Hartalega ramping up rubber glove production amid signs of demand recovery

Kuala Lumpur – Malaysian rubber gloves manufacturer Hartalega has begun to ramp up production capacity amid signs of recovery in the market.

Steps include the recent commissioning of "some of the more advanced and efficient production lines” at its newly built NGC 1.5 glove manufacturing complex in Sepang. 

Furthermore, the group said it aims to gradually start more production lines at NGC 1.5 to ensure that its capacity is aligned with the “prevailing market supply-demand dynamics.” 

“Longer-term prospects” for the rubber glove sector remain positive as the group anticipates a return to and expansion beyond pre-pandemic levels of demand, Hartalega said 12 Nov.

Demand is expected to be driven by the healthcare sector, further supported by an increasing awareness of hygiene practices.

For its fiscal first half to 30 Sept, Hartalega reported a 39% year-on-year increase in sales to RM1.24 billion (€263 million), supported by increased volume.

Earnings (EBIT), however, showed only a modest improvement: reaching RM4.7 million in the first half of 2024, compared to RM4.8 million in the same period last year.

Hartalega linked the continuing losses primarily to a strengthening of the Ringgit against the US dollar, which limited the effect of rising average selling prices (ASP), as well as higher raw material costs.

These impacts, it said, were partially mitigated by reduced operating expenses, achieved from enhanced productivity and streamlined operations.

Hartalega went on to note persisting headwinds across the rubber gloves industry due to continuing global oversupply and related supply-chain stock adjustments.

“The market remains highly competitive among both regional and domestic producers, which continue to exert pressure on average selling prices,” it added.

Furthermore, the sector is facing global shipping constraints due to the Red Sea crisis, which has disrupted global trade routes and led to shipment delays.

Nonetheless, the Malaysian gloves maker said there were “early signs of improving demand trend as pandemic stockpiles worldwide continue to deplete and consumption begin to normalise.”

Moreover, capacity streamlining by key Malaysian producers and the exit of recent market entrants have alleviated some of the oversupply pressures.

The group also expects the recently announced higher tariffs on glove imports from China by the US could benefit Malaysian gloves manufacturers.