GLOVE manufacturer and exporter YTY Industry Sdn Bhd expects its revenue to grow at a compounded rate of more than 30% for the next five years, director Lim Loi Heng said.
Speaking to reporters after the signing between YTY and The Dow Chemical Co for the transfer of the latter's polymer polyurethane (PU) glove technology and business to YTY yesterday in Kuala Lumpur, Lim said the PU business was expected to grow by 20% per year.
He said the PU business currently contributed very little to the company's revenue, as prior to the agreement, YTY was only a contract manufacturer for Dow.
With the agreement, YTY would own Dow's INTACTA PU glove technology and be the sole manufacturer of the patented gloves.
Going forward, we expect PU business to account for more than half of our revenue, maybe in five years, Lim said.
Gloves made from synthetic materials typically cost 40% more than natural latex gloves. PU, being at the top end of synthetic material, cost 50% more.
YTY managing director Oh Tiam Sing said the three-pronged agreement between YTY and Dow was more of a partnership agreement. YTY would acquire the PU technology and glove business from Dow; Dow would continue to provide technical support and share future research and developments in gloves over the next 20 years; and would also provide YTY with a long-term supply of raw materials for the manufacture of PU gloves.
According to Stephen James, business manager (thermosets) new business development of Dow Chemical (Australia) Ltd, a subsidiary of US-based Dow, the group picked YTY out of 160 glove companies, of which six out of the 10 shortlisted were Malaysian glove firms.
YTY has been a contract manufacturer for Dow since October 2000 and it has met or exceeded every promise it has made. We're proud to continue our partnership with YTY and we believe YTY will grow the business better than Dow, James said, adding that Dow saw the agreement as a logical evolution for its glove business.
Dow will focus on its core strengths and continue to supply YTY with the PU polymers and technology required to make the gloves; while YTY will leverage its expertise in manufacturing and marketing to further grow the business globally, he said.
Since commercial production of the PU gloves commenced in January 2001, YTY had gained acceptance in North America, Europe, Japan and Australia, and continued to expand to other parts of the globe. It currently has annualised sales of between 400 million and 450 million pieces.
Dow is a leading science and technology group that provides innovative chemical, plastic and agricultural products and services with annual sales of US$28bil.
Dow INTACTA PU examination gloves were developed to address increasing allergy concerns, and to help healthcare professionals meet occupational health requirements.
Type I infection is triggered by specific proteins found in natural latex rubber, while Type IV allergy is as a reaction to chemical residues used in glove manufacturing.
Demand for PU gloves has been especially strong from segments with clean room and critical environments, and medical exam applications.
YTY, established in 1998, is a leading glove manufacturer and 100% exporter for a range of disposable latex and nitrile examination gloves.
Over the years, it has gained a reputation for product quality and reliability as well as on-time delivery, factors that Dow took into account in picking YTY as its partner.
Did you find this article insightful?