PETALING JAYA: The Malaysian Rubber Glove Manufacturers Association (Margma) has called for a revision of the natural gas tariff following the sharp fall of liquefied natural gas (LNG) and coal prices in recent months.
The association urged Gas Malaysia Bhd and Tenaga Nasional Bhd (TNB) to review current cost factors and to revise the tariff to be in line with the international prices of LNG and coal, and has sought the Energy Commission’s assistance in moderating energy costs to make the local rubber glove industry more competitive.
“It is obviously natural that the cost of manufacturing ought to come down in tandem with the sharp drop in prices of these two important sources of energy. The reduction in energy costs will definitely be a booster to rubber glove manufacturers who are now saddled with a rather high natural gas cost and the higher tariff of electricity usage for businesses,” Margma president Denis Low Jau Foo (pix) said in a statement.
According to Margma, the Asian LNG pricing, using Japan Korea futures, was at its highest at US$11.81 per MMBtu in September last year. Currently, the price is only US$4.62 (about RM19) per MMBtu, representing a difference of around 60%.
The price of coal, meanwhile, has dropped by almost 25%, from US$118 a tonne in July 2018 to US$88.25 (about RM360) a tonne now.
Low said the Malaysian rubber glove industry is currently affected by rising costs due to higher wages, higher natural gas prices over the months, a not-so-conducive electricity tariff for businesses and the highly competitive global business environment.
“While most of our member-companies are seasoned players and very matured, it is still a challenge too much for them and, as such, it would be wise and clever for the Energy Commission to quickly step in to ensure that Malaysia continues to be the global leader in the supply of medical examination and surgical gloves to the world,” he added.
In terms of global consumption, Margma expects 300 billion pieces of rubber gloves this year, of which it hopes to garner 65%. Malaysia exports to over 190 countries across the globe.
Last year, Margma member-companies exported an estimated 168.8 billion pieces of rubber gloves to the world with a value of about RM17.74 billion. These companies aim to export RM19.88 billion worth of rubber gloves this year.
In addition to the costs and competitiveness of the Malaysian rubber glove industry, Margma hopes that the foreign workers issue will be resolved and will be engaging with Home Affairs Minister Tan Sri Muhyiddin Mohd Yassin and Human Resources Minister M. Kulasegaran to seek a winning solution.