Ebola outbreak drives up glove makers' shares
ERJ staff report (PR)
London – The continuing spread of the Ebola virus in west Africa is driving up demand for protective medical gloves and increasing investor interest in Malaysian-based manufacturers of these products.
The current outbreak, which has claimed nearly 900 lives so far, has led to a rally in the share prices of rubber gloves manufacturers, according to an update on the sector from Hong Leong Investment Bank.
The Malaysian bank is monitoring the situation to see if the outbreak will be escalated to pandemic level. This, it said, could lead to an upgrade in the ratings of the sector.
Among those targeted by investors is Top Glove Corporation Bhd, which claims to be the world's largest rubber glove manufacturer. It has seen a significant bounce in its share price, which is now 8 percent above its value of a few weeks ago.
Similar increases have been reported by the Hartalega Group and Kossan Rubber Industries Bhd, which are also listed on the Malaysian stock exchange.
Hartalega manufactures latex and nitrile surgical and examination gloves, employing 4,000 people across six manufacturing facilities. It claims to be the largest producer of nitrile gloves in the world, capable of manufacturing 14 billion gloves a year.
Kossan Rubber has a capacity to produce 16 billion gloves per annum. Its business network extends to more than 100 countries around the world, including the US, Canada, Europe, Asia Pacific, Latin America, Middle East and Australia.
Top Glove is ranked number 30 in the ERJ’s latest annual Top 50 ranking of non-tire rubber producers. It posted 2013 sales of $736,7 million from operations encompassing 27 factories, 464 production lines and a capacity of 42.0 billion gloves per annum.
Kossan Rubber is ranked at number 48 in the ERJ Top 50 ranking with sales of $417.1 million last year.