June 14, 2010: Global prices of chemical materials and rubber have seen a continuous increase over the last six months, which has now reached 35 to 40 per cent or USD 1,600 to USD 2,800 per metric ton, said Rubber World Industries (RWI), the leading manufacturer of closed-cell rubber insulation 'Gulf-O-flex' in the Gulf and South-East Asia, and part of the international business conglomerate, the Shaikhani Group of Companies.
Despite the increase, the company is aiming to keep its products' current prices by acting on its plan to increase production by 25 per cent this year and to sufficiently address the region's need for rubber insulation products. While market analysts predict a 4 per cent rise in international demand for rubber products per year until 2011, the shutting down of many factories in the region and across the globe is making it difficult for supply to keep up with the demand, and is indirectly spurring the price hike. RWI's efforts to reinforce its manufacturing capacity is aimed at catering to the bigger demand and at the same time achieving greater economies of scale, which will enable it to offer its products at their current prices.
The company's plan to increase production this year is part of a broader strategy to produce 3,600 containers per year by 2013, for which it has invested AED 30 million. “The worldwide surge in the prices of raw materials we use for the production of ‘Gulf-O-Flex' has driven us further into undertaking an aggressive expansion initiative, which will not only address the heightening demand for rubber insulation products but also allow us to maintain our prices for the benefit of our customers,” said Abu Baker Shaikhani, Chairman, Rubber World Industries.
“We are also motivated to identify more ways to increase our efficiency as we expand our manufacturing facility, both of which will significantly contribute to our end goal of delivering high quality products at economical prices to the region.” In addition to expanding its manufacturing infrastructure, the company is also working on growing its distribution network, having recently signed a deal appointing UAE-based HVAC company Leminar Air Conditioning Industries as the exclusive distributor of 'Gulf-O-Flex' rubber insulation for HVAC applications in the UAE.
RWI is also bidding to be the rubber insulation supplier for many prestigious projects being built in the region following its successful involvement in the construction of ‘Al Raha Beach' development, ‘Saadiyat Island' project and ‘Yas Island' in Abu Dhabi. “Despite the hurdles present in the market as an offshoot of the economic meltdown, we are committed to finding ways to sufficiently provide the required volume of products by our customers and accommodate their price limitations.
By doing so, we are confident that we will maintain our leading position in the market and further strengthen the loyalty of our customers to the RWI brand,” concluded Shaikhani.