KLK is No.1 nitrile latex supplier
Posted byKuala Lumpur: Ipoh-based planter Kuala Lumpur Kepong Bhd (KLK) is now the world's biggest synthetic latex producer, via its 19 per cent British unit Yule Catto & Co plc. The business is also growing and it plans to build another plant at a yet-to-be decided location in Asia.
"We foresee there is a need for an additional 30,000 tonnes every year as more glove makers switch to nitrile," said Synthomer Asia managing director Dr Brendan Catlow.
Synthomer Group's polymers business, which is wholly-owned by chemical maker Yule Catto, runs a 130,000-tonne per year nitrile latex plant in Kluang, Johor.
Yule Catto, which is listed on the London Stock Exchange, became the world's biggest nitrile latex producer two weeks ago, after it completed the purchase of Germany's PolymerLatex Group.
PolymerLatex operates a 100,000-tonne a year nitrile latex plant in Pasir Gudang, Johor. "As an enlarged group, Yule Catto now controls 40 per cent of the world's demand for nitrile latex," Catlow told at a press conference yesterday.
Currently, the world annual demand for nitrile latex is around 550,000 tonnes. The world's six nitrile latex producers, including Yule Catto, are cashing in on higher demand from Southeast Asian glovemakers.
Earlier this month, nitrile latex prices rose by between 10 and 20 per cent to US$2,000 (RM6,045) per tonne.
Two days ago at the Invest Malaysia 2011 conference, KLK executive director Datuk Lee Hau Hian told Business Times the supply of nitrile latex will continue to rise as demand picks up.Top Glove Corp Bhd chairman Tan Sri Lim Wee Chai, who was also at the conference, told fund managers and stock analysts that his company wants to step up nitrile glove production to half of its total installed capacity of 30 billion pieces. Currently, Top Glove's production ratio of nitrile to natural rubber gloves is only 20:80.
"About 64 per cent of our production cost is made up of natural latex. The volatile swings in latex prices have had an impact on our profits. In diversifying our risks, we've started to switch some of our lines to make nitrile gloves," Lim said.
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