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SEMPERGRAMS


September 15, 2017
Vinyl Glove Production Impact Update
In late November, 2016, Sempermed became aware of an important manufacturing issue regarding the production and shipment of vinyl, which had a significant effect on many industries that utilize vinyl products.

As we informed you at that time, the Chinese government had imposed a production ban on vinyl factories in the northern region of China. This mandate was made due to environmental regulations.

This production ban was never fully lifted, and the impacted factories have not been operating at full capacity or with all lines open since that time. As such, a vinyl shortage has been an ongoing issue since the original production halt.

Current capacity at Chinese factories is limited since the halt in production at the end of 2016/early 2017 shifted production to later months. Sempermed, and other suppliers of vinyl gloves, are only allowed a specified amount of product coming off of the production lines. Continued constrained supply of vinyl gloves is expected in the coming months.

The combination of limited supply coupled with steady demand drives the expectation of a price increase of all vinyl products, including the vinyl gloves used in our industry. Also of note is increasing raw material costs (including resin) as well as the evidence that factories are raising vinyl prices to help supplement the cost of the more environmentally friendly fuel supplies. Factories in poor financial condition may not continue to produce if they are not able to afford the new required equipment. This could further exasperate the supply problem.

Note that some Chinese factories produce low quality nitrile products in addition to vinyl, and the restrictions in effect will impact any products coming out of the country. While Sempermed does not source any of their nitrile products from China, these environmental restrictions will affect the entire nitrile supply chain as customers shift ordering to factories in Thailand and Malaysia.

Sempermed is monitoring the situation closely and will communicate further details as they become available.