FAIRLAWN, Ohio—The disposable glove industry is experiencing steady investment and growth, but it looks like an extended phase of overcapacity is emerging.
Those are just two of the observations made by Ravi Venkat, vice president of sales and marketing for Medisafe Technologies Corp., an Indonesia-headquartered producer of medical gloves with a strong sales base in the U.S. and Europe.
Speaking on the topic at the International Latex Conference, held recently in Fairlawn, he said the polymer mix for gloves has shifted in favor of synthetics overall in the industry.
It's likely the sector will see an even split between the three major polymers: natural rubber latex, nitrile and vinyl, he said.
"However, we are seeing (natural rubber) latex hold its own in some markets given its inherent natural advantages and recent price falls as latex supply overtakes demand," Venket said.
In his paper dealing with the global disposable glove industry, titled "An Overview of Trends, Markets, Polymers and Manufacturing Geographies," he said at the conference the overall glove market still is growing at a 5 percent clip, with synthetics rising at a faster rate.
Key growth factors
Drivers to that growth, he said, include an aging population in developed countries that continues to require health care; increasing regular maintenance within the dental sector; growing affluence in Latin America and Asia, raising awareness of infection control benefits; and almost-developed countries overhauling their health care systems and allowing private investments in modern hospitals.
Venket also cited some non-traditional markets as another reason for glove growth, such as industrial, manufacturing, food processing, automotive, household, pharmaceutical, janitorial and retail markets.
Recurring and unpredictable epidemics that spread quickly on a global basis also are a factor.
"Glove manufacturing is largely concentrated in Asia, with China, Malaysia, Indonesia, Thailand and up-and-coming Vietnam being the main production centers," according to the Medisafe executive, who is based in Mundelein, Ill.
The reasons for the success of glove production in the Asian region include proximity and easy access to raw materials, available low-cost labor, generally good manufacturing and shipping infrastructure, and significant incentives from government that promote the industry, he said.
"Thanks to a well-developed ecosystem of ancillary vendors, synthetic raw material producers locating close to customers and economies of scale, expansion of glove manufacturing continues unabated in those geographies," Venket said.
The return of glove manufacturing to the U.S. is not likely because of the advantages Asian countries have, he maintained, "except possibly in small, high-end product niches."
Cycle of overcapacity
Unfortunately for Asian producers, the industry continues to see large capacity additions that exceed demand, driving prices down sharply, Venket said.
He estimated that more than 12 billion gloves of capacity have been added in the last 10 months in Asia. And several new projects in the region currently are under way and expected to come online soon.
Because of that, the latex glove industry is expected to experience an extended cycle of overcapacity "that will test all incumbents for the next several years," he said.
It will take the market a few years, even with rising demand, to absorb the additional capacity, he maintained, and "only the best manufacturers with economies of scale, excess process technology/operations, consistently high quality and innovation will thrive."
Venket said the shift to synthetics that began with the latex allergy scares of the 1990s has continued into this decade "with nitrile and vinyl rivaling latex as gloves of choice."
Factors such as quality, improved fit and feel, along with less volatility in raw material pricing have helped continue the trend, he said. In addition, the shift away from powdered gloves is continuing in the U.S., European and Japanese markets.
Chloroprene examination and surgical gloves—with characteristics such as good fit and feel, good memory, and reduced hand fatigue—is a polymer that is making headway in the industry because, he said, it delivers the performance of latex and is an improvement to rubber latex in lower weight gloves.
Polyisoprene also is experiencing similar trends to chloroprene, Venket said, "and is truly the Rolls Royce of surgical gloves, but still too expensive for examination and general purpose gloves."
The effort to lower glove weights continues, he said, because it allows customers to adapt constantly to worsening cost and budget pressures without cutting usage.
Manufacturers so far have developed consistent quality and adequate barrier protection at lower weights, Venket said, "but may be reaching a floor soon where barrier integrity and wearer protection is compromised."