The Star Online: Business
The Star Online: Business |
- Malaysian Rubber Board to launch new strategies to spur rubber industry
- Tips on how to make your investments make money, What’s luck got to do with it?
- DiGi, Malaysia’s third largest celco, on track to complete network modernisation by year-end
| Malaysian Rubber Board to launch new strategies to spur rubber industry Posted: 24 Mar 2013 06:37 PM PDT KUALA LUMPUR: The Malaysian Rubber Board (MRB) is planning to launch a second edition of strategies for the local rubber industry within the next few months in view of the new challenges and prolonged issues in the thriving industry, according to director-general Datuk Dr Salmiah Ahmad. The local rubber industry has shown tremendous growth over the years. In 2011, the industry contributed RM39.8bil in terms of export earnings, 200% higher than RM13.27bil in 2000 reflecting an annual average growth of 16.7%. Despite the favourable growth, Salmiah told StarBiz that serious attention was needed to sustain the continued growth of both the rubber upstream and downstream sectors. Under the upstream sector, the major areas which would continously be developed are the declining natural rubber (NR) production and the domestic low productivity. She pointed out that the Malaysian upstream natural rubber production sector since 1982 has contracted in size especially in the estate sector as investors shifted factor resources to alternative investments that promise better return. "This is due to long term price decline prior to 2002 which have made returns unattractive and incomes low for the smallholders prior to the price increases starting from 2002. "Thus, under Economic Transformation Programme (ETP), the Government has initiated two Entry Point Projects (EPPs) such as increasing average national rubber productivity to 2,000 kg per ha per year by 2020 (EPP 1) and ensuring sustainability of the upstream rubber industry (EPP 2) to address this issue," Salmiah explained. These two EPPs are also initiated to overcome issue on low productivity and supply of NR. Despite efforts to improve productivity and production, she noted that production of NR had decline by 8% to 9% in 2012 owing to unfavourable weather conditions. "There is no indication to show that production will pick up this year. What more with unskilled tappers used in harvesting have seriously impacted on rubber trees in the long run," she added. Productivity still remain low due to the existence of old and low yielding clones, ageing smallholders that do no comply with good agriculture practices, unskilled harvesters and low adoption of latest latex harvesting technologies and low mechanisation. According to Salmiah, Malaysia's average yield per ha stands at about 1,500 kg, which is much lower than other major NR producing countries like Thailand, Indonesia and Vietnam. On the downstream Sector, she noted that industry players particulary rubber-based product manufacturers had to dealt with the implementation of the minimum wage, increase in gas tariffs and NR feedstock prices, labour shortage and also growing environmental-related issues. With the implementation of the minimum wage since Jan 1 this year, a minimum hike of around 29% was expected, Salmiah said. For example, the domestic rubber glovemakers which rely more on manual labour, have been on a labour reduction drive. It is believed that many of these players had incurred capital expenditure of RM70mil to RM80m each to improve on automation levels as "they plan to cut their unskilled workforce involved in stripping, counting and stacking by as much as 30% in 2013," explained Salmiah. "The impact of the wage hike for major manufacturers could be as little as 2% of total production cost this year as a result of the decrease in the number of workers. In general, labour accounts for 8% to 9% of the glovemakers' total production cost," she added. However, the implementation of the minimum wage will not have an impact on labour in the upstream sector as the current wages received by workers in rubber plantation are well above the minimum wage recommended. In addition, gas accounted for 4% to 7% of the total production costs of glove making and therefore any increase in gas tariffs would also see rubber glovemakers' costs increasing by 5% to 8% this year, said Salmiah. "The cost of raw materials (NR feedstock) for glove manufacturers is expected to register an increase between February and May this year as the wintering season sets in and NR production will decline. "Rubber prices in turn will trend lower once production returns to normal after the wintering season," she said. For this year, Salmiah also expected the strong demand for nitrile gloves to continue to take away the market share of latex rubber gloves. In Europe, the latex versus nitrile demand split was at 65%:35% compared with the United States whereby the split was about 30%:70%. Salmiah said this was due to the price competitiveness of nitrile gloves as they were a premium substitute for latex powder-free gloves. "The nitrile glove demand grew at around 20% to 30% in 2011-2012, and it is expected that the double-digit growth momentum will continue into 2013," she added. Meanwhile, both the midstream and downstream sectors would continue to depend on the importation of NR either in latex or dry rubber from the neighbouring rubber producing countries. Based on statistics in 2011, Malaysia imported 667,434 tonnes of NR which comprise of 45% latex while the remaining of 55% is dry rubber. But she pointed out that focus has been given to the recent shortage of latex to meet the requirement of latex based products which contribute about 80% of export earnings of rubber product sub sector. Salmiah said the local rubber industry was also facing shortage of labour particularly in the upstream and downstream activities and has to depend on foreign workers. In 2010, 52.7% of 78,878 workers in the rubber product manufacturing were foreign workers. Substantial costs have been incurred by manufacturers to recruit and train new foreign workers from time to time. Therefore, the continued scarcity of labour experienced by the local rubber industry would also increase the cost of production among industry players this year, said Salmiah. Another emerging issue is on the growing concern on the environment which resulted in the introduction of stringent international standards for environmental protection, which constitute non-tariff barriers imposed by importing countries. "The rubber industry particularly the midstream sector is constantly facing increasing stringent environmental regulations due to global trends towards environmental awareness and conservation," Salmiah noted.
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| Tips on how to make your investments make money, What’s luck got to do with it? Posted: 24 Mar 2013 06:35 PM PDT There seems to be a certain pattern among investors the ones who have somehow been always able to make good investment returns and the ones who almost always don't. And the common view among those who don't is that it is attributed to some kind of "bad luck". These are misconceptions, writes JOYCE CHUAH ON the surface, it sometimes seems as if luck does have something to do with one's record of bad historical returns. Can it be true that luck really has a hold on our money? And can luck be so powerful'? Essentially, there is no such thing as luck factors', only misconceptions about how markets react to varying economic, political, and environmental circumstances. These misconceptions are merely your biased observations which will only leave you with an impoverished financial mindset. Minimising these very misconceptions is important. Just as some people employ psychic strategies to minimise their "streak of bad luck", there are also strategies which can be used to minimise these poverty-driven misconceptions. DEVELOP AN INVESTMENT PLAN: Don't change your goals and directions frequently. Always make gradual rather than drastic adjustments. BE PATIENT WITH YOUR PLAN: Review your plan annually and not on a monthly basis. UNDERSTAND HOW EQUITY MARKETS WORK: Equity markets never move in a straight upward line. Wrong performance expectations simply produce detours away from your original portfolio goals. PREVENT ANALYSIS PARALYSIS': Your decision-making powers can be easily short-circuited by over-analysing data and trends. AVOID SPECULATION AND PESSIMISM: Speculation can lead you into a zero sum game when it is not controlled. On the other hand, pessimism makes you ignore buying opportunities when prices fall. Remember that even professional gamblers do not believe in luck; they always have a game plan to win. What about you?
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| DiGi, Malaysia’s third largest celco, on track to complete network modernisation by year-end Posted: 24 Mar 2013 06:28 PM PDT SHAH ALAM: DiGi.com Bhd, the third biggest mobile network operator by market capitalisation on Bursa Malaysia, is on track to complete its network modernisation by the end of this year. Its chief technology officer Ole Martin Gunhildsbu said: "After the modernisation, our customers will automatically be able to enjoy wireless fibre-like speeds on upcoming Long Term Evolution (LTE) mobile devices. "This upgrade had started since 2011 and we invested RM700mil in capital expenditure in 2012 where a significant portion went towards this purpose. "This is our effort to allow customers to surf quickly on the single Radio Access Network (s-RAN) and the hundreds of millions ringgit in investments for the network modernisation is with the hope we will eventually receive better returns that will make our customers happy," Gunhildsbu told StarBiz in an interview. S-RAN is capable of delivering multi-spectrum data solution on the 2G, 3G and 4G-LTE bands from a single base station site. Sectoral analysts said the successful migration to the s-RAN platform will potentially lower overall costs per customer and could in turn increase average revenue per user given the higher efficiency in delivery. "I do not discount this as this is a new technology altogether as the telcos aim to be more efficient in overall aspects," an analyst from a bank backed equity research firm said. Meanwhile when asked to comment on the matter of "dropped calls" for which it had been fined by the regulator, Gunhildsbu, who is in charge of Digi's network, said it was not in the company's interest to allow this matter to linger on. "This matter of dropped calls is present with any mobile operator in the world and it really is not in Digi's interest to allow this issue to fester. "Dropped calls are akin to the traffic jams we face on the highways - sometimes happens because of factors such as peak hour usage etc," he said. "We understand that the more dropped calls we have, the less revenue we will earn. Thus, dropped calls are really not in our interest: and we do not earn money from dropped calls as alleged by some quarters," he added. Gunhildsbu also presented the company's own internal study which claimed improvements in its network drop call rate and lost stood at 0.66% in the first quarter of calendar year 2013. He added Digi's internal ambition is to reach less than 0.60% drop call rate by the end of this year and noted that the rate for the Klang Valley area is lower at 0.52% in the quarter. "We may be the third operator (in terms of market capitalisation) in Malaysia and we may have our weaknesses due to certain limitations out of our control such as network spectrum flexibility," Gunhildsbu said. "Despite the limitations we aim to be on par in terms of providing the best service we can to our customers - thus the emphasis on our network modernisation drive. "We can then be on par or better than our competitors in certain areas," he added. He noted the risk of dropped calls are higher when one uses their mobile phone while driving at 120kmph on the highways due to the process of handover' between any two base station towers. On a related matter, Gunhildsbu also said Digi and the other telco operators are also facing the continued issue of vandalism and theft at its base stations that if left unchecked can cause havoc despite sounding petty on the surface. "The incidences of this is about 60-100 occurrence per month. "They can be stolen cables, batteries or telecomm equipments. "We are working with the police and relevant authorities to help resolve this problem but we believe there can be further improvements in this area," he said.
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