The impending US tariff hike on Chinese-made gloves presents an opportunity for Malaysian glove makers to increase production, according to Top Glove Corp Bhd managing director Lim Cheong Guan. With US tariffs on China-made gloves set to rise from 7.5% to 50% in 2025 and 100% by 2026, Malaysian glove manufacturers could step in to meet the supply gap left by Chinese competitors.
Top Glove, which derives 20% of its sales from the US, sees this as a chance to boost production. However, Lim emphasized that Top Glove has no plans to build new manufacturing facilities in the US due to the high costs of production, which are three to four times higher than in Malaysia. He noted that any US expansion would only be feasible if subsidized by the government.
Although Malaysian gloves are not affected by the tariffs, the industry has faced challenges in the past, including forced labor allegations. Competitors like Supermax Corp Bhd have opted to manufacture within the US, where 29% of their sales originate.
While Malaysian glove stocks have surged following the tariff announcement, analysts expect the demand boost to be short-term due to global overcapacity in the sector after the Covid-19 pandemic boom.
Top Glove shares rose 6.73% to RM1.11, giving the company a market capitalization of RM9.11 billion.
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