In the fierce competition in the global glove industry, Chinese glove manufacturers are gradually emerging, exerting greater competitive pressure on Malaysian glove companies. This pressure is not only reflected in the competition for market share, but also in many aspects such as technological innovation, cost control and supply chain management.

Although Malaysian glove manufacturers have repeatedly stated that Chinese glove manufacturers are not enough to pose a threat to the local glove industry, Maybank Investment Bank analysts personally visited Chinese glove factories and concluded that the competitive pressure from China may be greater than expected. They were surprised to find that Chinese glove manufacturers have demonstrated strong strength in modern factory construction, capacity expansion and market strategy. These Chinese companies not only possess complete production lines and efficient packaging and warehousing systems, but also have achieved remarkable results in the application of new technologies and supply chain integration.

Modernizing Factories and Gradually Expanding Production Capacity

Analysts specifically mentioned two Chinese companies, INTCO Medical and Bluesail. They said they were impressed by INTCO Medical’s modern factory, which was well-organized and efficient in every link from production lines to packaging and warehousing. Bluesail’s production is comparable to some Malaysian glove manufacturers except for packaging and warehousing.

What shocked analysts even more was that the production line utilization rate of these two Chinese companies was close to full capacity, and they were still actively seeking further capacity expansion in China and Southeast Asia. This rapid development momentum has undoubtedly brought great pressure to Malaysian glove manufacturers.

In addition, analysts added that INTCO Medical and Bluesail will gradually increase production capacity according to market demand, and their pricing and market strategies are still uncertain, particularly given they can achieve relatively low production costs on new production lines and technologies, as well as vertically integrated supply chains.

Looking back at Malaysia, analysts expect local glove makers to maintain strong profitability over the next 12 months due to increased demand for gloves and stable average selling prices. Nevertheless, competitive pressure from China remains, so analysts are cautious about the long-term prospects of Malaysia’s glove business.

Malaysian Manufacturers Have the Capital to Fight a Protracted War

Analysts pointed out that not all purchase orders will necessarily go to China, as buyers also employ risk management strategies to diversify their orders across various countries, including Malaysia. Therefore, cost efficiency is the key to seize these opportunities. In addition, a strong balance sheet allows Malaysian glove manufacturers to fight a longer price war.

In terms of individual stocks, although TOPGLOVE faces competitive pressure from Chinese manufacturers, it still has strong brand influence and market competitiveness as a leader in the Malaysian glove industry. Analysts downgraded its rating from “buy” to “hold” and lowered its target price from RM1.43 to RM1.10, which is more based on cautious judgment of the overall market competition pattern and industry development trends.

At the same time, Malaysian glove manufacturers such as HARTA and KOSSAN continued to maintain a “buy” rating. Hartalega’s target price was lowered from RM4.50 to RM4.28; Kossan’s target price was lowered from RM2.72 to RM2.62. These companies have demonstrated outstanding strength and potential in terms of technological innovation, market expansion and supply chain management, and are expected to stand out in the global glove industry competition.

In summary, the competition landscape of the global glove industry is undergoing profound changes. The rise of Chinese glove manufacturers has undoubtedly brought new challenges and opportunities to Malaysian glove manufacturers. In this fierce competition, whoever can keep up with the market, continue to innovate and improve cost efficiency will have the potential to stand out and become the industry leader.

                                                      ——From Oriental Daily News