The world’s largest rubber glove producer by volume plans to add one more factory to its initial plan of building two factories, according to a report in the Nikkei Asian Review (NAR).
By December 2018, the company could operate 28 factories with 632 production lines, cranking out up to 60 billion pieces of glove a year, Top Glove’s executive chairman Lim Wee Chai was quoted as saying.
Lim said the company would go ahead with its plan to acquire a smaller rival by the end of August as part of its ambitious target of capturing 30% global market share.
However, Top Glove would consider a joint venture with “supporting industries” if the company failed to clinch a deal, NAR quoted him as saying.
The company spent about RM210 million on capital expenditure in the last fiscal year.
The company said it aimed to improve its performance despite challenging business conditions in the months ahead. Prices of raw materials have been going up in recent months.
For instance, the average price of latex surged to a five-year high of RM5.95 a kilogramme between December and February, NAR reported.
Higher input costs, especially the price of raw materials, dragged Top Glove’s fiscal second-quarter net profit lower by 20.6% from a year earlier.
Net profit for the three months ended Feb 28 totalled RM83.05 million, declining from RM104.61 million in the same quarter last year, the report said.
However, quarterly revenue rose 22.7% year-on-year to RM851.54 million from RM693.86 million thanks to higher sales volume, the company informed the stock exchange.
“Looking ahead, the group expects the business environment to be increasingly challenging, with competition intensifying on a larger scale,” the company said. “We aim to do even better and will continue to strengthen our glove quality, costing and competitiveness in the coming quarters.”