Higher Demand For Rubber Gloves

December 30, 2008 15:29 PM

KUALA LUMPUR, Dec 30 (Bernama) -- Malaysian glove manufacturers are set to witness a higher demand for products, in riding on an increasing awareness of cleanliness and hygiene worldwide, despite the economic slowdown.

Currently, Malaysian rubber glove manufacturing companies command between 55 percent to 65 percent of the world market, OSK Research said in a research note here Tuesday.

"Given the stringent quality standards, there is strong world demand for their products," it added.

OSK Research also pointed out that the emergence of new diseases such as the Severe Acute Respiratory Syndrome (SARS), the bird flu and bio-terrorism, heightened awareness of hygiene in developing countries and the usage of gloves being made mandatory in developed nations.

On the cost issue, OSK Research said companies had stressed on the need to pass on the increased cost of production of either latex or natural gas to customers, especially for the medical grade gloves.

The research house said the glove manufacturing companies were safe as long as there was no huge fluctuations in cost.

"As rubber gloves constitute less than one percent of the total cost of healthcare centres, any increase in the selling price is deemed too insignificant to affect overall demand," it explained.

OSK Research said companies like Hartalega Holdings Bhd and Kossan Rubber Industries Bhd have begun to focus on nitrile gloves due to its low protein content compared to natural latex gloves.

The research house also said that in the case of Kossan, its premium gloves were widely used by developed nations and hence,was the most inelastic to an economic slowdown.

It said the construction of Kossan's new 11 double-former lines was progressing well for commercial production in the fourth quarter of this year.

"With the expansion plan, annual production capacity will increase by two billion pieces to a total of 12 billion pieces by the year end or in early 2009," OSK Research said.

The research house also maintained Kossan's financial year 2008 and 2009 earnings forecast at RM60.6 million and RM75.9 million respectively.

-- BERNAMA