Kuala Lumpur has seen some noteworthy moves recently, particularly with Supermax Corporation Berhad, as it gets ready to pivot its glove production operations to the United States. The company is slated to launch its glove manufacturing at its first U.S. facility located in Texas, with commercial operations expected to kick off by January 2025. This marks a significant milestone for Supermax, which has historically been rooted in Malaysia.
According to the company's bourse filing, its wholly-owned subsidiary, Maxter Healthcare Inc., will begin testing and commissioning its first batch of production lines by December 2024. The factory's phase one operations are set to have a total production capacity of 4.8 billion gloves per year, with expectations to reach half of this capacity by next year. Full-scale production is aimed for the fourth quarter of 2025.
Analysts have noted Supermax’s current production capability stands at approximately 21 billion gloves annually, with about 29% of its total sales directed to the U.S. market. This alignment toward U.S. production seems fortuitous, especially with the newly implemented tariffs on glove imports from China, which will see increases of 50% by 2025 and up to 100% by 2026, as Stanly Thai, founder and executive chairman of Supermax mentioned. This creates what he termed “a significant advantage” for U.S.-based manufacturers, particularly for Maxter Healthcare Inc.
Notably, Supermax has integrated cutting-edge manufacturing technologies within its U.S. facility. The Texas plant employs what they call a ‘smart manufacturing’ process, which features digital process controls and end-to-end automation. Such advancements allow them to lessen reliance on traditional labor pools by embracing artificial intelligence, automation, and robotics. Stanly Thai elaborated, “This approach reduces our reliance on blue-collar labor and leverages the latest technology.”
The completion of construction on their manufacturing building and distribution center has already taken place, and work is now underway to install manufacturing equipment—thanks to the assistance of technical teams sent from Malaysia.
On the stock market front, the announcement of these developments stirred excitement among investors. Following news of the U.S. tariff increase on gloves imported from China, shares of glove manufacturers, including Supermax, saw notable gains on the Bursa Malaysia. Supermax’s shares saw an impressive surge, climbing by approximately 17.7% to settle at 93 sen per share, resulting in market capitalization reaching RM2.53 billion. This appears to almost recover losses the company experienced earlier this year, reducing decline to just 1.1% year-to-date.
Meanwhile, as the local stock market closed on a high note, the rubber glove industry as a whole basked in renewed investor interest. The sentiment correlates with broader expectations around potential rate cuts from the U.S. Federal Reserve, hinting at possibilities for future economic improvements. Stocks of several glove manufacturers showed high trading volumes, reaffirming the burgeoning optimism surrounding rubber glove stocks once again.
Supermax’s strategic shift to U.S. production not only promises to bolster the company’s revenue from the lucrative American market but also highlights the growing need for local production amid geopolitical tensions. The rubber glove sector is still recovering from the pandemic era where demand surged, but with the current developments, companies are actively reshaping their strategies to withstand future market variations.
Investors will be watching closely as Supermax implements its U.S. expansion efforts and navigates the continuing changes within the global trade environment. How well they can adapt to these conditions may prove pivotal for their success moving forward.
