Earlier this year Malaysian tread rubber manufacturer Maxrubber celebrated its 30th anniversary at a high-profile reception held in Subang, Kuala Lumpur. The Klang based company takes great pains to emphasise its position as a medium-sized, family-owned business, and the anniversary event was more in keeping with a much more prominent entity than the company is wont to portray itself. The truth, however, is that during a period when the traditional, much larger leaders in the Malaysian tread rubber sector have struggled to maintain their position, Maxrubber has, on the back of steady and measured growth, gained a position as one of the market leaders locally, and is now looking to strengthen its business overseas.
Success Despite Difficult Conditions in South-East Asia
On the basis of this, we recently paid a visit to the company’s head office to find out more about the company’s plans for future expansion. There we spoke to Managing Director John Lee and Marketing Manager Liew Choon Kong, who were keen to emphasise the company ethos, outlined in the strapline used at the 30th anniversary event – namely “Together in Synergy, Winning in Unity.”
“We are a small company, which focuses only on tread rubber production,” emphasised John Lee. “We are growing steadily, but we are being careful with the growth,” he added. “We don’t want to run before we can walk.”
Maxrubber Industries Sn Bhd was originally founded in 1989 by John Lee’s father, the late Lee Chee Keong, as a manufacturer of rubber compounds and moulded automotive parts. The company first entered the business of manufacturing tyre retreading materials (both precure and mould cure) in 1993. Today, the company employs 80 people operating a total of five tread presses.
“Demand for high quality and value-for-money retread materials continues to grow around the world, and Maxrubber is at the forefront of the move to meet this demand, building new, dynamic markets for our products around the globe,” said John Lee.
Indeed, one of the key strategic aims of the company is to develop its international presence, and this was illustrated in March this year with the addition of a new 8 metre press at the Klang manufacturing plant.
“The new press is mainly intended to service the export market, and has helped increase our capacity, thereby positioning ourselves to meet growth in export demand,” explained Lee.
Maxrubber can currently claim to be a trusted brand in over 25 countries around the globe, and indeed, the company has managed to develop sales across an extraordinarily widespread range of countries from the USA to Ecuador, from the UK to Tanzania and from New Zealand to Japan. According to John Lee, though, the company’s priorities are now to develop a stronger presence in both Europe and Latin America, using the company’s premium brand, Maximus.
“We are looking for direct sales and we face strong competition from local suppliers, so it’s a challenge to penetrate the Latin American market,” said Lee, “but we have made some inroads in the region selling to Ecuador.”
Unfortunately, market conditions in South-East Asia are currently not helping. “Local tread production in Malaysia has fallen by 40-50%,” he continued. “The increased influx of Chinese tyres has impacted the pricing of retreads. The trade war between China and US is not benefiting us in this respect.”
The market conditions in South-East Asia have also had the effect of holding back the company’s plans to develop a franchise network in South East Asia. This concept was developed in 2016 and the company does have one franchisee in the pipeline within the South-East Asian region. Generally, though, the development of the concept has been held back due to the market difficulties in the region as a whole.
Overall, however, Maxrubber’s view of prospects for retreading sector are positive. “It is particularly gratifying to be celebrating this anniversary as the future for high quality rubber compound and tyre retreading business looks bright,” said John Lee at the company’s anniversary event earlier this year, and the company has certainly made a number of significant investments on the back of this positivity in recent years.
The company invested in an OTR extrusion line in 2003, expanding into the precure OTR sector ten years later in 2013. The company now sells OTR materials to several overseas markets including Thailand, Philippines, Japan and the USA.
The Sabah based retreader Vimax was also acquired in 2012 and, according to Lee, this subsidiary still continues to perform well, producing 2,000 retreads per month.
More recent developments have included the addition of Wing and Eclipse designs in 2014 and the launch of a completely new segmented brand line-up in 2017 consisting of four different branded products, the premium Maximus range, a mid-range brand called Maxcool, the Maxcap economy brand for the local market, and a branded Wing tread called Maxfit.
