Malaysia’s Top Glove, the world’s largest manufacturer of natural rubber gloves, has set a target of 10% year-on-year growth in sales volume for the 2017 financial year, despite its own warnings of a supply glut in the highly competitive industry.
The company’s sales volumes grew 11% in the full year to the end of August, largely due to growing demand for nitrile, or synthetic, rubber gloves. Rubber gloves are widely categorised into natural and synthetic rubber, with the latter preferred in developed countries for its allergen-free make-up.
Europe and North America account for 61% of the group’s market share.
Lim Wee Chai, Top Glove’s executive chairman, said in a briefing that they are ramping up production and expanding in Latin American markets as the company hopes to maintain the sales growth for the fiscal year ending August 31, 2017.
“This financial year will be challenging, but we have never stopped expanding for the past 25 years,” said Lim.
Top Glove has previously warned of “oversupply and industry consolidation”, after announcing record-breaking revenues of RM2.88 billion (US$684 million)on net profit of RM361 million for the 2016 fiscal year.
According to Malaysian Rubber Glove Manufacturers’ Association (MARGMA), global demand for rubber gloves is projected to grow at an average of 8% annually to 190 billion pieces in 2016. Malaysia supplies nearly two thirds of the global market, with the domestic industry led by Top Glove and three other big players.
Lim said that the company’s strategy to lower costs would be to add more production lines. Top Glove currently produces 46.6 billion individual pieces annually in its 25 glove factories in Malaysia, Thailand and China. It is increasing capacity by 26% to 58.8 billion pieces by May 2018.
“By then, we will be the largest nitrile rubber glove maker,” said Lim. The title is currently held by fellow Malaysian competitor Hartalega Holdings.
Top Glove, which sells gloves in nearly 200 countries, is looking to strengthen its market share in Argentina, Colombia and Brazil.