Invest Malaysia Supermax willing to sacrifice margins to boost market share

by **Cals** Wed 11 Jun 2014, 01:55

Invest Malaysia Supermax willing to sacrifice margins to boost market share

Business & Markets 2014

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Tuesday, 10 June 2014 16:51

KUALA LUMPUR (June 10): Supermax Corporation Bhd says it is willing to sacrifice its nitrile glove margins in order to compete with other glove manufacturers in Asia.

Supermax Executive Chairman and Group Managing Director Datuk Stanley Thai said Malaysia lost 4% of its US market share for nitrile gloves, while its market share for natural rubber latex gloves fell 5% during the first quarter of 2014.

"We are looking at around 9% to 11% margin for nitrile gloves.

"Through lower margins, we believe we are able to win back our market share," Thai said today on the sidelines of the Invest Malaysia 2014 conference here.

Despite the lower margins, he said, Supermax would continue to be profitable.

Thai said that the cost of doing business in Malaysia was now higher due to the recent hikes in electricity tariff and gas prices and also the implementation of the minimum wage.

He also pointed out that Malaysia had lost its Generalised Scheme of Preferences (GSP) status for the importation of products into Europe, which means that a duty of 2.7% has to be paid for products exported to the region.

Going forward, Thai said Supermax would look into higher automation of its production processes and into alternative energy such as biomass to mitigate the higher fuel costs.

He said the group would also proceed with its expansion plans in line with the level of demand for rubber glove products.

"We will not just continue expanding without the demand, so that we can manage our finances prudently," said Thai.