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M'sian rubber industry leaders ask for 30-yr reinvestment allowance
Publication Date : 25-10-2012
Representatives from associations in the rubber industry in Malaysia bid their request for reinvestment allowance (RA) of 30 years at a closed-door dialogue with the international trade and industry ministry (Miti).
The associations are: Malaysian Rubber Glove Manufacturers Association, Malaysian Rubber Products Manufacturer's Association, Malaysian Standard Malaysian Rubber-SMR Rubber Processors Association and Malaysian Association of Tyre Retreaders and Dealers Societies.
“About five years back, we had extended that provision to 15 and now they request for 30. 15 years are sufficient. Any new incentives will be reflected in next year's budget,” Miti Deputy Minister Jacob Dungau Sagan said at a briefing after the dialogue yesterday.
The dialogue also discussed issues such as foreign workers, investment incentives, taxation, minimum wage and utility-related matters gas, water and electricity.
“The representatives seemed satisfied with our discussion today (yesterday), although issues pertaining to minimum wages and foreign workers need further looking into,” Jacob said.
“We have to look at the implications as our decisions on these worrisome matters affect other industries as well.”
Over these past few months, the Minimum Wage Act, which is part of the six policy-reform initiatives under the Strategic Reform Initiatives of the New Economic Model, continues to be a moot topic for politicians as they debate over factors such as expected increase in productivity, foreign labourers (rather than locals) benefiting from the exercise and overpaying small-town workers.
Earlier, Miti Minister Mustapa Mohamed, who officiated the dialogue session, emphasised the rubber industry's role as a key propeller in the Economic Transformation Programme, where contribution to gross national income (GNI) was targeted to triple to 52.9 billion ringgit (US$17.33 billion) by year 2020 from 18.5 billion ringgit currently.
“It's a tough call, but it reflects our ambition and belief in the industry's capacity,” he said.
Four Entry Point Projects will be the primary contributors to the projected GNI growth of the rubber industry and these include improving the average productivity from 1,480kg per ha per year to 2,000kg per ha per year by 2020 and the replanting of 40,000 hectares annually until year 2020.
Others include raising the global share of latex gloves from its current 62 per cent (valued at 11 billion ringgit) to 65 per cent (worth 30 billion ringgit) and the commercialisation of “green rubber” products Ekoprena and Pureprena.