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Mercator Medical SAMercator Medical considers restoring production at its oldest factory in Thailand
Listed medical gloves producer Mercator Medical is seeing a continuation of positive trends in the market and is considering reintroducing production at its oldest factory in Thailand, the company's management representatives told a video conference.
"The third quarter shows us continuation of positive trends, although we are still struggling for profitability, especially of the distribution segment," CEO Monika Zyznowska said.
"The production segment shows very positive trends in terms of profitability. The impact of the situation between China and the United States allows us to assume that the trend will be maintained in the first half of 2025," she added.
The CEO pointed out that the tariffs have been announced and the document is awaiting President Biden's signature.
"A lot of gloves are still being shipped from China to the US with the possibility that after the document is signed, these goods will be with higher duties. In our factory in Thailand, we are seeing an increase in prices and their acceptance with US customers," Zyznowska assessed.
"We can expect this trend to continue early next year, but it is important to remember that once China loses profitable sales to the US, it is likely that all Malaysian, Vietnamese, Thai production will be diverted towards US markets and China will divert most of its production towards Europe," she added.
The CEO continued that this could mean a drop in prices for the European part.
"This is not yet visible, but we expect it to appear in the first quarter of 2025," Zyznowska assessed.
According to CEO Zyznowska, the trend of increased demand in countries outside China from the US could continue next year and Malaysia will unlock more production capacity.
The Mercator Medical Group currently owns three plants in Thailand that produce disposable NBR latex gloves. Due to limited demand for gloves in recent times, the group has decided to halt production at the oldest of its plants.
"We are considering restoring production at Plant 1 and setting up four dual production lines. It looks like the increase in demand related to the US-imposed tariffs on China will result in enough orders for us to think about it," the CEO said.
doa/ ao/ han/
