(From the Aug. 22, 2011, issue of Rubber & Plastics News)
AKRON—The good news coming out of the recent Latex International Conference was that most rubber and synthetic rubber companies seem to be doing well.
The even better news, certainly for the U.S. latex marketplace, was the sliver of a silver lining offered by DipTech Systems Inc.'s William Howe when he talked about shifting trends in the latex dipped goods arena.
After watching latex product manufacturing plants, especially glove producers, disappear in droves from American soil for more than 15 years and resurface in Southeast Asia and China, the DipTech vice president of molding and coating services said the tide is beginning to turn.
Manufacturing costs in China are rising at a 17-percent clip and will climb further in the next several years. Transporting goods is more expensive. The supply chain from Asia to the U.S. is often disrupted by a variety of problems. A low-cost skilled labor problem is emerging in the rubber latex glove industry as experienced workers find better paying jobs in China.
Add in the dramatic price increase for natural rubber, and the economics of manufacturing in Asia seem less appealing to some product manufacturers.
By no means do those concerns signal that latex processors will bolt China in large numbers. The country will remain an important manufacturing hub for years to come and companies will continue to set up operations there.
But, Howe said, Western glove producers are looking more closely at the location of their production centers and supply chain channels. And a number of U.S. distributors of dipped goods are investigating alternative sourcing locations, principally in America.
It appears, he said, that North America is potentially ripe for a modest resurgence in the manufacturing of dipped goods, particularly disposable gloves.
He's already seen signs that the change is occurring, citing the acquisition of a plant by a long-time distributor of disposable rubber latex and nitrile gloves with plans to produce 200 million gloves annually beginning in 2012; growth in contract latex product manufacturing in the country; a major food producer plans to finance a glove facility in the U.S. to improve quality and supply; and two recent expansions—one at a breathing bag factory, the other at a plant that produces NR latex electrical linemen gloves.
The U.S. latex industry hasn't seen that kind of growth in the last decade.
Howe thinks it will continue for at least the next several years. In fact, the possibility exists that by 2015, disposable gloves will be cheaper to make in the U.S. than in China, he said.
Only a remote possibility? Sure, but so too was the prospect of any glove production ever cropping up in the U.S. again. And it has.
McNulty is senior reporter for Rubber & Plastics News.