VIP Gloves (ASX: VIP) is on target to continue its recent growth having reopened its Malaysian manufacturing facility, powering its supply to fulfil forecast growth in the global nitrile glove market.
After a brief downtime while the company updated operational activities to comply with Malaysian Government Covid-19 requirements, VIP, which recently announced a 164% Year-on-Year increase in Q4 revenue, is now back supplying the vital personal protection market.
Recommencement of VIP’s Malaysian factory follows relaxation of the Malaysian Government’s Enhanced Movement Control Order (EMCO).
Under the current Standard Operating Procedure and in line with Government guidelines, VIP’s manufacturing facility is now operating with 60% of its workforce, with the remainder working from home.
While the temporary pause in manufacturing last month caused production delays, VIP moved quickly to engage in proactive discussions with customers to convey the company’s confidence it will meet all fulfilment obligations.
VIP is currently operating six production lines with a monthly rated production capacity of approximately 65 million pieces of nitrile gloves. Total glove production surged through FY21, with production for the year reaching 604 million pieces, representing a 46% YoY increase on FY20 when VIP produced 414 million pieces.
In other news, the Company elected to take the opportunity to bring forward planned maintenance and servicing of two of its production lines.
Commissioning of two new production lines is now estimated to occur in August and September 2021 respectively. Once commissioned, these new production lines will increase VIP’s nitrile gloves production capacity to 78 million pieces per month, or 936 million pieces p.a.
A new market study published this week by Global Industry Analysts Inc. (GIA) has forecast that the global nitrile gloves market will reach US$57.1 billion in revenue by 2026. This follows a study published earlier this year reporting that in 2019, the global nitrile glove market was only valued at US$3.39 billion. The COVID-19 pandemic and the need for extra sanitation protection globally has made the nitrile glove market one of the fastest growing in the world.
Raising awareness of the benefits of nitrile gloves is driving demand in the healthcare sector. Unlike their natural rubber alternative, they provide advantages such as being more resistant to chemicals, oils, and acids, and have superior strength.