Kossan Rubber Industries Bhd ’s latest quarterly net profit surged by more than eight-fold, boosted mainly by stronger demand for its gloves and a higher glove average selling price (ASP).The glovemaker announced a second interim dividend of 12 sen per share.
Malaysia’s export of rubber products is estimated to increase by 80% to reach RM74bil this year from RM41bil last year, attributed to a spike in the export of rubber gloves. Rubber gloves would likely constitute over 90% of the country’s total export of rubber products, said a Malaysian Rubber Board spokesperson. “The improving global economic activities have scaled-up the outlook for natural rubber (NR) demand. Global consumption of NR is anticipated to increase 6.7% to 13.7 million tonnes in 2021 following a 7.8% fall in 2020.
Manufacturers in non-essential sectors, which had seen sales plummet and cashflow nearly dried up due to the Covid-19 restrictions, appealed to the government to let them resume operations at 50% workforce capacity.
Green and clean industries would be the next frontier that the Malaysian rubber industry can capitalise on moving forward. Malaysian Rubber Council deputy director for marketing and development Angela Chan said, “This is in line with consumer demand since we see an increasing demand for electric vehicles which is projected to grow at a compounded annual growth rate (CAGR) of 27% from 2021 to 2030.”
Gas Malaysia Bhd ’s gas price hike for the third quarter period of this year is expected to have minimal impact on the price of rubber gloves. With natural gas accounting for about 10% of glove manufacturing cost, TA Securities in a report yesterday said the impact would be insignificant. “In our forecast, we have assumed the price of natural gas to decrease by 15.5% in 2021, compared with RM33.65 per metric million British thermal unit (MMBtu) in 2020.
Natural rubber (NR) prices are not expected to make a noticeable recovery in the short-term despite rising demand from the US, Europe and India, according to the Association of Natural Rubber Producing Countries (ANRPC).
JULY 1 marked a milestone for Malaysia's scientific and technological development. The crucial role of science in powering the economy is being recognised increasingly as ministers heading the Science, Technology and Innovation Ministry and Economic Planning Unit jointly launched the nation's Fourth Industrial Revolution (IR4.0) blueprint.
MALAYSIAN AIDS Foundation (MAF), Karex Bhd and Hilton are collaborating on a campaign — the ONE® x Hilton for MAF. It is aimed at raising funds for MAF through the sale of special-edition One condoms by Karex. The money will go towards funding treatment, care and support for the underprivileged living with HIV (PLHIV).
The US Food and Drug Administration (FDA) published a draft guidance document, Remanufacturing of Medical Devices, on June 21. Issued jointly by the Center for Devices and Radiological Health (CDRH) and the Center for Biologics Evaluation and Research (CBER), the guidance attempts to provide clarity on the difference between servicing and remanufacturing a medical device.
PublicInvest Research has downgraded the rubber glove sector to "neutral" as it expects average selling prices (ASPs) for the sector to decline gradually in the second half of the year (2H21), following the improving Covid-19 situation in both the largest glove consuming markets, the US and the European Union (EU). Its analyst Chua Siu Li in a note today cut her earnings forecasts for the sector by 10% to 35% on the back of lower ASP assumptions.
Rubberex Corp (M) Bhd has proposed a private placement of up to 83.23 million shares or 10% of its share capital to raise RM78.65 million. From the proceeds to be raised – based on an indicative issue price of 94.5 sen per placement share – some RM69.13 million will be used to acquire 28 double-formers nitrile disposable glove production lines as part of its expansion in Perak, the company said. Another RM9 million will be used for working capital.
The production of natural rubber decreased by 33.5 per cent year-on-year (YoY) to 23, 013 tonnes in April 2021 compared to 34, 616 tonnes in April 2020, the Department of Statistics Malaysia (DoSM) said. Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said this was due to the seasonal factor -- wintering period -- which causes the tree to be less productive. He said month-on-month (MoM), the production of natural rubber fell by 36.2 per cent.
While there is scepticism over the viability of new players entering rubber glove manufacturing, Johan Holdings Bhd reckons it has a strategy to make a success out of the business. This includes, among others, building a new state-of-the-art facility that complies with all environment, social and governance (ESG) issues and using the latest technology which not only reduces the labour headcount but also enables it to achieve economies of scale to reduce production costs.
After recording rapid profit growth in the past few quarters, Top Glove Corporation Bhd's earnings could have peaked in the March-May quarter but would start declining thereafter amid lower glove prices, said analysts. Rakuten Trade Research's head of equity sales Vincent Lau said it is also possible that the world's biggest rubber glove maker may report flat earnings growth for the third quarter ended May 31, 2021 (3QFY21) compared with the preceding quarter.
The global demand for rubber gloves is projected to maintain a double-digit growth of between 12% and 15%, backed by the persisted healthcare demand amid the rolling out of the Covid-19 vaccines, said Malaysian Rubber Council (MRC). MRC CEO Nurul Islam Mohamed Yusoff said the expectations remain high as Malaysia’s export of rubber products continued to chart an upward trajectory since the beginning of the year.
Malaysia is a powerhouse in the $28 billion global rubber glove industry, producing nearly two-thirds of the world’s supply—and prices have tripled this year due to a global shortfall of 80 billion rubber gloves. U.S. buyers, meanwhile, are shifting purchasing to Malaysia from China, allowing the industry to double glove exports last year to 35.3 billion ringgit ($8.8 billion). All this boosted the fortunes of five founders of Malaysia’s glove companies—even though their stocks have come off last year’s highs as countries roll out vaccines.
Mah Sing Healthcare Sdn Bhd, the wholly-owned subsidiary of property developer Mah Sing Group Bhd, has received its business licence and other relevant licences and permits to export gloves from its factory in Kapar, Klang. The developer said the first shipment of gloves is expected to be delivered by May or June 2021.
Comfort Gloves Bhd (CGB) plans to dismantle 20 dipping lines and rebuild 22 new dipping lines at its facilities, which are capable of producing 3.9 billion gloves per annum, up 57% from the group’s existing capacity of 6.8 billion gloves. The group also plans to build a production facility in Bemban, Batu Gajah, Perak, which when completed will be capable of producing up to 14.5 billion gloves per annum.
Malaysia's Top Glove Corp., the world's largest rubber glove maker, said Wednesday it hopes to swiftly end a U.S. ban on its products due to allegations of forced labor after one of its shipment was seized at a U.S. port. U.S. Customs and Border Protection said Tuesday it had seized a shipment of 3.97 million nitrile disposable gloves from Top Glove worth an estimated $518,000 at Cleveland port, Ohio.
Driven by the Covid-19 pandemic, numerous new players in the country are getting into glove manufacturing. Many of these are by public companies whose announcements have attracted a fair bit of investor interest, considering the bumper profits the large players have been reporting since last year. The question is, will they be able to churn out those dream profits? Or will they fall on the wayside as increased capacities catch up with the demand and nudge the average selling prices (ASPs) down?
The government has allocated RM69.9 million as Monsoon Aid (BMT) this year as a continuous effort to ensure the wellbeing of rubber smallholders and tappers in the country. Prime Minister Tan Sri Muhyiddin Yassin said the aid would benefit 232,319 rubber smallholders and tappers as they would each receive RM600 which to be paid in two installments, namely in December 2021 and January 2022.
ecoWise Holdings has disposed of its 51% stake in Saiko Rubber (Malaysia) for a consideration of RM18 million ($5.8 million). The sale and purchase agreement was entered into by ecoWise’s subsidiary Sunrich Integrated and Kasan Corporation for the sale of 357,000 ordinary shares in Saiko. Prior to the disposal, ecoWise owned 51% in Saiko while the remaining 49% was owned by Kato Sansho.
Kedah Rubber City (KRC) has attracted over RM2.2 billion committed investments in advanced latex product development, production of feedstock, manufacturing, storage warehousing and logistics despite the ongoing Covid-19 pandemic. In a statement today, Kedah Menteri Besar Muhammad Sanusi Md Nor said KRC is an attractive destination for businesses in the medical devices sector, particularly for medical glove manufacturers to expand their operations.
The European Commission’s Medical Device Coordinating Group (MDCG) has issued new guidance explaining the role of safety and performance standards under current Medical Device Directives as well as the upcoming Medical Devices Regulation (MDR) and In-vitro Medical Devices Directive (IVDR).
Kossan Rubber Industries Berhad (Kossan) is the first client to be supplied with recycled water from treated effluents by Pengurusan Air Sdn Bhd (Air Selangor) for industrial use. Air Selangor and Indah Water Konsortium Sdn Bhd (IWK), in a joint statement, said the reclaimed water for industrial use not linked to food and drinks was produced by Central Water Reclamation Sdn Bhd (Central Water), whereby Air Selangor held a 60% share and IWK held the balance of 40%.
After hybrid and EV batteries, semiconductors, select metals and even seat foam, the auto industry could rapidly be facing a shortage of tires. Global rubber supplies are running critically short, some analysts warn. Demand for rubber gloves and packaging tape has increased significantly during the pandemic, and supply has also been depleted by drought, floods and a leaf disease in the top-producing countries such as Thailand and Vietnam.
The construction of the rubber gloves and personal protective equipment (PPE) hub by the World Gloves International Group City and Hub Development Sdn Bhd (WGC) is set to begin this June. To be located in the Gebeng industrial area, the hub will be constructed on a piece of land spanning 128.2 hectares, involving an investment of RM100 million, said Pahang State Development Corporation (PKNP) chief executive officer (CEO) Mohd Faizal Jaafar.
The US Food and Drug Administration (FDA) has 26 active guidance documents related to special recommendations for medical devices during the COVID-19-associated public health emergency. Medical device types covered include personal protective equipment (gloves, masks, etc.), certain remote assessment and monitoring devices, ventilators, sterilizers, disinfectants, infusion pumps, thermometers and telethermographic systems, digital health devices for treating psychiatric disorders, and diagnostic tests for COVID-19.
George Kent (Malaysia) Bhd said it has been invited by Johan Holdings Bhd to buy a 40% stake in the latter's subsidiary, Dynacare Sdn Bhd, for RM40 million. George Kent and Johan share the same major shareholder — Tan Sri Tan Kay Hock. In a bourse filing, George Kent said Dynacare will work on constructing a manufacturing plant to make gloves for two years, with a global contract sum of RM624.1 million.
The push towards advanced technologies has been a key theme in the Malaysian corporate sector, even before the Covid19 pandemic came along and turned it into a necessity. And this is even more apparent in the rubber glove industry, which has seen a surge in business stemming from increased global demand because of the pandemic.
Pegasus Heights Bhd (PHB) is confident about its proposed joint venture (JV) with glove maker WRP Asia Pacific Sdn Bhd. This is given the high global glove demand and WRP’s vast experience as well as resources in the industry. “Unlike other companies which are embarking as new players in the rubber glove industry, a JV with WRP will ensure that we have a partner that has been in the business for more than 20 years with significant infrastructure in place, ” the group told StarBiz in an email.
PDZ Holdings Bhd has proposed to diversify its business operations into the manufacture, sale and marketing of gloves in an effort to turn around its financial performance. PDZ intends to acquire, install and commission up to four double former glove-dipping lines, which are expected to yield a production capacity of up to 829 million pieces of gloves annually. The glove business is anticipated to contribute 25% or more of the net assets and/or net profits of the group, and will be undertaken by Erat Marine Sdn Bhd, a wholly owned subsidiary of the company.
KAREX Bhd’s earnings are expected to improve going forward, driven by sales shifting back to the lucrative own-brand manufacturing (OBM) channel and its new glove manufacturing business. Hong Leong Investment Bank Bhd (HLIB) is confident of Karex’s prospect ahead as Karex claimed condom prices have nearly recovered fully after falling by about 30% to 40% since financial year 2017 (FY17).
An acute short supply, high demand from the glove manufacturing industry, and issues associated with the supply of nitrile have made NR latex prices substantially high, particularly in the second half of February, according to the Association of Natural Rubber Producing Countries (ANRPC). Latex rubber supply was ‘abnormally low’ during the month of February, due to high demand from the rubber gloves industry, said a 4 March market intelligence report by ANRPC.
Malaysia’s Top Glove Corp Bhd posted a record profit in the second quarter of the financial year, as continued demand for gloves globally boosted sales, the company said on Tuesday. Profits soared to 2.87 billion ringgit ($695.93 million) in December-February from 115.7 million ringgit during the same period a year ago.
China’s National Medical Products Administration (NMPA) and its Center for Medical Device Evaluation (CMDE) recently published annual reports summarizing regulatory activities in 2020. Both of these reports reflect an active year, with regulatory bodies and medical device manufacturers scrambling to respond to the impact of the COVID-19 pandemic.
The cornerstone of the UK’s post-Brexit medical device regulatory system, the Medicines and Medical Devices Act 2021, received royal assent and passed into law on February 11, having been introduced in the House of Commons almost a year previously.
The government will continue to assist the manufacturing sector, especially the rubber glove industry to maintain Malaysia’s position as a main player in the supply of rubber gloves for the global health industry. Minister in the Prime Minister’s Department (special functions) Datuk Seri Mohd Redzuan Md Yusof said this was in line with Malaysia’s status as a major producer of rubber gloves globally with exports valued at RM2.9bil in October last year
While there is a growing concern that the demand for rubber gloves will normalise sooner than later as vaccination continues globally, AT Systematization Bhd today inked an agreement with Kenteam Sdn Bhd (KSB) to manufacture and supply nitrile examination gloves. In a filing exchange, the group said its wholly owned subsidiary, AT Glove Engineering Sdn Bhd, has reached an agreement to supply 30 million boxes of nitrile examination gloves for a period of 12 months and allocate 10 production lines to KSB.
Kossan Rubber Industries Bhd reported today a net profit of RM542.49 million for the fourth quarter ended Dec 31, 2020 (4QFY20), almost nine times the RM61 million it recorded in the corresponding quarter a year ago, thanks to higher volume of gloves sold and better average selling prices.The 4QFY20 net profit is up 56% from the RM348.74 million that Kossan made in 3QFY20, as revenue grew 27% from RM1.03 billion.
The Norwegian Medicines Agency (NoMA) has added language (link in Norwegian) on its website regarding the requirement that medical device labeling and instructions for use (IFU) be printed in the Norwegian language in order to be legally marketed in in the country. The expanded notice confirms that the language requirement will still apply following the implementation of the EU Medical Devices Regulation (MDR) on May 26, 2021.
Kossan Rubber Industries Bhd continues to witness strong global glove demand owing to Covid-19 as the company's capacity has been fully taken up until end of 2021, said CSG-CIMB. Its analyst Walter AW said Kossan had also been receiving orders for the first quarter (Q1) of 2022 and fully filled up its allocation for spot orders, utilising up to 20 per cent of its total capacity, till end of 1Q of this year.
A wholly-owned subsidiary of Riverstone Holdings has acquired a piece of industrial land in Malaysia for a total consideration of RM5 million (S$1.6 million) in a bid to expand the group's production capacity for cleanroom gloves and other operations. The land acquired by the subsidiary, Riverstone Resources, spans about 6,741 square metres, and is in the Bukit Beruntung industrial area in Selangor, Malaysia.
Aspen (Group) Holdings Ltd, which is diversifying from property into glove making, has secured a glove sales and distribution contract worth US$100 million. In a statement today, Aspen said its subsidiary Aspen Glove Sdn Bhd (AGSB) had entered into a sales and distribution agreement with a distributor for the offtake of its entire 2021 production.
ACE Market-listed INIX Technologies Holdings Bhd and L&S Gloves Sdn Bhd will start commissioning an additional two latex glove production lines by February to complement the existing two lines which are in production.INIX executive director Siva Kumar Kalugasalam said the company’s wholly owned subsidiary, INIX Glove Manufacturing Sdn Bhd (iNix Glove), has signed a 10-year lease agreement (renewable for another 10 years) for a 0.91ha glove factory site in Beranang, Selangor.
Glove makers are set to continue recording stronger earnings in 2021, on the back of higher average selling prices, increase in production capacity and better economies of scale. An analyst with a local bank-backed brokerage said demand for rubber gloves will continue to be strong next year, mainly due to the impact of the Covid-19 pandemic and distribution of the vaccine across the globe.
The growing global medical-grade silicone rubber market is providing fresh opportunities for rubber medical component manufacturers to expand. Silcotech Industry Sdn Bhd, a rubber component producer based in Sungai Petani, Kedah, is one of the companies looking to leverage this surge in demand. “Three years ago, we ventured into the production of rubber medical parts, a diversification from our core business which was supplying silicone components to the consumer electronics industry.