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Directions Of The Rubber Industry In Malaysia Economics

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The issue of our subject is tightness in gum elastic supply in Malaysia. The natural gum elastic production in Malaysia is worsening recent old ages. The statement of supply-demand balance of natural gum elastic in ANRPC member states during 2009 province that Malaysia ‘s entire supply is 1751000 metric tons while entire demand is 1765000 metric tons. There is a natural gum elastic demand excess of 14000 tones. Natural gum elastic will stay in tight supply following twelvemonth as outputs from aging trees decline and end product freshnesss decelerate, said the Association of Natural Rubber Producing Countries.

The association represents Cambodia, China, India, Indonesia, Malaysia, Papua New Guinea, Philippines, Singapore, Sri Lanka, Thailand and Vietnam.

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PROBLEM STATEMENT

There are three job statements of our issue. First is the deficit of land. The deficit of land is caused by the competition for land usage. Production diminution due to seting of other harvests, particularly oil thenar. Second job statement is upwind status affect the gum elastic end product.

The dry enchantment has began in the autumn of 2009 and many harvests harm from drouth cut downing the gum elastic production. Third job statement is the increasing no-good demand. The increasing gum elastic demand is caused by the development of car sector as the sector is the biggest latex user.

Aim

Our aim of this proposal is to measure the statistic of gum elastic industry in Malaysia. We have to happen informations of the statistic of gum elastic industry in Malaysia and measure it in order to cognize the rise and autumn of the industry throughout the old ages. As Malaya is one of the universe top manufacturers of natural gum elastic, the statistic that we find is chiefly on natural gum elastic in Malaysia. Our rating focuses on the production of natural gum elastic since twelvemonth 1961 to twelvemonth 2010.

Our following aim is to find the factors lending to the rise and autumn in the gum elastic industry in Malaysia throughout the old ages. Rubber industry in Malaysia rise from the 1960s, but so there was a drastic autumn in the late seventiess. In the mid 1980s, there was a recovery in the industry, but it falls once more about 1997 and 1998. In this proposal, we will happen out and find why our gum elastic industry rise and autumn throughout the old ages.

The 3rd aim of this proposal is to place the challenges confronting by the gum elastic industry and its future waies. Although there are some challenges confronting by the gum elastic industry such as our issue – stringency in gum elastic supply and others, the hereafter of gum elastic industry in Malaysia is said to be bright. Here we will discourse about why our gum elastic industry is said to hold a bright hereafter despite of the challenges we are confronting now.

Methodology

The methodological analysis we use is chiefly based on secondary informations which are statistics, cyberspace diaries and newspaper articles. Statistics we found from the cyberspace such as the information of Malaysia NR production and a graph of the country replanted with gum elastic trees in Malaysia. We found many internet diaries such as other gum elastic industry research paper in our literature reappraisal. A few newspaper articles had besides being found such as the intelligence about “ Malaysia gum elastic industry expects to resile back ” hence we can find that our gum elastic industry will hold a bright hereafter.

LITERATURE REVIEW

Dr Habibah Suleiman from the Malayan Rubber Board established a diary on November 2000 entitled “ The Status of and the Future Direction of the Malayan Rubber Industry ” . In the diary, Dr Suleiman states that alterations in gum elastic industry included smallholder industry has become an of import natural stuff provider and the outgrowth of the downstream sector. The other alterations that highlighted is the increasing domestic ingestion in gum elastic industry has turning Malaysia into a major importer of NR.

Dr Suleiman suggested that consolidation of retentions is of import, as amalgamate retentions will supply a synergism for incorporate economic activities in the gum elastic industry. Replanting gum elastic activities should be concerned and value added gum elastic merchandises are encouraged. Measures such as R & A ; D need to be taken to guarantee the hereafter development of an incorporate gum elastic industry which includes the re-engineering of all sectors and more significantly the integrating of the upstream and downstream sectors.

The 2nd literature reappraisal is “ An Evaluation of the Impact of Rubber Trees in China on the Rural Economy with Specific Focus on Xishuangbanna, Yunnan and Hainan Island ” by Roland Cheo in 2000. In this diary, Roland explains about the universe trends in natural gum elastic production and the practical troubles of turning natural gum elastic in China in the 1990s. Roland provinces that in the center of 1990s, the natural gum elastic monetary value is falling, the universe demand for natural gum elastic is stagnating and the dependance on man-made gum elastic is increasing. China is confronting jobs such as increasing direct and indirect cost and lost of productiveness.

Roland besides suggested some policy in order to heighten the gum elastic industry in China. One is to pattern agro-forestry in Xishuangbanna particularly on the preexistent individual harvest gum elastic plantations. Second is to utilize gum elastic trees as lumber, particularly in furniture industry. As the clime of Xishuangbanna non suited to works gum elastic trees, therefore cleared land can utilize to works other harvests such as java.

The 3rd literature reappraisal is by N.M.Mathew ( 2009 ) with the rubric of “ Rubber Products Manufacturing Industry in India: Current Tendencies and Future Prospects ” . Mathew mentioned that India is the 4th largest manufacturer of natural gum elastic. The natural gum elastic growing in India is supported by the entry of foreign states in gum elastic merchandise industry and this will assist the domestic market of gum elastic industry in India. In the diary, Mathew states that the Sur production, one-year turnover, export in the gum elastic industry in India grow steadily from 2006 to 2009.

Besides that, Mathew highlighted that India is emerging as a big market for gum elastic merchandises as it has a big population based. The Sur sector has perform good, while the non-tyre sector such as some high-value proficient goods still needs farther investings. The gum elastic industry in India is expected to turn as the car industry in India develop quickly presents.

Introduction of gum elastic industry in Malaysia

The gum elastic industry is get downing since twelvemonth 1878 with the first gum elastic tree was planted in Kuala Kangsar, Perak. Therefore, it can be seen evidently that the gum elastic industry has been about in a really long manner and more than a century in our life. It has formed the anchor and go one of the cardinal sectors of the Malayan economic system particularly it being an of import constituent in the agribusiness sector which contributes to the state ‘s prosperity and gross domestic merchandise ( GDP ) Malaysia. The Malayan gum elastic industry has successfully established itself as a 3rd biggest manufacturer of natural gum elastic ( NR ) in the universe and produces a wide scope of merchandises from natural gum elastic every bit good as gum elastic wood merchandises and superior quality is widely used as a benchmark in the international market. Besides that, Malaysia besides remains the universe ‘s largest exporter of natural gum elastic ( NR ) medical baseball mitts, catheters and latex yarn. From the finished gum elastic merchandises, gum elastic baseball mitts are the Malaysia ‘s biggest export merchandise. For illustrations, the good known manufacturers of gum elastic baseball mitt in Malaysia are such as Top Glove, Oon, Comfit, Profeel, Dermagrip, Supergloves and RadiaXon. It is estimated that over 60 % of the gum elastic glove market at the internationally degree is control by the Malaysia. As reported by the Department of Statistics Malaysia, an export of Malaysia ‘s natural gum elastic ( NR ) has recorded 85,587 dozenss in August 2010. It showed an addition of 10,082 tones or 13.4 per centum over the old month. The major finish of Malaysia ‘s NR was China which is about 48.1 per centum. In add-on, the Malayan gum elastic sector besides contributed 80,643 tones production of natural gum elastic ( NR ) in the August 2010. Malaysia has invests to a great extent in research and development ( R & A ; D ) in the gum elastic industry in order to develop advanced and new utilizations for its gum elastic.

Rise and Fall of the Rubber Industry in Malaysia and factors lending to it.

Malayisa, NR country, production and outputs, 1961-2005

hypertext transfer protocol: //www.unctad.org/infocomm/anglais/rubber/images/MalaysiaProduction.gifSource: UNCTAD secretariat ( Data: FAOSTAT database

statistic rubber.png

Since 1960, the increased in demand for gum elastic began to be overtaken by the big additions in man-made gum elastic supply. Therefore, gum elastic monetary values declined up to 1970 due to this expanded gum elastic supply except for a ephemeral rise in 1969. However, natural gum elastic production still on the rise because in the average clip, proficient progresss in fixing and boxing NR ( natural gum elastic ) were the positive factors in respond to the demand and to competition from the spread outing function of man-made gum elastic ( SR ) . These proficient alterations in the nature of manufactured gum elastic merchandises had influenced the demand for NR in a loosely positive mode. One major was the debut from the mid-1960s of radial Surs, which much enhanced the usage of NR at the disbursal particularly of styrene-butadiene gum elastic ( SBR ) . Radials increasingly replaced the antecedently dominant cross-ply Surs, and were to hold great impact on NR and SBR ingestion portions over clip.

Latex merchandises and notably dipped goods with high NR content were a farther growing country, although there were besides opposite effects due to the increased in penchants for SR latices in rug backups. From the 1950 up to 1970 was really a period when the market for gum elastic visibly divided into proficient niches for given NRs and SRs, with less possibly permutation and more complementary.

Retaining production viability

Steady rises in labor and land cost were the negative factors for NR production during these old ages ( 1950-1970 ) . Rise in rewards were really the preferred result for workers but with the rise in both rewards and land value, a considerable accommodations in resource allotment and engineering were extremely required in order to retain profitableness. Thus, bring forthing low quality gum elastic from unselected seedlings became uneconomic in such fortunes, and these negatives factors were the stimulator for many Malayan gum elastic manufacturers to follow new production and processing engineerings to diminish the production cost. Although rewards in Malaysia were already much higher than those elsewhere, but this was offset by the superior application of engineering and conveyance cost comparison to states like Indonesia and Thailand due to better roads and shorter distances.

By 1970 high giving trees occupied a big net income of the rubber country on Malayan estates. The country of deep-rooted gum elastic on smallholdings had besides expanded well. Malaysia ‘s consequent progress to an NR end product of 1.269 million metric tons in 1970 enable it to retain a 40 % portion of universe entire production although its proportion of planetary plantings had dropped well.

Further growing and alteration, 1970 to early 1990s

The growing of NR was interrupted by market downswings and was instead lower than in 1960s. During this period, oil dazes in the 1970s and the two planetary economic recessions of the early 1980s and early 1990s were the main influences on NR production. The immense oil monetary value additions affected NR in two conflicting ways. They raised the cost and monetary value for SR but at the same clip besides reduced the demand of vehicle users for fuel. Rise in cost and monetary value for SR increased the demand for NR but the reduced in demand for car decreased the demand for NR. Therefore, with these two conflicting effects, in each oil dazes, initial rush in monetary value of NR, as it followed SR, was succeeded by a diminution as the demand for gum elastic slackened. The diminution in the late seventiess was so exacerbated by recession and the dead universe trade good market, but was corrected by strong recovery in the mid-1980s. This continued until farther hard conditions emerged in 1990s, when non-fuel trade goods including NR reached their lowest existent monetary value since 1932.

Besides that, proficient alterations in the nature of Surs had besides influenced the demand for NR. Improved designs which gave longer distances travelled per Sur and lower weights per unit, advanced auto layouts including front wheel thrusts which cut the grade of Sur wear had reduced the NR use and hence the demand which affect its production.

However, the turning consumer demand for lordotic goods and particularly examination baseball mitts, associated with the rapid spread of AIDS has influenced the NR demand in a positive mode.

Till 1990, Malaysia was the universe leader in NR industry. It was the largest manufacturer every bit good as leader in research and the full universe looked up to Malaysia for everything on NR. But a host of factors, including hapless leading, large-scale displacement to oil thenar, unattractive monetary value for NR for old ages, deficit of skilled tapsters, reallocation of resources from gum elastic cultivation to rubber merchandises industry and monolithic urbanization influenced many to make a rethinking on NR ‘s continued viability. The consequence: From 2 million hectares in 1965, the gum elastic country drastically came down to 1.02 million in 2009. Today, Malaysia is the 3rd largest manufacturer of NR with Thailand and Indonesia busying the first and the 2nd places with production at 3 million metric tons and 2.6 million metric tons severally.

Problems associating to the gum elastic industry that caused stringency in gum elastic supply

Deficit of land/Competition usage of land

Over the past decennaries, the planetary gum elastic industry has witnessed unbelievable growing in the production in the Malaysia. It can be proven by Malaysia has become the top 3 gum elastic manufacturer at the internationally degree. Besides that, the Malayan natural gum elastic ( NR ) industry is presently being controlled and dominated by the smallholders ‘ in which they had accounted about 86 per centum of the entire deep-rooted country. Rubber cultivation has occupied about 4.2 million estates with 65 per centum of the entire cultivated country in the Malaysia. But, presently, there was a limited handiness of land for the plantation and besides enlargement of gum elastic particularly the natural gum elastic ( NR ) plantation in the Malaysia if compared to the last decennaries which the entire country of Malaysia is largely dominated by the gum elastic trees plantation. Rubber plantation country is demoing a diminishing tendency twelvemonth by twelvemonth from twelvemonth 1990 until twelvemonth 2009 with the ground of competition of the land usage in the Malaysia. It can be shown in the figure below.

The statistic reported by the Bank Negara Malaysia ( BNM ) shown that the country replanted with gum elastic trees in period 1990 to 2009 has decrease well from 1,837,000 hectares to 1,237,000 hectares severally. The entire gum elastic plantation countries had fallen with sum of 600,000 hectares.

The entire country for gum elastic plantation worsening is because the land has been available for transition for different and assorted usage. For illustration, the land had been used for seting other harvests, particularly the dominant oil thenar trees. In Malaysia, the enlargement rate of oil thenar plantation is quickly increasing particularly in Sabah. In the early 1980s, merely 1 per centum of the Sabah ‘s land was planted with oil thenar. But, get downing from twelvemonth 1998, the oil thenar plantation countries has achieved 11percent or about 842, 496 hectares of Sabah ‘s land country. Therefore, between 1990 until 2002, Malaysia ‘s oil thenar country has already expanded from 1.7 million hectares in twelvemonth 1990 to 3.37 million hectares in 2002. In the last twelvemonth which is 2009, the country under oil thenar cultivation has represented 29 per cent of the Sabah ‘s entire land country. Majority of these oil thenar countries are dominated by smallholders in that provinces.

The land non merely used for the oil thenar plantation. When we consider land usage in an urban country, the land is fundamentally or normally use for residential ( private places, terraced houses, flats and townhouse composites ) , industries ( storage, light industries and heavy industries ) , and besides included the development of substructures like streets, diversion ( Parkss, athleticss evidences and civilization ) , public services such as infirmaries, airdromes, graveyards and sewage and besides instruction ( primary and high school ) . The increasing of these buildings in the urban country has wholly diminishing the land usage in the chances agriculture such as gum elastic. As a effect, the sums end product or production of the gum elastic has worsen a big measure of figure and do the supply of gum elastic become tight while the demand for the gum elastic is progressively.

Weather Condition

Weather status will impact gum elastic end product particularly in the major gum elastic manufacturer states such as Thailand, Indonesia and Malaysia. In the late February 2010 and March 2010, rubber supply in Malaysia has bit by bit declined as the dry season started. There will be drier turning season in Southeast Asia this twelvemonth due to the El Nino conditions form. El Nino is an unnatural heating of surface ocean Waterss in the eastern tropical Pacific, besides called Southern Oscillation. Our authorities functionary said that Malaysia may non make the jutting 1 million dozenss of gum elastic this twelvemonth if this terrible drouth continues.

Actually the clime status for optimal growing of gum elastic trees is rainfall of around 250 centimeter equally distributed without any pronounced dry season and with at least 100 showery yearss per twelvemonth. Besides that, the suited temperature scope should be approximately 20A°C to 34A°C with a monthly mean of 25A°C to 28A°C, and should be absence of strong wins. When the drouth season semen, the temperature will be higher and the rainfall will less. This will decidedly impact the growing of gum elastic trees and hence affect the aggregation of gum elastic and diminish the gum elastic supply.

Addition in no-good demand

The usage of gum elastic is widespread, runing from family to industrial merchandises, come ining the production watercourse at the intermediate phase or as concluding merchandises. The car industry is the individual biggest user of latex, easy devouring about 70 % of the universe latex production. Harmonizing to Association of Natural Rubber Producing Countries ( ANRPC ) director-general Prof Djoko Said Damardjati, stringency in gum elastic supply would stay an issue amid an rush in demand from China and India for their flourishing car and Sur fabrication industries. The staying 30 % are taken up by the general gum elastic goods ( GRG ) sector, which includes all merchandises except tyres and tubings.

In the fabrication sense, uses of gum elastic are door and window profiles, hosieries, belts, matting, flooring and moisteners ( antivibration saddle horses ) for the automotive industry in what is known as the “ under the bonnet ” merchandises. Baseball gloves ( medical, family and industrial ) and toy balloons are besides big consumers of gum elastic, although the type of gum elastic used is that of the concentrated latex. Significant tunnage of gum elastic is used as adhesives in many fabrication industries and merchandises, although the two most noticeable are the paper and the rug industries. Rubber is besides normally used to do gum elastic sets and pencil erasers. Many aircraft tyres and interior tubings are still made of natural gum elastic due to the high cost of enfranchisement for aircraft usage of man-made replacings.

Additionally, rubber produced as a fibre sometimes called elastic, has important value for usage in the fabric industry because of its first-class elongation and recovery belongingss.

Degree centigrades: UsersmagrineDesktopdemand 2.pngEstimates and projections for universe gum elastic ingestion in the Sur sector

Degree centigrades: UsersmagrineDesktopdemand1.png

Estimates and projections for universe gum elastic ingestion in the general gum elastic goods sector

Beginning: hypertext transfer protocol: //books.google.com.my/books? id=5nJ4TzFiE_MC & A ; pg=PA105 & A ; lpg=PA105 & A ; dq=consumption+of+natural+rubber & A ; source=bl & A ; ots=XqdFUn04Dj & A ; sig=q8bENLsH088sJnIJKPL-sZt2NL4 & A ; hl=en & A ; ei=VBPHTMuTH9Okce_ysd8N & A ; sa=X & A ; oi=book_result & A ; ct=result & A ; resnum=6 & A ; ved=0CDYQ6AEwBTgU # v=onepage & A ; q & A ; f=true

Future of Rubber Industry

The Malayan gum elastic industry was one of the major beginning of income of the state in past decennaries. Subsequently on, the production of gum elastic has been worsening and some investors even labeled gum elastic industry as a sundown industry. Somehow it is still early to foretell the hereafter of Malaysia gum elastic industry. However, presently the gum elastic industry is in its positive tendency and there are some other positive marks of the hereafter. Therefore, we believe that the hereafter of Malayan gum elastic industry is bright.

Malaysia is now the largest consumer of latex dressed ore in the universe. Besides, our state is besides the universe ‘s largest provider of medical gum elastic baseball mitts and besides the universe ‘s largest provider of latex yarn and cord. Harmonizing to Malaysian Export Promotion Council, many states frequently choose Malaysia to import gum elastic to their states because the gum elastic produced in Malaysia has high quality and the gum elastic monetary value and the gum elastic merchandise is competitory in the international market. ( Beginning: Malayan Rubber Export Promotion Council )

Regardless of competition from Thailand and Indonesia, and late China, Malaysia is expected to stay as one of the major provider of baseball mitt due to the dynamic and farsighted baseball mitt makers. Malaysia has the advantage in term of lower cost beginning of energy such as natural gas and local productiveness. Malaysia besides exceeds China in natural stuff supply as the 3rd largest natural gum elastic provider after our neighbouring states Thailand and Indonesia. On the other manus, Malayan baseball mitt makers are advanced in footings of technological industry of scrutiny and medical class baseball mitts where their quality demands are going more rigorous and rigorous. ( Beginning: Bursa Malaysia News, August 26, 2009 )

Furthermore, Malaysia is presently the 3rd largest manufacturer of natural gum elastic in the universe. Even though the ingestion of natural gum elastic has been increasing, Malaysia has been able to bring forth more than one million metric tons of natural gum elastic to be exported since 2004 as shown in table 1. Therefore, the consumers of natural gum elastic can still anticipating Malaysia as a provider of natural gum elastic.

Table 1: Rubber Production, Export and Consumption of Malaysia ( Tonnes ) , 2000 – 2009

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Production of NR1

927,608

882,067

889,832

985,647

1,168,735

1,126,023

1,283,632

1,199,553

1,072,365

857,019

Export of NR1

977,975

858,993

927,919

1,646,708

1,369,428

1,322,165

1,184,396

1,018,052

916,599

703,051

Consumption of NR1

363,715

400,888

407,884

420,775

402,769

386,472

383,324

450,246

468,894

468,706

Consumption of SR2

95,000

96,000

90,000

90,000

86,500

96,400

112,400

122,800

124,500

129,500

Beginning: Department of Statistics, Malaysia ( DOS ) and International Rubber Study Group ( IRSG ) Adopted from Malayan Rubber Export Promotion Council

Furthermore, there are more than 160 states in the universe which import gum elastic merchandises from Malaysia. For case, USA and China are the two biggest export finish of Malayan gum elastic merchandises following by Germany, Japan and United Kingdom. Malayan gum elastic merchandises are celebrated for its high quality and the competitory monetary value. The no-good merchandise makers include local and foreign little and average sized endeavors which have the capablenesss of providing the downstream merchandises such as automotive constituents, medical baseball mitts, hosieries and belting. ( Beginning: Malayan Rubber Export Promotion Council )

Malaya is the top provider of scrutiny and surgical baseball mitts which carry throughing about half of the universe ‘s demand. For case, the scrutiny baseball mitts are largely utilized by the medical and wellness attention installations. Next, Malaysia is besides the universe ‘s top provider of Foley catheters and besides the 2nd largest provider of rubbers and latex togss. Basically, latex yarn is normally in the vesture industry as elastic sets and supports. Some other illustrations of of import latex merchandises which are produced in Malaysia include finger stables, balloons and others. Besides, Malaysia has a production comprises a broad scope of industrial gum elastic merchandises such as beltings, wires, hosieries and overseas telegrams for the international market. This is shown in table 2.

Table 2: Malaya ‘s Export of Selected Rubber Products, 2005 – 2009

Rubber Product

2005

Value ( RM Million )

2006

Value ( RM Million )

2007

Value ( RM Million )

2008

Value ( RM Million )

2009

Value ( RM Million )

Baseball gloves, other than surgical baseball mitts

3,793.23

4,624.52

5,095.24

5,991.92

6,279.86

Surgical baseball mitts

706.87

758.39

780.41

916.34

866.21

Catheters

647.71

469.92

670.02

285.22

96.87

Vulcanized gum elastic yarn and cord

574.20

745.66

720.86

615.48

707.60

Wire, overseas telegram and other electrical music directors

60.96

86.74

103.04

22.84

20.16

Shrieking and tubing

216.72

223.08

307.60

338.31

218.39

Sheath preventives

115.78

143.75

151.71

212.50

233.65

Belt outing

55.22

57.92

62.15

59.31

45.05

Balloons

33.69

33.51

38.89

10.88

8.65

Precured pace of non-cellular gum elastic

32.26

32.18

19.17

26.95

54.19

Cellular gum elastic lined with fabric cloth on one side

24.94

17.23

13.40

6.56

13.99

Finger stables

9.51

9.85

8.67

4.46

3.34

Teats & A ; soothers

9.30

12.32

17.36

14.14

11.76

Pipe seal rings of untempered cured gum elastic

3.43

2.38

1.53

0.50

5.19

Beginning: A Department of Statistics, Malaysia ( Adopted from Malayan Export Promotion

Council )

The other ground why hereafter of gum elastic industry is said to be bright is because of the recovery of the mechanization sector. This is because gum elastic is one of the major stuffs needed in car fabrication such as Surs, shrieking and tubing. With this, Malaysia ‘s natural gum elastic for 2010 is expected to increase by 16 per centum to one million metric tons beared by higher monetary values compare with 900,000 metric tons in 2009. The Director General of the Malaysian Rubber Board, Dr Salmiah Ahmad, said that the place of natural gum elastic for 2010 is believed to be positive because of the recovery and the turning demand in the planetary automotive sector. She besides claimed that the higher production of gum elastic estimated this twelvemonth would be due to the more attractive monetary value of natural gum elastic which would likely promote smallholders to tap for more latex. Besides, she added that during the first one-fourth of 2010, the normal monetary value of Standard Malaysian Rubber ( SMR20 ) , which is the major gum elastic class utilised in the fabrication Sur has increased more than twice to RM10,140 per metric ton from RM 4,990 per metric ton recorded in the first one-fourth of 2009. ( Beginning: The Star Online, April 13,2010 )

The addition in no-good monetary value presents which has benefited all rubber little holders is due to several grounds. First, with the increasing demand from China due to its rapid economic growing in that peculiar state increase the demand for natural gum elastic. Second, the addition in crude oil monetary value which later increase that monetary value of man-made gum elastic, which means the addition in monetary value of rivals of natural gum elastic. Third, the wintering seasons in the major state which produces gum elastic causes the stringency in gum elastic supply. Following, the cooperation and understanding between three major manufacturer states, Indonesia, Malaysia and Thailand named “ Tripartite Rubber Cooperation ” has balanced the universe ‘s demand and supply of gum elastic and go on to supply positive mentality toward the gum elastic market. The last factor which causes the addition in no-good monetary value is the instability in South Thailand which affects the production of gum elastic in that part to diminish. However, the addition in the gum elastic monetary value has made this industry attractive and this encourages little holders to tap more gum elastic. In add-on, harmonizing to economic experts which predict that the universe economic science will turn better particularly due to the recovery of car industry in China and India which would increase the demand of natural gum elastic production. It was given that in twelvemonth 1990, the monetary value of SMR20 is 214.00 sen/kg. The monetary value of SMR 20 has surged to 631.50 sen/kg. ( Beginning: Ministry of Plantation Industries and Commodities Malaysia, 2010 ) . In short, the addition in the gum elastic monetary value will do this industry more attractive to acquire involved in this sector. The tabular array below shows the recent monetary value of SMR20 in several provinces in Malaysia.

Table 3: Daily SMR20 Price from different provinces in Malaya

Date

States

Skrap monetary value ( sen/kg ) *

1 twenty-four hours

3 yearss

26/10/2010

Kelantan

541

563

26/10/2010

Terengganu

544

565

26/10/2010

Pahang

541

563

26/10/2010

Johor

536

557

26/10/2010

Negeri Sembilan

544

565

26/10/2010

Melaka

539

560

26/10/2010

Selangor

539

560

26/10/2010

Perak

539

560

26/10/2010

Kedah

536

557

26/10/2010

Perlis

536

557

26/10/2010

Pulau Pinang

536

557

Beginning: Rubber Industry Smallholders Development Authority

Next, the Economic Transformation Programme ( ETP ) is a programme to transform Malaysia into a high income economic system by twelvemonth 2020 by the Malayan authorities. ETP will convey back Malaysia ‘s place as the major manufacturer of natural gum elastic and reenforce its competitory exporter position in the international market. Under ETP, Malayan gum elastic sector can keep its hectarage at one million hectares. In add-on, there will be extra zone of one million hectares by working appropriate land bank in Sabah and Sarawak. There are besides replanting activities which increased to 40,000ha every twelvemonth twelvemonth from 20,000ha. Indeed, the ETP has three entry point undertakings ( EPPs ) for gum elastic, which including rubber country or output betterment, concentrating and rushing up in downstream merchandises and bring forth new merchandises aimed by 2020. ( Beginning: The Star Online, September 28,2010 ) .

In decision, gum elastic industry is an of import portion of agribusiness sector that should non be neglected. The related governments should concentrate on the research and development activities in the upstream sector of gum elastic in order to alleviate the job faced by the industry which is stringency in the gum elastic supply. Research and development activities should besides concentrate on issues faced by the manufacturer such as bettering the seting stuff, the demand to increase land and labour productiveness and besides bettering the acceptance of labour-saving engineerings to cut down the labour deficit job. The Malayan Rubber Research and Development Board ( MRRDB ) owned a UK based research and development centre named Tun Abdul Razak Research Center ( TARRC ) in the UK which has a research research lab to run in R & A ; D related to merchandise end-uses and possible markets. In the other manus, gum elastic industry should go on concentrate on the downstream merchandises and keep its current place as the top provider of scrutiny and surgical baseball mitt in the universe.

Policy Deduction

There are several establishment to assist in the development of gum elastic industry such as Malayan Rubber Research Development Board ( MRRDB ) . This is a authorities organisation which conducts overall control of the research, proficient development and promotional work in support of the Malayan natural gum elastic industry. The chief intent of MRRDB is to help in accomplishing the modernisation of the gum elastic industry with nonsubjective to collaborate and interact with all other national bureaus and responsible for research, extension, proviso of agricultural credits, processing and selling of gum elastic

Next, the Rubber Industry Smallholders ‘ Development Authority ( RISDA ) is a establishment which purpose at the modernisation of gum elastic smallholdings. RISDA is responsible for group processing development and established processing Centres in Malaysia. RISDA besides provides smallholders with installations to treat their natural stuffs. The maps of RISDA include pull offing the Rubber Industry ( Replanting ) Fund, control and run approved undertakings and strategies and implement all inventions from research that are appropriate to the smallholder sector ;

Malayan Rubber Development Corporation Berhad ( MARDEC ) is another establishment which engaged in the processing and selling of gum elastic of smallholders. MARDEC aims at bettering the quality of gum elastic and obtain premium monetary values for their production. The aims of MARDEC are to maximise the income of the gum elastic smallholders through the proviso of improved processing and selling installations and besides to upgrade the quality of gum elastic produced by smallholders into technically specified gum elastic.

Cite this Directions Of The Rubber Industry In Malaysia Economics

Directions Of The Rubber Industry In Malaysia Economics. (2017, Jul 23). Retrieved from https://graduateway.com/directions-of-the-rubber-industry-in-malaysia-economics-essay/

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