Rubber gloves make Korean petrochemical firms’ Q2 profit soar

South Korea’s leading petrochemical makers report their second-quarter sales and operating profit soared, boosted by strong sales of rubber gloves, which are in greater demand amid the protracted COVID-19 pandemic.

Kumho Petrochemical Co. said on Friday its consolidated operating profit increased more than sixfold to 753.7 billion won ($659 million) in the three months to June from a year ago. The quarterly figure is larger than the company’s entire operating profit of 742.1 billion won in 2020.

Second-quarter sales doubled to 2.2 trillion won, the company said in a regulatory filing.

The results mark the company’s highest-ever quarterly sales and operating profit.

Kumho’s stellar performance was driven by significant sales growth in nitrile butadiene latex (NBL), the raw material in rubber gloves.

NB latex is a type of synthetic latex used to make industrial, cooking and surgical gloves. Demand for the raw material in latex gloves has surged since early last year following the outbreak of the COVID-19 pandemic.

“As concerns over the resurgence of the pandemic grow, demand for rubber gloves from chefs, medical staff and even ordinary people is surging,” said a company official.

Kumho’s other businesses that manufacture synthetic rubber for tires and acrylonitrile butadiene styrene (ABS), a raw material used in toys, automobiles and home appliances, also reaped decent profits, according to the company.

LOTTE’S Q2 PROFIT UP 18-FOLD

On Friday, Lotte Chemical Corp. posted its second-quarter operating profit jumped 18-fold to 594 billion won from a year earlier on a consolidated basis, while sales rose 62% to 4.35 trillion won.

The chemical unit of Lotte Group, Korea’s fifth-largest conglomerate, attributed its strong revenue and profit growth to higher sales of its key products – olefin and aromatics.

As part of efforts to expand its source of revenue and foster a new growth driver, the company said last month it is investing 4.4 trillion won in hydrogen projects by 2030.

While there are concerns over competitive capacity expansion among latex players, analysts expect the market to continue to grow even in the post-pandemic era amid the public's heightened awareness of sanitation and protection.

According to the Malaysian Rubber Glove Manufacturers Association (MARGMA), global demand for latex gloves is forecast to grow to 410 billion units by 2024 from 200 billion units in 2020.

Write to Jeong Min Nam at peux@hankyung.com
In-Soo Nam edited this article.