Jumping on the lucrative glove making bandwagon

MALAYSIAN glove makers are thriving amid the pandemic, thanks to the ongoing demand for rubber gloves. Malaysia – the world biggest maker of rubber gloves –has supplied 240 billion pieces of rubber gloves globally, meeting almost 70% of 360 billion pieces of world demand in 2020.

According to the Malaysian Rubber Glove Manufacturers Association (MARGMA), worldwide demand for rubber glove is projected to rise to 330 billion in 2020 from 296 billion in 2019.  

However, the outbreak of COVID-19 has resulted in a 100% surge in demand worldwide in the first few months of 2020. Also, the demand for examination gloves has been overwhelming with an order waiting list of more than a year for major glove players compared to the normal delivery time of 30-40 days. Besides that, the demand supply imbalances of the glove industry are only expected to normalise after 2022.

It is predicted that the disposable gloves market size is expected to grow at a compound annual growth rate (CAGR) of over 14% during the period 2019 to 2025 based on a report by ResearchandMarkets.com.

Meanwhile, Gloves producers in the country as seen their profits soared during this period. Top Glove Bhd – the world’s biggest rubber gloves producer – said it was seeing orders of between 11 to 12 billion a month compared to 4.5 billion prior to the pandemic. As a result, Top Glove posted a 2030% surge in net profit to RM2.38 bil from September to November (first quarter) from RM111.4 mil a year ago.

Kossan Rubber Industries Bhd – one of the largest producers of disposable latex and nitrile gloves in Malaysia – saw its net profit jumped sevenfold to RM348.74 mil in Q3 ended Sept 30, 2020, from RM49.18 mil in the previous corresponding quarter.

For its Q2 ended Sept 30, Hartalega Holdings Bhd delivered its best-ever quarterly net profit at RM544.96 mil, a leap of five times from RM103.87 a year ago.

As glove making is seen as a lucrative business in Malaysia, public listed companies have jumping on the rubber glove bandwagon, branching out from their core businesses and into rubber glove making.

Luster Industries Bhd (manufacturing and selling precision plastic parts), property developer Mah Sing Group Bhd Salcon Bhd and Jiankun International Bhd (Property and construction group) have all diversified into rubber glove making.

The latest addition to the list is KTG Bhd, one of the oldest ceramic companies in the country is expanding its ceramic products to include manufacturing of ceramic hand moulds also known as ceramic glove hand former for the use of gloves production. Formerly known as DWL Resources Bhd with its core business in the ceramics industry, the group believes they will be able to tap on the shortage of the gloves supplies and capture the excess orders in the market. 

The list will not stop here as more companies will join in the glove making industry. It is said that there won’t be any oversupply of rubber gloves scenarios in the next few years as the demand will not be affected by the vaccines for COVID-19 despite average selling prices (ASPs) expected to decline.

But glove makers mustn’t ignore their moral obligations by worshipping profits at the expense of the welfare of their workforce. – Dec 25, 2020

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