MALAYSIA: Top Glove bullish on growth

"There is a 10% to 20% oversupply right now. This is due to the high demand over the past one to two years,” chairman Tan Sri Lim Wee Chai said.

"But this is a long-term business and we will continue to invest as demand for gloves is still growing at 8% to 10% every year,” he said.

He said at a media and analysts and fund managers' briefing in Kuala Lumpur that Top Glove had set aside RM100 million for capital expenditure next year, mainly for research and development and marketing expenses. Top Glove is the world's largest glove manufacturer.

Top Glove intended to focus more on "market-driven” products rather than being "product-driven”, he said, noting that the company's plants were running at full capacity for high-demand products like nitrile gloves, while for the less-in-demand vinyl gloves, production was running at between 30% and 40% capacity.

Top Glove had targeted to grow its capacity to 463 production lines producing 41.55 billion gloves a year by May 2012 from the current 395 lines that could produce some 35.25 billion pieces per year, Lim said.

On the floods in Thailand, where the company sourced most of its latex needs, Lim said the floods were in the north of Bangkok and not south where most of the supply came. "It may have some effect but it will not be critical,” he said.

Source: Daily "The Star", Kuala Lumpur; 19 Oct 2011

(Syed Rashid Ali, Karachi, Pakistan)