MANUFACTURERS of medical gloves, Foley catheters and condoms are reiterating their appeal to the government to accord them reinvestment allowance as they  aggressively reinvest to automate production lines, develop more innovative medical gloves and seize a sizable chunk of the world’s lucrative condom market.

Prime Minister Datuk Seri Najib Razak announced that under the 2015 Budget, rubber product manufacturers would be entitled to 200 per cent automation capital allowance on the first RM4 million expenditure incurred between next year and 2017.

“This is a step in the right direction. Although the capital allowance amount is very low, our members will put in their claims. Hopefully, the entire automation cost is claimable,” said Malaysian Rubber Glove Manufacturers Association (Margma) president Lim Kwee Shyan.

“The manufacture of medical devices is highly capital-intensive as we have to meet international  safety and hygiene  standards. We hope the government  can view our contribution more favourably.”

Margma represents 90 per cent of local glove manufacturers and associate members who are suppliers and service providers to the industry.

Malaysia has been the world’s top supplier of rubber gloves for the past 16 years.

This year, the country is set to export around 115 billion pieces of rubber gloves to more than 190 countries.

This volume constitutes two-thirds of the global market for rubber gloves.

Under the Economic Transformation Programme, the rubber industry is undergoing a structural change.

The manufacture of medical gloves, Foley catheters and condoms is now seen as high technology and knowledge-based.

More engineers, chemists and branding experts are being hired to automate the manufacturing processes, fine-tune product designs and market house brands.

“In the past, we needed about 15 workers to produce one million gloves but with increasing automation at our production lines, we can eventually reduce the headcount by two-thirds,” said Lim, adding that Margma members spent RM1.6 billion per year on capacity upgrade.

Of this amount, about RM500 million goes towards factory automation.

“From a practical point of view, the medical devices industry needs the right support from the government to facilitate more advanced mechanisation and eventually reach full automation.

“Even then, for premiumly-priced surgical and clean room gloves, we have yet to find the correct technology for packaging. We have come a long way in product innovation in the last 25 years. Going forward, we are striving to move up the value chain and help boost the country’s gross national income further,” he said.

Malaysia ships out some 30 per cent of its medical gloves to the European Union (EU).

Lim noted that since the start of this year, Malaysia had graduated from the EU’s Generalised Scheme of Preferences status with regard to rubber gloves.

Shipments from Malaysia to the EU are now slapped with tariffs of two per cent for surgical gloves and 2.7 per cent for other gloves.

Rubber glove shipments from Indonesia and Thailand, however, continue to enjoy tax-free status.

Condom manufacturing is also part of the medical device sector. Condoms are produced in a clean environment and thoroughly tested.

Healthcare practitioners categorise the manufacture of condoms under Class 2B, which requires higher safety criteria than Class 2A’s Foley catheters and surgical gloves.

More investment is needed in quality control to ensure that the condoms do not leak and that they comply with other specifications of strength, length and visual properties. Also, every piece has to be hermetically sealed to prevent contamination.

Karex Bhd managing director Goh Miah Kiat explained that a tremendous amount of capital went to ensure that condoms complied with stringent requirements under the International Organisation for Standardisation (ISO) 4074, World Health Organisation (WHO) specifications and ASTM D3492-03 standards.

In order to meet the ISO 4074 standard, each condom is subjected to 100 per cent electronic testing. There is also random sampling of the condoms to further test the quality and elasticity of the rubber.

In an electrolyte water test, condoms are filled with water before they are submerged in a tank. If there are pinholes in the condom, the machines detect them automatically.

Then, there is the burst test where air is pumped into condoms like it is done for balloons. A condom must be able to hold a minimum 18 litres of air and record air pressure of at least one kilopascal before bursting.

The condom’s width uniformity is measured by laying it flat across a ruler. Condoms are sold at varying widths of between 49mm and 60mm, of which 52mm is the most popular. ISO 4074 requires a minimum length of 160mm, but WHO mandates longer condoms of a minimum of 180mm for their intended markets.

In the last decade, Karex has pumped in a lot of money, time and effort in automating many processes along its production lines.

“Automation is key to ramping up productivity. However, further capital expenditure is required. Government incentives, such as reinvestment allowance, are vital,” said Goh.

Source: New Straits Times