TOP GLOVE TO BOOST 45.1B GLOVES

EXPANSION .....A worker monitors a production line at a Top Glove factory in Malaysia. The company’s capacity expansion plan involves an additional 4.8 billion pieces of gloves per annum to a total of 45.1 billion pieces per annum.

KUALA LUMPUR : The world’s largest rubber glove manufacturer, Top Glove Corp Bhd, aims to increase its total volume production by 10 per cent this year, via its capacity expansion of 52 production lines by August.

Managing Director KM Lee said the growth last year was between 10 and 15 per cent, adding the 10 per cent target this year is quite substantial for the company.

“The capacity expansion plan involves an additional 4.8 billion pieces of gloves per annum to a total of 45.1 billion pieces per annum, in our factories in Banting, Klang and Ipoh,” he said after the group’s first-quarter results briefing, prior to its annual general meeting today.

On capital expenditure, Lee said the group has allocated RM200 million this year, with RM120 million to be spent on the capacity expansion plan, including the installation of robotic arms and auto stacking and packing machines.

“The balance of RM30 million will be allocated to our rubber plantation in Indonesia, whereby we have targeted to commence the first phase of planting in October, while the remaining RM50 million will be spent on our TG Tower project.

“The overall investment cost for this venture is RM450 million over 14 years, and we expect positive cashflow in the 10th year,” he said, adding that the group expects the first tapping to be in the year 2020.

Top Glove currently controls about 25 per cent of global market share, and the group aims to achieve 30 per cent by the year 2015, driven by the continuing demand for rubber gloves and improved operational efficiency.

He said the global demand for gloves has been growing at an average of eight to 10 per cent per annum, with the current demand estimated at 160 billion pieces per annum.

“Medical gloves are a necessity in the healthcare industry, especially with the rise in healthcare standards, coupled with the increase in the global population,” he added.

Meanwhile, Chairman Tan Sri Lim Wee Chai said following the increase in labour cost with the introduction of the minimum wage policy, the group would increase its glove prices by 3-5 per cent, depending on the type of product.

Lim said the policy, which took effect on Jan 1, is likely to cause its labour cost to increase by 50 per cent. (Bernama)