|
Source:
The Star Publication, Malaysia 10/04/00, By
Lim Hock Chye
EARLY
this year, Kossan Rubber Industries Bhd (Kossan) forecast it would have to
"bite the bullet for six months before the company can bounce back
with a vengeance".
But
Kossan's boss Lim Kuang Sia may just have to review his prediction,
positively that is.
Throughout
last year and spilling over to the beginning of this year, there appeared
to be a glut in international production.
Now,
the prospects look brighter than expected and the company is upbeat that
the rubber industry is far from being a sunset industry.
Although
it does not command the hype of an IT sector, the rubber industry is
equally vulnerable to market vagaries, if not more. It is the same old
syndrome--people jump on the bandwagon without considering the sustainable
effects.
But
Lim is not fretting as he rationalises that "one still needs rubber
in any hi-tech industry". Kossan is one of the largest manufacturers
of rubber rollers in Malaysia, supplying a wide range such as printing
rollers, industrial rollers and rice hulling rollers under the brand name Kossan.
The
group is believed to enjoy 60% of the local market share in industrial
rollers. It also exports its industrial and printing rollers to Singapore.
"Kossan,
apart from strengthening its existing market share, is also seeking new
export markets. The first shipment of rubber goods is expected to arrive
in China within the next few months," says Lim in an interview in
Shah Alam.
Besides,
the company is also exploring opportunities in rubber-related
pharmaceutical products in the United States.
"The
time has come for Kossan to contemplate a global market in a new era of
trading," says Lim whose plant in Klang employs some 700 workers.
A
100% manufacturing concern, the company started operations in 1980 with
the production of rubber cutless bearings used in the marine industry. Lim
said the company would now be looking into related areas which have better
prospects.
"We
are looking at infrastructure projects which may use rubber-related
products. Vietnam and Cambodia are potential markets," he says.
Kossan
intends to play a leading role in the country's rubber industry because of
its expertise and technology, said Lim who graduated from Imperial
College, University of London.
If
you are wondering about the rate of rejection of its export products to
the United States and Europe, he said it was almost zero--thanks to the
company's quality control and good manufacturing practice.
However,
Lim foresees that the salary of workers in the rubber trade will double
quite soon and this is one pivotal reason for his emphasis on automation
and information software.
Kossan
has increased its production from four million pieces per line per month
to six million pieces today, representing an output improvement of 50%.
About
70% of its products head for the United States and the rest are sent to
the Middle East, Europe, Latin America and Eastern Europe.
To
buffer any ill effects, Lim said the company had earlier signed a joint
venture agreement with US-based Normandin Pacific Holdings Corporation
through its wholly-owned subsidiary Ideal Quality Sdn Bhd.
The
joint venture enables Kossan to build its own sales and distribution
network in the United States as im believes that ultimately, the company
has to build a brand name for itself.
Besides
Normandin Pacific, he said the company is also working with another US
firm to create better market dominance as he considers the US market
extremely crucial not only for rubber products but also other goods.
If
all goes according to plan, Lim does not discount the possibility that the
company can sail through the year quite comfortably. An annual growth of
about 10% is not a tough target.
The
company whose turnover for 1999 was RM100mil is now switching to producing
more powder-free and synthetic rubber gloves as opposed to powder gloves,
the market for which is saturated. Kossan is expecting an increase of
about 15% sales this year.
Subsidiaries
Kossan Latex Industries (KLI) and Perusahaan Getah Asas (PGA) which are
involved in the manufacture of latex examination gloves, have an annual
production of 360 million and 660 million pieces of latex examination
gloves respectively.
Besides
the United States and Europe, the gloves produced under the Examglo brand
name are exported to Japan. Almost 99% of the gloves produced by KLI are
exported overseas while the balance is for the local market. All of PGA's
latex examination gloves are exported.
Kossan,
Lim said, is putting in a lot of efforts to prepare the company for the
future and one cannot rule out the possibility that the company will one
day graduate to the main board of the KLSE.
A
traditionally prudent company, Kossan's focus is on quality consciousness
and cost-effective management and production. Above all, Lim believes
there is still a future for rubber and rubber-related products.
|
