FOR the past two decades the nation’s rubber downstream industry has been guided by the Malaysian Rubber Export Promotion Council (MREPC), which has seen the sector grow to a level where our rubber products are now exported to 195 countries and in 2019 generated RM23.3bil worth of export earnings.
However, with rubber now having to compete in a more dynamic and competitive environment, there is a need to transform the commodity into a high value-added industry that keeps pace with advancement of technology and needs of the market.
That transformation is today being led by what is now known as the Malaysian Rubber Council (MRC) and it goes beyond a mere change of name as it reflects the expansion of its earlier role.
The rebranded council’s new direction and wider mandate that coincided with its 20th anniversary was recently announced by Plantation Industries and Commodities Minister Datuk Dr Mohd Khairuddin Aman Razali.
“We have come a long way in the past two decades and have reviewed what worked and what has not. What we need to do now is keep improving and scale new heights to elevate Malaysia’s rubber industry and flourish further, ” says MRC chief executive officer Brandon Chan.
“We have a wider role and more responsibilities which include driving the growth of the nation’s rubber products industry.
“The tasks for MRC now include connecting the downstream with the midstream and upstream industries, which is the way forward for the industry as a whole.
“It is time to look at the industry as a whole to ensure that everyone moves along together, hence the vision of value creation and value addition by MRC. We create value for the downstream industry, then add value to the midstream and upstream industries, ” says Chan.
With its expanded mandate, MRC’s mission is to now break new ground and identify new opportunities through domestic promotion, capacity building of the rubber downstream industry, talent development and adoption of advanced technology, while promoting investment.
To do so, its business strategy will focus on several programmes that are also designed to enhance the tyre industry in Malaysia and move the industry up the global value chain, as well as ideate, invent and innovate.
The aim of enhancing the tyre industry is to diversify Malaysia’s export contribution of high value products and increase export performance of dry rubber products, while increasing consumption of locally produced rubber.
“Aside from our mature markets like the US and European markets, we will also be looking more at China, India, Africa and Latin America for new markets, because of their larger population and good business prospect.
“We aim to strengthen our presence in those markets, as we have not uncovered their full potential, ” says Chan.
He adds that MRC collaborating with international development organisations such as the World Bank, United Nations agencies, Islamic Development Bank and Asian Development Bank is for the purpose of moving the industry up the global value chain.
“It’s no longer just being at trade shows. We are now doing things differently, it is not business as usual.”
These new strategies reflect the expansion of the council’s role in the development of Malaysia’s rubber industry, human capital development and adoption of advanced technology while promoting the rubber industry.
Chan also sees joint ventures and partnerships as the way forward to facilitate promotion of investment while catalysing ideas, inventions and innovations to further boost development of the downstream rubber industry.
“We have to ensure that there is uptake of the ideas by industry members so it will be important to get their buy-in, ” he says.
MRC launched several new initiatives to spur the growth of the sector as well as to move the industry towards a sustainable industry.
To encourage industry members to move towards automation and IR4.0 as well as renewable energy resources such as solar, biomass and water, a RM20mil fund for automation and green technology is available.The move is aimed at shifting the rubber industry towards greater automation, as well as increase the application and use of renewable sources of energy and sustainable water resources.
“The initiative will help alleviate productivity challenges in the downstream sector of the rubber industry. For example, the demand for foreign labour can be moderated with greater automation in rubber glove production lines, ” says Chan.
To remain competitive in manufacturing and products, industry members are encouraged to collaborate with researchers from local public and private higher education institutions as well as research institutions to improve product innovation and enhance manufacturing processes, which is facilitated by the MRC’s RM3mil Industry Linkage Fund.
The fund bridges the research gap between academia and industry with the aim of encouraging the Malaysian rubber products industry to collaborate with universities and research institutions on R&D projects that have the potential to increase the country’s exports of rubber products and enhance the industry’s competitiveness in the global marketplace.
To complement that, MRC’s research division also works with research agencies and produces industry reports as well as conducts in-house research initiatives for their members.
There is also a RM36mil fund to encourage rubber downstream companies to hire more locals to work in the industry, which is expected to benefit 10,000 Malaysians and about 200 rubber manufacturers in the industry.
This will also help address the shortage of foreign workers that the industry is currently experiencing, and is in line with the Government’s policy of prioritising the creation of more jobs for Malaysians and reduce reliance on foreign workers.
“We will provide a wage subsidy of RM300 for each local worker, for a period of 12 months, in the downstream sector.
“Our target is to hire 10,000 Malaysians to work in over 200 manufacturing companies in the downstream rubber sector, ” says Chan.
MRC is also investing in the next generation of industry talents with its scholarship programme which since 2010 has allowed undergraduates to pursue degrees at local institutions of higher learning.
More recently, MRC provided scholarships for graduates to enrol in the Professional Graduateship of Rubber Technology programme offered by the Plastics & Rubber Institute Malaysia (PRIM) and UniKL.
“The council has been an integral part of the industry’s development and has become a trusted partner that provides it with strategic direction.
“To meet the changing needs of the industry we serve, MRC needs to constantly redefine our role and functions so that our rubber products are the preferred choice in the world market, ” says Chan.