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Supermax OBM business model does manufacturing and marketing together. The ASP price is much higher than the OEM glove company's. Moreover, the US factory in Texas will contribute US 50-100 million in revenue in coming quarters. If the revenue doubles, the Supermax will register the highest profit among the big 4.
In uncle opinion March Qtr and June Qtr will be weak before potentially improving in Sep Qtr. Glove investors may need to wait a bit more before improvements. After that, if the uS tariffs on China remains high, then there could be more permanent performance moving forward
The U.S. government is supporting the local manufacture of gloves through initiatives like the "Make PPE in America Act" and by raising tariffs on Chinese-made gloves. This aims to reduce reliance on foreign manufacturing, particularly during crises, and to support domestic production and jobs.
Here's a more detailed look:
"Make PPE in America Act":
This act aims to incentivize and support the production of personal protective equipment, including gloves, within the U.S.
Tariff Increases:
The U.S. government has announced increases in tariffs on medical-grade nitrile gloves imported from China, with rates set to rise significantly in the coming years. This makes it more expensive to import Chinese gloves, potentially encouraging domestic manufacturers to increase production.
Funding and Support:
The U.S. government has provided funding and support for companies to set up manufacturing facilities in the U.S.
Waiving Requirements:
In some cases, the U.S. government has waived certain requirements, like those related to the "Make PPE in America Act," due to the lack of available domestic suppliers, Made in America.gov.
Focus on Domestic Production:
The U.S. government is prioritizing the use of domestically manufactured gloves for agencies like the Department of Veterans Affairs (VA), aiming to cover 100% of their needs with domestic products.
Previous Concerns:
The U.S. government has also addressed concerns about forced labor in glove production, leading to bans on imports from certain companies.
Potential for Reshoring:
The U.S. government's actions, including tariff increases and support for domestic manufacturing, are seen as a way to encourage the reshoring of glove production to the U.S.
