AmerCareRoyal - Disposable Glove Market Update August 2020

Market Commentary We expect ongoing elevated demand and new cost increases to continue to impact glove availability and prices beyond 2020

Supply Update  Factories are returning to normal utilization levels; however, they now face higher operating costs which is further impacting price – Incentive payments required to attract labor – Raw material shortages for certain materials (e.g. NBR used in Nitrile glove) represent new threat to availability – Higher distribution and logistics costs including PPE/ new safety protocols required to operate safely  Factories are rationalizing SKUs to increase efficiency / output – this will limit some offerings going forward  Increasing instances of counterfeit PPE flooding the market  Factories are continuing to communicate future price increases

Demand Update

 In April 2020, ACR estimated that global glove demand would increase by 150%-200% through September  However, we now believe the following to be true: – Current demand levels are higher than originally estimated (some are now saying 200-300% increase) – Duration of higher demand will last longer than originally predicted (at least the next 12 to 18 month)  Long-term global glove market expected to grow at 13% CAGR through 2027 (~2-3x pre-COVID estimates) 1  New glove applications and users driving higher LT growth rates Glove Market Timeline




2020 Outlook

• Pandemic spreads globally

• Demand increases exponentially

• Preparations for 2 nd wave of the virus in Fall drive continued demand • Raw material shortages • Aggressive price increases and long lead times (12 Mo.) • Factories selling out capacity to highest bidder

• Elevated demand will continue into 2021 • Lack of new capacity being added to satisfy new normalized demand • Prices should remain above historical levels • Challenging payment terms

• First shelter in place orders result in factory shutdowns in SE Asia • U.S. customers begin stockpiling PPE drawing down domestic inventory

• Factories raise prices as demand exceeds supply • New market participants enter further driving up prices • Prepayment requirements

Glove Prices

1. Allied Market Research

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