KUCHING: As one of the top five medical examination glove producers in the country, Latexx Partners Bhd (Latexx) will further gear up its aggressive strategy to advance its product presence and market share in other geographical markets besides the US.
Ultimately, Latexx aims to enlarge its revenue base by capturing more market share in the non-US markets. Its current customer base is very much centric to the US market, taking up approximately 70 per cent of the total sales.
“In the past, the company has not tried to tap into the rest of the region beside the North American market. The European market has huge potential, is more price elastic and demand on quality is not as tight as in the US market,” its executive chairman and chief executive officer Low Bok Tek told The Borneo Post in an exclusive interview.
“Latexx has recently decided to strategically enter into these markets that are potentially larger than the US market and other advanced markets. We strongly believe this will successfully help us to enlarge our regional customer base in the coming years,” he added.
Concurrently, the company was also aggressively penetrating into the non-medical markets, particularly the food-handling, beauty and daily personal hygiene as well as the industrial sectors via the latest ultra-thin nitrile glove range successfully developed by the company.
“We are ready to tap the potential growth in demand in these sectors driven by the heightening of hygiene and work safety awareness,” Low stressed.
On the industry front, Latexx head of corporate service Dr Liew Lai Lai pointed out that global demand for gloves was still growing at a pace of 10 per cent to 12 per cent annually contributed by the growing hygiene awareness standard in both medical and non-medical sectors as well as the ageing of world population and the expanded healthcare expenditure worldwide.
“In fact, we foresee that the rapid growing awareness of daily personal hygiene and higher occupational safety will further expand the demand for gloves globally, beyond the 10 per cent to 12 per cent growth rate starting 2011,” she added.
According to the market research done by Liew, the headwinds in the glove manufacturing industry was still persistant, especially with the escalation of latex prices.
It was foreseeable that the trend would persist further in the coming months supported by the data from the International Rubber Study Group (IRSG) that indicated world rubber consumption was out stripping the production.
However, the US dollar was expected to strengthen further from its current stance which would be positive for the industry.
“If the US dollar strengthens further, it will definitely offset the negative impact by the rising latex prices on the glove manufacturers in Malaysia to a certain extent,” she pointed out.
In short, business opportunities for rubber glove manufacturers in 2011 was still bright spurred by the growing demand and the relative resilient nature of the industry interms of macro economics.
“However, due to the remaining high latex prices that had shifted the industry landscape to another platform, rubber glove players are expected to abide by different rules of the game,” Low opined.
“For instance, the selection criteria for customers will gradually shift from price and quality to value-delivery that comprised a set of optimised mix between price, quality and delivery.”
He further said that technological advancement in production process as well as on-going research and development on new product development should be the focus for most industry players to secure their competitive position in the augmented industry landscape.
Attributed to the company’s internal advancement, Latexx has a range of value-price gloves, especially the ultra thin nitrile gloves that met the EN & ASTM standard. Latexx aimed to rock the industry with its latest range of ultra thin nitrile gloves that weighed 2.5 grammes.
“The ultra-thin nitrile glove offers greater value to customers,” Liew explained. “It comes at a lower price than the lower-end natural rubber (NR) powdered gloves, confirming quality standards and better chemical resistance.”
Latexx would further poised this glove range as the best product choice for current and potential users of lower-end NR powdered glove users, especially in the food-handling and industrial sectors.
In line with the product strategy, the company would continue to allocate more capacity to nitrile production in the next few months. Driven by the increasing and high NR latex price, the switching from NR to nitrile was unavoidable among current and potential glove users.
To tap on this change in the industry landscape, it aimed to increase its nitrile product between 65 per cent and 70 per cent in its product mix in the coming months.
“Being mindful of the unfavorable situation on latex prices and US$ foreign exchange, we have started implementing a series of contingency measures to defend the profit margins,” said Low. “Amongst all the industry players, we are still able to effectively pass on the rising raw material costs to our buying customers, mostly MNCs.”
The company continues to adopt effective cost saving measures to mitigate the impact of the rising raw material costs. It maintains a high level of flexibility as a majority of the facilities and lines were interchangeable between the production of NR and nitrile gloves, with minimum conversion time.
When asked on the current joint venture (JV) project with Budev BV on undetectable protein level NR gloves, Low revealed that project was going according to schedule.
“The fabrication of the first commercial machine unit has been completed in Europe. Once installation is completed in the facility site in Kamunting, commercialisation will kick off immediately.”
The expansion plan for 2011 would result in Latexx having a larger capacity base with approximately nine billion pieces per annum compared with six billion pieces per annum in 2010. Hence, the company would be able to increase the allocation of capacity to its customers based on their requirements.
“Our target for 2011 is to achieve a 30 per cent growth in revenue that would be achieved through the successful implementation of our expansion programme going forward,” Low concluded.
PRODUCT DIVERSIFICATION: Latexx is aggressively penetrating into the non-medical markets via the latest ultra-thin nitrile glove range successfully developed by the company.