Friday October 9, 2009

Top Glove to beef up capacity

By EILEEN HEE

PETALING JAYA: Top Glove Corp Bhd, the world’s largest glove manufacturer, expects its two new factories to beef up production capacity by 10% next year, said executive director Lim Cheong Guan.

He said the group was in the process of installing 16 new glove production lines in the factories, both located in Klang.

“We will grow organically and add on three billion pieces capacity a year,” he told Starbiz, adding that the factories would be completed by February and July next year.

At present Top Glove has 19 glove factories and two latex concentrate plants, operating 355 production lines with a production capacity of 31.5 billion pieces of gloves per year.

The company’s two latex concentrate plants in Thailand supply 50% of its latex concentrate materials.

“In order to meet the increase demand of latex concentrate for our glove production, we will install additional nine concentrate centrifuge machines in Thailand,” he said. This is targeted to be completed by December.

The company registered a 121% increase in net profit for the fourth quarter ended August 31 to RM56.8mil or 19.18 sen per share from its corresponding quarter last year, due mainly to effective cost control, improvements in glove quality and aggressive marketing strategies which helped to sustain Top Glove’s market leader position.

Revenue increased to RM427.4mil in the fourth quarter from RM364.5mil a year earlier.

For the full year, Top Glove’s revenue was up 11% at RM1.53bil while net profit increased to RM169.2mil from RM110.1mil.

The good performance has prompted the rubber glove maker to bump up its dividend payout by 100% for FY09, from 11 sen per share.

Lim said the company was also open to further increase its market share via mergers and acquisitions, “if there is a suitable candidate.”