RUBBER INDUSTRY IN VIETNAM AND MALAYSIA

SOUTHEAST ASIA is widely known as the world’s largest region for rubber plantations, with Thailand, Indonesia, Vietnam, and Malaysia accounting for nearly 80% of the global natural rubber output. This article will cover some important information for companies to consider when thinking about sourcing rubber products in Vietnam and Malaysia, the two fastest-growing markets in the rubber industry worldwide. For an overview of the rubber industry in Vietnam and Malaysia with their natural resources and the global soaring rubber demand in which both markets have the potential to grow further in upcoming years. However, there are distinctive characteristics between the two nations. While Vietnam’s major advantage is in raw materials sales (natural rubber) and Malaysia stands out in the production of synthetic rubber and medical glove production. In 2021, the Vietnamese rubber yield surpassed major manufacturing countries such as India, Thailand, and Malaysia. Vietnam’s estimated rubber output was at 1.2 million tons in the year, accounting for 8.7% of the world’s market share. The industry remains export-oriented, with China, India, Taiwan, South Korea, and the United States being the main export destinations. Despite the global COVID-19 pandemic, Vietnam’s rubber export turnover in 2021 was up about 36.2% compared to a year earlier. Furthermore, Vietnam is also the 5th largest importer of rubber with a total value of 648 million USD in 2020, and imports mainly from Cambodia, Laos, and Thailand. Actually, in this article in "Anim Agriculture Technology" blog I would to share an information about both Malaysia and Vietnam rubber industry.

Malaysia ranked seventh in natural rubber production worldwide. In 2021, the total production volume reached 690.4 thousand tons of which natural rubber and synthetic rubber made up 68% and 32% respectively. The output decreased by 4% compared to 2020. Although the plantation hectarage for natural rubber plantations has been decreasing gradually over the last decade. The rubber industry continues to be significant for Malaysia due to its importance as an export product. In 2021, Malaysia’s export of rubber products soared 50.5% (YoY) to reach approximately 14 billion USD, with latex goods as the biggest contributor. The main export markets are the US and the EU which together take up more than 50% of the country’s export value. Reported that the products that can be sourced in Vietnam and Malaysia where Vietnam’s rubber industry development has mainly relied on the export of raw materials. There are three main product groups in the industry, including natural rubber, rubber products, and raw rubberwood or rubberwood products. Specifically, tire production consumes approximately 70% of the total amount of natural rubber, making it one of the fastest-growing rubber products, together with automobile spare parts, mattresses, and shoe soles. As sustainable materials have been rising in recent years, raw rubberwood, which is considered environmentally friendly, has become an important source of raw materials in Vietnam’s timber industry. Malaysia focuses on manufacturing and exporting products from rubber instead of raw and semi-processed rubber. The biggest and most popular export product is rubber gloves, which accounted for 89% total export value of rubber products in 2021. Glove export already doubled in 2020 and continued to increase by 55.4% in 2021. Other rubber export products that can be sourced from Malaysia include new pneumatic tires, latex thread, tubes, pipes, hoses, insulated wire and cables.
Governmental supports

The natural rubber industry is one of Vietnam’s most important agricultural and forestry industries. The Vietnamese government has focused on promoting the industry as a national brand to further push its growth. Ministries and localities have coordinated to implement supply-demand strategies to ensure the rubber supply matches demand. Rubber manufacturers are encouraged to produce natural latex and improve processing technologies to stay competitive in the market. The National Vietnam Value Programme allowed rubber companies to assess business performance and branding strategies, in which quality, innovation, and pioneering capacity are the main criteria taken into account for rubber businesses to be qualified as national brands. The Malaysian government consistently grants support policies to upstream rubber production companies as the industry is considered a key pillar in the economy. The policies range from subsidized gas prices and subsidy packages for high-technology companies, to tax exemption for up to 15 years for foreign companies investing in glove manufacturing. Big local players in the industry have taken advantage of the government policies and invested heavily in this sector. Source: NSTP 

Thanks...

By,

M Anem,

Putrajaya,

Malaysia.

(October 2023).