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MARGMA expects global glove demand to resume growth next year, after 19% drop

03 Aug 2022, 00:00 AM SGT

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MARGMA’s President Dr Supramaniam Shanmugam speaks at the press conference on Wednesday, Aug 3, 2022, in conjuction with the MOU signing ceremony. (Photo by Sam Fong/The Edge)

MARGMA’s President Dr Supramaniam Shanmugam speaks at the press conference on Wednesday, Aug 3, 2022, in conjuction with the MOU signing ceremony. (Photo by Sam Fong/The Edge)

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PETALING JAYA (Aug 3): The global demand for rubber gloves is expected to return to growth in 2023, after a 19% contraction to an estimated 399 billion pieces this year, from 492 billion in 2021 when the world was at the peak of the Covid-19 pandemic. 

The Malaysian Rubber Glove Manufacturers Association (MARGMA) expects glove demand to expand in the range of 12%-15% next year. Meanwhile, the association has cut its demand forecast for this year by 12% to 399 billion pieces, from 452 billion pieces previously, as the demand normalises against the backdrop that the Covid-19 pandemic is under control. 

MARGMA’s President Dr Supramaniam Shanmugam, however, stressed that the association’s forecast “is a very conservative estimate”, given the various growth drivers, for instance rising hygiene awareness, ageing population and recovery in non-Covid-19 related demand. 

He explained that MARGMA’s initial forecast on global glove demand had taken into consideration the potential risk from the outbreak of the Omicron variant.

“Now we find most of these [risks] have come under control. That’s why we need to reassess the numbers,” said Supramaniam. 

He was speaking at the press conference on Wednesday (Aug 3) in conjunction with the memorandum of understanding (MOU) signing ceremony for the upcoming 10th International Rubber Glove Conference & Exhibition (IRGCE).

MARGMA and the Malaysian Rubber Council, which will jointly host the IRGCE, had signed the MOU with 18 key sponsors of the IRGCE on Wednesday.

Supramaniam said Malaysia, which produces an estimated 240 billion pieces of gloves in 2022, is expected to command a 65% share of the global rubber glove market, followed by China (20%), Thailand (10%) and Indonesia (3%).

In line with the decline in global demand this year, MARGMA projects that the export value of rubber gloves from Malaysia would drop by 58% to RM23.10 billion this year, from RM54.81 billion last year and RM35.26 billion in 2020.
 
Nonetheless, MARGMA foresees that the export value for rubber gloves from Malaysia would grow 10% annually from 2023 onwards.

“Glove manufacturing will still be a profitable business, bearing [in] mind, in normal conditions, its (annual global demand) growth is about 15%,” said Supramaniam.

Nonetheless, Supramainam expects the outlook of the Malaysian glove industry to be tough in the next six- to nine months, in terms of production capacity utilisation and glove average selling prices.

“Supply pipeline has sufficient gloves. Upon (supply-demand) equilibrium, players will expand only to the tune of demand growth,” he said. 

Supramaniam also updated that MARGMA members have so far automated about 85% of their glove production operations, and that it will take them another three- to four years to automate 95% of their operations.

“The last mile is very important and we are investing continuously to achieve that. One of the examples we like to use is 10 years ago, we needed 9.7 workers to produce one million pieces of gloves. Today, to produce the same [number] of gloves, we need 1.7 workers. So, we will continue to automate,” he said.

Kathy Fong & Chong Jin Hun

Source: https://www.theedgemarkets.com