Malaysia has emerged as the glove capital of the world thanks to its strong rubber Research and Development, entrepreneurship of the investors and the Government support. In an exclusive interview to Rubber Asia during the recently held International Rubber Glove Conference, Sankara N Nair, Chiarman of the Malaysian Rubber Board (MRB), says that having established its dominance in the glove industry, the country will now focus on innovative value-added dry rubber products. What is more, MRB will continue to serve as the driving force propelling the industry into the next millennium with the implementation of cutting edge technologies to improve the lot of the smallholders. EXCERPTS:

Let’s at the outset congratulate you on your appointment as the Chairman of the Malaysian Rubber Board. In this context, what are your priorities to take the Malaysian rubber industry forward in respect of both the upstream (NR plantations) and downstream (NR-based products) sectors?

The rubber industry remains important to the Malaysian economy, notwithstanding the significant growth of the manufacturing sector and the other commodity sectors. The rubber industry supports more than 450,000 smallholders who contribute to about 93% of rubber produced in the country. More importantly, rubber supports many downstream activities which are export earners for the country.
In 2017, the rubber industry contributed significantly to Malaysia’s export earnings at RM 32.3 billion of which RM 21.8 billion or 67.5% was accounted by rubber products. The export of rubber products was dominated by rubber gloves with an export value of RM 15.9 billion capturing 73% of global rubber gloves market share. I am glad to learn that the industry targets a higher export of rubber gloves worth RM 18.8 billion for 2018 through its continuous market expansion initiatives.
The growth and success of the rubber industry for over 140 years in Malaysia from merely an exporter of raw rubber in the past to a leading global exporter of rubber products today can be attributed to the extensive R&D undertaken, entrepreneurship of industry players and support of the Government. Over the years, the Government has provided incentives and assistance for rubber smallholders and tappers to increase rubber production; granted incentives and funds to the industry to encourage research and development, and innovation as well as automation.
With our established base of rubber product manufacturers, excellent infrastructure, market-driven R&D and the combined efforts of the related Ministries and Agencies, the Malaysian rubber industry has transformed and increased its focus to downstream activities, particularly on manufacturing high-end innovative products. More importantly, innovative R&D must have commercial values and be translated into both foreign and domestic investment opportunities for the Malaysian rubber industry. It has provided vast opportunities, especially in the manufacturing of high value-added automotive and engineering components as well as created additional employment to over 75,000 people in 2017.

Malaysia is the glove capital of the world and the Malaysian glove companies are expanding their production as well as global footprint. According to you, what are the driving forces behind this fast track of growth? Also tell us about what are challenges ahead.

I give credit to the success of the Malaysian rubber gloves sector, which has made Malaysia proud as the world’s largest exporter of rubber gloves. Since its humble beginnings in the 1980s, the rubber glove industry has made significant progress in capturing world markets by producing high quality, affordable and innovative products. Further, the industry has also invested heavily in technology which enhanced efficiency and productivity.
Today, Malaysia leads the world in the innovative production of rubber gloves, supplying 63% of global exports in volume terms or about 170 billion pieces to 195 countries. In terms of efficiency, the industry is capable of producing 45,000 pieces of gloves per hour today, compared to only 3,000 pieces per hour three decades ago.
I hope that the industry will not remain complacent with its achievement today. It is important for MRB and the industry players to work hard to continuously enhance their research and development activities in order to increase production capacity and to develop more quality rubber products that meet the functions and applications of various industries. The rubber industry also needs to innovate, automate and maximise the usage of robotic.
Today Malaysia is the world’s leading manufacturer of medical examination, surgical gloves and a whole array of innovative gloves to satisfy every need and want of the discerning customers worldwide. In 2016, Malaysia exported about 122 billion pieces, and in 2017, it jumped to 150 billion pieces and this year, we are targeting ourselves to export 172 billion pieces, which is about 64% of total world demand of roughly 268 billion pieces. The revenue had been RM 13.1 billion in 2016, RM 16.2 billion in 2017 and our aim is to touch RM 18.6 billion this year.
We have to change the landscape of the rubber industry. Currently, we are importing latex from Thailand, totalling almost 400,000 tons per year. In order to compete, Malaysia has to use its own latex. We are trying to bring smallholders into the supply chain by adopting end-stream cooperatives. These end-stream cooperatives manage up to 300 small holders, and will implement the necessary treatments to produce latex concentrate.

Sustainability of the natural rubber industry is a matter of great concern with all stake holders of the rubber industry. Bodies like IRSG and IRCo are also engaged with this quite seriously. Appreciate your comments on this and MRB’s initiatives to have a sustainable NR industry.

Sustainability is an emerging subject that asserts strong influences on future global developmental activities and socio-economic aspects regardless of geographical, social and political systems. The universality of the subject indicates that comprehensive considerations are necessary and must be given due priority to ensure that conservation of environment and natural resources remain a top agenda in any development being carried out. Malaysian industries and in particular, the natural rubber industry which has contributed significantly to economic development of the country for nearly a century, must adapt and strategise all efforts to be in accordance to the sustainability concept.
Sustainability is essential as sustainable growth can only be realised if the effects of greenhouse gases, global warming and consequently climate change, which have been regarded as a threat to our ecosystem and civilisation, can be minimised as well as managed effectively.
The natural rubber industry has the potential to be sustainable since elements of sustainability are inherently incorporated in the nature and operations of industry. Sustainable development is not only about environment but also about efficient use of resources and achieving a balance of economic, social and environmental aspects in all endeavours. The rubber industry is still at the early stage of implementing formal sustainability indicators and management although the actual essence of sustainability practices have been incorporated in our industrial and agricultural procedures since 1980’s. Therefore, opportunities are wide open for the industry to be developed into a sustainable one by balancing economic, social and environmental aspects in future developmental programmes.

The major challenges facing the NR industry is labour shortage, high labour cost, climatic vagaries and influence of factors other than the fundamentals of demand and supply on prices. Appreciate your comments

During the low rubber price periods, replant or divert plantations to other economic activities need to be intensified. Old and less productive clones shall be replaced with high-yielding clones. However, there are sufficient scientific evidences to show that Good Agricultural Practices (GAP) is a critical component for maximising potential productivity and returns, as clone alone is unable to produce projected yields. High quality planting materials, appropriate applications of fertilizer, weed and disease control, proper horticultural practices mainly pruning and branching induction are some of the key practices that must be adhered by the rubber producers during the immature stage.
Marketing chain efficiency is another area that needs to be put on focus to maintain the economic and social sustainability of rubber growers. The Government has implemented projects that exude coops as an agent linking direct to the smallholders to supply direct to manufacturers. The farmgate price consequently has improved by shortening the supply chain.
There is always room for improvement for the quality of rubber produced by the smallholders because better quality will fetch better price with the dealers. On-going awareness program will reach the farthest smallholdings to produce good quality raw material.
NR has a narrow product usage dominated by tyre sector. Demand for tyre is highly dependent on the economy growth. When the world economy slowing down, so does the demand for tyres and this has heavily influenced direction of NR price. MRB continues its research and development on rubber products and compound for green material, which will be Malaysia’s competition edge in the global rubber industry.

When do you think the NR prices will make a turnaround. Please explain the reasons.

Just like the other commodities, world natural rubber (NR) prices are influenced by supply and demand. To sustain price at acceptable levels, world supply of rubber must not exceed demand. In order to achieve this objective, an orderly growth of rubber supply is needed to ensure remunerative prices to the growers. The Government has undertaken several efforts at the national and international level to stabilise NR prices and ensuring the sustainability of the Malaysian rubber industry.
Malaysia continues to work closely with other major producing countries to ensure that growth rate of NR production should be in tandem with the consumption. At the international level, the International Tripartite Rubber Council (ITRC) which consists of Thailand, Indonesia and Malaysia (TIM) account for about 70% of NR production share globally, continued to work closely to ensure a remunerative price for the growers and fair price for the consumers via implementing some measures, namely the Supply Management Scheme (SMS), Agreed Export Tonnage Scheme (AETS) and the Demand Promotion Scheme (DPS). The SMS is an on-going scheme for long term, implemented with the aim to rationalize world NR supply to maintain a balance such that price could be maintained and sustained at a reasonable level.
Mechanisms that can be employed under the SMS include replanting, diversification to other crops and tapping holidays when supply needs to be reduced. When supply needs to be increased there can be planting of new areas, use of higher yielding clones and boosting of yield through appropriate exploitation techniques.
AETS, on the other hand, is a short-term measure aimed at restricting exports through quota to address the transient imbalances between supply and demand. The objective of this scheme is to withhold export in order to bring about a better balance between supply and demand in the world market. ITRC has also agreed on the measures to increase NR consumption domestically. These include the use of NR in various sectors such as transportation, infrastructure, sports, defence, health and consumer goods, rubberised road construction, rail pads for railway construction, dock fenders and sea toll and other suitable areas. In this context, the three countries have exchange technology and expertise in the use of NR for new road construction and resurface.

How the MRB-initiated value-added products like Pureprena and Ekopprena are doing in the market. Please elaborate.

The MRB has driven the domestic natural rubber industry to stay one step ahead of regional competition by capitalising on growing environmental awareness that has created consumer preference for natural and renewable materials over synthetic products. This spurred Malaysia to produce specialty rubbers such as the epoxidised natural rubber (Ekoprena) and deproteinised natural rubber (Pureprena) that can be used in green tyres and high performance engineering products.
Ekoprena and Pureprena are established specialty rubbers produced through modification processes to enhance technical properties of natural rubber (NR) while still maintaining the inherent advantageous properties of NR. These rubbers are produced from NR as a renewable source to be inline with the global trend towards sustainable and environmentally-friendly rubber products. These specialty rubbers would expand applications of NR beyond conventional rubber products including tyres, hoses and fenders.
The development of Ekoprena by the Malaysian Rubber Board is the result of comprehensive R&D programmes to further enhance value-addition of NR by improving properties and expanding applications for niche and advanced applications particularly for green rubber products manufacturing. More importantly, Ekoprena is introduced to address growing global concerns on sustainable development and environmental protection.
Applications of Ekoprena are primarily targeted for tyre manufacturing and advanced rubber engineering products. In particular, the use of Ekoprena in the production of green tyres improves fuel efficiency and wet grip, reduces the percentage of non-renewable petroleum-based components and increases recycle-ability of used tyres. All these factors lead to lower carbon emission which ultimately contributes to controlling the greenhouse effect and global warming.
To boost the take-up rate for Ekoprena, MRB has initiated trial projects on Prasarana Bhd’s Rapid Buses in the Klang Valley using Ekoprena tyres. The road trial is commencing well and the success of the green tyres will be based on parameters including fuel consumption, tyre abrasion and number of passengers.

Please tell us about MRB’s roadmap under your stewardship.

MRB will ensure all R&D findings to be disseminated for adoption by the industry effectively and efficiently while the services are provided with promptness and accuracy. For the future, the MRB will be the driving force propelling the industry into the next millennium with the implementation of cutting edge technologies to improve the lot of the smallholders who are, after all, the very foundation of the industry. The welfare of the individuals, particularly the small, seemingly unimportant ones, is a matter of prime consideration, for individuals make communities that make nation succeeds.
The ultimate goal is to produce high-value jobs and increased revenues in the rubber sector. MRB will continue to withstand the challenges faced by the industry with the support of the Plantation Industries and the Commodities Ministry. It is the Ministry’s desire to see the MRB continues with its strategies and action plan as it is a vote of confidence in the leadership of the MRB. It is clear that R&D is an important part of the MRB’s work in enhancing the rubber industry in Malaysia. Among its pride is the Tun Abdul Razak Research Centre (TARRC) in London, which is also one of the oldest research centres for rubber.
It is because of the founding studies conducted by centres such as TARRC that the MRB has been able to contribute to the rubber industry in Malaysia. One example is that of the high-damping rubber bearings which are being used on the Second Penang Bridge, and which will help protect the structure from the effects of seismic activities and this represents one of significant contributions of MRB and TARRC to the society.