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The gloves sector is facing challenging times, with demand declining and an oversupply situation expected, though Malaysia, the largest exporter of gloves, maintains an optimistic view. Meanwhile, the emergence of contaminationcontrol technology and an ironclad requirement for cleanliness in manufacturing is creating a niche spot for rubber gloves, says Angelica Buan in this report.
On a decline
Is the healthcare sector’s perennial demand enough to keep glove players in top shape? Finlandheadquartered research consultancy Global Research & Data Services forecasts an annual global demand expansion of 7.9% for rubber gloves between 2014 and 2018. A large volume of the demand will be from the medical and healthcare segments.
This outlook, however, has not kept Safeskin Medical and Scientific, a Thailand-based unit of US firm Kimberly-Clark Corporation, from closing its rubber glove plant in Songkhla province, and displacing some 3,000 workers.
Australian glove maker Ansell, while seeing sustainable sales of its medical gloves, is also cutting back due to weakening sales of its gloves in its domestic market. The company’s recent acquisitions to boost its revenues did not help as expected. A sales growth of 9% was posted last year in the six months to 31 December, with 1% coming from organic growth and the rest from the acquisitions.
Sales in the Asia Pacific region are also declining for most of Ansell’s products as well as in Russia and Turkey, against the slowdown in the mining sector that has led to a decreased requirement for Ansell’s occupational gloves. Recently it announced that it is transferring its wellness unit offshore. It is also exiting the US military gloves operations, and shutting down a manufacturing plant in Malaysia.
Oversupply situation in Malaysia?
Meanwhile Malaysia, which is a manufacturing base for 125 glove makers who supply half the world’s requirement for gloves, according to the Malaysian Rubber Export Promotion Council (MREPC) website, is currently at risk of facing a glut and competitive pricing.
Malaysia’s major rubber glove manufacturers, Top Glove, Kossan, Supermax and Hartalega, are ramping up production to the point of overcapacity. Their combined additional production totals to about 9 billion pieces, which will be made during different periods:
Kossan is increasing its output to 2.5 billion pieces this year; Supermax, in view of a new 5.3 billion unit-capacity plant is increasing production by 2.5 billion pieces; Top Glove is accruing an additional 2 billion pieces by end of the year, while Hartalega is expected to increase production by 2 billion pieces.
Nonetheless, some industry experts opine that oversupply is unlikely with an increased demand – a redeeming situation in the case of Malaysia.
The Malaysian Rubber Gloves Manufacturers Association (MARGMA) notes that the country’s rubber glove exports, particularly for the healthcare, food, electric/electronics, and automotive sectors, will rise by 8% to 178.6 billion pieces this year.
The association recently signed an MOU with MREPC and nine key sponsors for the staging of The 7th International Rubber Glove Conference and Exhibition (IRGCE). It will be held from 2-4 September in Kuala Lumpur, Malaysia, and is sponsored by rubber chemicals company Excelkos as well as glove makers Hartalega, Kossan, Latexx Partners, Smart Glove, Supermax, Top Glove, WRP, and YTY.
The bi-annual event is expected to draw 500 participants and 3,000 trade visitors. There will be conferences where key international and regulatory bodies from the US, Japan, China and Malaysia will present technical papers on standards and specifications, quality assurance and regulations on medical devices and protective gloves.
Bargaining chip in the cleanroom
Just like how the IRGCE is themed “Beyond Just Infection Control”, to indicate a larger market for gloves, there are other niche segments, such as cleanroom consumables, which glove makers can tap for increments.
The McIlvaine Company, in its World Cleanroom Markets report, says that Asia will be the largest market for cleanroom consumables by 2015. Sales from this segment are expected to reach US$8 billion through 2015, with the pharmaceutical and biotechnology sectors expected to be the third largest consumers of cleanroom products.
Cleanroom consumables include masks, coveralls, boots, hoods, rubber gloves, and other equipment worn or used in controlled environments (cleanrooms) that are free from dust and other contaminants, where electronic components are manufactured or scientific research is conducted.
The above is echoed by research firm TechNavio in its Global Cleanroom Consumables Market 2014-2018 report. The US firm says that the Asia Pacific region is a leading driver for cleanroom consumables, amidst the strong presence of the semiconductor and electronics industries in the region. Between 2013-2018 cleanroom consumables will reach a CAGR of 4.95%.
Cleanroom gloves, classified also as non-medical gloves, partake in the US$7.85 billion forecast value for global disposable gloves by 2019, according to research firm Transparency Market Research’s study.
Growth in cleanroom gloves
The cleanroom gloves market is subject to high margins but nevertheless has potentials for growth. Growth sectors such as electrical and electronics (E&E) and semi-conductors have dire need for cleanroom gloves.
The Cleanrooms World Markets study published by McIlvaine suggests that global cleanrooms space (net space in operation) is forecast to expand to 12.12 million sq m this year, up by 5% from a year ago.
Thus, a majority of medical glove makers also produce gloves for cleanrooms, especially since materials with controlled environment features are developing.
Cleanroom gloves that are made from nitrile, latex or vinyl materials resemble examination gloves. They are usually thin, ambidextrous, and disposable; and, listed with an ISO number or Class number to denote particulate levels for cleanroom compatibility.
The Scottish Society for Contamination Control, in its report, explains that cleanroom gloves are critical for contamination control in the semiconductor, flat-panel display, disk-drive, and other high-technology industries. It states that gloves are among the most important, and most expensive too, in the cleanroom consumables sector. It also says that technology plays a role in the formulation of cleanroom gloves.
Furthermore, there is strong demand for cleanroom gloves from the food and automotive industries too, which require protection for workers using chemicals, reactive or unhygienic materials.
Giving a hand to the non-medical glove sector
Since the semiconductor industry, the largest user of cleanrooms worldwide, is strong in Asia (China, Taiwan and South Korea), where manufacturing operations are brisk for flat panel displays, hard disk drives, storage and photovoltaics, cleanroom gloves have a high potential in the region./p>
Malaysia, the rubber gloves hub in Asia, is also benefiting from the optimistic global semi-conductor equipment forecast of a growth of 20.8% to US$38.4 billion this year; and increasing further by 10.8% to exceed US$42.6 billion by 2015.
In view of the forecast, glove makers that are traditionally known for making medical and healthcare gloves are also producing cleanroom gloves to broaden their market catch.
Where cleanroom gloves were a sideline business for glove makers, whose primary business was manufacturing medical gloves, and cleanroom gloves were nothing more than medical gloves laundered, tested for contaminants and packaged for controlled environments, now things are different. As cleanroom glove sales continue to grow, the cleanroom industry is starting to carry more weight with glove makers, who see an opportunity to profit from materials and features specifically developed for the controlled environment user.
For instance, Top Glove’s latex and nitrile cleanroom gloves are marketed for the semiconductor, electronic, aerospace and biotechnology industries. Among other physical features are that the powder-free gloves provide protection from contaminants and unwanted substances, while providing comfort and natural fit.
Hartalega, which claims to be the pioneer in nitrile gloves production, is wagering on the semiconductor, biotechnology, nanotechnology, pharmaceutical, flat panel displays, thin film technology, and disk drive industries for its cleanroom gloves. It says the gloves do not contain plasticisers, carbamates, thiuram, fillers, phthalate esters, silicone oil, and amide.
Yet another glove maker, Kossan produces cleanroom, food grade, high risk gloves and other thick versions of natural gloves for specific applications. Kossan reported last year that sales growth from the cleanroom segment is evidenced by more customers approving and accepting its cleanroom gloves and cleanroom disposables. Nonetheless, it says that revenue contribution from the cleanroom segment is relatively small, approximately 2.6% of the total glove sales. However, the company is optimistic that sales in this segment will pick up in the near term.
According to a report by Malaysia’s Affin Investments Bank, Kossan is eyeing capacity expansions, with possible ventures in Indonesia and Vietnam, and diversification into technical rubber products, surgical and cleanroom gloves to widen its customer base.
A relatively low-profile but nevertheless, leading cleanroom consumables maker based in Malaysia, Riverstone Resources, produces latex and nitrile cleanroom gloves for the hard disk drive sector, which accounts for a majority 60% share of its cleanroom gloves output. It also caters to the LCD, semiconductor, consumer electronics, pharmaceutical and healthcare industries. Exporting 85% of its products to the US, Europe and rest of Asia, the company has five factories, three of which are in Malaysia, one in Thailand, and one in China. The facilities have a combined annual production capacity of 3.1 billion pieces of gloves.
According to Singapore-based UOB Kay Hian Research, Riverstone is on the way to increasing its capacity to 8.2 billion pieces by 2018.
Meanwhile, UK-based Nitritex has launched a new range of isolator and Restricted Access Barrier Systems (RABS) sleeves and gauntlets (a type of glove), suitable for use in highly controlled environments. It says that the design meets the stiff requirements of a pharmaceutical barrier system.
The companies say that the gloves are processed and packed in accordance to ISO cleanroom standards to meet the stringent requirements of the pharmaceutical, life science, medical device, and microelectronic industries where contamination control is the greatest concern.
While the market may never produce a single glove suitable for all applications, but cleanroom users can be assured that the growth of the cleanroom sector will result in glove manufacturers continuing to grow the product range for years to come.