First Malaysia produced rubber. Then it produced rubber gloves. Now–as rising health care budgets, aging populations and higher hygienic standards around the world boost the medical industry’s demand for gloves–the country is proving the natural place to produce synthetic gloves.
Malaysia supplies 63% of the world’s disposable gloves, thanks to sharp competition that has led to continual improvements and built a skilled workforce. Lower latex prices and the 6.6% fall in the ringgit in a year have helped recently. Three of the 13 people who are new to the list this year owe their fortunes to glovemaking; a fourth glovemaker once again makes the list.
Kuan Kam Hon’s Hartalega Holdings is leading an industry shift from latex to nitrile. Health care professionals and patients increasingly prefer synthetic nitrile gloves to rubber to avoid allergic reactions. And innovations have given them a lightness and elasticity that’s difficult for rubber gloves to match. In 2002, while local competitors were focused on latex gloves because of the cheap rubber from Malaysia’s numerous plantations, Kuan began investing in research and development of nitrile gloves. Today he says his factories can produce the world lightest nitrile glove. He plans to more than triple capacity to 42 billion gloves a year by 2020.
Lim Kuang Sia started out making rubber goods for the marine industry but moved into gloves to mine Malaysia’s lead in rubber. Shares of his Kossan Rubber are outperforming the sector, surging 156% over the past year. But Lim Wee Chai of Top Glove Corp., an eight-year veteran of the list, suffered a 4% drop in his fortune. Too dependent on rubber, he saw his margins tighten.
Stanley Thai’s Supermax stands out as the first in Malaysia to sell branded gloves instead of anonymously supplying overseas retailers. He’s massively expanding his capacity after a year in which his shares jumped 60%. –N.P.J.
Source: Forbes
Published: 26 Feb 2014