Asia

Malaysias largest rubber glove manufacturer bullish about prospects as demand soars amid COVID-19

KUALA LUMPUR: Malaysias largest rubber glove manufacturer Top Glove is investing US$1 billion over the next five years to expand its production capacity, in order to meet surging demand for protective gloves amid the COVID-19 pandemic.

Speaking to CNA in an exclusive interview, Top Gloves executive chairman and founder Lim Wee Chai noted that the companys third-quarter earnings ending May 31 jumped more than three times to hit almost US$90 million, while its share price has quadrupled since the beginning of the year.

Advertisement

Advertisement

The best quarter has yet to come, he declared, as the demand is still “very strong”.

“We are now only just (getting) started. There are more good quarters to come. It is only the first quarter and we are seeing good results … The next five or six quarters can be even more in terms of sales revenue and profit.”

Its nitrile gloves, he said, are oversold by 360 days, which means that customers will have to wait for up to a year to receive their orders. Most buyers are state agencies and many are willing to pay a higher price in order to secure their deliveries.

Malaysia is reportedly producing around 65 per cent of the worlds supply for rubber gloves. There has been an exponential jump in demand for rubber gloves since the pandemic.

Advertisement

Advertisement

Dr Lim, 62, who started the company about 30 years ago with his wife Tong Siew Bee, took the company public in 2001. Top Glove obtained dual listing on SGX in 2016.

Top Glove Corporation now has 45 manufacturing facilities across the country and controls over a fifth of the worlds multi-billion dollar rubber glove industry.

Malaysian firm Top Glove founder Lim Wee Chai tells CNA that 2020 is going to be a record year for the company.

With all its factories running at almost full capacity, Dr Lim wants to add up to 10 more factories over the next two years.

“Usually we build one or two factories a year, this year we are building more. It is good times, we build four or five factories this year and next year, we will also build another four to five factories.”

Top Glove Corporations current production capacity is 75 billion pieces of gloves per year. By 2021, this will be increased to close to 100 billion, he said.

READ: Top supplier Malaysia sees no quick end to shortages in US$8 billion gloves industry

CUTTING-EDGE TECHNOLOGY

A firm believer of cutting-edge technology, Dr Lim said Top Glove must constantly invest in research and development.

The company has more than 600 researchers and half of them are engineers, while the rest are chemists and scientists, he said.

“Traditional business grows very slow, 5 per cent to 10 per cent every year. But using technology, we can skill up … We find something new, something better – digitalisation, internet of things, artificial intelligence, all these are very important.”

In particular, automation and artificial intelligence have saved costs and improved efficiency. They have also enhanced the quality of the products he said.

By harnessing technology, between 1,000 to 2,000 workers are made redundant each year. They are then deployed to new factories, he explained.

The number of workers to produce per million gloves has been reduced significantly, from five to 10 a decade ago to less than two today, he also said.

Top Glove Corporation is the worlds largest rubber glove producer. (Photo: Top Glove Corporation Bhd)

LOFTY TARGET TO BECOME FORTUNE GLOBAL 500 COMPANY

Dr Lim who is a father of two grown children, has set lofty targets for himself and the company.

He wants Top Glove to become Malaysias second Fortune Global 500 company after Petronas by 2040, with an annual revenue of US$35 billion.

“In order to grow big, to become a Fortune Global 500 coRead More – Source