Supermax anticipates glove market to remain weak in near future

KUALA LUMPUR, Malaysia—Malaysian gloves manufacturer Supermax Corp. expects the gloves market to remain weak in the near future amid oversupply and an easing of demand to pre-pandemic era levels.

The manufacturer reported a 97-percent year-on-year decline in fourth quarter profit after tax at about $7.03 million, on 84-percent lower sales of $65.9 million.

For the 12 months to end of June, the company posted profit after tax of 169 million, 80 percent lower than the $879 million reported the year before but higher than $117 million in 2020.

Sales revenue for the year dropped 62 percent year-on-year to $593 million, but came in 28-percent higher than the $461 million reported in 2020.

"This performance may have appeared lower than FYE2021 but is overall higher compared to FYE2020," said Supermax.

Supermax linked the decline in results to a continued oversupply, which exceeds demand and weak glove selling prices.

"The rubber glove industry is currently well into a consolidation phase, after having gone through its strongest ever growth phase historically in 2020 and 2021," it said.

Supermax said the sector's strong growth spurt had attracted many new players into the market and encouraged existing players to ramp up production capacity to capitalize on the surging demand.

The resulting over-supply situation coupled with normalizing demand following the easing of COVID-19 resulted in lower average selling prices (ASPs) for gloves, it added.

"Going forward, Supermax is expecting the market to remain weak, competition continue to be intense and profit margins continue to moderate," said the statement.

The group said it anticipated "continued consolidation" in the rubber glove industry as ASPs and demand continue to moderate from the record highs seen at the peak of the COVID-19 pandemic.

"Nevertheless, the structural shift triggered by the pandemic will see demand remain at a higher level compared to the pre-pandemic period," it added.

Demand, Supermax continued, is also expected to resume "a longer-term upward trend" once the current demand-supply disequilibrium rebalances in time.