KUALA LUMPUR: Malaysia’s share of the glove market in the United States has risen to 56% this year, up from 46-47% in 2024, driven by high tariffs imposed by the US on China, said Hartalega Holdings Bhd.
Hartalega executive chairman Kuan Kam Hon said the tariff in general is helping Malaysian glove manufacturers as Malaysian exporters are at 90%, compared to 80% imposed on Chinese products.
“There are two tariffs here. One is the Section 304 tariff, the Chinese were impacted by this, gloves being exported to the US are subjected to 50% tariff under this rule. Then there is the reciprocal tariff. China will have a 30% tariff, whereas Malaysia is at 19% (total). So definitely this is helping us,” he told a press conference after the company’s AGM today.
Currently, Hartalega’s share in the US market is 10%.
Kuan said glove consumption is projected to reach 370 billion pieces in 2025, up from 357 billion recorded in 2024.
“This would put demand close to the pandemic peak, when usage hit a record 380 billion pieces in 2021. What it means is that glove consumption is expected to continue to grow, the demand is there although challenging.”
However, Kuan said oversupply remains a drag as Chinese manufacturers relocate to Indonesia and Vietnam to bypass tariffs.
“Because of the tariff, Chinese manufacturers who lost the US market have moved to Southeast Asia, mainly Indonesia and Vietnam, to rebuild capacity and export from there at the same 19–20% tariff as Malaysia,” Kuan said.
“Once the capacity in Indonesia and Vietnam is ready, the playing field will be levelled. For the time being, they have lost significant market share in the US, but they will gain it back very quickly,” he added.
Vietnam already has small-scale production, while Indonesia is expected to have significant capacity by year-end.
“I am quite certain that by the end of the year, they will be exporting medical-grade gloves,” Kuan said.
On a separate matter, Hartalega is contesting additional tax assessments amounting to RM101.36 million issued by the Inland Revenue Board (IRB) for the financial years 2017 to 2022.
The additional assessments were received by its subsidiary, Hartalega NGC Sdn Bhd, comprising RM13.92 million for 2017, RM36.35 million for 2018, RM10,695 for 2019, RM32.89 million for 2020, RM18.10 million for 2021, and RM90,624 for 2022.
Kuan said the company has obtained a stay order from the court, meaning it is not required to make any payments until the legal process is resolved.
“Normally the procedure is companies have to pay first, but we initiated legal proceedings and the court has granted us a stay order. So there is no financial impact on our books until a decision is made,” he told reporters.
Kuan stressed that Hartalega has consistently complied with its tax obligations. He said Hartalega is one of the biggest tax contributors in the country.
“From 2020 until now, we have paid more than RM2.1 billion in taxes. During Covid-19, we also contributed RM90 million to the government fund. There has never been any intention to evade tax, all payments were made based on consultants’ recommendations and audited accordingly,“ he said.
