“We are here to stay and will not move out our production facilities (from Malaysia),” said Executive Chairman and Group Managing Director Datuk Seri Stanley Thai.
This is despite the fact that it is bracing for a lower margin amid cut-throat competition from rivals in Thailand and China, as well as rising costs of doing business locally.
Despite still retaining leadership in the industry, Malaysian gloves makers lost 4-5 per cent market share to their peers in Thailand and China in terms of exports to the United States in the first quarter of 2014.
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Oneof the reasons for the market share loss was due to market players, including Supermax, which chose to pass on the higher business costs to the customers. That came in the wake of the scrapping of fuel subsidy, the implementation of minimum wage, as well as adjustments in electricity tariffs earlier in the year.
Malaysia also lost the generalised system preference (GSP) for duty-free status for imports to Europe and are now dutiable of about 2.7% while Thailand, China and Indonesia are still enjoying the GSP programme.
To maintain its global competitiveness, Supermax has to brace for a lower margin of 9-11 per cent going forward, or risk losing its market share to rivals.
“Gone were the days that we have a margin as high as 15-20 per cent,” he said.
To counter the rising costs, manufacturers have embarked on automation processes for production lines and is in the midst of looking for alternative energy sources
/Bernama:10-06-2014
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