Good demand, lower cost to boost rubber glove sector

Business & Markets 2013
Written by Zatil Husna of theedgemalaysia.com
Tuesday, 07 May 2013 10:15
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KUALA LUMPUR: Double digit market growth and lower material costs
will boost the rubber glove sector this year.
“Global market growth is expected to be 10% to 15% this year while
the raw material price, which is 50% off [its peak], is also low and
stable,” said AmResearch analyst Cheryl Tan.
While speculation over a H7N9 pandemic is premature, she believes the
rubber glove sector has a decent outlook for 2013, although it will not
be as good as in 2012.
“We expect slow growth in 2014 and 2015 as there may be oversupply.
With lower material cost and players expanding aggressively, we see
that demand may not be sustainable as there may be a supply
saturation similar to 2011,” she said.
But the sector will continue to be resilient as rubber gloves are a necessity and the demand for industry has always been
strong, Tan said.
MIDF Investment Research analyst Azman Hussin said H7N9 is a short-term catalyst for glove manufacturers.
Barring any worsening of the bird flu outbreak, he expects global glove consumption to maintain its historical average growth
at 8%.
“Should the H7N9 virus develop into a pandemic, we expect glove consumption growth to surge, although for the time being
we think it is still unlikely,” said Azman.
Like Tan, he believes the sector will continue to draw interest as there is sustainable growth in demand.
“We expect the rubber glove industry will achieve 8% to 10% year-on-year constant growth for five years,” he said, adding
that there is growing demand from emerging markets like India and China, as both countries continue to develop a higher
health care standard.