Property players entering glove industry include Mah Sing, Jiankun International and Iconic Worldwide, among others
by S BIRRUNTHA / Pic by BLOOMBERG
SUSTAINED demand and supply disruptions stemming from alleged labour compliance have attracted a pool of property developers venturing into the now highly profitable glove business.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said the import ban on Top Glove Bhd products in the US over forced labour concerns had been one factor that helped render opportunities for new glove entrants to fill in.
“With that in mind, this whole situation entails an opportunity for other non-core rubber glovemakers, such as property companies, to fill the shortage caused by the import ban despite the average selling price peaking,” Adam told The Malaysian Reserve recently.
He said global vaccination programmes have eased market excitement on rubber gloves among investors. Still, the use of gloves is here to stay.
The analyst emphasised that vaccinated people may still be infected by Covid-19, albeit with milder symptoms, hence the glove demand to persist with heightened health consciousness.
“Hygiene awareness to prevent the spread of the virus remains high and thus warrants the continued usage of rubber gloves.
“Therefore, demand prospects for rubber gloves remain reasonable at the moment,” he said.
Top Glove, the world’s largest medical glovemaker, had recently stated that verification of the remediation payments is underway, but the group is uncertain when the US customs might lift the ban.
Last Friday, property developer and real-estate tourism specialist Sheng Tai International Sdn Bhd announced it entered into an exclusive memorandum of agreement with latex and nitrile gloves manufacturer KenTeam Asia Glove Hub Sdn Bhd.
The agreement entailed Sheng Tai International to offtake 110 production lines from KenTeam’s 90-acre (36.4ha) glove hub in Jasin, Melaka. The property developer was appointed to design, instal and build the glove hub.
Each production line is expected to have a capacity of three million boxes per annum or 330 million boxes per annum for all the 110 assembly lines.
Sheng Tai International founder and chairman Datuk Leong Sir Ley said the partnership enables the group to enter the nitrile glove manufacturing industry that is growing rapidly due to Covid-19 and other infections.
“We believe the demand for nitrile gloves will continue to grow post-Covid-19. The rising prevalence of chronic diseases, as well as the increasing awareness of health protection, especially among the elder generation, will continue to trigger the demand for nitrile gloves,” Leong said at the virtual signing ceremony last Friday.
He said the group has been working cohesively with the Melaka state government to create more business and job opportunities for Melaka through strategic partnerships with international brands.
KenTeam CEO Datuk Seri Justin Lim said the construction of the 110 production lines could begin in early July and slated for completion in 18 months. He said the RM1.5 billion glove hub project would create about 7,500 jobs in Melaka.
He noted that most of the gloves are for exports, mainly for the US, Canada and Europe markets.
Besides Sheng Tai International, property developer Mah Sing Group Bhd has diversified into gloves and related healthcare products to take advantage of the demand created by the pandemic.
Similarly, Penang-based property developer Aspen (Group) Holdings Ltd’s subsidiary, Aspen Glove Sdn Bhd, made a foray into rubber glove manufacturing in August last year.
Other property players, who entered the glove industry, include Jiankun International Bhd and Iconic Worldwide Bhd.