Top Glove doubles sales orders; expects solid H2

Not all companies are suffering as a result of the downturn caused by the spread of Covid-19, not least companies involved in the medical/healthcare sector. The world’s largest producer of gloves, Malaysian company Top Glove, says its sales have doubled with orders coming in from countries affected by the pandemic.

At the initial stage of the outbreak, the glove maker said sales orders came mainly from China, Hong Kong, Singapore and South Korea but it has recently been receiving strong sales orders from Europe, the US and other countries.

It added that current utilisation levels were above 90% but it is able to further ramp up production to nearly 100% to meet the surge in demand, while new capacity is coming onstream with its F2B and F5A factories having commenced operations, which will add a total of 24 lines and a capacity 3.2 billion pieces of gloves/year, when fully operational.

In tandem, the company is also embarking on more capacity expansion plans. These will boost the group’s total number of production lines by an additional 150 lines and production capacity by 17.7 billion gloves/year. By December 2021, Top Glove is projected to have a total of 861 production lines and a production capacity of 91.1 billion gloves/year.

Its financial results for the second quarter ended 29 February 2020 saw a sales revenue of RM1.23 billion, an increase of 6%, and a 9.3% hike in profit, compared with 2QFY19. This was attributed to steady sales volume growth, with particularly strong growth in the nitrile glove segment, where there was a 14% increase versus 2QFY19.

Sales volume for natural rubber gloves was down by 6% against 2QFY19, impacted by a 19% surge in natural rubber latex concentrate prices. Meanwhile, quarter-on-quarter sales volume for natural rubber gloves improved by 11% as Top Glove recovered market share through aggressive marketing strategies and production utilisation also increased

“We are pleased to have delivered good results, despite a challenging and competitive operating environment.

“Our good performance is testament to the effectiveness of our ongoing automation, digitalisation, quality and cost efficiency enhancement programs,” said Top Glove executive chairman Tan Sri Lim Wee Chai.

Meanwhile, the group’s surgical gloves unit Aspion recorded 29% higher sales volume, compared to last year.

Going forward, Top Glove says it envisions “very solid quarters ahead, having already secured exceptionally large sales orders for the next few months on the back of the Covid-19 outbreak”, as well as other factors like the recent plunge in oil prices.