War is not just a geopolitical issue; it's impacting the world's basic commodities. WRP, a Malaysian rubber glove manufacturer, is preparing to close down due to the effects of the Middle East conflict, which is driving costs up by 50%.
April 8, 2569 at 13.05:XNUMX, Bloomberg reported that WRP Asia Pacific Sdn. Bhd., a Malaysian rubber glove manufacturer, is preparing to gradually cease operations starting this month. This was justified by the severe disruption to global energy and petrochemical supply chains resulting from the conflict in the Middle East.
In a letter dated March 31 to customers, revealed by Bloomberg, the company stated that it was facing significantly increased costs for petrochemical raw materials and chemicals, while also experiencing supply uncertainty regarding the timing and terms of advance payments from suppliers.
“These unforeseen circumstances have forced us to make the difficult but necessary decision to begin the process of ceasing business operations, effective April 15,” the letter stated.
The decision comes amid a major shock to global energy markets from the US-Israeli conflict, which has driven oil prices soar, fueled inflation, and increased costs across a wide range of industries, from food to energy.
The rubber glove industry is directly affected because it relies on imports of nitrile latex, a synthetic rubber whose price is tied to the energy market.
Nadarajah Swaminathan, the company's Chief Operating Officer, confirmed the plan to cease operations, stating that the company is awaiting shareholder feedback and that there may be potential buyers in the future.
However, it remains unclear how much the two-week temporary ceasefire and the reopening of the Strait of Hormuz will alleviate the situation for the industry.
Previously, the Malaysian Rubber Glove Manufacturers Association warned that the blockade of the Strait of Hormuz was causing a shortage of key raw materials, putting significant financial pressure on domestic manufacturers and potentially impacting the global supply of rubber gloves.
Meanwhile, raw material costs increased by more than 50% due to disruptions in crude oil supply and refining, forcing Top Glove Corp. Bhd., the world's largest rubber glove manufacturer, to raise prices and advise customers to switch to natural rubber gloves instead.
Information from Bloomberg also indicates that: The price of butadiene, a key ingredient in disposable gloves, has surged nearly 70% since the war began. And that could account for more than half the cost of nitrile latex.
Industry experts believe that raw material shortages and soaring costs are putting Malaysian rubber glove manufacturers at a greater disadvantage compared to regional competitors, with companies lacking raw material stocks potentially having to postpone or halt production.
Malaysia produces approximately 45% of the world's rubber gloves and exports them to over 195 countries. WRP, a manufacturer of surgical gloves, examination gloves, and specialized gloves for the healthcare, food, and beauty industries, had experienced significant revenue and profit growth during the COVID-19 pandemic, but recently faced a loss of 78 million ringgit, or approximately 19.6 million dollars, on revenue of 204.6 million ringgit in the fiscal year ending June 2567.
refer : bloomberg.com
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