Protective glove market under threat, says report

Low-cost products flooding the market from China and the Far East are posing a significant challenge to manufacturers of industrial protective gloves in Europe, says a report

Low-cost products flooding the market from China and the Far East are posing a significant challenge to manufacturers of industrial protective gloves in Europe.

Recent analysis by Frost and Sullivan on the European industrial protective gloves market pegs annual revenues of the overall market at ?1.05 billion in 2003, including gloves made out of leather, textile, polymer-textile, polymer, and technical fibres.

By 2010 revenues will have grown to merely Euro1.26 billion at a compound annual growth rate of 2.7 per cent.

Although many of the manufacturers have already relocated a good part of their production operations to Eastern Europe, Africa and Asia - to benefit from lower labour costs and easy availability of raw material - they are now ironically facing growing competition in the home market, as well as downward price pressures from cheaper gloves produced in China and the Far East.

Since this trend is rising in specific material segments such as those for cotton, leather, and unsupported polymer gloves, many European manufacturers are choosing not to compete in these sectors and are instead focusing on the higher-value supported polymer-textile and knitted high-performance material segments.

However, manufacturers in the Far East are quick to bring out cheaper imitations of any product innovations at much lower costs, placing European manufacturers at considerable risk.

European manufacturers are also highly dependent on distributors to deliver their products to the end user.

This dependence has turned the distributors into a new breed of competitor that is wielding increasing power in the market.

Some of these distributors may even source gloves from Far Eastern manufacturers and sell them under their own labels.

This poses a distinct competitive threat to European manufacturers, compelling them to create strong brand differentiation in the mind of the purchaser.

Manufacturers that can identify and exploit rapidly developing niche segments may find new growth opportunities.

As Frost and Sullivan Industry Analyst Brian Balmer says, "The challenges facing companies can be turned into opportunities with the right combination of products, services and management." For instance, companies are increasingly raising the level of protection they provide employees by choosing gloves made of newer materials that not only offer enhanced safety against industrial hazards but also enable greater dexterity of movement.

This is leading to greater interest in materials such as technical fibres, polymer-textile gloves, and butyl rubber, which are gaining precedence over traditional - and cheaper - materials such as cotton, leather and latex.

Polymer gloves are also expected to become increasingly popular due to their versatility - and can provide opportunity for innovative European manufacturers.

Dr Balmer adds, "New innovations such as blends of polymers, where two polymers are mixed to produce a glove with the properties of both polymers; and multi-layer polymer gloves, in which the glove is repeatedly dipped, normally in different polymers, to provide additional protection, are likely to lead to continued growth." Manufacturers can also look forward to fresh opportunities as the ten Eastern European countries joining the EU this year start adhering to stringent EU legislation on health and safety.

This factor is expected to promote increased demand for protective gloves and drive overall market growth.

The new EU accession countries are set to grow at a forecast compound annual growth rate of 8.9 per cent, outpacing the European average.

Due to its large manufacturing base, Poland in particular is expected to substantially increase its consumption of gloves.

Southern European countries, which have been slow to implement EU health and safety regulations, are also expected to start experiencing rapid market expansion.

Spain and Portugal are projected to grow at 4.6 per cent, while Italy is forecast to grow at 4.1 per cent.

These newly developing regional markets are poised to erode the overall share of Germany, the United Kingdom and France- currently the three largest country markets.

While Germany's share of total revenues is anticipated to fall from 20.0 per cent to 18.9 per cent in 2009, contributions of the United Kingdom and France are expected to decline from 18.0 per cent to 17.0 per cent over the same time frame.

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