Supermax to maintain production base in Malaysia despite challenging business environment
KUALA LUMPUR: Medical gloves manufacturer Supermax Corp Bhd ( Supermax) said it would maintain its base in Malaysia despite the rising challenges in operating business here.
“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 four to five per cent market share to their peers in Thailand and China in terms of exports to the US in the first quarter of this year, Thai said.
He made the remarks to reporters on the sidelines of Invest Malaysia 2014 here yesterday.
Part of 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 early this year, Thai added.
To maintain its global competitiveness, Supermax has to brace for a lower margin of nine to 11 per cent going forward, or risk losing its market share to rivals, he said.
“Gone were the days that we have a margin as high as 15 to 20 per cent,” he said.
Thai urged the authorities to come up with relevant measures to offer a more conducive environment for local manufacturers to operate in.
To counter the rising costs, the maker has embarked on automation processes for production lines, and is in the midst o f looklookingi n g for alternative energy sources. — Bernama