KUALA LUMPUR: Top Glove Corporation Bhd expects continual improvement in sales orders in line with more positive demand supply dynamics as recovery for the glove industry continues to gain traction.
Its managing director Lim Cheong Guan said glove sales to the United States (US), which already been increasing exponentially, are expected to receive an additional boost.
He attributed this to the United States Trade Representative's (USTR) recent announcement of impending tariff increases for Chinese medical gloves from the current 7.5 per cent to 50 per cent effective January 2025, and to 100 per cent by January 2026.
"The growth in these sales to US where we have seen the 100 per cent growth quarter-on-quarter in the fourth quarter (4Q).
"This is mainly because of the replenishment of the inventory stocks but not due to the tariff effect yet but maybe there are some effects from the US Food and Drug Administration (FDA) issue encountered by some of the Chinese manufacturers," he said.
Previously, it was reported that US FDA added more Chinese glove manufacturers into its import alert list in June 2024.
Lim noted that the US tariff hike on Chinese rubber medical and surgical gloves' imports will be felt partially in the first quarter 2025 and likely to increase in the second quarter as sales from China to US completely stop.
On weakening US dollar, he said the 4Q was affected due to sudden change of the exchange rate in August after the greenback declined 8.0 per cent against ringgit.
However, he said the selling price had been adjusted by increasing it up to US$2 over the past two weeks in the US market but also will be revised for the markets especially for natural rubber gloves.
"In fact, we have revised the selling price but due to time lag, some of these price impacts will only felt in the month of November," he said.
To ensure that it is well positioned to meet the rapidly returning glove demand, installation of advanced production lines, which had been temporarily halted due to oversupply, will resume at Top Glove's newer factories.
However, the group maintains a cautiously optimistic approach for capacity expansion plans in light of the volatile business environment which can be affected by geopolitical factors.
Top Glove's long-term outlook for the glove industry remains optimistic, as gloves are an essential, single use item in the healthcare industry, for which there is no viable replacement to date.