2. The current outbreak of novel Covid-19 has resulted in a 100% surge in demand globally in the first few months of 2020.
3. Top gloves, the largest producer of rubber gloves worldwide, has enhanced its capacity during the last few years, increasing the same from 60.5 billion pieces in August 2018 to 70.1 billion pieces in November 2019.
4. The company now plans to expand annual capacity by 30% more to 91.4 billion pieces by the end of 2021. Other companies are also ramping up production by tweaking the production lines to run at optimum levels to gear up with increased demand.
5. Hartlega, for an example, is expected to reach utilization level of more than 95% in 4Q-FY20 verses 86% utilization in 9M-FY20. Its two new production lines, which commissioned in January and February 2020, are also likely to be fully utilized during this surge timings.
KEY CHALLENGE - SHORTAGE OF LABOUR
1.To manage increased capacity and to replace those who have left, rubber gloves industry require at least 25,000 foreign workers which is a difficult task in a rather short time span.
2. Gap of hiring a foreign worker and a domestic graduate, is getting closer due to these added costs. Though the ratio of foreign workers to total workforce has come down to 60-70% from earlier 80-90%, the industry is still heavily depended on them.
3. Industry has adopted automation and innovation during the past years to counter rising labour cost and reduce dependency on external labourers.
4. Automation is likely to result in 30-50% increase in production as stated by some companies like HLT Global.
5. While these aspects did enhance productivity (based on the number of workers for producing one million pieces of gloves). Labour continues to be an important and integral part of this industry.
SUPERNORMAL RUBBER GLOVE DEMAND OVER NEXT TWO YEARS
1. Acute supply and supernormal demand of rubber gloves could persist over the next two years, Kenanga Research said.
2. The estimated new yearly capacity may not actually start as scheduled and hence the supply shortage will continue to be acute in 2021.
AUTOMATION PUSH
1. Malaysia-based Top Glove, the world's leading producer of rubber surgical gloves, will invest 3 billion ringgit ($700 million) to modernize its production facilities in a bid to reduce the dependency on migrant workers.
2. The 3 billion ringgit will be used to add 450 new production lines through 2026. Annual output capacity will be lifted nearly 80% to 140 billion gloves, up from 78.7 billion units.
3. Artificial Intelligence will be used for quality control to reduce the volume of defective products and boost production efficiency. AI-equipped cameras will also analyze activities of laborers to improve workplace safety and security.
4. Top Glove, which exports to 195 countries, commands a global market share of 26%. The company has seen demand grow sharply amid the coronavirus pandemic.
5. Orders from China and Brazil have approximately quadrupled compared with before the pandemic, while orders to the U.S. swelled 150%.
6. The skyrocketing demand helped Top Glove earn a net profit 575 million ringgit for three quarters through May, breaking previous all-time highs for the full year.
7. Out of 13,000 factory workers hired by Top Glove, 11,000 are foreign nationals.
AUTOMATION INDUSTRY 4.0
1. Implementing the Industry 4.0 concept, also known as the Fourth Industrial Revolution, means synergistic advantage from the confluence of “cyber-physical systems, the Internet of Things (IoT), cloud computing and cognitive computing.
2. In the rubber agriculture sector, the on-going trial of the Automated Rubber Tapping System (ARTS), which mechanises timed tapping, latex collection and bulking to increase yield, with data crunching of gram per tree per tapping (GTT).
3. Apart from Hartalega, which has adopted automation, particularly in its upcoming NGC complex, Kossan said that it is also going in that direction. By 2020, it would have automated its factories
4. Kossan’s plant in Jalan Meru, Klang, for example, already features automated high-speed dipping technology. It has a capacity of 3 billion gloves/year, and therefore, it is expected to increase the company’s capacity by 13.6% to 25 billion gloves/year. Kossan is also reportedly undertaking innovation and adopting robotics in its manufacturing processes.
5. Top Glove is also increasing automation in its facilities. Lim said that automation has already staved off about 34% of its human labour requirement, or a reduction of more than 2,000 workers, in the previous years.
6. Treading along the same path is Supermax, which has unfurled its automation plans in its factories and plants.
Source:
https://www.televisory.com/blogs/-/blogs/malaysian-rubber-glove-industry-impact-of-covid-19,
https://www.nst.com.my/business/2020/06/601764/supernormal-rubber-glove-demand-over-next-two-years,
https://asia.nikkei.com/Business/Companies/Top-Glove-makes-automation-push-amid-pandemic-labor-shortage
http://rubberjournalasia.com/malaysias-glove-sector-in-a-quiet-revolution-with-automationindustry-4-0/)
