Fabricated Rubber Products, NEC

SIC 3069

Companies in this industry

Industry report:

This category covers establishments primarily engaged in manufacturing industrial rubber goods, rubberized fabrics and vulcanized rubber clothing, and miscellaneous rubber specialties and sundries, not elsewhere classified. Included in this industry are establishments primarily engaged in reclaiming rubber and rubber articles. Establishments primarily engaged in the wholesale distribution of scrap rubber are classified in SIC 5093: Scrap and Waste Materials. Establishments primarily engaged in rebuilding and retreading tires are classified in SIC 7534: Tire Retreading and Repair Shops; those manufacturing rubberized clothing from purchased materials are classified in SIC 2385: Waterproof Outerwear; and those manufacturing gaskets and packing are classified in SIC 3053: Gaskets, Packing, and Sealing Devices.

Industry Snapshot

This industry includes more than 100 rubber products not classified in other rubber products industries, such as toy balloons, rubber brake linings, rubber rafts and pontoons, and many others. The total value of U.S. shipments for these products was $8.42 billion in 2008. Approximately 2,214 establishments employed 62,200 workers in this industry in 2009.

Organization and Structure

This industry is highly diverse. Thus, the impact of the economic recession that set in during the late 2000s affected various segments of the industry differently. Certain segments, such as medical supplies, were highly immune, whereas deep cuts in consumer spending negatively affected the automobile, housing, and textile industries. Although demand for items used in automobiles and housing was expected to return gradually during the 2010s, those items related to health protection forecast larger-than-average percentage increases. With a large number of players in these market segments, firms would continue to focus on improved customer service, product design, and delivery. U.S. firms exported a good deal of products to industrialized countries, but the country also imported a considerable amount of low-cost products from developing nations. Manufacturers were expected to continue focusing on flexible, customer-oriented production. The development of new materials also forecast improved product quality and durability.

Gloves and Condoms.
With the AIDS crisis escalating throughout the 1980s and 1990s, more attention was focused on latex gloves and condoms than on any other fabricated rubber product. Both products are made by a dipping process in which a form in the shape of the product desired (such as a hand) is dipped into latex. Condom sales fell between 1991 and 1994, according to the American Psychological Association and based on scanner data from retail outlets. However, sales were on the rise again in the late 1990s and early 2000s. In 2005, condom sales rose over five percent, and in the late 2000s, as the economy fell into the doldrums, condom sales continued to increase, moving up 2.3 percent in 2008. According to Charisse Jones of USA Today, "Condoms make for a relatively inexpensive form of birth control at a time many cash-strapped families are hesitant to grow." Church & Dwight, maker of Arm & Hammer baking soda as well as Trojan condoms, was the largest U.S. producer of condoms in 2010. The company reported revenues of $2.52 billion in 2009. Ansell International of Victoria, Australia, is the world's largest maker of examination gloves and also produces Lifestyle condoms. The company reported revenues of $1.09 billion in fiscal 2010. Ansell America is headquartered in Red Bank, New Jersey.

Latex gloves, long used routinely during examinations and surgery, are used by virtually all health-care personnel whenever they perform a task that requires contact with a patient. Besides physician's exams, the gloves also are widely used in dental procedures. Despite high expectations, however, neither the glove nor the condom market reached the enormous proportions projected in the 1980s. One official at a glove firm said that from 1986 to 1990, the demand for latex examination gloves may have doubled, but capacity quadrupled. Medical institutions helped to unrealistically raise apparent demand by placing duplicate orders with multiple distributors in an effort to ensure delivery. This situation led to a consolidation in the glove industry, with many start-up firms going out of business and larger, multinational firms scaling back production.

Firms that produced examination gloves in the United States faced stiff competition from overseas companies, much of it economically driven. Many companies locate plants in Malaysia because of the country's readily available supply of latex. Also, the Malaysian government placed duties of between five to 10 percent on exported liquid latex, but none on exported finished gloves. Malaysia also offered economic incentives and cheaper labor than that found in the West. However, even glove firms in Malaysia were hurt when demand did not meet expectations. From 1987 to 1990, the government issued 300 permits for glove factories. By late 1988, only 90 had begun operating, and by the end of 1990, only 30 plants remained.

Entering the mid-1990s, glove and condom makers began studying a new problem: the use of alternate materials for those allergic to latex. Reactions to latex range from relatively minor problems, such as localized contact dermatitis, to much more severe symptoms such as systemic dermatitis and anaphylactic shock, which can be life threatening. From October 1988 to April 1992, a total of 1,036 severe reactions and 15 deaths related to latex allergies were reported to the U.S. Food and Drug Administration. Studies showed that employee groups most exposed to latex, such as operating-room nurses, were more susceptible to latex allergies.

To counter these problems, glove and condom makers produced and tested more hypoallergenic latex products. By the mid-1990s, a few companies in North America began making gloves of thermoplastic elastomers, a material with the characteristics of rubber but processed like a plastic. In 1993, the FDA approved a polyurethane condom made by London International and a polyurethane condom for women produced by Pharmacal of Wisconsin. It was not until new synthetic glove polymers were developed in the late 1990s that the latex glove market began to feel an impact. According to Frost and Sullivan Inc., although demand for examination gloves grew throughout the mid-2000s, latex gloves gave up some of its market share to synthetic gloves. By the end of the 2000s, synthetic gloves held roughly 20 percent of the market. In addition, Malaysia continued to dominate production. In the late 2000s, members of the Malaysian Rubbers Glove Manufacturers Association produced 60 percent of the world's rubber latex gloves.

In 2009, the market for disposable exam gloves saw unexpected increases in the United States due to the H1N1 flu pandemic; according to a report by MarketStrat, the disposable glove industry was valued at nearly $2 billion in 2009. Disposable glove demand tends to peak in years when a particular health concern appears, such as SARS in China and H1N1 in the United States; however, demand for disposable gloves continues to grow based solely on an increasing global population and increasing standards of personal and occupational hygiene both within the United States and abroad. Nonetheless, while good news for glove manufacturers, there is a definite trend away from rubber and toward synthetic materials.

According to MarketStrat's report, hospitals are looking to avoid allergy issues related to latex and are thus increasingly replacing latex-based gloves with synthetic gloves such as vinyl or nitrile. In addition, a new generation of polymers (e.g., polychloroprene and polyisoprene) are being developed that offer superior comfort and durability. Major manufacturers have already begun to make the shift in production capabilities with the expectation that latex use for gloves is on the decline. Other manufacturers are working to reduce the allergic sensitivity of latex. While high demand will likely keep latex viable for the coming years, synthetic-based gloves are expected to grow at a rate up to three times as fast as latex.

Single-Ply Rubber Roofing.
The most common type of rubber roofing used in commercial building was developed in 1963 by DuPont. Two reasons this type of roofing evolved are the poor weather durability of other roofing materials and the energy crisis of the 1970s, which resulted in higher material costs for asphalt-based roofs. Roofers were looking for flexibility and superior weather and water resistance over long periods. Rubber roofing increased in popularity because it could accommodate movement, was functional at high and low temperatures, and resisted environmental elements, among other features.

From a small 1980 base of $70 million, rubber roofing demand in the United States quadrupled by 1985 to $287 million, then doubled by 1991 to an estimated $608 million. Annual growth of 11.1 percent was expected, but the rubber roofing market staggered early in the 1990s, according to the Rubber Manufacturers Association (RMA), which represents rubber product firms. Single-ply roofing hit a peak in 1990 and stagnated for the next several years. However, demand for single-ply roofing began to pick up again in the 2000s as new developments boosted its performance.

The rubber roofing market has seen much consolidation, with many firms entering the fray but later dropping out, especially after a 1983 price war that virtually wiped out profits for many companies. The two leading firms in the United States were Carlisle SynTec Systems of Syracuse, New York, which pioneered the product's usage, and Firestone Building Products Company, of Indianapolis, Indiana, a subsidiary of Bridgestone's Bridgestone America. Both leaders made major acquisitions in 1993. Carlisle bought the roofing business of Goodyear Tire & Rubber Company after making the product for Goodyear for two years under a private-label arrangement. Firestone purchased the roofing operations of Colonial Rubber Works Inc.

Rubber-Covered Rollers.
Rubber-covered rollers consist of three parts: a metal core, a rubber bonding adhesive applied to the core, and a rubber cover. The largest market for these products is the graphic arts industry, which uses rollers in printing presses to convey the ink onto the printing plate. Other applications are in papermaking, plastic film production, printing, steel fabricating, textile manufacturing, metal coating, and leather processing. In the paper industry, the rollers are used to squeeze water out of newly formed paper web so it compresses to the correct thickness. Steel mills use rollers in many strip processing lines as the rubber coverings reduce noise, provide traction, give a wringing action between processes, and protect the metal from corrosion. Growth of rubber-covered rollers has been gradual since 1980.

Sheet Rubber.
This rubber product is made using a machine called a calender. A strip of material fed into one side of the machine is flattened and emerges as a rubber sheet, which is used in various industrial applications like packing and lining. The process makes sheet goods in various widths and thicknesses. U.S. consumption of sheet rubber goods has varied since 1980.

Sponge Rubber Products.
Sponge rubber goods are classified as either open-cell or closed-cell. Open-cell sponge rubber derives its name from natural occurring sponge. G.R. Sprague of Colonial Rubber Works defined open-cell sponge rubber in the Vanderbilt Rubber Handbook as "an elastic mass made porous by interconnecting cells." Typical open-cell products include carpet underlay and mattress and upholstery filling. Closed-cell sponge is different because the cells do not connect. Applications of this type of sponge rubber include insulation, automotive weather-stripping, architectural gaskets, swimsuit material, pipe insulation, and mattress and upholstery filling. The value of sponge rubber shipments was $1.10 billion in 2008, a small increase from $1.07 billion in 2007.

Hard Rubber Products.
Rubber products usually can stretch to at least twice their dimensions when stress is applied, then return to their original form once the stress is removed. Hard rubber products do not follow this guideline, although the goods retain many other qualities of rubber. Typical hard rubber products include steering wheels, caster wheels, electrical insulation, battery boxes, and bowling balls.

Rubberized Fabrics.
The making of rubberized fabric is one of the oldest forms of rubber manufacturing. When latex was discovered, it was spread on a fabric and placed in the sun. When the water evaporated, the resulting product was a type of coated material. Historically, makers of rubberized fabrics considered their processes an art and kept their production methods secret. This created an environment in which only a few manufacturers made highly specialized products. The technology for making coated fabrics evolved from an art into a science, and as the information spread through the industry, the application grew tremendously. Polyurethane coatings simulate leather, especially in the apparel, shoe, and upholstery industries. Rubber fabric products include inflatable safety equipment such as life vests, lifeboats, and escape slides carried on aircraft.

Industry Leaders

Leading companies in the industry include the Plumley Division (formerly Plumley Companies) of Dana Corporation of Toledo, Ohio; Gates Corporation (formerly Gates Rubber Company) of Denver, Colorado; and Foamex International Inc. of Linwood, Pennsylvania. The Plumley Division of Dana Corporation is a axel and driveshaft manufacturer and also produces molded products, including hoses, tubing, and extrusions for the auto industry. Dana emerged from bankruptcy in 2008 and in 2009 posted revenues of $5.22 billion. Gates Corporation, which posted sales of over $1 billion in the late 2000s, produces belts and hoses for automotive and other industrial uses, batteries, formed fiber products, and other automobile accessories. Foamex International manufactures flexible polyurethane foam and foam products. Its 2009 sales totaled $1.17 billion.

Workforce

In 2009, the rubber manufacturing industry employed 130,640 people. The 89,260 production workers earned an average hourly wage of $16.47. More than 2,200 establishments were doing business in this industry at the beginning of the 2010s.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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