When completed in 2024 the complex, owned
by Japan’s SHOWA Glove Co will be able to produce about 3 billion medical-grade
nitrile gloves a year from its dozen massive new, five-stories-tall, automated
assembly lines.
That may seem like a lot but is only a
small slice of the over 100 billion consumed in the United States annually.
“There’s a burgeoning glove
manufacturing industry popping up in this country, a lot of it funded by the
government,” said Dan Izhaky, chief executive of New York-based United
Safety Technology, which got $96 million in federal backing to begin to
transform an empty Baltimore steel plant.
Demand for gloves spiked early in the
pandemic, spotlighting a glaring weakness in the US supply chain for all types
of medical safety equipment. Most of it comes from factories in Asia.
“The market went absolutely crazy
during the pandemic,” said Richard Heppell, head of SHOWA’s US division,
as buyers scrambled to find supplies and prices exploded.
SHOWA was expanding a small, decades-old
glove factory in Fayette – originally built to make old-style latex gloves –
when the pandemic struck. Seeing an opening for a revival of larger-scale US
glove manufacturing as the government reconsidered the wisdom of heavily
relying on foreign sources, the company decided to triple the size of its
expansion.
At least 12 other companies – a mix of
domestic startups and Asian and US producers looking to gain or expand US
footholds – are building new glove plants, including the one inside the former
Baltimore steel mill and another in a former Caterpillar factory outside
Chicago. One entrepreneur wants to build a plant on a Navajo reservation in New
Mexico.
The US Department of Health and Human
Services (HHS) has so far committed $572 million to five glove projects,
including $81.3 million for SHOWA, “that will result in domestic
capacities that can produce more than 600 million nitrile gloves per
month,” according to a HHS spokesperson.
PANDEMIC-RELATED BUSINESS RISKS
Izhaky knows the risks of jumping into a
pandemic-related business.
An employee works at a factory of SHOWA, a large Japanese glove producer, in Fayette, Alabama, US, June 2, 2022. REUTERS
He and a partner hastily built a face mask
factory with private funds in Los Angeles early in the COVID crisis but was
forced to shutter it when mask prices collapsed and customers evaporated. Most
of the mask factories that sprang up during the pandemic have closed.
Despite that experience, Izhaky and other
producers are counting on customers willing to pay some premium for US-made
gloves, as well as federal mandates such as requiring them in government safety
stockpiles. A group of glove makers are discussing forming a trade group to
push for such mandates and lobbying is underway, company officials said.
“The VA, DHS, TSA, they all use huge
amounts of gloves,” said Izhaky, reeling off a list of federal agencies.
“We’re expecting that they’ll be mandated to purchase Made in
America.”
But it remains a risky proposition. The
Biden administration has not guaranteed it will buy the output of these new
operations, and the cost of producing domestically, even using the latest
equipment, is expected to remain higher than imports.
Glove making is far more capital intensive
than masks, raising the stakes for those building large factories.
Modern glove factories are modelled on
those developed in Asia, a reverse of the decades-old pattern of companies in
advanced economies developing industries in low-cost regions. Izhaky’s project
has 45 US employees and a team of 28 in Malaysia with industry experience.
Alison Bagwell is an American engineer who
spent most of her career working for Kimberly-Clark KMB.N, setting up glove
factories in Thailand and Malaysia. With private backing, she is building a $70
million plant in Sandersville, Georgia, set to open next year.
“I feel pretty confident that I can do
this,” she said, “having done it in a third world country.”
In Fayette, the SHOWA factory is churning
out gloves in the original production area and a towering new addition that
holds the first four new production lines. Behind the building, a new structure
for four additional lines is nearly complete, while another four-line building
has yet to break ground.
Plant manager Scott Robertson leads the way
past a team of women catching clumps of blue gloves as they are automatically
pulled off ceramic hands used to mould them and piled into stacks.
“We have to use these auto
stackers,” he said, referring to the machines that gather the gloves,
“because gloves are coming off the line so fast there’s no way a person
could keep up.”
The company is planning to install new
machinery in this spot that will do the job of putting the gloves into boxes.
“We have to do everything we can to
control cost,” said Gilbert LeVerne, the company’s marketing director,
“because this country is cost impulsive – the disaster goes away and the
mindset shifts back to the bottom line.”