Welcome

Honeywell, Premier to Bolster U.S. Production of Medical Gloves

July 13, 2021, 8:31 AM

Honeywell International Inc. and hospital supply-purchasing group Premier Inc. will launch a venture to manufacture 750 million nitrile exam gloves in the U.S. each year, the companies told Bloomberg Law.

It is the latest effort to shore up problems in the medical supply chain for personal protective equipment, which gained widespread attention due to the Covid-19 pandemic. Nitrile gloves, used for nonsurgical purposes in hospitals, and other medical gloves have been in short supply since the beginning of the pandemic and are among of the main types of PPE that health workers still struggle to get.

“Honeywell and Premier share a commitment to increase the domestic production capacity for safety solutions to help to protect American healthcare workers,” Praveen Reddy, president of Honeywell’s personal protective equipment business, said in a statement. “Our N95 respirators are protecting millions of healthcare workers, and now we’re bringing our technical and supply chain management expertise to support another category of essential PPE.”

Eighty health systems have committed to purchasing a percentage of Honeywell’s gloves over five years, Premier said. About 90% of the 750 million gloves will go to health systems that are members of Premier, CEO and President Michael Alkire said in an interview.

The partnership with Honeywell was spurred on by one goal, Alkire said: “Never again will we be put into a scenario like that again where we have an overdependence on either one country like China, or we have an overdependence on a region of the world.”

The partnership has been in the works for “a long time,” Alkire said, but it took time for Honeywell to ensure it had the capacity to meet Premier’s demand in an “efficient, ecologically friendly, and high-quality way,” he said.

Manufacturing gloves is complex, and Alkire said Honeywell was the right partner because it has the “manufacturing wherewithal” to have a “strong influence on that entire supply chain” for gloves.

Federal Investment

The federal government has also been making investments in domestic production of gloves, telling Bloomberg Law in December 2020 about plans to invest about a half-billion dollars in such ventures. Awards for manufacturing began in May. About $424 million in such spending has been announced by the Defense Department to Rhino Health Inc., Renco Corp., US Medical Glove Company LLC, Blue Star NBR LLC, Showa Best Glove Inc., and United Safety Technology Inc.

The global demand for gloves was projected to be about 585 billion pairs in 2020, while the supply was about 370 billion, a shortfall of 37%, according to a report by Australian glove manufacturer Ansell.

The world’s biggest glove producer, Top Glove Corp., was forced to shutter 14 of its 28 factories after an outbreak of Covid-19 in November 2020 and was given permission to resume operations a month later. About 65% of the world’s gloves are made in Malaysia.

Premier has been working to diversify where its PPE was manufactured prior to the pandemic, moving isolation gown production to Cambodia and gloves to Malaysia, Alkire said.

The company first got its hint that “things were going to get pretty rough, from a supply demand and balance,” when China redirected all the N95s made in a Premier plant in Taiwan to mainland China, Alkire said.

Several Locations

The gloves will be made in several different locations to ensure a natural or public health disaster can’t stop the entire operation, Alkire said. However, he wouldn’t say exactly when gloves would begin rolling off manufacturing lines.

This is Premier’s third major investment in the production of PPE within the U.S. during the Covid-19 pandemic. The company has also partnered with Texas-based Prestige Ameritech to guarantee purchasing of N95 masks by its members and with DeRoyal Industries Inc. to manufacture isolation gowns in Tennessee.

Alkire said, “what’s really important to Premier and me is that we create the muscle by which we can flex, that if in fact we ever get into a scenario like this again, we have the equipment and we have the facilities to ensure that we’ve got some sustainability in producing these products.”

To contact the reporter on this story: Shira Stein in Washington at sstein@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Brent Bierman at bbierman@bloomberglaw.com

To read more articles log in.

Learn more about a Bloomberg Law subscription.