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 $1,600 to $2,800 per metric tonne, said a top official.

Despite the increase, Rubber World Industries (RWI), the leading manufacturer of closed-cell rubber insulation Gulf-O-Flex, is aiming to keep its products’ current prices by increasing production by 25 per cent this year, said its chairman Abu Baker Shaikhani.

“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 Shaikhani.

“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,” he added.

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, a statement said.

RWI, part of the international business conglomerate Shaikhani Group of Companies, is reinforcing its manufacturing capacity to cater to the bigger demand and at the same time achieve greater economies of scale, which will enable it to offer its products at their current prices, Shaikhani said.

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 Dh30 million ($81.7 million).

In addition to expanding its manufacturing infrastructure, the company is also working on growing its distribution network.

“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,” Shaikhani continued.

“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,” he concluded. – TradeArabia News Service