Rubber gloves will still be in demand, as the Malaysian Rubber Glove Manufacturers Association (Margma) predicts a 20% growth in exports to RM12.8 billion this year.
“This year, rubber glove exports are expected to expand by 20% to RM12.8 billion, from last year’s RM10.71 billion. “In the first half of the year, we have shipped out about RM6 billion worth of gloves,” Margma president Denis Low Jau Foo told Business Times.
He said earnings of rubber glove makers had been on the rise since the beginning of this year. For the top four rubber glove players — Top Glove Corp Bhd, Supermax Corp Bhd, Hartalega Holdings Bhd and Kossan Rubber Industries Bhd — 90% of their sales are in the US dollar while a substantial portion of their cost base, such as natural rubber, labour, packaging, gas and electricity, are in ringgit.
“The strengthening of the US dollar and weakness of the ringgit is a short-term catalyst for our sector. Some of our inputs, such as nitrile latex, is sourced in US dollars. That’s a natural hedge. Also, clients have been asking for discounts in selling prices,” he said.
Margma represents 90% of local glove manufacturers and associate members, which are the suppliers and service providers to the industry. Malaysia has been the world’s top supplier of rubber gloves for almost two decades.
“Glove exports usually perform better in the second half as hospitals would order more to stock up at the end of the year. I think we can achieve a 20% jump to around RM12.8 billion, after stagnating at around RM10.5 billion for three years. Low said this year, the country was set to export around 120 billion pieces of rubber gloves to more than 190 countries. This volume constitutes about 62% of the 193 billion pieces of rubber gloves exported globally.
“In the last few years, glove exports have been measured by weight and then converted to pieces. The conversion does not take into account that we are producing more lightweight gloves of just 3g per piece. So, some of us have been under-counting the volume we are exporting. “A more accurate account of the 2015 export volume would be in the region of 120 billion pieces,” he added.