KUALA LUMPUR: Malaysia's glove industry is projected to produce an additional 20 billion pieces, or a 17 per cent output growth, this year based on the post Covid-19 scenario.
Malaysian Rubber Glove Manufacturers Association (Margma) vice president Dr Supramaniam Shanmugam said this would contribute to a total of 220 billion pieces of gloves that Malaysia would produce this year.
He said Malaysia's export revenue was expected to hit RM21.8 billion this year on continued strong demand for gloves globally.
"We expect Malaysia to supply about 67 per cent or 220 billion gloves for the global demand this year. During the pre Covid-19, Malaysia records between 12 per cent and 15 per cent production growth. During Covid-19, the industry posts a 20 per cent growth ," Supramaniam said in a panel discussion at Invest Malaysia 2020 here today.
The local glove industry sold 55 billion pieces of gloves in the first-quarter (Q1) of 2020, with 99.6 per cent of the supplies were exported.
"Gloves have two pricing perceptives - contractual and spot buy. We expect the gloves prices to hover around mid-US$60 (contractual) and US$120 (spot buy) for the post Covid-19 scenario.
"It all depends on who (producers) are able to supply and who (buyers) need gloves urgently," he said, adding that prices of post Covid-19 would be much higher than the pre Covid-19," he said.
Supramaniam said any move to impose a windfall tax on glove companies given their supernormal earnings due to the pandemic would only curb their expansion plans.
He said the local glove industry had invested between RM600 million and RM1 billion annually for organic expansion, following the increased in global demand averaging about 10 per cent to 12 per cent without the Covid-19 pandemic.
"Whatever profit we have after paying our (24 per cent corporate) tax, we will also plough the profit back for our expansion (reinvestment).
"If it (tax rate) goes beyond that, it affects our expansion plan and affect our ability to produce more. Hence, other players will take up our market share," he said.
Supramaniam also said the local glove industry needed to hire an additional 25,000 workers urgently to meet the increased global demand.
Of the total, the industry plans needs 10,000 local workers and 15,000 foreign workers for the expansion of production lines.
Currently, the industry employs 71,800 workers, of which 28,000 are locals and 43,800 foreign workers.
"We try to minimise foreign workers. The plan to reduce foreign workers should be done in stages and it should be a long-term plan rather than come out with a knee-jerk plan. Engage us and give us enough time to work through the situation," he added.