Supermax looking at Vietnam, Indonesia on cost factors

Supermax Corp Bhd, the world’s second largest rubber glove maker, may expand to Vietnam and Indonesia in the future on cost and labour factors.

There are abundant availability of raw materials and labour supply in the two countries, senior Supermax executives said.

Thailand, Indonesia, Malaysia and Vietnam are the world’s top four natural rubber producers respectively, producing latex which is the feedstock to make rubber gloves.

Supermax has nine factories which are all in Malaysia, manufacturing various types of latex gloves, 100 per cent for exports to over 146 countries.

Supermax executive chairman and group managing director Datuk Seri Stanley Thai Kim Sim said both Vietnam and Indonesia are strategic fits as they are expanding their rubber plantations.

“But that does not mean we are closing our operations here. We will remain in Malaysia which is also expanding its rubber plantations by another 40,000ha by 2012,” Thai said here after the company’s annual general meeting.

Thai said the future expansion overseas is also partly due to the sometimes difficult conditions brought about by the authorities here, causing all manufacturers including glove makers to be in a lurch.

“Don’t get me wrong. As a Malaysian company, we are committed to investing and reinvesting in our manufacturing operations here. We want to keep all our manufacturing hubs here as much as possible.

“But the electricity tariff hike in May 28 effected on June 3 was very short notice and could scare investors away,” he said.

Thai said Supermax has always been supportive of various government initiatives, including the Economic Transformation Programme, but the government must give the industry the heads-up before making major announcements.

“Although global demand is good, we are operating under difficult business conditions in Malaysia such as labour problems, so many government departments.

“We have to look for alternatives for future expansion probably five years down the road.”

Supermax had invested in Vietnam before via APLI Industries Bhd but pulled out in 2005.

Thai declined to say if the expansion would involve buying another company or if Supermax would expand on its own. – Btimes

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