Malaysian manufacturer Top Glove, the world’s largest natural rubber glove maker, is stepping up research and innovation to maintain its leading position among competitors. Lim Wee Chai, founder and executive chairman of Malaysia’s Top Glove, said in an interview that the company needs to achieve “breakthroughs” in product quality, pricing and cost to do this.
Since its foundation in 1991, Top Glove has built an average of one new plant each year. It is currently operating 23 factories in Malaysia, four in Thailand and one in China. The company’s annual output is set to grow by 26% to 58.8 billion gloves by May 2018.
However, competition is quickly catching up, with Hartalega Holdings, Top Glove’s closest rival, matching its expansion. The global leader in synthetic rubber gloves, Hartalega has embarked on a RM2.26 billion (US$527 million) investment push aimed at boosting capacity by 28.5 billion gloves to a total of 42 billion by 2021.
According to Lim, they are doubling the number of their researchers from 100 to 200 next year. A hundred researchers is already a relatively big number for a Malaysian company with an annual revenue of RM2.88 billion. This is matched by the number of patents held by Top Glove. The company files around 10 patent applications a year and Lim said they are also looking to double that number.
The group, whose products are used everywhere from homes to hospitals, is boosting production of premium nitrile gloves, a synthetic alternative to natural rubber gloves.
Hoping to lift sales, the company recently began offering nitrile gloves that come available in dual colors, are accelerator-free and have an enhanced grip. “The market is very demanding,” explained Lim, who said customers – over 60% of which are in the US and Europe in terms of sales – are constantly asking for lower prices.
One way the company is trying to meet such demand is by expanding its manufacturing facility in southern Thailand, adding 1.4 billion gloves on top of the current capacity of 4 billion produced there by the end of November.
There have been concerns that the aggressive expansions by industry players will create a price-clobbering supply glut. But global demand for rubber gloves, which has been growing by an average of 6-8% a year for the past few years, is expected to stay on track in 2016, rising to about 190 billion pieces, according to the Malaysian Rubber Glove Manufacturers’ Association (MARGMA).
Listed in both Malaysia and Singapore, Top Glove aims to up glove production by around 10% more for the fiscal year ending August. At that rate, said Lim, the company will be able to match the compound annual sales growth rate of 25% it has achieved for the past 15 years.
Top Glove, which exports to 200 countries, is expanding its product range in emerging markets such as Argentina, Brazil, Columbia, Saudi Arabia, Egypt, China and India. Lim said growth in these markets will overtake that in the US and Europe as incomes in other countries rise.
As for the threat by US President-elect Donald Trump to shoot down the Trans-Pacific Partnership free trade pact, Lim said he is not worried, even though the US accounts for about 30% of Top Glove’s sales. He said that such a big decision does not rest on Trump’s hands alone.