KUCHING: Top Glove Corporation Bhd (Top Glove), the world’s largest rubber glove manufacturer, is expected to overcome mitigating factors in the rubber glove industry such as oversupply and the threat of unfavourable foreign exchange rates.
SWITCHABLE LINES: Photo shows a Top Glove rubber glove production line. The bulk of its new production lines would have the capability to inter-switch production between natural rubber and nitrile gloves, having increased nitrile gloves production by six percentage points to 11 per cent.
In an analyst briefing, the company expressed its view that Malaysia’s rubber glove exports had dropped due to slower demand growth and latex price was expected to fall further in the longer term.
OSK Research Sdn Bhd (OSK Research) analyst Jason Yap noted, “The export of rubber gloves from Malaysia has dropped from about 140,000 tonnes in early 2010 to about 120,000 tonnes in early 2011.”
According to him, this indicate d that there was a slowdown in the demand since the H1N1 pandemic no longer dominated the news headlines.
Also, with some countries still recovering from the global recession, there were no additional new markets and hence, the growth of demand should continue to contract from its high last year, with lower orders expected from existing markets after the resolution of the H1N1 virus outbreak.
“In our view, we believe that latex price may soon bottom out and resume its uptrend, but probably in a manner which is less aggressive than before, while entering into the winter season of the first half of calendar year 2012 (1HCY12).
“Given that latex is also a tradable commodity, we are not expecting the price to break the recent high of RM11per kilogramme (kg), as long as other commodity prices, especially crude oil price, do not break similarly and the global economy continues to slow down or grow at a slower pace,” Yap opined.