Dipped Products makes inroads into sports glove market to blunt legacy business’ impact

Dipped Product PLC made inroads into making sports gloves recently as the company’s revenues and profits in the hand protection segment came under pressure from the second half of the financial year ended March 31, 2022 as prices moderated while costs escalated, pinching its margins badly.

Dipped Products is a leading non-medical glove manufacturer accounting for roughly 5 percent of the global market share while it also makes medical gloves.

In the second half of the forgoing financial year, the company saw the robust ascent in demand for both non-medical and medical gloves during the pandemic decelerating due to excess supply, which put sharp pressure on prices, amid escalating raw material and freight costs squeezing the margins.

The restoration of glove supplies from the rest of the world also brought in added competitive pressure on the company and prices.

Despite the annual revenues rising by nearly 25 percent to Rs.37.9 billion in the glove business, the operating profits of Dipped Products fell sharply by 44 percent to Rs.3.1 billion in the financial year ended in March 31, 2022, reflecting the extent of margin pressure.

In a bid to blunt the negative impact, the company forayed into sports gloves recently and said there was an overwhelming response thus far and is now courting new customers for the new line of products.

Sports gloves is another niche in the overall hand protection market, but could command higher margins due to their different specialties associated with the glove types required in each sport.

“In a major milestone in its journey of innovation, the sector ventured into a new product vertical with the launch of the sports glove segment during the year,” Dipped Products said in its annual report.

The company also widened its existing product range in electrician gloves as it expanded its value-added product portfolio.

Meanwhile, to stay true to its commitment to sustainability, the company also incorporated sustainable designs into its gloves and packaging as it explored the development of a compostable glove last year and introduced recycled packaging material for selected products.

Dipped Products is striving to deliver on environmental, social and governance standards, more often known as ESG, which came to the forefront of corporate performance since of late, as the expectations from corporates rose to enormously high levels from all stakeholders on the road to net zero carbon emissions.

Hayleys group, Dipped Products’ parent company, has an ambitious target of reducing carbon emission by 30 percent by 2030.