This article first appeared in The Edge Malaysia Weekly on August 17, 2026 - August 23, 2026

EFFORTS by Malaysian glove makers to regain market share in the global market, especially in the US, have yet to bear fruit despite hefty tariffs slapped on medical and surgical rubber gloves from China. This is a result of Chinese players relocating their production to Indonesia and Vietnam.

Since January 2026, US tariffs on medical-grade gloves from China have doubled from 50% to 100%, giving non-Chinese glove makers a competitive advantage — but only to a certain extent.

Most analysts remain unconvinced by the recovery narrative for Malaysian glove makers, as the higher US tariffs have yet to translate into a meaningful recovery in market share for local players, while persistent oversupply continues to weigh on margins.

There appears to be little sign of competition from Chinese glove players easing, analysts say, pointing to intense competition in the generic healthcare-glove space, following the relocation of Chinese glove production to Southeast Asia, particularly Indonesia and Vietnam, to circumvent high tariffs in the US market.

One analyst tells The Edge that Malaysian players’ loss of market share is primarily due to the growing presence of Chinese-backed manufacturers in Indonesia and Vietnam.

While tariffs had previously helped local manufacturers capture a 70% market share in the US, the analyst, who did not want to be named, points out that their share has dropped to about 60% over the past two to three months, following an increased presence of manufacturers from these countries. Nearly half of Malaysian gloves are exported to the US.

In a brief reply, Kossan Rubber Industries Bhd (KL:KOSSAN) founder, group managing director and CEO Tan Sri Lim Kuang Sia tells The Edge that competition from Chinese peers remains, as they continue to expand their production capacity.

Nonetheless, CGS International estimates that nitrile capacity expansion in Southeast Asia by Chinese regional players has been lower than previously expected.

“In our view, China’s expansion into Southeast Asia aimed to avoid US tariffs but was constrained by origin-based duties, limited subsidies and local regulations. We note the slower Chinese overseas expansion (actual 10 billion pieces in 2025 versus our estimate of 17 billion pieces), coupled with global factory shutdowns (circa 11 billion pieces), is accelerating the resolution of industry oversupply,” it said in an Aug 10 note.

The research house said Intco Medical Technology Co Ltd appears to be the only Chinese producer to have added capacity in 2025. Its nitrile glove capacity rose from 56 billion pieces in 2024 to 70 billion pieces in 2025, above its estimate of 66 billion pieces.

In terms of average selling prices (ASPs), the analyst says they have retreated from peak levels of US$25 to US$27 per 1,000 pieces to about US$19 to US$20, largely due to easing raw material costs, although geopolitical conflicts could provide some pricing support.

He says that while glove manufacturers are attempting to raise prices, the blended cost of nitrile and butadiene remains about 10% above pre-Covid levels, limiting their ability to substantially hike ASPs. He notes, however, that “the recent re-escalation of the US-Iran conflict would lend some support in terms of pricing.”

CGS International has projected that Malaysian glove producers’ earnings before interest and taxes (Ebit) could expand by an average of US$0.80 per 1,000 pieces per annum over the 2025 to 2028 period.

“Even so, Ebit per 1,000 pieces will remain 25% below the 2012 to 2019 market share-weighted average of US$3.40, reflecting continued dumping of Chinese glove capacity into ex-US markets, where producers are willing to accept lower margins to gain market share.”

Beyond traditional healthcare gloves, the industry players are also moving into speciality and cleanroom gloves to capture higher margins. Cleanroom gloves, in particular, have seen robust demand from semiconductor players.

Taking Kossan as an example, the analyst says its exposure in the Class 1,000 cleanroom segment has helped offset pricing pressure in generic gloves. He notes, however, that competitors such as Riverstone Holdings maintain a stronger presence in higher-precision segments such as Class 10 and Class 100.

“Entering the high-precision segment requires significant capital expenditure and years of building customer trust through strict audits.”

Asked whether local glove players are likely to make a major push into speciality and cleanroom gloves, he says the investment decision is less straightforward than in healthcare gloves.

“This is when your client does actually have a stricter protocol or audit process before they allow you to sell them the gloves.”

The FS209E cleanroom classification system has six cleanroom cleanliness classes — Class 1, 10, 100, 1,000, 10,000 and 100,000 — with Class 1 being the cleanest.

Perak-based, Singapore-listed Riverstone is the first Asian glove maker equipped with a fully integrated cleanroom glove production process. It has plants in Malaysia, Thailand and China with an annual production capacity of 10 billion gloves. Its products are widely used in the hard disk drive and semiconductor industries.

The glove sector is expected to continue facing a demand-supply imbalance, with total available capacity outpacing demand growth. Analysts calculate that a full recovery could take several years.

One analyst estimates that the industry may not reach equilibrium until 2027 at the earliest, with the situation potentially worsening if manufacturers restart idle capacity.

Earlier, Top Glove Corp Bhd (KL:TOPGLOV) indicated that its total production capacity could expand by 10% in the financial year ending Aug 31, 2027 (FY2027) from an expected 72 billion pieces by end-FY2026.

In response to The Edge’s queries, Top Glove joint managing directors Ng Yong Lin and Lim Jin Feng say the group is maintaining that projection for total production capacity expansion, but “any further expansion will be assessed and implemented according to demand and market conditions”.

They expect raw material prices to move in line with the impact on crude oil prices arising from the developing situation in the Middle East.

“We will continue to monitor developments closely and keep our customers updated regularly on any significant changes,” they say.

Recently, Hartalega Holdings Bhd (KL:HARTA) reported a near-sixfold jump in net profit to RM70.03 million in the three months ended June 30, 2026 (1QFY2027) compared with RM12.61 million in the same quarter a year earlier, driven by higher ASPs.

Nonetheless, analysts expect the strong performance to normalise in the coming quarters as margins come under pressure following the sharp correction in ASPs.

Hartalega noted that cost optimisation remains a key focus, with plans to upgrade and commission production lines for its Plant 3. This, along with Plant 9 fully operational, could further support cost reductions.

Analysts see limited growth catalysts for the glove sector in the short term, while the long-term prospects are very much dependent on annual volume and demand growth.

It is also worth noting that any reversal in US policy on Chinese gloves could put the advantage enjoyed by Malaysian players at risk.

“If these tariffs are removed — potentially depending on upcoming US election outcomes — Malaysia may struggle to compete with China’s lower costs,” one of the analysts warns. “Chinese players are more volume-efficient and utilise newer technology and plants compared to older Malaysian facilities that may be up to 20 years old. Chinese plants were largely established during the Covid-19 period, making their technology more advanced,” he adds.

CGS International recently upgraded the glove sector from “underweight” to “neutral”, saying valuations appear to fairly discount the earnings recovery, with the sector trading at 11.9 times 2028 forecast price-earnings ratio (PER).

“However, profitability remains subdued, with the 2028 forecast return on equity of 7% still well below the pre-pandemic range of 18%-24%.”

Stock-wise, the research house favours Top Glove, which trades at a slight discount to peers at 11.7 time 2028 PER, noting that its dormant capacity of 25 billion pieces provides a first-mover advantage should supply gaps emerge, enabling the group to ramp up faster than peers without committing significant new capex.

CGS International also upgraded Kossan from “reduce” to “add” as its increased focus on the higher-margin cleanroom segment could drive earnings upside.

Kenanga Research, which downgraded the glove sector to “neutral” from “overweight” last month, has Kossan as its top pick as it believes the strategic pivot towards speciality and cleanroom gloves is a step in the right direction, mitigating its exposure to ongoing price wars within the commoditised, low-margin generic nitrile segment.

“According to our estimates, speciality glove ASPs are 60% to 80% higher than generic medical gloves, while cleanroom gloves command three times premium. Backed by a ‘sticky’ customer base — due to the mission-critical nature of cleanroom applications where switching costs outweigh potential savings — the group is expanding its cleanroom capacity from 300 million to 400 million pieces per year to 800 million pieces by FY2027 [financial year ending Dec 31, 2027],” it said in a July 16 note.

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