Government urged to strengthen rubber manufacturing sector

KOTA KINABALU: The government needs to introduce value-added and transformation in the rubber industry to ensure the competitiveness of the commodity, said Tenom Member of Parliament Riduan Rubin.

Riduan lamented that the current drop in rubber prices to around RM2.80 has resulted in many rubber tappers refusing to continue and shifting to other crops, causing the country to incur losses of about RM2.3 billion due to the lack of rubber output from 425,000 hectares of extensive plantations.

According to him, the problem stems from rubber prices influenced by middlemen and the difficulty for the government to control world market prices.

“Therefore, the government should focus on strengthening the local rubber manufacturing sector, especially in the production of local brand tires, similar to what the government has done through the implementation of the national automotive policy that has successfully produced Proton.

“Efforts need to be made to produce local brand tires to ensure a ‘game changer’ or transformation in the rubber industry to keep it globally competitive,” he said when debating the Royal Address in the Parliament last week.

According to Riduan, a mechanism that the government can implement is through injecting funds or loans from the government to industrial entrepreneurs and rubber-based product manufacturers.

He said this was implemented by the Thai government in 2016 through a loan of 15 billion baht or around RM1.78 billion at the prevailing exchange rate at that time for the glove, tire and rubber product manufacturing sector.

“This loan is given with the condition that rubber industry entrepreneurs must use four tons of rubber each year for one million baht (RM119,000) in an easy loan.

“I believe initiatives like this can increase the use of domestic rubber and indirectly raise rubber prices to a more competitive level,” he emphasized.

He expressed concern that if immediate action is not taken by the government, the industry will eventually be buried due to rubber planters shifting to more profitable crops.