Thursday, 30 December 2010

Glove lovely growth: Rubber glove exports are due to grow 23 per cent to RM8.8 billion this year

By Ooi Tee Ching

Published: 2010/12/30

Malaysia is set to post record rubber glove exports for the eighth straight year in 2010, driven by higher global demand for medical gloves.

Rubber glove exports are due to grow 23 per cent to RM8.8 billion this year, said The Malaysian Rubber Glove Manufacturers Association (Margma).

For the last 15 years, Malaysia has been the world's top supplier of rubber gloves. Last year, the country exported close to 100 billion pieces of rubber gloves to more than 180 countries.

This volume makes up two-thirds of the global market for rubber gloves. Healthcare products like medical gloves continue to see strong demand despite the current lacklustre global economic growth.

"Rubber gloves, be they natural rubber or synthetic, are a necessity in the healthcare and food-handling sectors," Margma president Lee Kim Meow said in a recent interview.

"We expect further growth on the back of rising healthcare awareness in emerging markets, especially in China, India and the Latin American countries," he said.

This is because emerging markets currently spend less on healthcare compared with developed nations like the US, Europe and Japan.

Despite the strong headwinds buffeting the industry, Lee is optimistic that next year's global glove exports from Malaysia will expand by 10 per cent to 108 billion pieces.

Latex cost, which used to be 55 per cent of the total production cost, has swollen to more than 65 per cent since the sudden spike in natural rubber prices over the last three months.

Currently, the average rubber glove selling price is at US$32 per 1,000 pieces, about 23 per cent higher than a year ago.

Lee said Margma members are likely to keep raising rubber glove prices in tandem with the rising latex prices and the weakening US dollar.

Natural rubber latex prices have risen by 65 per cent from an average of RM6 a kg from a year ago. Yesterday, it closed at RM9.89 a kg.

The US dollar, currently trading at RM3.09, has also weakened against the ringgit by 10 per cent compared with RM3.45 about 10 months ago.

Costly natural rubber latex have prompted many glovemakers to produce less natural rubber gloves and more of the synthetic variant.

This trend bodes well with Kuala Lumpur Kepong Bhd (KLK) as it seeks to tighten its grip on the world’s supply of nitrile latex, which is mainly used to make synthetic gloves.

KLK, which holds 19 per cent of Yule Catto & Co plc, supports the UK firm’s buy of Germany’s PolymerLatex Group for e443 million (RM1.8 billion). Chemical maker Yule Catto, listed on the London Stock Exchange, is the owner of the Synthomer Group’s polymers business.

Synthomer’s unit in Malaysia runs a 130,000-tonne-per-year nitrile plant in Kluang, Johor. On the other hand, PolymerLatex operates a 100,000-tonne-a-year plant in Pasir Gudang, Johor.

When asked to comment on KLK and Yule Catto’s decision, Lee replied: “We welcome the move. Our members look forward to see how Yule Catto can offer a wider variety of feedstock to work with.

“We’re actually not short of nitrile latex suppliers,” he said, adding that Bangkok Synthetics Co Ltd is planning to put up a 110,000-tonne a year plant at Rayong province in southern Thailand.

The plant is scheduled to supply nitrile latex to rubber glove makers in Thailand, Malaysia and Indonesia by the third quarter of 2012.

Read more: G-lovely growth

No comments: