The Malaysian Rubber Council aims to achieve balanced ‘sustainable’ impacts guided by specific values of prosperity, people, planet and partnership to mitigate risks face by the industry in the future
Sustainability is the ability to exist and develop without depleting natural resources for the future.
The Malaysian Rubber Council (MRC) has long believed that a robust foundation is crucial towards productive measures of sustainability in terms of competitiveness and sustainable development through the implementation of an operational strategy which focusses on economic, environmental, social and governance (EESG) principles.
In a recent exclusive interview with BusinessToday, MRC Chief Executive Officer Nor Hizwan Ahmad expressed a passionate stance toward the agency’s quest for their long-term value creation model under which MRC aims to achieve balanced ‘sustainable’ impacts guided by specific values of prosperity, people, planet and partnership to mitigate risks in the future.
‘365 A Moment In Time’
“Our sustainability initiative dubbed as ‘365 A Moment In Time’ applies these values in meeting our goals which are aligned with the National Agricommodity Policy 2021-2030 (DAKN 2030) and to ultimately achieve MRC’s vision to make Malaysia a leading exporter of quality and sustainably produced rubber products,” said Nor Hizwan.
Among the goals of the DAKN 2030 are increasing idea germination in terms of technology, expanding markets and further boosting productivity based on five core thrusts — sustainability, productivity, value generation, market development, and inclusivity. The policy was developed to ensure all agencies under the Plantation Industries and Commodities Ministry share the same direction.
Nor Hizwan explained that since the establishment of its Sustainability Division in May 2021, it has been actively organising and implementing measures within the agency and across the value chain, under its six main pillars, namely:
- Social Compliance,
- Safety & Health,
- Environmental,
- Entrepreneurship,
- Education, and
- Philanthropy.
These parameters used are curated for the stakeholders in the upstream to midstream and downstream sectors, ensuring nobody is left behind whilst the industry grows. In 2022 alone, MRC has implemented more than 40 initiatives involving almost 25,000 participants and beneficiaries.
“The initiatives resulted in MRC earning awards for its commitment to excellence and are proud to be recognised for their work in alleviating the Malaysian rubber industry to greater heights. Among the recognitions obtained were, The BrandLaureate BestBrands Awards 2022, Sustainability & CSR Awards 2022, Asia Pacific Enterprise Awards 2022 for Corporate Excellence and Inspirational Brand, as well as the 13th Annual Global CSR Virtual Summit and Awards 2021.”
Overall, these acknowledgements are proof of our strong leadership and resilience to overcome numerous challenges especially during the COVID-19 pandemic. We are humbled to say MRC remained steadfast in strengthening its resilience to weather the rubber product demands while not losing sight of its long-term plans to elevate the Malaysian rubber industry, expressed Nor Hizwan.
IR 4.0 and Grants
In light of this, MRC has also embraced The Fourth Industrial Revolution (IR 4.0) to enhance rubber production by inculcating the need for lesser dependency on labour and increased automated processes. This is done by giving out grants like the Fund for Automation and Green Technology (FAGT).
FAGT encourages the rubber product industry to adopt automation and green technology to enhance the industry’s competitiveness, to alleviate the labour shortage problem while promoting the adoption of green technology towards achieving sustainability.
Nor Hizwan said the agency foresees that the demand for rubber products would continue to increase, whether in local or international markets. This is due to the fact that rubber has so many applications in our daily life, whether it is for consumer or industrial products; for example, condoms which are made mostly of rubber is still a very effective contraceptive while a car, even the electric vehicle, will not be able to function properly without rubber parts, adding, as the global population increases and countries becoming more developed, the demand for consumer and industrial products will go up.
He explained that MRC’s strategies are to continue on highlighting the quality of Made in Malaysia rubber products while ensuring that our products comply to the importing countries regulations and requirements. There are also a number of new entrants opening up glove manufacturing facilities over the last two years due to opportunities that arise during the pandemic.
Awareness to Project Positive Image of Rubber
MRC believes that this will continue to happen naturally whenever there is an opportunity in the industry. It is a business decision and entrepreneurs will put their money in lucrative industries. Additionally, MRC has been embarking on awareness programmes to project the positive and energising image of rubber in order to attract youths towards the industry.
“We have conducted seminars, talks, visits and engagement sessions with secondary and university students to provide information about the industry,” he said.
The Department of Statistics Malaysia recently found exports of Malaysia’s natural rubber amounted to 60,170 tonnes in August 2022, increasing by 11.9 per cent as against July 2022 (53,752 tonnes). China remained as the main destination for natural rubber exports which accounted 40.5 per cent of total exports in August 2022 followed by the Iran (5.4%), Germany (4.0%), the United States of America (4.0%) and Turkiye (4.0%).
Total exports of rubber products in the first half of 2022 amounted to RM15.626 billion compared to RM39.826 billion in the first half of 2021. Meanwhile, the export of rubber in 2021 was RM4.563 billion and with the increase of 1.01% for year 2022, this totalled the numbers to RM4.609 billion.
The latex products (non-gloves) showed a positive expansion of 35.5% for the first half of 2022 amounting to RM1.230 billion, comparing to RM0.907 billion in the first half of 2021, and these are separated by products such as in catheters, foam products, condoms and rubber toys. Foam products mainly latex mattresses recorded the highest increase at 182.4% in the first half this year at RM202.5 million compared to RM71.7million in the same correspondence year.
Nor Hizwan stressed that MRC will continue its effort to support the rubber industry by reinforcing knowledge development by organising industry related seminars, workshops and briefings and meet industry demand on acquiring relevant technical and practical knowledge, current issues and industry related information as well as up-to-date trade and market information.
On technical workshops, MRC will continue disseminating technical topics and contents encompassing latex technology, rubber science and glove manufacturing to accentuate the manufacturing improvements, processes and procedures, technology and engineering elements, analytical techniques and methods, components and formulations for existing and new rubber product development and innovations.
As for non-technical workshops, members of the industry will obtain knowledge focusing primarily on human capital development, sales and marketing strategies and ethics, business management and soft skills, communication abilities, professional business development, and corporate brandings.
As for the specialised industry briefings, these are organised to discuss and highlight current issues and fundamentals related to the rubber industry specifically on foreign labour shortage, smart manufacturing, adoption of automation and green technology, sustainable innovations and inventions, and even compliances on environmental, social and corporate governance.
The briefings on industry updates will also feature changes in regulatory requirements, product standards and certifications. In efforts to ensure accurate and updated information is disseminated, the briefings will be organised in collaborations with government ministries, agencies and government link corporations and other organisations as well as internationally recognised certification bodies.
The findings of research projects will be presented to industry members through the market information seminars as a platform to provide latest trade and market updates to facilitate access to specific markets. The market information seminars will highlight insights and updated information on key products, major players, procurement policies, regulatory requirements, supply channels, market opportunities, the global outlook and key markets, he explained.
The information to be shared will be significant in efforts to increase market exports and tackle any obstacles commonly associated with the rubber industry.
Enhancing Demand
You can’t possibly replace rubber with other material or product to get similar properties, at least not at this point of time. However, we are single minded in our pursuit to continue adding value to our products. Together with our manufacturers, we are embarking on sustainability initiatives whereby Made in Malaysia rubber products, particularly gloves, will be able to comply to the social and green requirements so that the consumers will be able to enjoy products that are not only good quality, but also ethically produced.
MRC, through its Commercialisation & Investment Unit (C&I), is looking to accelerate the productivity of rubber-related industry players in the country via successful R&D and C&I as well as to optimise the growth and sustainability of the industry by attracting FDI and DDI for the rubber industry in the country.
In doing so, the C&I Unit is focusing on activities such as:
End-to-end matching facilitation – to scout for information from agencies, universities, research institutions and industries to create a database. Then, to establish a virtual matching platform (to combine with the existing MRC platform), and to engage various parties via events and direct engagement.
Funding assistance for commercialisation: – To support high potential companies and technologies to penetrate the market as per the approved guidelines.
Attracting and facilitating investment: – The focus will be given to support the growth of Kedah Rubber City (KRC) and rubber related companies in need. And, facilitate promotion events and direct engagement for them.
Commercialisation-related seminar/events: – To improve knowledge, network, collaboration and successful matching among stakeholders.
Asked on the growth of the rubber industry, Nor Hizwan opined aside front the various awards and acknowledgements received, MRC in collaboration with the ILO launched a book entitled “A Practical Guide for Malaysian Employers: Addressing, Preventing and Eliminating forced labour in the rubber industry in Malaysia. This guide will assist employers in the Malaysian rubber industry, particularly those employing migrant workers – on how to identify risks of forced labour in recruitment, employment, and sourcing practices, and how to effectively address, prevent and eliminate these risks.
This is done through direct engagements with industry players which include capacity building initiatives, for example seminars, briefings, and workshops, such as:
Market Information Seminar (MIS) on Market Updates and Opportunities for Latex Thread and Foley Catheters in China and Thailand. MIS were aimed to highlight relevant market information on latex thread and Foley catheters against other players from China and Thailand while assisting industry members in identifying market competitiveness and potential advancement.
MRC also conducts briefings on ‘Rubber Products Standards, Promotions, and Commercialisation for the Rubber Industry’. Which is aimed at updating industry players with the latest rubber product standards, promotional efforts, and commercialisation programmes specifically for the industry.
The agency facilitates annual industry consultation where industry members are invited to provide feedbacks and suggestions directly on MRC’s programmes and services besides featuring Regional Market Briefings.
Incentive Initiatives
The Covid Stimulus (CS) packages introduced in 2021 will be extended to Dec 31, 2022. CS packages are aimed to support and facilitate rubber product companies to weather the challenges brought by the pandemic. Apart from the extension, selected CS and existing incentive packages have also been reviewed to increase the maximum claimable amount as well as to include additional features to further strengthen the packages. There are proposals to increase the amount from RM5,000 to RM10,000 for website development per company, per year with the maximum claimable amount being between RM20,000 to RM30,000 as an incentive for product registration for the same period.
There is also a one-time 100% reimbursement grant for participation in the first virtual trade exhibition of the year, increased from 70% previously.
Asked on what lies beyond with the Graphene Aerospace Balloon, Nor Hizwan said the commercialisation of graphene-enhanced latex aerospace balloon is a tripartite collaboration between the Malaysian-owned, UK based company, Green Space Industries Ltd., Cranfield University and Levidian Nanosystems Ltd. This will also be supported, in terms of expertise and testing facilities by Tun Abdul Razak Research Centre, an agency under the Malaysian Rubber Board MRB.
“No doubt, this will benefit both the UK and Malaysia. The multiplier effect on both job and value creation is limitless and Malaysia will enjoy in boosting the value of its rubber. This G2G collaboration is just a start. MRC believes that the rubber industry is primed for a transformative phase and that the time is now.
“As a recap, the R&D works between the two countries began in 2019, through Meditech Gloves Sdn. Bhd. and Cranfield University, where they have successfully infused graphene into latex. As this is considered platform technology, it shall create more and more direct demand for Malaysian rubber for high-value derivative products (high-priced products). As a result, high-value products using rubber directly secured from a group of small planters will give better profit margins directly to them,” he adds.
Since taking over the lead position in MRC, Nor Hizwan said the challenges faced were on the issue of sustainability. We launched into training to ensure the sustainability of the rubber industry while creating awareness on daily basis. These topics include Green House Gas Emission and waste management trainings.
There were also internal integration issues which involved business process improvement, to have clear SOPs and a stronger staff participation to carry out change management and internal communications in order to move forward. The systems also needed to be updated alongside the digitalisation era.
On post pandemic issues, he said, “The demand for rubber gloves has declined, however demands for dry rubber increased immensely as we are always expanding and finding new ways to make the rubber world sexy.”
Since the pandemic, forced labour has been an insistent issue in the industry, and since then, the Malaysian government, its agencies, and companies have been tirelessly working to address the issue, mitigate the risk in future and eventually eradicate any forced labour in the country. As a council under the Ministry of Plantation Industries and Commodities (MPIC), tackling the social compliance issues in the rubber industry is our top priority, therefore MRC has carved a strategic plan to carry out impactful initiatives such as capacity building, awareness initiatives, and strategic collaboration with stakeholders in the industry.
In addition, since 2020, MRC has introduced Hiring Malaysian Workers Fund (HMWF), an incentive to encourage rubber product companies to hire more Malaysian workers. It is aimed to increase the participation of Malaysian workers in the downstream sector of the rubber industry and subsequently reduce dependency on foreign workers. MRC will launch HMWF 2.0 in Q4 this year, as an extension of this fund for the industry players, in collaboration with Social Security Organisation (SOCSO).
HMWF 2.0 will complement SOCSO’s available incentives by extending more incentives to the employers to encourage them to hire more local workers, to encourage more Malaysians to work in the local rubber industry, as well as to encourage smallholders to be insured under SOCSO.
The Future
Moving forward, MRC will focus on promoting key rubber products that contribute most to the country’s exports such as rubber gloves, rubber medical devices, latex foam and mattresses, rubber automotive components, precured treads, engineered rubber products and green rubber. While the US and Europe are the traditional markets for us, we will explore developing markets such as Latin America, Africa and Eastern Europe through various promotional programmes such as participation in trade shows, organising working visits, missions, educational seminars and advertisements. At the same time, the agency will focus on a creative engagement through social media and to enhanced other marketable features of other rubber products.
“All in all, MRC is committed to play a more active role in engaging differently with industry players while uniting rubber stakeholders from various agencies towards the same goal and objectives. And also empowering the upstream industry towards a better future,” said Nor Hizwan.
The Malaysian Rubber Council (MRC), formerly known as Malaysian Rubber Export Promotion Council, was incorporated on 14 April 2000 under the Companies Act 1965 as a company limited by guarantee under the Ministry of Plantation Industries and Commodities (MPIC).
MRC is governed by a Board of Trustees appointed by the Ministry of Plantation Industries and Commodities (MPIC). MRC is tasked with undertaking market promotion of quality Malaysian rubber and rubber products in world markets. MRC has overseas offices in the US, China, India, Europe and the Middle East.
