Budget 2026: MARGMA Appeals For Immediate Financial Relief, Human Capital Support

By Danni Haizal Danial Donald

KUALA LUMPUR, Oct 5 (Bernama) -- The Malaysian Rubber Glove Manufacturers Association (MARGMA) has appealed for immediate financial relief, critical support for human capital and strategic focus on market positioning for the rubber gloves industry in Budget 2026.

Its president Oon Kim Hung said the most urgent is to reduce the cumulative financial burden, particularly the cess export duty, given the multi-segment cost increases and trade headwinds, such as the United States (US) tariffs.

Cess refers to a levy or tax on rubber products, primarily collected by the Malaysian Rubber Board (MRB) to fund the industry.

“The Malaysian rubber glove industry is currently battling severely compressed margins due to escalating operational costs and fierce global competition, particularly from rivals in China and Thailand.

“These measures are essential to enhance our global cost competitiveness and ensure the Malaysian rubber glove industry can maintain sectoral growth for our economy to thrive and perform sustainably throughout 2026 and beyond,” he told Bernama.

Reduce or Temporarily Suspend Cess

Oon said MARGMA urgently appeals to the government to reduce the current cess rate from 0.2 to 0.1 per cent or temporarily suspend it.

He said this measure is necessary given the precarious economic environment faced by the industry, in particular, the intensifying competition from China and Thailand and declining global market share.

“This relief measure will immediately help local manufacturers of all sizes, including small and medium enterprises (SMEs) and corporations alike, to combat high operating costs and eroding profit margins,” he said.

He urged the government to lower or temporarily suspend the cess to ease financial pressures on glove manufacturers and enhance Malaysia’s competitiveness, as the industry works to regain market share and attract reinvestments.

“A review mechanism could be introduced to reimpose or revise the cess once the industry stabilises and global demand recovers,” said Oon.

Rubber gloves manufacturers are currently battling the Sales and Service Tax, foreign workers’ mandatory Employees Provident Fund contributions starting Oct 1, the Multi-Tier Levy System for foreign workers, higher utilities and sustainability compliance costs, all of which result in escalating costs.

Human Capital and Tax Incentives

Oon also suggested that the government consider reopening and streamlining the foreign workers recruitment and replacement process, as human capital is a critical driver for the industry's expansion.

He said a persistent shortage of foreign workers, exacerbated by workers who do not renew contracts or abscond, continues to affect production scheduling and fulfilment for manufacturers.

“We suggest the government reopen and streamline the foreign-worker recruitment process for the rubber glove manufacturing sector. Expedite the approvals for replacement workers to ensure a stable, adequate labour supply,” he said.

The association also requested additional government support in the form of tax incentives, reinvestment allowances and grants to help manufacturers remain competitive while meeting international compliance.

“Manufacturers are facing rising compliance costs and the high complexity of meeting new global sustainability regulations, which erodes profit margins and competitiveness, particularly for SMEs.

“We, therefore, hope that the budget will assist to offset these unavoidable costs by addressing key data and audit requirements, especially related to meeting environmental, social and governance and European Union Deforestation Regulation compliance and reporting standards,” he said.

Allocation for Rubber Gloves

To effectively support the Malaysian rubber glove industry and help it regain lost global market share, he added that the upcoming budget must include targeted allocation to boost strategic market influence and trade expansion efforts.

According to Oon, as rubber gloves are Malaysia’s top rubber product export, the association proposes the allocation of dedicated funding for the sector to include a strategic “Malaysia Made Glove” global branding campaign that comprises industry-driven marketing and certification branding.

“This can be further extended to collaborating with international healthcare associations, procurement agencies, and non-governmental organisations to showcase Malaysia’s commitment to sustainable and ethical glove manufacturing.

“We also believe that there should be an allocation for targeted and sustained funding for workforce training programmes within the rubber glove industry, to prepare for higher-value and specialised roles aligned with the use of artificial intelligence and technology within the industry,” he added.

Prime Minister Datuk Seri Anwar Ibrahim, who is also the Finance Minister, is scheduled to table Budget 2026 in Parliament on Oct 10.

-- BERNAMA