Set Up Rubber Base In South America To Seek Markets, Says MRB

By S. Joan Santani KUALA LUMPUR, Feb 17 (Bernama) -- Malaysian rubber product manufacturers should consider setting up a new base in South America as a gateway to penetrate markets in both South and North America. Malaysian Rubber Board (MRB) Director-General Dr Mohd Akbar Md Said felt that the country's impending membership in the Trans-Pacific Partnership Agreement (TPPA) would unlock trade barriers for the rubber products industry and lead to greater market access to other member countries. He said North America was considered a traditional market for Standard Malaysian Rubber (SMR) and rubber products such gloves, condoms, pipe seals rings and hoses. "The United States is the distribution centre for this region and through TPPA, exports could further improve due to tariff elimination particularly for gloves, which currently attracts an import duty of between 4.0 and 14 per cent. "This will be eliminated with the implementation of the TPPA. "In the case of South America, there is potential to expand the market share for SMR, gloves, condoms, catheters, rubber thread as well as tube pipe and hoses," he told Bernama. However, Mohd Akbar said at this stage no formal discussions has been initiated on the setting up of a rubber base in South America. Malaysia remains the world’s leading supplier of medical gloves (examination and surgical gloves), satisfying more than 50 per cent of global demand and also the global supplier of Foley catheters and condoms and the second largest exporter of latex threads. Export-oriented sectors particularly that of rubber gloves will benefit from greater market access in terms of higher output growth, especially with countries that Malaysia has yet to sign trade agreements like the United States, Canada, Mexico and Peru, he said.  Mohd Akbar said the four countries accounted for about 74 per cent of the market size of the TPPA economic bloc with a Gross Domestic Product of about US$21 trillion as of 2014. "This shows our country will have an advantage in terms of market access in the TPPA economic bloc with less competition from other rubber producing countries which are not members of TPPA. Malaysia's natural rubber is also exported to China, Germany, Iran, the US, Turkey, Finland, Korea, Taiwan and Portugal. The US, Germany and Japan remain the largest markets for Malaysian rubber products, accounting for 42 per cent of the country's rubber product exports. Other important markets include China, the United Kingdom and Australia. Mohd Akbar pointed out that, except for gloves, export of certain rubber products would face competition from countries in the TPPA like Indonesia and Vietnam which was large rubber producers. In 2015, about US$1.06 billion (RM4.5 billion) or 34 per cent of Malaysian rubber gloves were exported to the US and US$2.04 billion (RM8.6 billion) went to 180 other countries. "The demand for Malaysian rubber gloves is expected to remain strong with a growth rate of eight to 10 per cent," he said. "Although the South American market is potentially attractive but some of these countries are not TPPA members," Mohd Akbar said, adding that Chile and Peru import very little rubber. Mohd Akbar said Malaysia was currently leading in rubber technologies and training which also gave it an edge to expand especially in the South American market. -- BERNAMA