For Immediate Release
Medline Receives Force Majeure Notice from Hong Ray Enterprises
Thursday, July 03, 2008 —
Hong Ray Enterprises of Shijiazhuang, China, the world's largest manufacturer of vinyl exam gloves and a major manufacturer of nitrile gloves, has notified Medline Industries, Inc., and other U.S. customers that they are facing "force majeure conditions" and that they will be unable to meet their normal agreements to customers. Hong Ray is Medline's largest exam glove supplier.
"This disruption to supply will have a cost impact on the entire industry," said Tripp Amdur, president of Medline's glove division. "We are moving quickly to secure adequate supply for our customers through alternative factories, at ultimately a much higher cost. It is crucial that we act fast for exam gloves, however, because it's a high demand item that can spike in times of crisis situations such as SARS and the pandemic flu."
In its letter to Medline and its other U.S. customers, Hong Ray cited a long list of events and government actions that have led to its inability to fulfill its contracts. These include a fire at a major raw material manufacturer, dramatic changes in government policy impacting labor, taxes and credit and pollution-control measures associated with the Beijing Olympics.
According to Amdur, Hong Ray's situation is by no means unique.
"All of our suppliers are facing enormous and unexpected obstacles in fulfilling their contract obligations," said Amdur. "While Hong Ray is the first factory to formally declare 'force majeure,' other factories, including those that manufacture latex gloves, face similar circumstances. In Malaysia, for example, the government recently declared a change in pricing for natural gas, almost tripling the price overnight."
About Medline
Medline, the nation's largest privately held manufacturer and distributor of healthcare products, manufactures and distributes more than 100,000 products to hospitals, extended care facilities, surgery centers, home care dealers and agencies and other markets. Headquartered in Mundelein, IL, Medline has more than 800 dedicated sales representatives nationwide to support its broad product line and cost management services.
Over the past five years, Medline has been the fastest growing distributor of medical and surgical supplies in the U.S., serving as the primary distributor to over 250 major hospitals and health care systems. As a leading distributor, Medline offers a comprehensive array of consulting and management services encompassing the supply chain and logistics, utilization and standardization, business tools and enhanced reporting capabilities, and on-staff clinicians.
Medline has a growing network of 34 distribution centers around the country, as well as an expanding, dedicated transportation fleet with over 160 vehicles in a variety of sizes to fit customers' specific delivery needs. The fleet is equipped with the latest navigation devices for enhanced order tracking and communication.