Demand For Rubber Gloves Will Decline, And It Will Be Difficult For Interbank Investors To Make Profits

- Sep 22, 2020-

According to foreign media reports, with the spread of the new crown pneumonia epidemic, the demand for medical rubber gloves around the world has continued to increase, which has attracted investors from different industries into the rubber glove market.

In Malaysia, the largest producer of rubber gloves, companies in different industries such as real estate development, information technology, and palm oil production have entered.

According to the Malaysian Rubber Glove Manufacturers Association (MARGMA) forecast in July, by 2020, Malaysia’s domestic rubber glove production will expand to 220 billion, a year-on-year increase of 20%, almost all for export.

Among them, the Malaysian listed companies that announced new entry into the field have invested a total of 900 million ringgits in the past two months, and approximately 70 new rubber glove production lines have been added.

According to analysts at JF Apex Securities, due to the inflow of investor funds, the annual production capacity of rubber gloves is expected to increase by 20 billion. JF Apex Securities analysts pointed out that as the epidemic eases, demand for rubber gloves will decline in the first half of next year, and it will be difficult for new companies that lack market competitiveness to make profits. With the development of vaccines and the end of the epidemic, the demand for gloves has declined. However, the initial investment cost of these new entrants in the field of rubber glove production is very high, and its production efficiency is difficult to compare with large enterprises. Therefore, it is difficult to obtain the expected large profits.

It takes at least half a year to build a rubber glove production plant. New companies that lack professional production experience and sales network can hardly form competition with large companies.