The year has been kind to Malaysia as its economy strengthened amid a confluence of taunting domestic and external factors which include the low commodity prices and a weak currency. Most economists have been very cautious over the evolving economic outlook at the outset of the year and this was especially true in the context of rising protectionist policies in the US and populism sentiment globally, which could potentially set the world's growth into a tailspin, had they materialised.
Beginning Jan 1, 2018, employers will be responsible for paying the levy for their foreign workers. Announcing this today, the Human Resources Ministry, in a statement, said with the implementation of this new policy, all employers must bear the cost of levy payments for new foreign workers as well as foreign workers who have renewed their Temporary Employment Visit Pass (PLKS).
Top Glove Corporation Bhd will see earnings growth and increased production capacity when two of its new manufacturing facilities becomes operational next year. Top Glove's Factory 31 will be operational by May 2018, and Factory 32 is expected to be operational by December 2018, all part of the company's commitment in building one or two factories yearly. Upon completion, these new factories will boost the Groupâ€™s total number of production lines by 78 and production capacity by 7.8 billion gloves per annum.
Proton Holdings Bhd, Perusahaan Otomobil Kedua (Perodua) and the local automotive industry have played a major role in increasing energy-efficient vehicles penetration in the country, said International Trade and Industry Second Minister Datuk Seri Ong Ka Chuan. As a result, the country is now a step closer to achieve 60 per cent EEV penetration of the total industry volume (TIV) by end of this year and on the right track for 80 per cent penetration in 2022.
Rubber glove manufacturers are expected to have a decent fourth quarter, supported by robust orders and higher margins despite short-term headwinds faced by the industry, according to a research house. UOBKayHian Research said it projected earnings before interest and tax margin of glove players to remain healthy in the range of 15% to 16% for the first half of 2018.
Malaysia's economic growth for the third quarter (3Q17) may have peaked at 6.2% based on preliminary data, with gross domestic product (GDP) in 4Q17 estimated at 6%. AmBank Research said going into 2018, GDP growth will moderate to an estimated 5.5% year-on-year (y-o-y) largely due to the high base effect of this year. It noted that based on preliminary estimates from the October macroeconomic data, third-quarter GDP for this year has most likely peaked. It noted that based on preliminary estimates from the October macroeconomic data, third-quarter GDP for this year has most likely peaked.
Malaysiaâ€™s October exports rose 18.9 per cent from a year earlier, snapping a two-month streak of slowing annual growth on the back of higher demand for manufactured and mining goods. Export growth was above the 18.5 per cent rise forecast by a Reuters poll, and up from Septemberâ€™ 14.8 per cent growth. Malaysia has seen double-digit growth in exports for most of 2017 so far, peaking at 32.5 per cent in May.
The Vietnamese government plans to eliminate tariffs on key autoparts from January. The move follows the planned termination of tariffs on cars within the region, as the Association of Southeast Asian Nations Economic Community becomes fully effective in the same month. From January, a greater number of cars is expected to be imported from neighboring nations. The government wants to protect domestic car assemblers, as well as foreign automakers operating in the country.
The Sabah government will introduce the use of rubber in paving roads and 'green tyres' as a long-term strategy to address the issue of low rubber prices, said Deputy Chief Minister Datuk Seri Yahya Hussin.
Top Glove Corp Bhd says the plan to buy surgical glove maker Aspion Sdn Bhd for at least RM1.3bil will boost the groupâ€™s profits by a fifth in the financial year ending Aug 31, 2018 (FY18) and accelerate the groupâ€™s expansion into the highly lucrative segment of the market. As it is, Aspion commands a healthy 30% gross profit margin on its business, while Top Gloveâ€™s own smaller surgical glove unit generates about 20% gross profit from sales.
Glove maker Supermax Corporation Bhd recorded a 42.7% jump in its earnings to RM27.90mil in the first quarter ended Sept 30, 2017 "boosted by improved efficiency and productivity" and it remained upbeat on global demand for both natural rubber and nitrile gloves.
The Ministry of Food and Drug Safety said it plans to revise its regulation on powdered surgical and medical gloves. Under the amendment, powdered surgical and medical gloves need to receive approval, certification, and registration. The new amendment aims to limit the use of powder gloves that can cause allergic reactions to medical personnel and patients.
Malaysia Automotive Institute (MAI) chief executive officer Madani Sahari says the automotive sector could contribute 10% to the country's gross domestic product (GDP) by 2020. The Edge quoted him as saying: "The automotive sector has been recognised by the Malaysian government as an important contributor to the country's GDP. Last year, it contributed 3.6% or RM40 billion. And the substantial contribution by the automotive sector will only continue.
The rubber gloves sector is expected to be buoyed by solid demand which will further boost the sectorâ€™s earnings for the second half of 2017 (2H17), analysts observed. In a sectoral outlook, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) said strong industry 1H17 volume sales are expected to further gain momentum in 2H17. â€œAmplifying the earnings growth potential is the strong demand supported by new capacity expansion, re-stocking activities and positive operating environment in the absence of price competition.
The glove sectorâ€™s earnings momentum is expected by the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) to remain stable as earnings continue to be demand driven. According to MIDF Research, in the recently concluded earnings season, most of the gloves manufacturers posted earnings that were in line with the research armâ€™s full-year earnings estimates with the exception of Supermax Corporation Bhd (Supermax) which recorded the groupâ€™s fourth consecutive quarter of earnings disappointment.
Natural rubber remains an important contributor to our nationâ€™s economy. The revenue earned from natural rubber products still runs into billions of ringgit and the industry continues to provide much-needed employment for both rural and urban folks. Rubber smallholders still enjoy reasonable incomes even though their earnings are not as lucrative as in the 70s and 80s.
HARTALEGA Holdings Bhd has to contend with short order cycles, multiple suppliers, and customers can easily source for alternatives. Order cycles are refreshed every month in the glove making industry where only the fittest survive. Hartalega has come a long way and today prides itself as being the worldâ€™s largest glove maker by market capitalisation.
The Malaysian rubber export industry is moving towards high-value precision engineering, according to Minister of Plantation Industries and Commodities, Datuk Seri Mah Siew Keong. He said, Malaysiaâ€™s export of structural bearings rose by 36.2 per cent to RM14.14 million in 2016, from RM10.38 million in 2015. â€œRubber bearings from Malaysia are bringing much-needed safety to buildings in earthquake-prone countries,â€ said Mah, adding that rubber bearings can save countless lives and prevent billions of dollars in damage.
Malaysia, Thailand and Indonesia are considering cutting rubber output from 10% to 15% in order to curb falling prices, said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong. He said the International Tripartite Rubber Council (ITRC), comprising Malaysia, Indonesia and Thailand, would meet in Bangkok on Sept 15 to discuss measures to stabilise rubber prices.
The US Food and Drug Administration (FDA) has finalized a list of more than 1,000 medium-risk medical devices that will no longer require 510(k) premarket notification in order to obtain market authorization. The FDA has provided registrants of affected Class II devices with recommendations for next steps, such as the US market applicants with pending 510(k) registrations should get in touch with their lead FDA reviewers to determine whether their devices fall under the new exemption rules; manufacturers as well as importers and distributors should review their registration information to see whether they should continue using their existing product codes that require 510(k) premarket notification, or if their devices qualify for new product codes and exemption from 510(k) requirements; and manufacturers whose devices are exempt may need to amend their Unique Device Identification (UDI) data in the Global Unique Device Identification Database (GUDID).
Taking the cue from Hartalega Holdings Bhdâ€™s fourth quarter ended March 31, 2017 (4QFY17) results, we expect the financial year ending March 31, 2018 (FY18) and FY19 net profits to register higher than our estimates. Due to the solid volume growth in 4QFY17 and Hartalegaâ€™s persistent effort in expanding into other countries, we expect the utilisation rate for its Plant 3 at 88%, which is in line with its historical average.
Malaysia's Karex Bhd., the world's largest condom maker by capacity, expects to incur hefty operational expenses through the next fiscal year starting July 1 as the company ramps up marketing campaigns and expands distribution network to propel its own-branded products, its chief executive said. Distribution expenses have risen nearly 30% in the fiscal year-to-date and could grow at the same pace next fiscal year, which could help it sustain gross margin between 27% and 33% in the longer run, Goh Miah Kiat told Nikkei Markets.
Rubber industry players in Malaysia have been urged by the countryâ€™s Plantation Industries and Commodities Minister, Datuk Seri Mah Siew Keong, to focus on increasing the use of automation in order to reduce the size of the labour force. He said technology was the way forward to strengthen the industry, and the government was encouraging businesses and industries to adopt more automation as a means of increasing productivity.
Top Glove Corporation Bhdâ€™s (Top Glove) latest corporate development, which involves wholly-owned subsidiary GMP Medicare Sdn Bhd (GMP) acquiring two rubber glove assets amounting to RM39 million, has been viewed positively and a step in the right direction by analysts. In a filing on Bursa Malaysia, Top Gloveâ€™s board of directors announced that GMP had entered into two separate sale and purchase agreement with A1 Glove Sdn Bhd and Titi Glove Sdn Bhd to acquire two rubber glove assets for the total amount of RM39 million.
Southeast Asia accounts for about 7.5 percent of the global market share of synthetic latex polymers, the fourth largest consumer globally, according to the recently published Southeast Asia report from Kline's continuous program Synthetic Latex Polymers: Global Business Analysis and Opportunities. It is the fourth largest consumer of synthetic latex polymers globally. Strong economic growth, low industry regulations and stability in raw materials prices appeal to multinational corporations and domestic suppliers, increasing the market rivalry in the region.
Rubber glove industry players in Malaysia saw an uneventful first half of 2017 (1H17) and are struggling to meet market expectations as their earnings suffer from a huge increase in raw material prices. Only half of glove manufacturers under the coverage of the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) managed to meet market expectations based on the recently-concluded earnings season.
Malaysia's exports in February jumped 26.5% to RM71.77bil â€“ the fourth consecutive month where the exports exceeded RM70bil â€“ exceeding Bloomberg's survey of 15.1% growth â€“ as demand from China grew at a faster pace. The Ministry of International Trade and Industry (MITI) said on Wednesday the exports were higher than the monthly average of RM64bil in the Janaury-October of 2016. On a month-on-month basis, exports rose by 2.1%. Underpinning the export growth were electrical and electronics (E&E) products, valued at RM24.57bil, up 22.4% from February 2016. These exports constituted 34.2% of total exports.
According to the report, U.S. condom market was valued at USD 1,366.86 million in 2016 and is expected to reach USD 1,680.22 million by 2022, growing at a CAGR of 3.5% between 2017 and 2022. A condom is a sheath-shaped obstruction device used during sexual intercourse. It is very beneficial for reducing the chances of pregnancy. It also decreases the risk of sexually transmitted infections (STIs) such as HIV/AIDS. There are different types of condoms available in the market with the variety of thickness, texture, material, size, color and taste. Condoms are highly effective to reduce the probability of pregnancy if used consistently and correctly.
Zion Market Research has published a new report titled â€œCondom Market by Gender (Male and Female), Distribution Channel (Commercial Outlets, Non-commercial Outlets and Non-traditional Outlets) â€“ U.S. Industry Perspective, Comprehensive Analysis, and Forecast, 2014 â€“ 2020â€ According to the report, U.S. demand for condoms was valued at USD 1,275.98 million in 2014, and is expected to reach USD 1,563.95 million in 2020, growing at a CAGR of 3.5% between 2015 and 2020.