PETALING JAYA – Glove maker Top Glove Corp Bhd expects to grow its global market share to 30% from 26.7% by the end of the year.
“The global market volume consists of 150 billion pieces of gloves per year. Top Glove Corp has 40 billion pieces of gloves, in terms of capacity, at present,” said chairman Tan Sri Lim Wee Chai. “By the end of 2012, with our capacity expansion plans, we should be able to achieve 45 billion pieces of gloves.”
Top Glove is the world’s largest rubber glove manufacturer and exports to more than 185 countries.
About 80% of its products are for the medical sector.
Top Glove is also aiming to increase its annual revenue to RM5bil in the next five years.
For the year ended Aug 31, 2011 Top Glove’s net profit stood at RM113.1mil against RM245.2mil a year earlier on revenue of RM2.05bil, compared with RM2.08bil previously.
The company is aiming for further automation of its production lines, and a capacity mix flexibility of 50% natural rubber and 50% synthetic gloves.
Managing director Lee Kim Meow said that new products would be launched this year.
“We are doing much more business with Japanese customers. As our nitrile lines continue to expand, we are looking at getting additional business from American customers,” he said.
During a briefing, Lim pointed out that the company’s 2012 sales target would depend on the stability of latex prices.
“Latex price at around RM6 per kg is reasonable. If it hits RM11 per kg (like last year), then our target would be dificult to achieve,” he said.
Lim said the latex price should be stable (in the region of RM6 per kg) this year, due to the supply and demand situation.
He said the company was in a much better position this year, compared with 2011 when “we were hit by headwinds high latex price, weaker US dollar and overcapacity.”
Top Glove is also moving upstream to rubber plantations.
Lee said the company was in the process of applying for plantation land in east Cambodia.
“We should be able to firm up (the land) in Cambodia in another three to six months. We do not want to acquire the plantation land at high prices. Applying for land through the government would lower our costs,” said Lee.
Acquisition and development costs for the 10,000ha tract in Cambodia are expected to be RM160mil for the rubber trees to mature over seven years.
The company is also looking to acquire plantation land in Sabah and Sarawak, and Indonesia.
“But we do not want to rush into this. Developing rubber plantations is expensive. We keep our options open. The rubber plantations will be a good move, in terms of income stability, and to grow the company further,” said Lim.
The company’s capital expenditure for this year is expected to be RM100mil.
“This is very comfortable. Last year, we spent RM100mil to RM120mil. The direction is to continue to expand,” he said.
Source: The Star