MALAYSIA: Margma hopes govt will grant reinvestment allowance extension for industry

The Malaysian Rubber Glove Manufacturers Association (MARGMA) is optimistic the government would grant a five-year extension, as well as, expansion, of the special reinvestment allowance (RA) for the rubber gloves industry in the 2017 Budget.

MARGMA President Denis Low Jau Foo said the industry was currently implementing more automation and the transition from labour-intensive to more technology-driven required a lot of capital investment.

“We have to really modernise our factories and equipment in order to be self-reliant and not depend on labour,” he told reporters after opening the Eighth International Rubber Glove Conference and Exhibition 2016 in Kuala Lumpur 6 Sept 2016.

The special RA, granted for three years in the 2016 Budget, entails a rate of claim at 60 per cent of the qualifying capital expenditure and is allowed to be set off against 70 per cent of statutory income from year of assessment 2016 to 2018.

Meanwhile, Low remained optimistic that the industry would be able to achieve the target production of 182 billion pieces of rubber gloves this year, out of which 133 billion pieces would be exported.

However, he said the export value may be lower than the MYR 14.3 billion set earlier, given the uncertainties in natural rubber prices.

For the first half of this year, Low said the industry sold about MYR 6.4 billion worth of rubber gloves.

Earlier, Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong called on industry players to find an effective solution to fully automate their production which would certainly help rubber glove producers enhance their efficiency and increase their competitiveness.

“I would urge industry players to further explore the possibility of value-added manufacturing to diversify the range of rubber glove designs, durability and purpose, among others,” he said in a keynote address read, on his behalf, by his deputy, Datuk Datu’ Nasrun Datu’ Mansur.

Mah said the quality of made-in-Malaysia gloves had improved tremendously over the years and complied with the most stringent standards set by the United States and Europe.

This, he said, had facilitated greater market penetration of Malaysian rubber gloves to major export markets, including the United States and Europe.

“In 2015, Malaysia exported USD 4.5 billion (MYR 17.9 billion) worth of rubber products and the export of rubber gloves accounted for USD 3.3 billion (MYR 13.1 billion),” he added.

Currently, he said revenue generated from the export of gloves accounted for 76 per cent of the total export earnings from the rubber products sector.

Malaysian made rubber gloves is exported to more than 195 countries and represented 56 per cent of the global export value of USD 6.26 billion.

Source: Daily “The Borneo Post”, Kuching, Sarawak State; 7 Sept 2016

(Syed Rashid Ali, Karachi, Pakistan)