The World Wants Malaysia's Rubber Gloves, But Not Enough People Are Making Them

(Bloomberg) -- An acute labor shortage in Malaysia is penetrating its rubber gloves business, prompting the industry’s association to implore for more workers.

Global demand for rubber gloves has been growing, yet manufacturers are unable to meet the need because of the lack of labor, according to the Malaysian Rubber Glove Manufacturers Association. That’s forced the group to cut its output target for this year by 3.6% to 188 billion pieces of gloves.

“We’re crying for workers,” Denis Low, the president of the association, said during an industry dinner in Kuala Lumpur on Wednesday. “There’s a lot of demand, but the glove industry finds it hard to supply because we don’t have the luxury of that kind of overtime for our staff, and simply because we don’t have enough workers.”

The country has been facing manpower issues since Mahathir Mohamad was elected prime minister last year on a platform of cutting the economy’s reliance on cheap, foreign labor. The workforce squeeze is not only hitting the rubber glove industry, the world’s biggest, but also impacting businesses such as palm plantations, construction, restaurants and barber shops.

Exploiting Workers

Some companies in Malaysia have faced allegations of exploiting workers in modern slavery conditions. Earlier this month, U.S. Customs and Border Protection blocked imports of disposable rubber gloves from a Malaysian firm on suspicion that they were manufactured using forced labor.

The government has been imposing stricter labor requirements and has cracked down on foreign workers without permits. Excess work hours have also been cut, with foreign workers now limited to two hours of overtime compared with three to four hours earlier.

Malaysia is also asking business owners to carry out independent audits in line with international labor standards before they apply for foreign worker permits. The social compliance audits will become mandatory from 2021 and are designed to address issues affecting foreign workers and meet social and ethical demands from international buyers.

For the rubber glove industry, at least 25,000 foreign workers are needed to replace those who have left and manage expanded capacities, Low said. Output of rubber gloves in the first half of the year contracted by 4.5%, he said.

“If Malaysia supplies just 10% to 20% less, there’ll be a shortage in the world,” he said.

--With assistance from Yudith Ho.

To contact the reporter on this story: Anuradha Raghu in Kuala Lumpur at araghu3@bloomberg.net

To contact the editors responsible for this story: Anna Kitanaka at akitanaka@bloomberg.net, Atul Prakash

©2019 Bloomberg L.P.