lot of planning, strategising and collaboration with industry players.

Regardless, rubber will never go out of fashion and will continue to have a strong following, long beyond the lifespan of any petrol-based products.

The industry will continue to be an indispensable pillar of the nation’s growth for decades to come.

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