MALAYSIA: Top Glove allots RM200 million for capex

He said the world's largest rubber glove manufacturer's net cash remains positive at RM157.6 million as of 31 Aug. 2014.

"If good opportunities arise, then we will look into it. We are ready for M&A especially during these times where competition is intense," Lim told reporters during a media and analysts briefing in Kuala Lumpur.

"Our doors are always open. Our targeted markets (for M&A) are Malaysia and Thailand," he added.

Lim said capital expenditure will be used to build new factories to boost capacity and improve efficiencies as well as some cash kept aside for acquisition purposes.

In an effort to increase automation throughout the manufacturing process, he said the company will continue to install technologically advanced production lines to produce quality gloves.

He said once its new factories, Factory 29 and Factory 30 in Klang, start production, production capacity will go up to 49 billion pieces of gloves per annum by September 2016.

Factory 29 with 14 production lines is expected to be operational by January 2015 while Factory 30 with 28 production lines to be operational in September 2016, he said.

Lim said it currently has 25 factories with a production capacity of 42.6 billion pieces of gloves a year.

The company, he said, has 150 acres of land in Klang and 80 acres of land in Banting and Ipoh, which will be used for future expansion to add in new factories.

For the financial year ended 31 Aug. 2014, Top Glove's net profit was down 8.34 % from RM196.50 million to RM180.11 million, on the back of RM2.28 billion in revenues compared with RM2.31 billion a year ago.

In the pipeline, Lim said Top Glove plans to manufacture hybrid gloves and chemical free gloves. It currently manufactures 13 types of rubber glove products which are variations of natural rubber powdered and powder free gloves, nitrile, surgical, vinyl, cast polyethylene and thermoplastic elastomer gloves.

Source: "The Sun Daily”, Petaling Jaya; 17 Oct 2014
(Syed Rashid Ali, Karachi, Pakistan)