Malaysia aims to become top rubber products maker

Malaysia aims to become top rubber products maker

KUALA LUMPUR (AFP): Malaysia, the world's third largest natural rubber producer, wants to become a top rubber products manufacturer to cut its imports bill, officials said Wednesday.

The country imported some 850 million ringgit (US$223.68 million) worth of rubber products in 1998 and the figure is expected to rise to 900 million this year, said Malaysian Rubber Board chairman Alladin Hashim.

"With this very high import value, we have the opportunity for import substitution," Alladin told a press conference after opening a meeting on the industry.

"We intend to be the leader in the value-added manufacturing of rubber products."

Alladin said local rubber products used in the construction sector failed at present to meet required standards.

From next year, he said the board would help small- and medium-size industries in research and development to widen their product range, cut production costs and boost efficiency.

"The success in import substitution will provide a stronger foundation for Malaysian manufacturers in the domestic market as well as enhancing their export potential," he added.

Officials said Malaysia's rubber industry accounted for 13 billion ringgit or 4.5 percent of total export earnings. Alladin said the board has targeted export earnings of 15 billion by 2005.

Now that Malaysia had withdrawn from the International Natural Rubber Organization (INRO), he said, the government would have to develop its own mechanism to protect the industry. He declined to elaborate.

INRO, the world's last commodity agreement with economic influence, wound up in October following the withdrawal of Thailand and Malaysia.

Lim Keng Yaik, primary industries minister, was quoted last month as saying that Malaysia, Thailand and Indonesia hoped to set up a consortium to buy about 140,000 tons of rubber on the international market to stabilize prices.

The INRO council is to meet from December 13 to 17 to consider future international cooperation and plans to dispose of its buffer stock.