KUALA LUMPUR: Maybank Investment Research sees the glove manufacturing business as a growth market and Malaysia’s original equipment manufacturers (OEM) players are set to capitalise on this phenomenon.

“We are Overweight on the sector and remain buyers of Hartalega, Top Glove and Kossan,” said the research house on July 3.

Maybank Research sees the rubber glove manufacturing industry growing at 5% to 8% per annum over the next five years.

Natural rubber (NR) and nitrile gloves, which account for 80% and 10% of the global glove market, are the key growth areas. The nitrile glove market will lead growth, expanding by a higher 20% per annum. compared to 5% for NR.

Growth will be driven largely by the (i) rising hygiene standards and healthcare awareness in Latin America, Asia and Eastern Europe as well as higher frequency of global infectious outbreaks, (ii) increased outsourcing by major medical companies in USA, and (iii) rising populations and improved economic and social conditions.

Malaysia OEM manufacturers are the clear winners from this development. They have the advantages of competitive efficiency and economies of scale, technology innovation, sound track records and financials, and good manufacturing practices.

“They can beat regional competitors in driving unit costs down as the industry progressively turns into a volume oriented, low-price industry,” it said.