Demand for Malaysian rubber gloves rockets

The rocketing demand for Malaysian rubber gloves and other protective gear triggered by the COVID-19 pandemic has turned two  of the country’s millionaires into billionaires virtually overnight. In recent months, Supermax founder ‘Stanley’ Thai Kim Sim and his counterpart at Top Glove Lim Wee Chai have seen the value of their companies’ stock rise by 394% and more than 300% respectively. The share prices of  Hartalega Holdings and Kossan Rubber Industries have also doubled since the turn of the year. If some senior members of the Malaysian rubber industry have their way, their success should feed into a wider debate about the sector’s future; and if it does, that debate will take place in a position of considerable strength.
Rubber tree plantation malaysiaRubber has been contributing to the Malaysian economy ever since British colonialists introduced the plants from Brazil n the 1870s, and the industry it spawned has by and large survived and adapted to changes in global demand and application. In the 1980s, for example, the rapid spread of the aids epidemic saw it emerge as a powerhouse of glove manufacturing thanks to a combination of low labor costs and a plentiful supply of oil as well, of course of rubber. (The same epidemic and competitive advantages also allowed Malaysia to make inroads into the world of condoms. Launched in 1988, Karex has since grown into the world’s biggest manufacturer in the sector.)
But Stanley Thai was one of the earliest of the wave of entrepreneurs whose rags-to-riches story took off with that earlier epidemic. One of 14 siblings, he was working for a garment company when he answered an  industry-wide call from the government in Kuala Lumpur to create distinctively Malaysian  brands. In 1987 he and his wife founded Supermax and two years later he launched the country’s first branded latex glove range under the same name. According to its website, Supermax now exports to more than 160 countries and meets 12% of global demand for latex examination gloves. Even before the pandemic struck, the company was looking to expand its current annual production total from 24 billion to 44 billion by 2024. Top Glove’s immediate future is looking equally promising. The company reported a 366% surge in net income to a record  $1.12 billion in the three months to May, with an executive director last week telling analysts that ‘the best is yet to come.’
Ong Eng Gong Technical adviser to KossanAll four of Malaysia’s principal glove manufacturers owe at least part of their success to their investment in their in-house design capabilities, and the voices behind the call for a more centralised and co-ordinated approach to R&D are getting stronger. One of these voices belongs to Ong Eng Long, former deputy director of the Malaysian Rubber Board (MRB) trade federation and now technology advisor to Kossan. “Since Malaysia has already had to move downstream into manufacturing… its rubber industry should create other ‘niche’ manufactured goods for a better future,” he said several  years ago. “We therefore have to consider making stronger public-private linkages and sector business associations.”
The MRB is now the driving force behind plans for the development of the $23m Eastern Province Rubber Technology Centre.If the project ever wins governmental approval, the Center would be dedicated to the development of new sources of income in the up-, mid- and downstream sectors of the Malaysian rubber industry. In the meantime, the demand for gloves (and condoms) should keep  manufacturers  more than busy for the foreseeable future.