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Malaysia sees global demand for rubber gloves falling as pandemic comes under control
WITH the Covid-19 outbreak now largely under control, the worldwide demand for rubber gloves – an essential item used in many industries during much of the pandemic – is expected to fall as a result.
THE Malaysian Rubber Glove Manufacturers Association on Wednesday (Aug 3) lowered its projected global demand for rubber gloves this year to 399 billion pieces, a nearly 12 per cent drop from an earlier forecast of 452 billion pieces. The country – the world’s largest producer of rubber gloves and a powerhouse in the US$28 billion global rubber glove industry – estimates it will produce about 240 billion gloves in 2023.
At an event held in Kuala Lumpur, the association’s president Supramaniam Shanmugam said the higher projection – announced in March this year – was made with the assumption that the Omicron and other emerging variants of the coronavirus may prolong the fight against Covid-19.
The latest forecast represents a slightly slower annual demand growth of between 10 per cent and 12 per cent in 2022 after more than 2 years of overwhelming demand for rubber gloves during the pandemic. Demand will likely return to a long-term growth trend of 12 per cent to 15 per cent in 2023 when the surplus in supply is sufficiently absorbed by the market, Supramaniam said.
Despite the lower-than-expected output, the association is confident that Malaysia will see about RM23.1 billion (S$7.16 billion) in export revenue from rubber gloves in 2022. This is still higher than the RM17 billion in 2019 before the pandemic struck. On top of the slowdown in demand, glovemakers around the world are also contending with overstocked consumers and an over-expanded production capacity that has now placed the average selling price of rubber gloves under some pressure.
“The next 6 to 9 months will be difficult because there is quite a fair bit of supply in the warehouses of governments and buyers who overstocked due to fears of a shortage. Until this excess supply is wiped out, we will be showing lower numbers,” Supramaniam said.
While Malaysia has an estimated 65 per cent global market share in the rubber glove industry, the surge in demand during the pandemic prompted scores of new players to join the market. At least 15 new glove makers were set up in Malaysia alone last year, while China, India and Thailand also raised their production capacity.
At present, the association estimated that there could be as many as 200 rubber glove manufacturers worldwide.
Despite the rising competition globally, Supramaniam is confident that Malaysian manufacturers will keep its competitive advantage through pricing and advancement in research.
Supramaniam added that Malaysian glove makers already have a high automation rate of 85 per cent today, and collectively employ just 1.5 per cent of the total number of foreign workers in the country. The aim is to raise the atuomation rate to 95 per cent in the next 2 to 3 years and further reduce the reliance on low-skilled labour, he said.
“The last mile is the most difficult and we will need another few years. A lot of money has already been pumped in. You cannot fully automate everything as some jobs have to be done manually, but whatever is available, we are working on it,” he said.
Source: https://www.businesstimes.com.sg/asean-business/malaysia-sees-global-demand-for-rubber-gloves-falling-as-pandemic-comes-under-control